Advantages of SAP TM being embedded in 1709 release of S/4HANA
SAP is merging several of its applications in S/4HANA as highlighted in one of my previous blogs in URL https://blogs.sap.com/2015/11/05/hana-journey-and-features-of-scm-products-in-s4-hana-simple-logistics/.
SAP ECC LE-TRA provides transportation planning, shipment creation & execution, shipment cost calculation for logistic transportation processes. However, it does not meet today’s requirement for complex distribution scenarios for several customers/industries. SAP introduced TM (transportation management) some years back to cater to the challenges with distribution with increasing pressure on optimization of resources and reduction of freight cost.
SAP TM provides the following functionalities which are much advanced or not feasible in ECC LE-TRA
- Sales order scheduling: LE-TRA is based on delivery only i.e not at sales order level. ATP (Available to promise) function provides material availability date (MAD) and transit time is added to MAD to determine the delivery date at customer’s premises (site/warehouse). Determination of transit days is quite static with route scheduling of LE-TRA. However, SAP TM can consider non-availability of trucks, departure schedule for ocean ships etc in its scheduling.
- Transportation planning: SAP TM provides advanced planning options (like map based planning, route & capacity optimization) with improved resource utilization, reduced freight cost ensuring on time delivery w.r.t LE-TRA. SAP TM can consider non-availability of resources, incompatibilities (milk and pesticides can not be transported together), constraints (huge machinery to transported through the specific vehicle or port) etc.
- Selection of carriers: Determination of carrier in LE-TRA is very basic (like the default of Forwarding agent as a partner in customer or stage of shipment). SAP TM provides very extensive functionalities for selection of carrier based on cost, priority, allocations, business shares etc.
- Combination of inbound and outbound deliveries in a shipment: Outbound delivery and inbound delivery can not be combined in shipment in LE-TRA as the shipment types (hence shipment) are different for inbound and outbound shipments. However, SAP TM has no such limitation.
- Calculation of cost: SAP TM provides advanced charge management. Calculation of freight cost is also possible during transportation planning.
Many customers have developed their own custom solution on top of ECC (or as an extension to ECC) or may have implemented SAP TM as a separate application. SAP is now embedding SAP TM in 1709 release of S/4HANA and has also declared that ECC LE-TRA (Logistic execution – Transportation) will be obsolete by 2025. Hence, SAP recommends migrating to embedded TM for customers using LE-TRA to avail the advanced TM functionalities (Note that core TM functionalities are included in S/4HANA license, additional license fees need to be paid for advanced TM functionalities).
Embedded TM also will provide some IT and functional benefits w.r.t standalone SAP TM due to
- No requirement to transfer master data to TM (and hence CIF is not needed)
- No duplication of certain configuration object and transaction document
- Reduced data base foot print
- Lower TCO (Total cost of ownership)
Process in embedded TM also is also expected to be simplified w.r.t standalone TM as in below figure for integration of outbound delivery.
Note that this blog is being written before the formal release of S/4HANA 1709. The benefits highlighted for embedded TM and the above simplification in distribution process are based on my experience with embedded EWM (as released S/4HANA 1610) and standalone SAP TM. Hence, the actual benefits and the business processes may differ to some extent in embedded TM. Also, the content of this blog corresponds to Shipper functionalities of SAP TM (i.e not for LSP).
Hope, this blog gives some idea of the advantages of SAP TM being embedded in S/4HANA. Will appreciate your comments/feedback.
Gr8 sharing Mrinal.
Besides making the master data maintainance easy, simplifying the existing End-to-End process, Embedded TM in S4HANA1709 opens up doors to new business scenarios.
The New Innovations in S41709 & 1809 plus makes extensive use of this base that gets generated with ECC, EWM, TM, Industry-to-core, MDG coming into ONE powerful application.
This base when combined with MachineLearning capabilities and IOT scenarios lead to Predective Operations, reducing risks, increasing assurance and commitments across various processess.
Thanks Monika for your comments.
Yes, SAP Leonardo opens up new avenues for digital transformation. Business also needs to come forward with their specific need for new business models which will require IOT, ML etc.
For those customers who today have more than one SAP ERP system integrated into a single TM installation, what would an embedded TM solution look like if that customer were to have two S/4HANA systems? How would/could they use a single TM solution?
As far as I know (Let someone from SAP also confirm it), it will be possible to connect or interface multiple S/4HANA systems with a standalone TM (similar to the decentralized deployment of EWM even if EWM has been embedded in S/4HANA 1610 release).
S/4HANA TM 1709 integrates only into the embedded logistics applications in S/4HANA and is not yet released for “hub scenarios” where it can receive and process transportation requirements from other ERP or S/4HANA instances (side by side).
There will be some benefits with the merger of SAP TM in S/4HANA. However, we need to wait for some more release/s for Hub scenarios (as you stated). Many customers are also looking for seamless integration of embedded TM with embedded EWM (expected in next release in 2018).
SAP is very clear on their vision and roadmap.Let's see.
Would decentralized SAP TM be phasing out by 2025 as embedded TM gets matured? Does SAP have such plans?
As far I understand, standalone TM will be continued for customers willing to connect to a single TM application for their S/4HANA instances.
I meant "their multiple S/4HANA instances".
Thank you Mrinal
Good blog Mrinal.. Thanks.
Thanks for sharing your findings Mrinal. I am familiar with LE-TRA, but not SAP TM and am now trying to understand if what is referred to now as 'Basic Shipping' in S/4 HANA 1709, can offer advantages over what was in LE-TRA in ECC without the need for the additional licensing associated with the rest of what seems to be called 'Transportation Management'. We have customers who are on fixed route schedules, e.g., customer ABC is one of 30 customers who get a delivery every Mon/Wed/Fri on the NW route, customer XYZ gets a delivery every Tues/Thur/Sat perhaps on the same route. Using routes/schedules as selection criteria to create a shipment which equates to a truck delivering on that route on a particular day is a good match for that. I understand that a Freight order is the SAP TM replacement for the concept of a shipment. But, and this is the question, what is the SAP TM and now possibly 'Basic Shipping' equivalent of a route and route schedule for selecting orders/deliveries to be grouped in a Freight Order? I'm struggling to get an answer from various resources on this one ! Would be great if you have any thoughts on this?
SAP plans to provide 'Feature parity' for LE-TM with Basix shipping of S/4HANA TM. Freight order is equivalent to 'Shipment' of LE-TRA. As a part of Basic shipping , Freight order needs to be created manually and then the freight units (equivalent to delivery of LE-TRA) needs to be assigned to freight order.
Sales order scheduling is still not available in embedded TM and hence route etc still continues in S/4HANA.
Hope it clarifies your queries.
I have a query with regards to Basic Shipping(Embedded SAP TM); How can the Sales orders be confirmed with a promised delivery date to a customer - when all the route scheduling happens at a FO level- with no optimizer feature available in Basic Shipping?
Great Blog Mrinal. I appreciate sharing the information.
I am bit confused with LE-TM for Basic Shipping. In our landscape, currently we have businesses using LE-TRA and TM.
Do you see LE-TM as replace for LE-TRA, S/4 Hana TM for TM? Are these two components are different?. I am assuming that it is same S/4 Hana TM which caters to both Basic Shipping & Advanced Functionality.
Any thoughts on this would be greatful.
There will be no User right for LE-TRA after 2025 and hence SAP's recommendation is to use 'Basic' TM within S/4HANA. SAP will provide feature parity in 'Basic' TM for LE-TRA. Additional license is needed to use embedded 'Advanced' TM.
Hope , I am able to clarify.
where you can find the installation, configuration and user guides?