Copyright © 2003 Americas’ SAP Users’ Group Freight Rating and Payment Mark Ostlie, IS Analyst – General Mills 5/20/2003

Introduction About General Mills -Global food marketer -Numerous inventory locations in a diverse supply chain network About me -Joined General Mills in This project was my first exposure to SAP

Project Background Business case Streamline/unify rating and payment systems Bring data in-house for better reporting Scope Rate and accrue costs for truckload, rail, and ocean Make payment on all outbound and interplant shipments for all modes for transportation Team design Timeline: Nov 2002 – April 2003

High-level Process Overview Determine costs Rate shipment for planned charges Invoice-driven cost determination for unplanned charges Transfer costs to financial systems Process invoices Generate payment Collect data for R/3 and BW reporting

Technical Challenges and Solutions Distance determination Financial allocation Accepting invoices via EDI or manually Safeguards against overpayment and payment approval processes Cost reports in R/3 and extracts for BW Payment summary report for the carriers Pricing

Business Challenges Standardizing contract formats Identifying all valid agreements Business process changes regarding contract negotiation Coordinating with carriers on EDI specifications to eliminate variance Data quality Formats Charge codes

Planning Lessons Learned Engage other SAP teams to consider and estimate changes to peripheral processes thoroughly Determine the impact of path dependencies early on Foundation data affects time to implementation considerably

Results Robust system, unified set of processes Detailed cost data to drive business decisions Reduced manual processing Proactive/more effective use of freight auditor’s time Poised to expand business benefits Inbound rating and payment Contract management Improve service – require on-time reporting to trigger payment

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