4flow newsletter 3/2021

Pre-optimization of call-offs to reduce transportation costs

Software solution 4flow TORO – transport optimized release orders

As an SAP add-on, 4flow TORO (transport optimized release orders) is a serverless software solution that can be implemented quickly, offering the possibility to optimize delivery schedules during material planning by taking transportation-relevant factors into account. As a result, logistics costs for inbound supply chains are significantly reduced while the planning quality of delivery schedules is increased.

Traditional material planning doesn’t consider factors relevant to transportation

Traditional material planning does not consider transportation-relevant factors regarding costs, capacities or network restrictions in material requirements planning (MRP). In cases where there is no additional transportation management system, for example, this leads to inefficient shipments in the inbound network and higher logistics costs. Even leading ERP system providers do not offer fitting solutions in their standard products.

4flow TORO as SAP add-on for seamless material planning

With 4flow TORO as SAP add-on, 4flow offers a solution for integrating transportation-relevant factors into planning runs. Many variables and restrictions including transportation rates, capacity restrictions, route information and material master data are considered to create optimized shipments based on scheduling agreements.

The results from the standard MRP runs are transferred to the 4flow TORO application and immediately optimized based on the transportation-relevant factors. Once verified, the optimized schedule lines are integrated back into SAP in the scheduling agreement. 4flow TORO enables network, transportation and planning restrictions to be taken into account during the early stages of material planning. This way, users can achieve a reduction in logistics costs without active transport management

Optimizing call-offs to reduce costs

Already during material requirements planning, transportation utilization of call-offs can be increased while logistics costs can be reduced, for instance, by consolidating schedule lines and reducing the number of shipments. With this, cost savings of 3% for the entire network and up to 30% on selected transportation lanes are made possible. The timely availability of materials is considered when optimizing the call-offs. Early integration of material and transportation planning also helps to boost the quality of planning and results in more effective release orders.

Plug-and-play solutions offer quick integration

4flow TORO offers a plug-and-play solution as a web service application and allows easy and quick integration into an existing IT landscape. Standard interfaces are used to exchange the required data to be used for optimization in the 4flow TORO application. The serverless application contributes to a high degree of flexibility. A modern web interface that confirms the optimization suggestions and offers user-friendly interaction serves to complete the user’s product experience.

4flow TORO offers an excellent solution for businesses using SAP in material planning without requiring active transportation management in the application.

4flow TORO’s low implementation effort offers quick support in tactical and operational planning and facilitates the early and cost-reducing optimization of inbound transportation. To achieve an initial quick cost savings in a network, 4flow TORO can be piloted at a single location, for example, for selected transport relations or defined material volumes.

Benefits of 4flow TORO at a glance

  • Pre-optimization of call-offs
  • Integration of material planning and transportation planning 
  • Consolidation of shipments
  • Reduction of logistics costs
  • Reports on cost savings
  • Increased quality of planning 
  • High flexibility
  • Quick implementation
  • Optimization as-a-service