CODIS Freight Policy Processing

CODIS Freight Policy Processing

The freight rules are defined by the Freight Terms Codes record and associated freight terms qualifier codes records.

The freight terms code is put into the ship-to customer record and this becomes the default freight terms for that customer.

A freight terms code can also be specified for an order type. The freight terms code to use with the order type is placed in field 30 (OVR freight-terms) of the ‘OT’ codes record. When an order type with a freight terms code is used, it overrides the default freight terms from the customer record.

The freight terms code can be overridden at the order level at order entry time.

The following documentation refers to ‘Qualified Purchases’, which are defined as follows:

Qualified Dollar Purchase is the total order value of part numbers which are flagged ‘Allow Freight Allowance accumulation’ (bit 512 in field 5 of the PRODCT file record).

Qualified Unit Purchase is the total order quantity of part numbers which are flagged ‘Allow Freight Allowance accumulation’ and ‘Freight qualify on units vs. dollars’ (bit 512 and 8192 in field 5 of the PRODCT file record).

The Freight Terms Code Record

There are four different freight terms types, identified by the Type Code. Types 1,2, and 3 are used to define relatively simple freight policies whose definition is fully described in the freight terms codes record. Type 4 is used to define complex freight policies allowing for a number of qualifiers.

All four freight terms types require the following field to be populated:

Freight Terms Code – field 2

The 2 character code that uniquely identifies these freight terms

Type Code – field 4

This is a 1,2,3, or 4 depending on the type you are defining.

Description – field 9

Enter up to 30 characters to describe these freight terms.

Type 1 Freight Terms

This type can be used in one of two ways:

Method one causes an immediate freight determination (prepaid or not) for each order. Use the following fields:

Qualifying Dollar amount – field 5

Enter the amount of qualified purchases needed to make the order ‘prepaid’

Ty=1 Qualifying Unit count – field 28

Enter the number of qualified units needed to make the order ‘prepaid’

Ty=1 Ignore if Drop Ship – field 26

Enter a ‘Y’ if this freight terms code does not apply to drop ships.

Ty=1 Ignore if ship-wh changed – field 27

Enter a ‘Y’ if this freight terms code does not apply when the ship warehouse is changed.

Ty=1 Action (P,M) – field 29

Set this to ‘P’

Calc Allowed Freight – field 30

Set this to ‘N’

Method two is used determine qualified freight to be offered as a ‘Freight Allowance’ on the customer’s A/R statement. If the order reaches the specified dollar value or unit count, the freight charged on the order qualifies to be deducted from the A/R statement if it is paid on time. Use the following setting to implement this method:

Qualifying Dollar amount – field 5

Enter the amount of qualified purchases needed to make the freight charges eligible for deduction.

Ty=1 Qualifying Unit count – field 28

Enter the number of qualified units needed to make the freight charges eligible for deduction

Ty=1 Ignore if Drop Ship – field 26

Enter a ‘Y’ if this freight terms code does not apply to drop ships.

Ty=1 Ignore if ship-wh changed – field 27

Enter a ‘Y’ if this freight terms code does not apply when the ship warehouse is changed.

Ty=1 Action (P,M) – field 29

Set this to ‘M’. It causes an appropriate message to be printed on the order to let you know if the order should be shipped with the freight charges eligible for deduction. ‘P’ makes the order go ‘Prepaid’.

Calc Allowed Freight – field 30

Set this to ‘Y’

The freight charges under this method are always actual charges. Qualifying and non-qualifying freight charges have to be coded to different DC codes so CODIS can identify them at A/R statement time. The G/L account number associated with the DC code for qualifying freight must be defined under FRT-ALLOW in an SB codes record.

When an order qualifies for allowable freight, an appropriate message is printed on the pick ticket so that the manifest operator can enter the correct DC code.

Type 1 freight terms apply to all parts that are identified as ‘eligible for freight allowance’ (bit 512 or 8192 in field 5 of the Product file record). There is no ability to exclude selected products beyond this.

You can use fields 11 to 22 to specify an alternate freight terms code for various conditions (i.e. FAX order, EDI order, etc.). This redirection to an alternate freight terms codes is disabled if the freight terms code for this order was overridden at order entry time.

Type 2 Freight Terms

Type 2 freight terms let you offer a percentage of eligible purchases as a deduction on the customer’s accounts receivable statement.

The following fields in the Freight terms code record are used:

Qualifying Dollar Amount – field 5

This is the minimum dollar total of qualified merchandise that has to be on an invoice in order for the invoice to be added to the total qualified purchases for the month.

Target Sales Volume – field 7

This is the minimum dollar total of all qualifying invoices that has to be reached for the month to earn allowable freight.

Freight allow. Percentage – field 6

This is the percentage that is applied to qualified purchases for the month to calculate the allowable freight.

Ignore if Drop Ship – field 26

If this field is set to ‘Y’ then drop shipments from the Vendor to the customer or from the Central to the customer’s customer are excluded from the total qualified purchases.

Redirection to alternate Freight Terms – fields 11 to 21

You can specify alternate freight terms codes for certain conditions (i.e. FAX, EDI, etc.) by putting the alternate freight terms code into the appropriate field.

This redirection only works if the ‘parent freight terms code’ is the default freight terms code for the customer. It does not work if the freight terms code was overridden at order entry time.

In order for a part number to be considered ‘qualified merchandise’ it has to be flagged to “Allow freight allowance accumulation” in the PRODCT file.

When the A/R statement is run, the qualified purchases from invoices where the qualified purchase exceeded the minimum specified in field 5 are added up. If the total for the month exceeds the amount in field 7 then the percentage in field 6 is applied to that total and the resulting amount is printed on the statement as freight that may be deducted if the statement is paid on time.

Type 3 Freight Terms

Type 3 freight terms are used to offer allowable freight that is based on actual freight charges.

The actual freight charges are compared to a percentage of qualified purchases for the month. The allowance offered on the A/R statement is the actual freight amount or the percentage of purchases, whichever is less.

Actual freight charges are calculated at month end from the A/R distribution files. G/L accounts selected are those that are defined in the SB codes record where the first seven characters of the key are ‘FREIGHT’.

The following fields in the Freight terms code record are used:

Qualifying Dollar Amount – field 5

This is the minimum dollar total of qualified merchandise that has to be on an invoice in order for the invoice to be added to the total qualified purchases for the month.

Target Sales Volume – field 7

This is the minimum dollar total of all qualifying invoices that has to be reached for the month to earn allowable freight.

Freight allow. Percentage – field 6

This is the percentage that is applied to qualified purchases for the month to calculate the maximum allowable freight to be compared to actual freight charged.

Redirection to alternate Freight Terms – fields 11 to 21

You can specify alternate freight terms codes for certain conditions (i.e. FAX, EDI, etc.) by putting the alternate freight terms code into the appropriate field.

This redirection only works if the ‘parent freight terms code’ is the default freight terms code for the customer. It does not work if the freight terms code was overridden at order entry time.

In order for a part number to be considered ‘qualified merchandise’ it has to be flagged to “Allow freight allowance accumulation” in the PRODCT file.

Type 4 Freight Terms

Under the type 4 freight terms code you define a set of rules that is tied to a given ship method (ship via code). Each of these rules is defined in a PF codes record and it describes what freight action to take when a given set of conditions exist for an order.

The Type 4 Freight Terms code uses the following fields when the freight action is determined exclusively by the related PF codes records:

Redirection to alternate Freight Terms – fields 11 to 21

You can specify alternate freight terms codes for certain types of orders (i.e. FAX, EDI, etc.) by putting the alternate freight terms code into the appropriate field.

This redirection only works if the ‘parent freight terms code’ is the default freight terms code for the customer. It does not work if the freight terms code was overridden at order entry time.

Calc Allowed Freight (Y/N) – field 30

If you set this field to ‘Y’, then any freight added to an order with this type 4 freight terms code will be checked to see if it is allowable freight. It is considered allowable if the G/L account number associated with the DC code that you specify this freight charge is defined in a SB code record with the key FRT-ALLOW. The total allowable freight is show on the customer’s A/R statement to be deducted if the statement is paid on time.

Ty=4 Check Sequence – field 32

Use this field to define the priority in which qualifying values (TV, TC, MV, MC, etc.) from the freight policy (PF) codes record are to be evaluated.

Ty=4: Allow ty-1 upsell – field 33

Set this field to ‘N’ to use only the rules defined in the PF codes records for freight determination.

Ty=4 Force ty-1 policy – field 34

Set this field to ‘N’ to use only the rules defined in the PF codes records for freight determination.

Ty=4: Qualify $ PreSplit – field 35

By default, when an order is split to be shipped out of more than one warehouse, each of the resulting orders is evaluated to see if it satisfies the PF rules.

If you want the order to evaluated on the basis of its total value before any splits, you must set this field to “Y”.

You can also define type 4 freight terms that use a type 1 freight terms action before proceeding to the PF rules evaluation. You create this behavior by also populating the following fields in the FT codes record:

Qualifying Dollar amount – field 5

Enter the amount of qualified purchases needed to make the order ‘prepaid’

Ty=1 Qualifying Unit count – field 28

Enter the number of qualified units needed to make the order ‘prepaid’

Ty=1 Ignore if Drop Ship

Enter a ‘Y’ if this freight terms code does not apply to drop ships.

Ty=1 Ignore if ship-wh changed

Enter a ‘Y’ if this freight terms code does not apply when the ship warehouse is changed.

Ty=4: Allow ty-1 upsell – field 33

Set this field to ‘Y’. Order entry program will display running totals of the actual VS. the qualifying values as you are entering an order.

Ty=4 Force ty-1 policy – field 34

Set this field to ‘Y’.

(Field 33 and 34 must both be set to ‘Y’ to enable this functionality)

When the type 1 freight terms action is enabled for a type 4 freight terms code, then the program determines if the conditions defined here are met, and if so, the order option ‘P’ (prepaid) is set. The evaluation of the PF rules will be skipped.

Also note that the rules defined here will apply to any ship via code, whereas the PF rules apply only to the ship via code(s) to which they are tied.

You can define different sets of rules under the same type 4 freight terms code. Each set of rules is uniquely identified by the ‘Freight Policy Code’ (field 6). The freight policy code is tied to a ‘ship via code’ (in field 9 of the SH codes record).

The order is tested against the existing rules in the poster, which means that the final freight action is not known at order entry time. The poster does not process the rules if the order option ‘P’ (prepaid), ‘H’ (freight included), or ‘V’ (freight terms overridden) is set on the order.

For each rule you specify values for the following qualifiers:

Customer’s default shipping warehouse - field 2

You can enter an actual warehouse code or you can enter “***” to designate ‘any warehouse’

Actual shipping warehouse for the order - field 3

You can enter an actual warehouse code or you can enter “***” to designate ‘any warehouse’. This is only legal with ‘***’ in field 2, to

designate ‘any warehouse’ where the default and actual warehouse is the same.

You can also enter “###” in conjunction with “***’ in field 2 to designate ‘any warehouse’, where the default and actual shipping warehouse is not the same.

Pay Method for the order (COD, CCARD, or open account) – field 4

Backorder Shipment (Y/N) – field 5

Qualifying valuation method – field 8

AV – Total order value (qualifying and non qualifying parts)

AC – Total order unit count (qualifying and non qualifying parts)

TV – Total order value (both unit and dollar qualifying parts)

TC – Total order unit count (both unit and dollar qualifying parts)

MV – Total value of parts eligible based on $ value

MC – Total unit count of parts eligible based on $ value

UV – Total value of parts eligible based on unit count

UC – Total unit count of parts eligible based on unit count

Qualifying value – field 9

This is the dollar amount or unit count that has to be reached to satisfy the rule.

For each rule you must specify the desired freight action in the following fields:

Amount or add-on % - field 10

This is the dollar amount or percentage of the qualifying order value to add when the rule is satisfied.

DC code (with /S or /D) – field 11

This is the DC to use for the freight charge. If you specify ‘/S’, the value in field 10 is used as a dollar amount. If you specify ‘/D’, the value in field 10 is used as a percentage.

Add ‘Actual Charges’ message – field 12

When this field is set to “Y”, then the message ‘Add actual freight charges’ is printed on the order (any values in field 10 and 11 will be ignored).

You can change the text of the message printed on the order by defining a different message in a GS codes record with the key ‘MSG_ADDFRT’ or ‘MSG_ADDFRT_www’ (where ‘www’ is the ship warehouse).

When this field is set to ‘N’ the values in fields 10 and 11 apply. If the value in field 10 is zero, no freight is added to the order and the order option ‘H’ is set. This prevents manifest systems that are programmed to handle freight based on the order option field from adding freight.

You can exempt specified product codes from the rule, and specify a different freight action for these product codes by populating the following fields as needed:

Product Codes – fields 13, 17, 21, and 25+29

Enter the product codes (separated by commas) that you want to exempt from the basic rule. If you have more product codes than will fit in the available fields, you can create one or more GS codes record(s) with the key ‘FRT_POLICY_PRDxy’ where you enter the product codes to be exempted and then enter ‘FRT_POLICY_PRDx’ in fields 13, 17, 21, or 25 of the PF codes record (see Appendix A for detailed setup of the FRT_POLICY_PRDxy record(s).

Amount or add-on % - fields 14, 18, 22, and 26

This is the dollar amount or percentage of order value to add as freight if any of these product lines appear on the order.

DC code (with /S or /D) – fields 15, 19, 23, and 27

This is the DC to use for the freight charge. If you specify ‘/S’, the value in field 10 is used as a dollar amount. If you specify ‘/D’, the value in field 10 is used as a percentage.

Add ‘Actual Charges’ message – fields 16, 20, 24, and 28

If this field is set to “Y”, then the message ‘Add actual freight charges’ is printed on the order. You can change the text of the message printed on the order by defining a different message in a GS codes record with the key ‘MSG_FRT’.

If this field is set to ‘N’ the values in fields 14, 18, 22, and 26 and fields 15, 19, 23, and 27 respectively, apply.

Certain values in the ‘Amount or add-on%’ fields result in special freight action if the DC codes has the ‘/S’ qualifier.

A value of -100 causes no freight to be added, and it turns off the ‘H’ order option (freight added) and the ‘P’ order option (prepaid). This is used when you want to add actual freight, but you don’t want the message ‘Add actual freight’ to appear on the order.

Any other negative value causes no freight to be added and it turns on the ‘P’ order option (prepaid), but it does not print the ‘Prepaid’ message on the order.

The PF rules are checked in the priority sequence you specify in field 32 of the FT codes record. You enter the appropriate Valuation Methods, separated by commas in the order in which you want them checked (i.e. ‘UC, MV)

With the above example the program will check if the total qualified unit count (UC) for the order satisfies any of the UC rules. If it does, take the associated freight action and check no further.

If it does not, go on to check if the qualified dollar value (MV) of the order satisfies any of the MV rules. If it does, take the associated freight action and check no further.

If no matching UC or MV is found, no freight is added to the order and the order option ‘H’ is not set, which will cause manifesting to add actual freight.

If you want to be sure that some freight action other than actual freight is taken when none of the UC or MV rules matches, you must define MV rule with a qualifying amount of zero and take the desired freight action in that rule, or generally stated, must define a rule with zero qualifying value for the last Valuation Method in the priority list to avoid the default to actual freight when none of the rules match the order.

The rules for each Valuation Method are first checked using the actual warehouses for the order. If no match is found, the ‘wildcard’ characters (‘***’ and ‘###”) are substituted for the actual warehouses to check if a matching rule exists. If no match is found here either, then the process moves to the next valuation method.

To further elaborate on this example, lets assume that you have engines set up to qualify by units and parts are set up to qualify on dollars.

You have a UC rule that states ‘an order with a single unit goes out ‘actual freight’ and you have a MV rule that states ‘an order with more than $200 in parts goes prepaid’.

If you have an actual order with one engine and $250 in parts, and the priority is set to “UC, MV”, the order will go out actual freight because the UC method is checked first and the order satisfies the rule.

If you had the priority set to ‘MV,UC’, the order would go prepaid, because MV is checked first and the order satisfies the $200 MV rule.

Notes on Backorders under type 4 freight terms

Backorders do not retain the characteristics of the original order (qualifying/non-qualifying).

When backorders are released in a separate backorder release (not part of a current order) they freight rules are established according to the rules defined for backorders. Backorders to be released are combined on a single ticket, unless separate tickets are dictated (i.e. different terms) and the resulting order is evaluated based on the rules established for backorders.

If a backorder is released as part of a current ticket, the freight rules are determined by the current order. The value of the backorder(s) is not considered for this purpose, so if the current order qualifies then the backorders qualify. If the current order does not qualify, the backorders don’t qualify either.

Appendix A

Exemption of Product codes from the basic rule of PF records.

CODIS provides a GS Codes record to define groups of product codes that are exempt from the basic rule defined in a PF codes record.

Although you can put the product codes to exempt directly into the appropriate fields in the PF codes record, you should use this ‘string’ codes record to define the exempted product codes, because when you add or delete a product code you have to make that change only once instead of changing every PF record.

The key to this GS codes record is FRT_POLICY_PRDxy, where ‘x’ is a group code and ‘y’ is a sequence number to handle more than one record for the same group. The data portion of this codes record contains the product codes separated by commas. You can define up to 59 product codes in each record, but you may want to define multiple records with fewer product codes, which makes it easier when you have to make changes.

Assume that you want to exempt 50 product codes. You decide to define them as group ‘A’ and to put 20 product codes into each record.

You create three GS codes records FRT_POLICY_PRDA1, FRT_POLICY_PRDA2, and FRT_POLICY_PRDA3. You put 20 product codes into the first two records and 10 product codes into the third record.

In the PF records where you want to exempt this group of product codes you would put ‘FRT_POLICY_PRDA’ into field 13.

Usage of the Ship Via (SH) Codes record.

The freight policy code which is the primary identifier for a set of PF rules (field 6 in the PF record) is placed into field 9 of the SH code record to which the rules apply.

If field 9 of the SH codes record contains ‘NC’ or ‘WC’ no freight is added and order option ‘H’ is set for an order that is shipped via this SH method, regardless of the customer’s freight terms. This would normally be used with SH records for ‘Customer Pick Up’, ‘Will Call’.

Field 15 of the SH record ‘Disallow type 1 freight terms’ should be set to ‘Y’ if you don’t want the freight policy to apply to this ship method. You will likely want to do this for ‘premium’ ship methods such as ‘Next Day Air’.