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Author's profile photo Michael Haase

Assignment of incoterm locations in SAP TM

Dear friends of SAP TM,

Incoterms and incoterm locations play an important role during transportation planning. In an integration scenario with SAP TM and SD, MM or LE, the incoterms and incoterm locations are defined i.e. in the sales order or purchase order. In SAP TM, those might then be considered during freight unit building by adding an additional stop at the requested location, if required.

But there’s one issue…the locations used in SAP TM are not known in SD, MM and LE. So, in the sales order/purchase order/..  you can only maintain your incoterm locations as free text and afterwards some mapping to a ‘TM-location’ needs to be in place.

With the following example, we will take a look at this in detail.

At first, we maintain the relation between the ‘free text location’ and the ‘TM-location’ (transaction /SCMTMS/INCLOC_MAP):

Hereby, the location ZMHA_HUB has been created upfront in the location master:

Now, let’s create a regular sales order:

Here, incoterm EXW is maintained with the incoterm location ‘My Hub’. In other words…the goods to be transported are to be picked up at location ‘My Hub’.

Usually, this information is maintained at the business partner and then automatically taken over:

When we now integrate this sales order with SAP TM, the following freight unit is created:

You see, the incoterm and incoterm location have been taken over to the freight unit as maintained in the sales order

But furthermore, one additional stage has been created with a stop at the incoterm location:

For our example, this makes perfect sense, because the goods to be transported have at first to be carried from the shipping point ‘SP_TM84.’ to the hub ‘ZMHA_HUB’. And from there, it can be picked up and transported to the customer ‘TM84_BP_DUE’, just as the incoterm EXW implies.

It’s important to mention, that the consideration of incoterm locations in freight unit stage building is dependent on some settings in customizing. So, dependent on those settings, the stage building for this example might well look different. This is surely worth another blog post.

Finally, here are some additional remarks:

  • As the incoterm location in SD, MM and LE is free text, be careful to maintain it correctly when assigning the location, i.e. regarding spaces etc.
  • For some incoterms, no additional stage is necessary. So when you miss a stop in the freight unit, check at first, if it’s really required. And of course the mentioned settings in customizing are important.

I hope you enjoyed reading this. Please feel free to comment!

Best regards,

Michael

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      Author's profile photo Alberto Yubero
      Alberto Yubero

      Hi Michael,

      Thanks for the blog entry. We were wondering if it would be possible in upcoming versions to add  in the SD, MM, LE Incoterm location entry a matchcode linked to the Incoterm Locations (the TM locations) maintained the transaction /SCMTMS/INCLOC_MAP. We find that the free text sometimes is not populated with the correct text, hence the integration fails.

      Best regards,

      Alberto

      Author's profile photo Michael Haase
      Michael Haase
      Blog Post Author

      Hi Alberto,

      Thanks for your comment!

      Your point is very relevant and we know that this is certainly a point with potential for optimization, making the integration with TM a bit more smoothly. But I kindly ask for your understanding that I can't comment on functionality in any future release not being published yet, no matter if there are such plans for optimization or if there aren't.

      Best regards,

      Michael

      Author's profile photo Alberto Yubero
      Alberto Yubero

      Hi Michael,

      I understand your point and thank you for your prompt reply.

      Best regards,

      Alberto

      Author's profile photo Adi Mogilevsky
      Adi Mogilevsky

      Hi Michael

      could we add a capacity constraint to the SD location? for example the restrain of 10 ton of a bulk material could be stored in it for FOB and 12 ton for CIF?

      also how will you direct the truck to pick up either from location A or location B inside the yard from the gate in such case?

      tbis should be somehow mentioned in sales order since delivery will be created after freight order - am I correct ?

      Adi

      Author's profile photo Michael Haase
      Michael Haase
      Blog Post Author

      Hi Adi,

      For the capacity constraint, I would rather go for making two items out of them.

      And for the picking up of the truck, there are various possibilities i.e. depending whether an EWM is used.

      But I'm not the expert for those topics and this surely needs to be analyzed deeper.

      Best regards,

      Michael

      Author's profile photo Adi Mogilevsky
      Adi Mogilevsky

      Hi Maichael

      You have mentioned two items - do you mean 2 product codes?

      We are in continious manufacturing, i.e. Cement, so thsi is the same product code in 2 silos (interexchangeable )

      WM will be may be overkill and the Yard Management too.

      I assumed if there is some simple solution, e.g. Store Room, etc, which will be included in Product Allocation, and the transport trucks, etc.

      What is teh integration between Bin and Freight Unit