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Blog Series – SAP S/4 HANA 1709 Supply Chain for Transportation Management – 02 – Logistics Execution and SAP Best Practices for Basic Shipping scenarios

In the previous blog, most of the discussion was around differences between embedded TM (SAP S/4 HANA Supply Chain for Transportation Management) and standalone/decentralized TM (Business Suite SAP TM 9.5).  However, the old SAP Logistics Execution Transportation is (LE-TRA) is in the process of getting phased out. As per SAP simplification document, LE-TRA is not the target architecture within SAP S/4 HANA and the recommendation is to use Transportation Management (SAP TM). Even though LE-TRA functionality is still available within the SAP S/4 HANA, this is not considered as future technology. A similar recommendation is provided for LE-WM (use eWM instead). So, it is important to understand the SAP recommendation and how to use SAP TM for basic shipping process also.

Since SAP recommendation is to use SAP TM even for basic shipping process, it is advisable to move from LE-TRA to SAP TM. SAP may not introduce any new functionality in LE-TRA module. So, the clients who are in SAP LE-TRA cannot expect the LE-TRA module to have the new functionalities. For example, few years before LTL carriers in US introduced Dimensional(DIM) weight rule in road transportation. In LE-TRA, DIM weight calculation is not straight forward for road transportation. However, SAP TM has this functionality and it is much easier to use DIM weight logic in TM. Almost all the new functionalities, which cater to new requirements in transportation process, are introduced only in TM. So, if the customer uses LE-TRA and wants these functionalities, they may have to custom develop these using the internal IT team.

Secondly, it makes sense from a product perspective not to duplicate the functionalities across various products. So, SAP is consolidating all the functionalities of transportation across various modules (LE-TRA, TPVS etc…) into one single product – TM. As a result of this architecture, it is natural to phase out the old, redundant and outdated modules (for example LE-TRA, TPVS).

Licensing and basic shipping

Embedded TM (SAP S/4 HANA Supply Chain for Transportation Management) is the future of SAP TM and it has almost all the functionalities which were available across various TM products of SAP. Since LE-TRA is getting phased out, the functions might have to be realized differently in embedded TM. However, when SAP used to sell ECC licenses, it included LE-TRA. SAP TM licenses were sold separately (based on freight spend). Hence, it is a genuine demand from customers to have some basic shipping functionality along with the core ERP (S/4 HANA) product license. For this SAP has split the functionalities of the embedded TM (SAP S/4 HANA Supply Chain for Transportation Management) as basic and professional TM. The functionalities in embedded TM which are used to establish the LE-TRA processes are considered as ‘Basic Shipping’. Some of the functionalities of basic shipping includes:

  • Main part of transportation network,
  • Basic transportation planning using POWLs
  • Transportation execution without event management
  • Freight settlement management
  • Freight agreements
  • Charge management
  • Basic agency billing
  • Direct tendering to carriers
  • TM output management

For example, in LE-TRA, it was possible to calculate the freight cost in shipment cost document. Hence, the basic freight agreement with standard rate structure along with freight settlement document is considered as basic shipping. Similar explanations are available for other functionalities.

‘Professional Shipping’ section of the embedded TM includes those functionalities which were not available in LE-TRA. So, additional licensing is required to use these functionalities. This is similar to the additional licensing requirement, when customers use SAP TM 9.5 (in a decentralized architecture). Some of the functionalities of ‘Professional Shipping’ includes:

  • Optimizer planning
  • Package Building
  • Load planning
  • Transportation proposal
  • Forwarding order management
  • Forwarding settlement
  • Strategic Freight Procurement
  • Driver management
  • Integration with EM, LBN, GTT etc…

For example, in LE-TRA it was not possible to have package building, load planning or optimizer planning. Customers used to connect to other third-party systems or decentralized SAP TM to have these functionalities. Hence, these functionalities are categorized as processional shipping which comes with additional license cost.

Above diagram is used by SAP to detail the technical and process view of transportation management. In 1709, technically both LE-TRA and S/4 HANA embedded TM are available. Hence, the basic shipping process can be achieved via both LE-TRA or S/4 HANA TM. However, post 2025, there may not be any LE-TRA component, and the basic shipping process should be realized only via S/4 HANA TM. So, if LE-TRA is used to realize basic shipping process, then it will be difficult to upgrade the system to new versions in the future. So, it is important to understand how the basic shipping process is realized via basic shipping functionality of embedded TM (which was previously realized via LE-TRA).

Best Practices

Recently SAP has released a note ‘2535942 – SAP Best Practices for Transportation Management in S/4 HANA 1709 on premise’ which contains the links to other notes which details the best practices of transportation management. Currently there are two notes available in this document.

  • 2563537 – SAP Best Practices for Transportation Management in S/4HANA – Outbound Transportation (Basic Shipping Scenario)
  • 2563425 – SAP Best Practices for Transportation Management in S/4HANA – Stock Transport Orders (Basic Shipping Scenario)

These two notes detail how the outbound and STO transportation process can be realized using basic shipping functionality of embedded TM. These notes have process flow diagrams, configuration documents and master data guides. These can be used to configure and set up the transportation processes without using the LE-TRA component. It is clear from the documentation, how the processes are realized differently in embedded TM without using the professional shipping functionality. These documents can be used in ‘Fit-to-Standard’ workshops as per the new ACTIVATE methodology. Similarly, other basic shipping processes such as the return order scenario, purchase order scenario etc… can be designed.  Moreover, TM public cloud is in the road map to be released in 2019 and the knowledge of these best practice scenarios are very important to realize/implement various processes.

Hence, for new implementations the recommendation is to use S/4 HANA TM basic shipping functionalities to achieve the basic shipping processes. It is expected that SAP will release more best practice notes and there will be enough documentation to achieve basic shipping processes via embedded TM functionality (without any additional license cost).

Link to the other blogs:

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