SAP Transportation Management
Basic use of Incoterm
in SAP TM
Incoterms are intended to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. They define a contractual agreement between shipper and consignee to determine who is responsible for which stage of the transport and where and when the responsibilities of each partner start and end.
Some of these incoterms require a location, at which tasks, costs, and risks are transferred from the shipper to the consignee. The incoterm location is the place where the goods are physically handed over and where the responsibilities for the goods change. The incoterm location is a master data location in TM and can be used for routing purposes.
Incoterms is Mandatory in Standard SAP
CIF indicates Location Mandatory in the configuration
Incoterm and Location from the Customer BP Sales Area Billing Tab is written to the Sales Order item “Billing Doc” Tab
In TM, user can build stages based on the incoterm location. The Incoterm Location Stage Building field in the logistics integration profile customizing defines how stages are built based on source location, incoterm location, and destination location. The system uses the incoterm location for stage building if the incoterm has set the Incoterm Location flag (a flag that indicates that you must enter a location with this incoterm). If no incoterm is specified, the system does not use the incoterm location for stage building and the system creates only one stage from the source to the destination location. If an incoterm is specified but this incoterm has not set the Incoterm Location flag, the system does not use the incoterm location for stage building. Instead, the system creates only one stage from the source to the destination location.
In TM, user can build stages based on the incoterm location. The Incoterm Location Stage Building field in the logistics integration profile customizing defines how stages are built based on source location, incoterm location, and destination location. The system uses the incoterm location for stage building if the incoterm has set the Incoterm Location flag (a flag that indicates that you must enter a location with this incoterm). If no incoterm is specified, the system does not use the incoterm location for stage building and the system creates only one stage from the source to the destination location. If an incoterm is specified but this incoterm has not set the Incoterm Location flag, the system does not use the incoterm location for stage building. Instead, the system creates only one stage from the source to the destination location.
In order to use the Incoterm as a criteria for Stage Building, Location must be set Mandatory for the Incoterms
Sales Order Type ZTMB
Outbound Delivery Type TMLF
Customer
TMBS00-01
Shipping Condition 03
Shipping Point 1010
Control Key 053 (relevant of Outbound Delivery)
Logistics Integration Profile S4TM
Material
TM-MAT-01
Loading Group
0001
Delivery Plant
1010
Freight Unit Type BS00
Logistics Integration Profile set with the Incoterm Location Stage Building Rule can be used to determin how Stage is created in the Freight Unit
Customer
TMBS00-01
Shipping Condition 03
Shipping Point 1010
Control Key 053 (relevant of Outbound Delivery)
Logistics Integration Profile S4TM
Material
TM-MAT-01
Loading Group
0001
Delivery Plant
1010
Outbound Delivery Type TMLF
Check “Transportation Relevancy Blog Post” for Details
The following stage building rules are possible:
This setting is set as default. Two planning-relevant stages are created.
One stage from the source to the incoterm location is created.
Two stages are created:
One stage from the incoterm location to the destination. This is relevant, for example, for the consignee who plans only the route from Incoterm location to the goods receipt.
Two stages are created:
Two planning-relevant stages are created.
Scenario Demo for these Strategies will be done in a later Blog Posts
Business Partner TMBS00-01
assigned with
Incoterms “FH” and Location “Walldorf”
BUT
Incoterms “FH” not set with Location Mandatory
Incoterm Loc. Stage Building set with “Two Activate Stages based on Incoterm Location 1”
BUT
the previous slide “FH” not set with Location Mandatory, the RULE says if “LOC”flag not set, the system does not use the incoterm location for stage building, instead the system will create only ONE Stage from the Source to the Destination Location.
Incoterm Loc. Stage Building set with “Two Activate Stages based on Incoterm Location 1”
BUT
the previous slide “FH” not set with Location Mandatory, the RULE says if “LOC”flag not set, the system does not use the incoterm location for stage building, instead the system will create only ONE Stage from the Source to the Destination Location.
When Location is Not Mandatory
The following stage building rules are possible:
This setting is set as default. Two planning-relevant stages are created.
One stage from the source to the incoterm location is created.
Two stages are created:
One stage from the incoterm location to the destination. This is relevant, for example, for the consignee who plans only the route from Incoterm location to the goods receipt.
Two stages are created:
Two planning-relevant stages are created.
When Location is Not relevant