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.