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Third Party Logistics - How To Use 1

Third party logistics in ByDesign allows customers to outsource inventory storage and handling to a third party while retaining visibility and planning capabilities. It describes how to set up third party logistics by defining an external warehouse organization, assigning it a supplier, and using transport lanes to determine when inventory is sourced from the third party warehouse for demand.

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131 views6 pages

Third Party Logistics - How To Use 1

Third party logistics in ByDesign allows customers to outsource inventory storage and handling to a third party while retaining visibility and planning capabilities. It describes how to set up third party logistics by defining an external warehouse organization, assigning it a supplier, and using transport lanes to determine when inventory is sourced from the third party warehouse for demand.

Uploaded by

E-learning
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Third Party Logistics - How to Use #1

community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/third-party-logistics-how-to-use-1/ba-
p/13442222

3 Kudos

I have put these blogs together mainly for the ByD partners, so they can understand how
exactly Third Party Logistics works and how they can best demonstrate it. Of course
customers will find this useful too if they are ready to expand the scope of their ByD
solution.

Third Party Logistics - what is it?

Third party logistics in ByDesign allows ByD customers to sub-contract the storage and
handling of their on-hand inventory to a third party, but at the same time retaining the
visibility of ATP and planning of this stock. It is often confused with Third Party Order
Fulfillment (or DropShip).

In the scenario Third Party Logistics (3PL) the on-hand inventory is owned by the
ByDesign customer. They are just not handling the logistics and storage.In DropShip
scenario the ByD customer never owns the stock, it passed directly from supplier to end
customer.

3PL - Setup

PreRequisites:

To enable this process, this scoping questions need to be answered

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In Organisational Management Work Center;

An Organisational Unit needs to be included in the company org structure. This org unit
definition is:

Business Residence:

You must include the Full Address of this warehouse too.

In Supplier Base work center;

Add your Warehouse Supplier and add the attribute "Warehouse Provider"

In Supply Chain Design Work center;

this Site needs to have the following Location attributes.

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Since this is an externally managed location, ByD does not manage its layout, material
flow or storage profiles.

You have defined that the site is an externally-managed location and have assigned
the warehouse provider to it.

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in Supply Chain Master Data work center,

Using Transport Lanes, you can determine under which circumstances inventory is picked
from a 3PL warehouse.

In this case I have decided that delivery to either Gloucestershire or Worcestershire is


automatically sourced from our externally managed warehouse. So first I create the
transport zone

and then assign a warehouse/zone combination

For this blog in my standard SAP reference system I have created a new product called

"Worcester Boiler EV112"

Purchasing is ACTIVE

Logistics Planning Area P1124 is ACTIVE

Planning for Logistics Area P1124 is ACTIVE

Demand Driven Planning

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External Procurement

Safety Stock = 5

Sales is ACTIVE

Valuation is ACTIVE

If everything is in order, you can run planning and in your Supply Planning work center
you should see this exception

This indicates that all the master data is in alignment and that the system can see a need
for safety stock in the external warehouse.

To help with the smooth automation of the procurement process, also set up a purchasing
contract for the new boiler. This will automatically propose the supplier when we process
purchase proposals and requests.

This is done through the Sourcing and Contracting Work Center.

Further automation is located in the Third-Party Logistics work center, where you can
make the following rules apply.

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ByDesign also supports direct connection of 3PL warehouse management systems, so
optionally you need to create a communication scenario. Details are here on that process.

In my next blog we will process tasks manually.

SAP Managed Tags:


SAP Business ByDesign,
SAP Supply Chain Management

Labels:
Technology Updates

1 Comment

former_member781998
Discoverer

‎12-21-2021 7:04 AM

0 Kudos

Thanks for sharing the beautiful information about the third-party logistics ,This blog
helped me in understanding the third party logistics .

https://fulfillmenthubusa.com/

Fulfillment HUB USA is the best Third-party logistics service provider and the fastest
growing e-commerce around the globe.

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