Visibility of charge hierarchy in SAP TM for tendering
In this blog post we talk about the freight tendering with SAP S/4HANA Transportation Management with focus on sending and receiving charge hierarchy during the tendering process. Freight tendering process is also explained in our SAP application documentation which you can find here.
At the time of creation of a tendering plan, you would be interested in proposing a price limit to the involved parties (carriers). The price limit can be an absolute price limit or charge hierarchy.
- Absolute Price Limit
Total amount is sent to the carriers as price limit via EDI message.
- Charge Hierarchy
Complete charge hierarchy created during the charge calculation is sent out to the carriers via EDI message. You can view the charge hierarchy before publishing your tender.
Note: Instead of using EDI messages, also the FIORI carrier collaboration app could be used by the carrier representative.
The pre-requisite steps for using charge hierarchy during tendering process are also explained in the documentation link: Calculation of Price Limits.
You start by creation of tendering plan. Important thing to note if you want to enable charge hierarchy is highlighted in the following screenshot.
Price Details can be set to ‘Charge Hierarchy’ which specifies that you would want to transmit and receive price limit using complete charge hierarchy.
Carrier specific freight agreement indicator specifies whether you would want charge calculation engine to use existing freight agreements between involved parties in tendering plan and requesting organisation.
Action “Propose -> Price Limit” performs the charge calculation for the involved parties in the tendering plan. This step is mandatory before you publish the tendering plan.
Post this step you publish the tendering plan. This shall send request to carrier as an EDI message as shown below which comprises of transportation charges.
Carrier would then receive the request for quote and shall be able to send a quote using the same hierarchy of charges to confirm their participation as long as visibility settings in your tendering plan allows carrier to make proposal to the price limit.
The quotations can then be evaluated and awarded as per normal process. Once awarding is done, the charges proposed by carrier are copied to the freight order charges.
With the steps described above, you can communicate your charges structure to the carriers during the tendering process. This would allow you to also receive quotations in the same charges structure if you allow your carriers to respond with deviating price limits.
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