ASR Group: Making freight quote pricing faster and more accurate with predictive analytics
Explore ASR Group’s journey with SAP
ASR Group International Inc. is applying predictive analytics to streamline freight quote generation for routes in the United States using SAP Business Technology Platform. The SAP Data Intelligence Cloud and SAP Analytics Cloud solutions make it possible to integrate, orchestrate, and manage data and make it visually accessible to business users.
prediction accuracy more than 30 days out.
of transportation data and seven external data sources used.
to generate 2,200 forecasts.
In the ever-changing world of freight prices, we have to ensure we are pricing freight correctly. SAP Business Technology Platform will save our team time by giving us a prediction on freight price for the lanes we service.
Director Logistics Supply Chain, ASR Group International Inc.
Eliminating manual, spreadsheet-based freight quote generation
For sugar manufacturer ASR Group, accurate freight price quoting is vital to securing future sales contracts and must be completed with 12- to 18-month lead times. But the global logistics team was spending too much time manually analyzing data to develop freight quotes for trucking routes in the United States.
The team needed something better than spreadsheets to collect external fuel data, understand current conditions, and make estimates for thousands of lanes – all while responding to ad hoc requests from sales for new customers.
Efficiencies were required for better visibility into the variance between freight revenue and freight settlement to provide better customer quotes and service experiences.
The answer was automated predictive analytics.
To meet the challenge, ASR Group embarked on a strategic initiative to maximize efficiency in predicting freight costs. The first step was a proof-of-concept (POC) project using SAP Business Technology Platform (SAP BTP).
We must deliver goods as expected without absorbing the costs of the volatile trucking market. The predictive freight model developed with SAP BTP uses our data and other indicators to predict what the market will do in the future.
Director Logistics Supply Chain, ASR Group International Inc.
Delivering an effective cost prediction model and actionable analytics
ASR Group built a POC that includes a predictive algorithm to forecast trucking costs more than 30 days out. The model uses 12 months of internal company data and a descriptive algorithm based on seven sources of external data. These include economic data, labor statistics, transportation statistics, weather information, transportation management system data, and more.
SAP Data Intelligence Cloud integrates, orchestrates, and manages the data and the predictive algorithm, which provides a network-level expression of costs. The confidence interval is based on:
• 12 months of data (maximum)
• Lane network ratio
• Lane level prediction
• Three-month moving average for freight price data
• First derivative calculation of freight price by lane
• Measure of the distance between outputs from the long-term forecast to the near-term moving average
• Conditional logic that selects the best output
SAP Analytics Cloud is then used by the business for visualization and what-if analysis.
Supporting sales with highly accurate freight cost predictions
In a matter of seconds, ASR Group’s POC algorithms can generate 2,200 forecasts for 628 trucking lanes from six states, with each forecast set including six months of data – all with 95% accuracy.
The workflows in SAP Data Intelligence Cloud make it possible to produce accurate trucking lane rates for thousands of locations and produce new customer rates for sales contracts beyond 30 days. Compare this with commercially available predictions at 30 days, which are only 90% accurate.
Now, ASR Group can discover, enrich, integrate, cleanse, and orchestrate disjointed data assets from across the enterprise. Not only does this save time for logistics teams, but it also allows them to more confidently and quickly provide rates and accurate quotes for North American sales contracts.
And with SAP Analytics Cloud, business users have the user-friendly data visualization tools they need to create business insights in near-real time.
Moving to production to help manage a volatile trucking market
Looking forward, SAP Data Intelligence Cloud will allow the POC environment to be moved into production without retooling – which is expected to happen soon.
Additional lane rate data from a reliable API source will enable continuous improvements in forecast accuracy. An SQL query to the SAP HANA database will replace a source file from BluJay and allow the solution to be scaled to 3,000 customer locations.
The end result will be that logistics teams will have the data they need to keep pace with a changing market and respond to ad hoc sales demands – all of which are particularly important in the face of a national driver shortage and continually skyrocketing trucking costs.
SAP helps ASR Group run better
Key business outcomes and benefits
- Discovery, enrichment, integration, cleansing, and orchestration of disjointed data assets from across the enterprise
- 2,200 forecasts for 628 trucking lanes sampled from six states using six months of data – all with 95% accuracy
- Accurate trucking lane rates for thousands of locations and new customer rates for sales contracts beyond 30 days
- Ability to provide more accurate, responsive, and timely shipping rates to sales for North American contracts
- Democratized data access among users that helps break down departmental data silos
Featured solutions and services
- SAP Business Technology Platform brings together data management, analytics, AI, application development, automation, and integration in one unified environment.
- SAP Data Intelligence Cloud is the key platform for data orchestration, algorithm execution, and outcome distribution.
- SAP Analytics Cloud provides analytics capabilities to support scenario-based predictions of freight costs for future sales contracts and new customers.
About ASR Group
ASR Group is the world’s largest refiner and marketer of cane sugar, with an annual production capacity of six million metric tons. It produces a full line of grocery, e-commerce, industrial, foodservice, and specialty sweetener products, with a strong focus on innovation and product development. The group is owned by Florida Crystals Corporation and Sugar Cane Growers Cooperative of Florida.