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!