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

2. Introduction About General Mills -Global food marketer -Numerous inventory locations in a diverse supply chain network About me -Joined General Mills in 1999 -This project was my first exposure to SAP

5. 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

6. 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

7. 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

8. 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

23. 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

24. 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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26. Copyright © 2003 Americas’ SAP Users’ Group Thank you for attending! Please remember to complete and return your evaluation form following this session. Session Code: 4309