Efficiency through standardization

_TEchnologiEs

CAMELOT ITLAB CusTOMEr suCCEss sTOry

_ProducTs & soluTions _sAP APPlicATions

Transparency in freight cost management with SAP TM in the passenger car segment

For the optimization of freight cost management with more

than 6 million passenger car transports BMW Group implemented

sAP Transportation Management and took a step forward to

standardization and cost reduction.

From Innovations to solutions.

rE-AlignMEnT And rE-dEsign oF FrEighT billing

Problem today:

Inconsistent end-to-end processes

and lack of data quality

results:

High degree of manual validation

efforts, no transparency of current billing

volumeAdditional risks:

Outdated technologies, dying know-how of

technical and functional support

objectives

Number ONE is the branding of the corporate strategy BMW

Group established to lead business areas to efficiency and long

term value add . Logistics, being a crucial business area, and

freight cost management as a part of it, is using this strategy

for the management of 80 suppliers who transport vehicles

from production site to distribution centers either by land,

by air or sea.

In 2011, 1.7 million passenger cars were routed to their final

destination plus special freight transports for special vehicles

like preproduction prototypes.

BMW Group regarded the adaption of new logistic concepts

in freight cost management as a challenge. The former IT solu-

tion, an inhouse development, did not have the functionalities

to meet all requirements. End-to-end processes for freight cost

billing were not fully covered. software technologies and hard-

ware were outdated and important know-how of technical

and functional support slowly disappeared. A new IT solution

was stringently required as BMW planned to expand its busi-

ness with freight cost billing volume to further extend.

CAMELOT ITLAB CusTOMEr suCCEss sTOry

Transparency in freight cost management with SAP TM in the passenger car segment

Figure 1:situation at project start

The solution

BMWs choice of sAP Transportation Management as its

favoured platform for freight cost management is fully inte-

grated into an existing sAP solution landscape for planning,

purchase, billing and transport services.

To minimize efforts in invoice verification, services are billed

via credit item procedure. In certain cases invoices are pub-

lished to suppliers via platform for download and further

financial processing.

Early Product Experience

Being one of the first roll-outs, go-live for sAP TM 8.1 was

in June 2012. BMW was looking for an implementation

partner who had combined expertise in products, end-to-

end processes in supply chain and freight cost management.

CAMELOT is a process-oriented IT consultancy with proven

track in sAP sCM and sAP TM.

CAMELOT supported sAP AG during the implementation

of sAP TM 6.0, sAP TM 7.0 and sAP TM 8.0 prototypes.

CAMELOTs expertise was also requested by sAP AG for

the implementation blueprint of sAP TM at BMW in 2011.

BMW chose CAMELOT as its implementation partner and the

established project teams cooperated closely from blue-

print phase to final business concept. Two main challenges

had to be mastered: new technologies which bases sAP TM

and a close time frame given.

Due to a strict project management approach, with progress

and milestones to be monitored every two weeks, the new

solution for freight cost management was implemented

within 7 months. BMWs and CAMELOTs team consistingly

exchanged for setting up testsystems and live demonstra-

tions to eventually co-create the final solution design.

Figure 2: sAP standard and BMW's implementation requirements

sAP TM includes all functionalities of an integrated transport management solution

The consistent document flow concept follows a stringent end-to-end process

state of the art technologies meet customer's requirements

sAP Ecc

_sAP TM concEPT

Bid for transportation

3

Order handling

1

Transportation

4

Transport planning

2Freight

cost billing

5

Most TM functionalities stay in existing systems

Possibility of a consistent document flow concept through high degree of interfaces

Freight order the central object of freight cost management

_bMW scEnArio

Tbb/EXTKoM

Freight cost billing

5

6

AsTrAs

3

GPs/THP/MDBB

1

FAIs/spetros

2

FAIs/spetros

4

results

BMW was able to implement a standardized, transparent

passenger car freight billing process without technical or

functional disruptions, clear responsibilities and less manual

validation efforts.

Costs were reduced while dataquality increased. Through

enhanced evaluation methods, decision makers quickly gain an

overview of a suppliers services and billing volume. Mapping

of freight contracts and according price combinations were

simplified. Tax calculations for passenger car transports and

transport sections in various countries are now available at the

push of a button.

The biggest benefit for BMWs IT department is the fall back

on internal know-how for administration and support of sAP

TM and regular functional software updates.

A potential solution upgrade in the future is not an obstacle

anymore: Even though a high degree of individual processes in

passenger car freight cost management was maintained sAP

TM releases are installed easily.

outlook

After the successful project phase for passenger car distribu-

tion, BMW will conclude the upcoming project phase with

CAMELOT. Objective is the optimization of freight manage-

ment for billing scenarios Factory supply Production Mate-

rial and spare Parts Transport based on the latest release.

Figure 3: Functional extension of freight cost management in sAP TM

_inTErFAcEs _TEchnology

subsequent modification of freight order

Port services

Progressive freight order handling

Generation of final freight order

Taxation attribute

Cost allocation

Destination-dependent freight payer

up-/Download of pricetables

Performance enhancement

Tiered volume

Dieselfloater

Freight cost calculation

Packaged freight cost documents

Explicit calculation for containers and passenger car positions

_businEss ProcEss

hisToricAlly EsTAblishEd ProcEssEs rEquirE EXTEndEd sTAndArd FuncTionAliTiEs

interview

dr. Kirsten commerBMW Group, Process-IT Order to Delivery

What is the relevance of passenger car freight cost

management within bMWs supply chain ?

It is crucial as a supply chain only works as long as delivered

services are compensated accordingly.

After the blue print phase sAP TM went productive in

less than 7 months. What were the drivers for such a fast

implementation ?

Main driver was certainly the close cooperation of responsi-

bles from planning, purchase, transport logistics, accounts

payable and IT working with CAMELOT. CAMELOTs process

consultants and sAP TM solution architects had a deep under-

standing for our business needs. so at all times a high quality

was delivered and given time lines kept.

Which challenges did bMW face with the implementation

of sAP TM ?

At that specific time the software was brandnew and still in

ramp-up phase. The challenge was to find an implementation

partner who had already expertise in the field.

Transport management is not as widely spread as other clas-

sic ErP solutions so there are less resources with profound

know-how to be found.

CAMELOT met all our expectations: deep expertise in prod-

ucts, methodology and close relation to sAP AG. That relation

is an important criteria for problem solving if consultation of

the software manufacturer is needed.

PrinciPlEs

Projectmanagement needs to support core activities

during implementation (supplier of specialists)

Less, but efficient reporting documents and project

monitoring

Clear milestones and activities

Exact role definition

stakeholder and management communication

riskmanagement via projectsponsor and project

office (no additional ressources needed)

bEnEFiTs

reduced administration

Prioritization of activities by management

_ succEss FAcTor 1: lEAn ProjEcT MAnAgEMEnT

PrinciPlEs

step by step development (2-3 weeks cycle),

individual workpackages

- Early involvement of and validation by customer

Clearly defined and short term development results

bEnEFiTs

Visible progress in systems, not only slides

_succEss FAcTor 2: EFFiciEnT dEvEloPMEnT APProAch

CAMELOT ITLAB CusTOMEr suCCEss sTOry

your contacts

bMW group

BMW Group and brands BMW, MINI, Husqvarna Motorcycles

and rolls-royce is the most successful manufacturer of pas-

senger cars and motorcycles. As a global player BMW Group

is represented in 140 countries by its own distribution net-

work and has production sites in 14 countries.

At the end of 2011 earnings before interest were 7.38 bil-

lion E, sales revenues 68.82 billion E and approx. 100.000 employees worked for BMW Group.

www.bmwgroup.com

cAMEloT iTlab

CAMELOT ITLab is a process-oriented IT consultancy with

strong focus on sAP modules MDG, srM, sCM, CrM, TM and

BI. Established partnerships with leading IT providers like

sAP, IBM, Oracle and Microsoft in conjunction with customer

focused solutions and innovative blueprints make CAMELOT

ITLab the consultancy of choice for end-to-end-processes.

CAMELOT provides in addition to sAP standards independ-

ent solutions like the Add-On supplier Management Camelot

Csx. As part of CAMELOT International Group we provide

combined strategy-, organizational- and IT-consultancy

services. Headquarters are based in Mannheim.

cAMEloT iTlab gmbh

Mario Baldi Managing Partner

Theodor-Heuss-Anlage 12 68165 Mannheim

Phone +49 621 86298-800 mba@camelot-itlab.com

www.camelot-itlab.com

Consistentautomationoffreightcostmanagement

Moretransparency

Increaseddataquality

Improvedanalysis

Lessmanualvalidation

Lessmanualdataentry(Dieselfloatercalculation/

up-/Download)

Cost-andtime-saving

Improvedmappingoffreightcontracts

Varietyofpricecombinationsinstandardsolution

ReleaseabilitydespitehighdegreeofBMWspecific

processes

_ FrEighT cosT MAnAgEMEnT bAsEd on sAP TM AT A glAncE: