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OUTBOUND DELIVERY LE-TRA

Transportation Management - SD

Overview Transportation is an essential element in the logistics chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensure that shipments are dispatched without delay and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down. Effective Transportation can be used in all the industries where the shipment costs play a major role and are borne by the organization. Reducing the shipment cost in turn reduces the delivering cost of the product.

Business Process: An Organization has already implemented SAP and is now willing to implement the Transportation Module in order to ensure the timely delivery to the customer and reduce shipment costs. The business process to be implemented is as shown in the figure below.

Terminology: Mentioned below are some important terms used in Description Transportation: SAP Terminology Forwarding Agent

Agent who provides the transportation

Transportation Planning Point

Org. unit responsible for planning shipments with particular features. E.g.: A company has different groups of shipping personnel responsible for organizing shipments by train or ship

Shipment Document

The document containing the details of the deliveries, service agents, routes, stages, planning and execution times.

Shipment Type

Shipment types contain all the essential control features for the shipment document such as number ranges, service level, and output and partner determination.

Routes

The route determines the itinerary and the means of transport in shipping, and influences transportation scheduling.

Shipment Cost Document

The shipment cost document is the used for shipment cost processing. It contains the details related to accounting and the cost calculations.

Shipment cost type and item categories

Shipment cost types and item categories contain all the important control features for the shipment cost document, such as number range, status requirements for the shipment documents, and parameters for shipment costing, parameters for shipment settlement.

Prerequisites: Master Data: Purchase Order is created for Vendor if the weekly or monthly orders are not created during the transaction by the system. Relevant pricing conditions are maintained. Customization:        

Transportation Relevance is marked for Delivery type, Delivery Item Type, Route. Route Determination is active. Route is determined in the delivery document. Shipment types are created as desired. Shipment pricing procedure is in place. Shipment cost types are created and assigned to shipment types. Purchasing Data is assigned. G/L Account assignments are done.

Inbound & Outbound Transportation process:

Outbound shipments are part of the Sales and Distribution (SD) process and are processed based on outbound deliveries. The basis of the Sales and Distribution process is the sales order. The subsequent document is the outbound delivery, which documents the shipping of the goods. The outbound delivery is the basis for creating the outbound shipment that is, transporting the goods from the company’s plant to the customer. The goods issue is posted and the invoice is created. Shipments can also be used for stock transfers between plants.

Customization required for Outbound Transportation process  Maintain Transportation Planning Point The transportation planning point represents a group of employees responsible for organizing transportation activities. Each shipment is assigned to a specific transportation planning point for transportation planning and shipment completion Note: The transportation planning point is assigned to a company code, but is otherwise independent of other organizational units. To create Transportation Planning Point: Go to T-Code “SPRO” Display IMG > Enterprise Structure > Definition > Logistics Execution > Maintain transportation planning point

Enter a four-character alphanumeric key with a description and an address.

Routes: In this step you maintain settings for routes.

Define Routes: In the following IMG activities, you define your routes. The route determines the itinerary and the means of transport in shipping, and influences transportation scheduling. For example, if the route includes rail transport, transportation scheduling may have to include the time required to reserve freight carriages. Using routes, you can combine sales order items according to shipping criteria. The system determines routes automatically for a sales order item and can repeat the procedure for a delivery In order to define routes, proceed as follows: 

Define the modes of transport.



Define the shipping types.



Define the transportation connection points and maintain the relevant data on the detail screen.



Define the routes and route stages.

You can also maintain the route stages for several stages. Define Modes of Transport In this activity, you define the modes of transport. Menu Path: Logistics Execution > Transport > Basic Transportation Functions > Routes > Define Routes > Define Modes of Transport

Activities 1. Check which modes of transport are relevant for your system. 2. Define the modes of transport by entering an alphanumeric key of maximum two digits as well as a text description. 3. Assign the mode of transport to a mode-of-transport type. The mode-of-transport type serves for classification of modes of transport in dangerous goods management. Define Shipping Type: In this activity, you define the shipping types in combination with the mode of transport. The shipping types can include the following: 

Truck



Truck with trailer



Plane



Ship

Menu Path: Logistics Execution > Transport > Basic Transportation Functions > Routes > Define Routes > Define Shipping types

Activities 1. Define the shipping types. Enter an alphanumeric key of maximum two digits as well as a text description. 2. Assign one or several modes of transport to each shipping type. 3. Assign the shipping types to a shipping type group, which serves to determine the pricing procedure for calculating the shipping costs.

Defining Transportation Zones Define the transportation zones to specify all the regions that you plan to cover with your routes. Routes will flow from a departure zone to a destination zone. IMG ➢ Logistics Execution ➢ Shipping ➢ Basic Shipping Functions ➢ Routes ➢ Route Determination ➢ Define Transportation Zones.

Here you can select a country and define transportation zones with a meaningful description. The zones you set up here will be used in the master data. The location of each customer and vendor will be identified using the Transportation Zone field on the Address tab in the customer (or vendor) master record.

You can also specify the zones for each of your shipping points by following the menu path IMG ➢ Logistics Execution ➢ Shipping ➢ Basic Shipping Functions ➢Routes ➢ Route Determination ➢ Maintain Country And Transportation Zone For Shipping Point.

Select the shipping point, and specify the country and transportation zone. Creating Transportation Groups A transportation group combines all materials that share the same transportation requirements. For example, you can group all liquids into a transportation group that requires special tankers for transport. IMG ➢ Logistics Execution ➢ Shipping ➢ Basic Shipping Functions ➢Routes ➢ Route Determination ➢ Define Transportation Groups.

Setting Up Weight Groups If the exact weight of the delivery plays a role in route determination in your organization, you can set up weight groups in SAP by following the menu path IMG ➢ Logistics Execution ➢ Shipping ➢ Basic Shipping Functions ➢Routes ➢ Route Determination ➢ Define Weight Groups.

Maintain Weight Group; create a new weight group with a meaningful description. From the navigation menu on the left, you can go to Maintain Details For Weight Group. On this screen, you can specify the maximum weight that is allowed in each weight group. At the time of delivery creation, the system will take into account the weight and then determine an appropriate route. This is an optional setting. If you choose not to use it, route determination will take place in the sales order and be copied into the deliveries.

Define Routes and Assigning Routes In this work step you define routes and route stages. You also have the option of maintaining the transportation connection point from here. Definition of routes Activities To define the routes, proceed as follows: 1. Check which routes are relevant for you? 2. Define the routes. Enter an alphanumeric key of maximum 6 digits length. Also enter a text description for each route. 3. If necessary, enter further data for your route. This data includes: o Shipping type You can assign a shipping type to the route, to the preliminary leg, and to the subsequent leg. o Transportation service agent o Transit time o Transit planning lead time o Factory calendar, work time Note: You must have already defined the factory calendar before you can work with it. Driving time (transit time minus breaks, distance) o You can assign a mode of transport to the routes for processing export activities. For information on this. The path to set up routes is as follows: IMG ➢ Logistics Execution ➢ Shipping ➢Basic Shipping Functions ➢ Routes ➢ Define Routes ➢ Define Routes And Stages (transaction 0VTC).

This will bring you to an overview screen that lists all the routes that have been defined in the system. To define a new route, click New Entries, or copy from an existing route. Identify the new route with a unique number. Identification tab: Use these fields to add a meaningful description of the route. Processing tab: If the route is managed by a specific vendor, you can specify it in the Service Agent field. You can also fill in the Shipping Type field here. Scheduling tab: These are the important fields on the Scheduling tab: Transit Time: Transit Time is the total time taken for the goods to reach the customer following the route. It is specified in calendar days. The time entered here is taken into account for planning purposes and for determining the date on which the product will reach the customer. Trav.Dur: Travel Duration, expressed in hours, is a subset of the total transit time. It is the time taken for the actual travel along the route.

TransLdTm. Transportation Lead Time is the time needed for planning and arranging transportation. SAP uses it to arrive at the transportation planning date. It is specified in calendar days and in hours. When you have defined the attributes of the route, click the Route Stages tab in the left menu in Figure You will see a screen that looks like figure. On this screen, specify the departure and destination points from the list of transportation connection points defined earlier. Also specify the duration and shipping type details for each stage. Figure: Defining routes

Figure: Defining route stages

Determining Routes Automatic route determination is based on the following factors:    

Country/departure zone (picked up from the address of shipping point) Country/destination zone of the recipient (from the ship-to party address) Shipping condition Transportation group (from the material master)

In the case of deliveries, you can also add weight groups to the list of controlling factors, if that is applicable to your organization. The menu path for route determination is as follows: IMG ➢ Logistics Execution ➢Shipping ➢ Basic Shipping Functions ➢ Routes ➢ Route Determination ➢ Maintain Route Determination.

To set up a new record, enter the country and transportation zone of the source and destination locations. You can also specify generic routes between countries, leaving the Transportation Zone field blank. Click Route Determination Without Weight Group (Order), as shown in Figure 8.36, and then click the New Entries button. This enables you to specify a route for every combination of shipping condition and transportation group. Figure: Setting up route determination

You can also choose Route Determination With Weight Group (Deliveries) if it is applicable. During delivery creation, the routes will be re-determined based on the weight of the delivery. Note: The shipping condition comes from the customer master record of the sold-to-party, and the destination address (transportation zone) comes from the customer master record of the ship-to party.

Configuration of Shipments The following are the steps in the configuration of shipments. Maintain Transportation Relevance Before we move on to configuring shipment documents, we have to select the relevance to our business processes. To carry out this activity, the menu path IMG ➢Logistics Execution ➢ Transportation ➢ Shipments ➢ Maintain Transportation Relevance.

There are three activities listed here. Follow the sequence, and select the relevance of the following:   

Delivery Type Delivery Item Type Route

Figure shows the screen for marking delivery types relevant to transportation.

Set Up Transportation Planning Points

After you decide on transportation relevance, you need to configure the organizational elements that look after transportation. The shipment documents are created for a transportation planning point.

Define Shipment Type The shipment types represent the different forms of transportation processing in sales and distribution. The following forms of transportation processing are distinguished:  Individual shipment, one or more deliveries are transported by a single mode of transport from one point of departure to one final destination.  Collective shipment, one or more deliveries are transported by a single mode of transport from one or more points of departure to one or more final destinations.  Multimodal shipment, deliveries are transported by several modes of transport between one or more points of departure and one or more final destinations. IMG ➢ Logistics Execution ➢ Transportation ➢ Shipments ➢ Define Shipment Types.

Define a four-character alphanumeric code and description for the shipment type. Figure 8.42 shows some of the critical fields to be configured. Number Systems tab: On this tab, you can specify an internal and external number range for the shipment documents that will be created. This is identical to any other number range settings that we covered earlier. Document Content Perhaps this is the most important tab that defines the shipment type in detail. The following are some of the important settings on this tab: Shipment Completion Type The field Shipment Completion Type specifies the type of shipment being created. You can specify whether it is an inbound or outbound shipment and whether it is filled or empty. Shipping Type The field Shipping Type signifies whether the shipment will be by road or air or other means of transport. (We covered this when talking about route definition.) Process Control The field Process Control defines the way the shipment will be planned. The options here are as follows:    

Individual Shipment With Single Mode Of Transport Individual Shipment With Multi Mode Of Transport Collective Shipment With Single Mode Of Transport Collective Shipment With Multi Mode Of Transport

Figure: Defining Shipping Type

Leg Indicator: In the field Leg indicator, you can specify whether a leg is a direct leg of a shipment or whether it is a primary leg, mail leg, or subsequent leg of a transportation chain. If you select Direct Leg or Return Leg, the entire process will be carried out in a single shipment document. However, if you select Primary Leg, Main Leg, or Subsequent Leg, it will be a transportation chain with multiple shipments interlinked to complete the shipment. You can also specify the transportation type of the preliminary and subsequent legs through the fields ShTypePrelimLeg and SubseqLegShType. Determine Legs: Using the field Determine Legs, you can select a rule; based on this, the system then tries to structure the legs of the shipment. For example, if you choose type 1 (1: Legs Determined

according To Departure Point & Itinerary) for a collective shipment, leg determination will be carried out on the basis of the sequence of departures and destinations. In other words, assume there are two deliveries in a shipment. Both originate from the same shipping point, 9001, in Los Angeles. The first delivery is being sent to a customer in New York. The other is being shipped to New Jersey, which is near New York. The first leg of the journey is from Los Angeles to New York (carrying both the deliveries). After the first delivery is offloaded at the customer’s location, the subsequent leg is from New York to New Jersey (with the second delivery only). In the shipment document, if you click Leg Determination, the system will check the points of origin and destination of each delivery and automatically propose the stages of the journey. You can override or modify the proposal manually. Note that leg determination is not an optimization algorithm. Rather, it is a simple tool to help create legs on the basis of rules that you specify. Define and Assign Activity Profile You can use activity profiles to define which actions are to be performed once a shipment reaches a particular status. For example, once the shipment reaches “completion” status, the system should perform the goods issue activity for each of the constituent delivery documents. There is a provision to attach different activity profiles for each status of the shipment. To maintain and assign an activity profile, the path is IMG ➢Logistics Execution ➢ Transportation ➢ Shipments ➢Define And Assign Activity Profiles.

Select your shipment type. The columns in Figure denote the various statuses of a shipment document, such as check-in, completion, and so on. For each status, you can specify an activity profile. Select from the list of available profiles. To set up a new activity profile, enter a profile name, and click the Maintain button. Figure: Assigning activity profiles to shipment types

On the next screen (Figure 8.44), we have selected the post goods issue and billing options.

Figure: Defining activity profiles

Technically, the program RV56ABST is being called in this transaction. You can set the options on the selection screen of this program and save the variant for further use.

Define Shipment Cost types: Define Item Categories: Item Categories characterizes the control parameters for calculation and settlement for the shipment item. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢ Shipment Cost Document ➢ Shipment Cost Types and Item Categories.

Values of the field “Generate PO” Value Do not generate purchase order A B C

Description Generate purchase order for validity period of 1 day Generate purchase order for validity period of 1 week Generate purchase order for validity period of 1 month

Define Shipment Cost Type Shipment cost type defines the number ranges for the shipment cost documents and controls the minimum status after which the shipment cost can be calculated. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢ Shipment Cost Document ➢ Shipment Cost Types and Item Categories.

Assign Shipment Cost Type and item categories: IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢ Shipment Cost Document ➢ Shipment Cost Types and Item Categories.

Maintain Shipment cost relevance and default for shipment cost type: IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢ Shipment Cost Document ➢Shipment Cost ➢ Relevance and Default for Shipment Cost Type

In this node assign the shipment cost types to the shipment types and set an indicator to show whether the cost type is relevant to shipment costing. This needs to be done for every cost type. Define shipment cost relevance for shipment type IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢ Shipment Cost Document ➢Shipment Cost ➢ Shipment Cost Relevance and Default for Shipment Cost Type

This indicates the level at which the shipment costing needs to be done. E.g.: If “Header” is selected it indicates that shipment header is relevant for shipment costing.

Pricing Define and assign shipping type procedure group Shipping type procedure group is assigned to individual shipping type. Shipping type can be in the form of any means of transport. Shipping type procedure group is used in determining the shipment cost pricing procedure. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢ Define And Assign Pricing Procedures

In the following menu points you maintain the control elements that are needed for calculating the shipment costs in the shipment document. The standard SAP pricing/condition technique is used for the calculation along with shipment-specific factors and some additional functionality.

Define and assign item procedure group Item procedure group is assigned to individual shipment item categories. Item categories can be the type of cost which needs to be calculated and it defines the different characteristics to be considered while distributing the cost... Item procedure group is used in determining the shipment cost pricing procedure. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢ Define And Assign Pricing Procedures

Define Service Agent Procedure Group IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢ Define And Assign Pricing Procedures

Service agent procedure group is assigned to individual service agent when the vendor master data is created. Service agent procedure group is used in determining the shipment cost pricing procedure.

Maintain Condition Type: IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢Define Condition Type

The calculation type needs to be “D” in case for gross weight dependent, as required in this business case example. Keeping the calculation type as “D” ensures that the prices will be calculated based on the gross weight specified in the deliveries in the shipment document. Since the prices are service agent dependent the access sequence used is “DIEN” in this case.

Maintain Pricing Procedure IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢ Define And Assign Pricing Procedures

Shipment pricing procedure is same as the standard pricing procedure and uses condition technique to retrieve the data from condition tables.

Define Pricing Procedure Determination for Shipment Costs Based on the combination of Item category Determination group, Service Agent Procedure Group, Shipping Type Procedure Group, pricing procedure is determined. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Pricing ➢Pricing Control ➢ Define And Assign Pricing Procedures

Settlement Certain control elements must be maintained for calculating shipment costs with the transportation service agent and for forwarding of shipment costs to FI and CO. In the following IMG activity, you can maintain these control elements and carry out the corresponding assignments. Assign Purchasing Data This assignment plays an important role because based on these criteria the purchase orders for service agents are searched and are sued to create the service entry sheets with respect to PO. Search Procedure for the PO: For settlement, you must assign the organizational units in the shipment to the relevant organizational units in purchasing. These settings are necessary for creating accruals. The accruals are posted using service entry sheets. The purchasing organizational units are needed for service procurement. TPPt: Transportation planning point is taken from the shipment document SCTy: Shipment Cost type is taken from the shipment cost document POrg: /Pgr/Plant: Purchasing Organization, Purchasing group and Plant is assigned to the combination of TPPt & SCTy. On these values the purchase order is searched for the Vendor mentioned in the shipment document IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Settlement ➢ Assign Purchasing Data

Automatic G/L account Determination From the Transaction “GBB” and combination of General Modification key “VBR” and valuation class the G/L account is determined for the posting to the freight accounts. IMG ➢Logistics Execution ➢ Transport ➢ Shipment Costs ➢Settlement ➢ Automatic G/L Account Determination

From the Transaction “WRX” and value of valuation class as the G/L account is picked for GR/IR accounts.

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