Logistics Execution Process

Find out how to execute logistics in manufacturing ERP. Learn how to configure deliveries, transportation, routes, determination and packaging.

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The following is an excerpt from Implementing SAP ERP Sales & Distribution, by Glynn C. Williams. It is reprinted here with permission from McGraw-Hill; Copyright 2008.

Here we configure deliveries, transportation, routes, and determination as well as packaging. This chapter deals with copy control, picking, simple warehouse management processes, and special stock.

Delivery Process

The delivery process is a continuation from the sales process. It is generally used in outbound processing to move goods from the plant to the shipping vendor to the customer. However, the returns process of inbound deliveries is also included as a standard SAP delivery process, where instead of "posting goods issue" for outbound deliveries, we "post goods receipt" for an inbound flow of products back into our plant. A delivery document can be created with reference to a sales document such as an order or a scheduling agreement (which was discussed in Chapter 4). Or it may be created, for example, with reference to an inbound return sales document. In mySAP ERP, the shipping functions have been removed from the Sales and Distribution section of the SAP Customizing Implementation Guide. Instead, they have been placed in the Logistics Execution section. However, it is critical that the people responsible for the SD module understand this topic.

Delivery Document Configuration
A delivery document type is similar to the sales order document type. Whereas in the sales process the sales document structure and control were defined largely by the sales document type, in the delivery process the delivery document type controls how the delivery is to function. The structure of the delivery document is very similar to a sales document type in that a delivery document has a header and item structure. The output of an SAP delivery is a goods movement.

Defining Delivery Types
The SAP delivery document is usually the step subsequent to a sales document type and preceding a billing document. However, a delivery is not restricted to being created from a sales document type. Use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Deliveries | Define Delivery Types [0VLK]

The delivery document type, shown in Figure 6-1, has fewer control settings than the sales document type.

The associated settings of the delivery document type are as follows:

  • Document Category This is a critical field that identifies to the system what document type is being used. It is used in internal table controls, for example, to determine system responses and messages.
  • Number Systems Here you assign the particular number range that your delivery will follow, as well as the item increment in the delivery document type. You may create the number ranges relevant for delivery documents by selecting SAP Customizing Implementation Guide | Logistics Execution | Shipping | Deliveries | Define Number Ranges for Deliveries [VN01] After creating the interval, you may assign your delivery document number range to the document type. (See Chapter 3 for more information on number ranges.)
  • Order Reference With this setting enabled, you can create this delivery without reference to a sales document type. You must specify a "pseudo" sales documents type in the Default Order Type field. This will cause the system to use the control data set for this referenced pseudo document type.

When it is necessary to have a specific goods movement assigned to a delivery that has no sales document type used as a reference, your pseudo sales document type must have an item category followed by an assigned schedule line category. It is this schedule line category that must have the assigned goods movement.

Here's an example of a pseudo sales document: The warehouse asks for a specific delivery, which must not be created from a sales order but is to use a special goods movement type. This goods movement type—for example, 901—is used to show the return of stock to a supplier.

  1. You would configure this by copying a standard delivery type such as LF, and naming it ZLF.
  2. Then you would copy a sales document type such as TA and name it ZTA.
  3. Next you would copy an item category TAN and name it ZTAN.
  4. Finally you would copy a schedule line category such as CP and name it ZCP. Assigned to this schedule line category would be the movement type 901.
  5. You would then assign the sales document type ZTA to the delivery type ZLF as the default order type.
  6. Do not forget your individual settings in the relevant document types and item categories, as well as the copy controls settings. The specific control of the item categories in the delivery will be covered a little later.

The item requirement must be fulfilled before an item can be processed in a delivery created without reference to a sales document type.

  • Document Content Most of the fields in the document content screen are not configurable from this view. They are mostly determined in individual settings that then allocate the settings to the delivery document type. They are shown in the delivery document type for ease of understanding and control.

Only the delivery split according to warehouse number, the delivery split according to additional partners, the rescheduling, the automatic packing indicators, the general packing material item, and the distribution mode are controllable from this section.

  • In this section the storage location rule specifies how the system determines the picking/storage location when you create a delivery without entering a picking/storage location for the item.

The storage location is determined by a combination of shipping point + plant + storage condition. However, this only applies if the storage location rule on the delivery document type is MALA. (Storage location rules are defined in materials management and warehouse management, and are not covered in this book.)

  • The output determination procedure and output type are used by the system in allocating output to the delivery document type. (Output is described in Chapter 9.)
  • The text determination procedure is used by the system to determine where texts are allocated from in the delivery. (Text determination is described in Chapter 9.)
  • The document statistics group is the determining field that updates the logistics information structures (LIS). It is not possible to assign a value to this field here.

You are able to assign a value to the delivery document type in the control settings for LIS. Note that it is only advisable to assign a statistics group value to those deliveries and delivery items that do not contain a reference to an order.

  • You are able to assign a delivery split per warehouse number, that is, items belonging to different warehouse numbers will be split into different deliveries. You can also force a delivery split by partners by setting the delivery split part checkbox.
  • The assignment and control of route determination will be covered later in this chapter.
  • The settings for the application are internally used by the system to allocate output—for example, whether the output is used for sales orders or for delivery documents, etc.
  • The partner determination is also not available to set in the delivery document type. it is set in the assignment of document types to the partner determination procedure. Partner determination procedures will be covered in Chapter 9.
  • The rescheduling indicator is used to control the rescheduling of backlog deliveries.
  • The automatic packing indicator controls if the packing proposal should be adhered to and the items in the delivery automatically packed or not. If you permit the delivery document type to automatically create packing items based on the configuration for packing (see packing later in this chapter), then check the generate packing material item checkbox.
  • If you use a decentralized warehouse management system, you will wish to update the system automatically. This is defined by the setting in distribution mode.
  • Transaction Flow In the definition of the delivery document type, in the transaction flow you may define the following:
  • Screen sequence group is used to determine the screens and the sequence in which the SAP system should display them for a certain delivery type.
  • The display range controls the data display for the delivery items. For example, you can limit the display to only the main items and to suppress all items dependent on main items.
  • The standard text field is not used in ERP ECC6.

An example of the standard delivery document types in ERP ECC are

Standard delivery: LF
Delivery without reference: LO
Returns delivery: LR
Returns delivery from a purchase order: RL
Replenishment delivery: NL

The standard SAP version of a delivery that may be made without reference to a sales order is delivery document type LO.

Delivery Item Categories and Determination

A delivery item category is similar to the sales document item category in that it controls how the item is to behave in the document type. Generally, the delivery item category has the same naming convention as the sales document item category from which it is determined; however, it has its own control features.

Defining the Delivery Item Category To define delivery item categories, use the following menu path.

Menu Path SAP Customizing Implementation Guide| Logistics Execution| Shipping| Deliveries| Define Item Categories for Deliveries [0VLP]

We will configure these a little later.

Defining Delivery Item Category Determination First, we need to discover from where the delivery item category is determined. If an order item or a schedule line is copied into a delivery, the item category used in the sales order is also copied. For example, if a TAN item category is used in the sales document type, the system will propose a TAN in the delivery document as well.

For items independent of orders in the delivery (for example, packaging material that is entered in the delivery) or for deliveries that have no reference to a sales document, the item category is determined by the delivery item category determination table.

This item category is determined, as seen in Figure 6-2, by the delivery type plus the item category group of the material plus the usage of the item plus the item category of the higher level item, similar to the item category determination procedure in the sales order.

To configure delivery item category determination, use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Deliveries|Define Item Category Determination in Deliveries

The SAP system will still need an underlying schedule line category, thus, should a delivery item category be able to copy an item category from a sales order, a schedule line category must still be maintained in order for the system to propose the correct goods movement type and subsequent financial postings for the goods movement.

The availability check in the delivery is still carried out and controlled by the delivery item category regardless of whether the delivery item category has the same name as the item it is referenced from in the sales order, or if it is determined in the delivery.

The delivery item category determination is especially useful for assigning batch items to standard delivery items. For example, should you carry out batch determination in the delivery, you are able to assign a delivery item category to an item that has a usage defined as CHSP- batch split. (This will create a delivery line item for each batch, even if the product on the delivery is the same and was represented by a single sales document line item.)

Don't forget you can view the usages of the item category in table TVVWT, which may be easier than looking at each in configuration individually.

Defining a Delivery Item Category Continued

The delivery item category is represented by the following settings as seen in Figure 6-3.

The item category is assigned to a document category; in this case the document category is for deliveries, represented as a "J."

  • The Material Number 0 Allowed field is used to permit the item to be created without having a reference to a material reference. This is used in examples for text items, where one creates a line item with a special item category and types text in the description of the material description.
  • The statistics group for the item category is used to generate statistics in the logistics information system.
  • The stock determination rule is used in conjunction with the stock determination group to determine the stock determination strategy.
  • The Check Quantity of 0 field specifies whether you can create an item that has a zero quantity and, if you do, how it is to react with a warning or error message or no message at all.
  • The Check Minimum Quantity field is a check carried out against the minimum delivery quantity on the material master record and the customer material information record. The response from the system can be a warning or an error message.
  • It is possible to create an over-delivery, thus the Check Over Delivery indicator is used to display a warning message or an error message should the delivery quantity exceed the limit in the customer material information record or the sales order quantity.
  • The Availability Check Off indicator allows you to turn off the availability check for a delivery item.
  • The Rounding indicator is used to determine if the system should round up, round down, or leave the results as they are in cases such as the correlation of multi-level bills of material in the delivery if the non-availability of a particular BOM in another partial BOM were to cause decimal positions. This would only impact you if you were using large numbers with indivisible partial quantities in a BOM.

  • The Relevant for Picking indicator is used to switch on picking relevance for a particular item. This item is then available in the picking list and to be transferred to warehouse management. It would not be advisable to make all items relevant for picking; for example, you would not pick service items such as a technicians hours. Generally, unless you do physical picking from the warehouse, you do not need picking. Picking is therefore not required for non-stock, value, and service items.
  • The Storage Location Required field indicates a storage location must be entered for this item before the delivery can be completely processed. Likewise, the Determine Storage Location field is an indicator used by the system to indicate automatic determination of the storage location for the delivery item. The Don't Check Storage Location field is used to stop the system from checking that the material exists in the storage location that was determined.
  • The No Batch Check field ensures the system does not check to determine if the batch entered in the delivery line item exists in the system or not. Thus, should you enter a batch in the line item when the batch is not in the system, the system will accept it anyway.
  • The Automatic Batch Determination field tells the system to carry out automatic batch determination in the delivery for this line item. (Automatic batch determination can happen at the line item level in the sales order or the delivery.)
  • The Text Determination Procedure field is not maintainable and will be covered in "Text Determination" in Chapter 9.
  • The Standard Text field is not used in ERP ECC6.

Delivery Due List

The delivery due list is used to create delivery documents en masse automatically as opposed to individually. A number of companies have a specific emergency shipping point for their delivery due list to create emergency deliveries. A variant is then created for this shipping point and is executed on a much shorter time scale than ordinary delivery document creation.

When one deals with delivery creation, one must be aware of the fiscal requirements of the country in which you are operating. Some countries do not permit a sales order to be broken up into more than one delivery, and likewise they may not permit more than one sales document to be combined into one delivery.

The item categories of a delivery are referenced from the sales order; for example, item category TAN in the sales order proposes item category TAN in the delivery.

The SAP standard version uses DLN as the standard item category used to represent an item in a delivery without reference to a sales order.

One is also able to define a delivery split according to specific criteria in the copy control rules. In the formation of the data transfer one may set up splitting criteria. Splitting criteria and the usage of ZUK is covered in "Pricing" later in Chapter 8.

One may execute the delivery due list by using the following transaction codes. (Note that the transaction code VL04 should no longer be used after SAP 4.0b.)

[VL10A]: Sales orders fast display
[VL10B]: Purchase orders fast display
[VL10C]: Sales orders items
[VL10D]: Purchase orders items
[VL10E]: Sales orders schedule lines
[VL10F]: Purchase orders item schedule line
[VL10G]: Sales and purchase orders fast display
[VL10H]: Sales and purchase orders items fast display
[VL10I]: Sales and purchase orders item schedule line
 

Although the processing program is the same for all transaction codes, the control is determined by the role defined in [VL10CUA] and scenario defined in [VL10CUV] as found on the User Role tab.

An example of an executed delivery due list is seen in Figure 6-4; note the column headings. You may add additional columns to the layout by pressing CTRL-F8 or clicking the Change Layout button. This will present you with a screen similar to Figure 6-5, where you can simply select fields on the right side and click the arrow button.

Shipping Point Determination

Shipping points are independent organizational units that are linked to a plant and represent the point of departure or receipt of materials. A plant may have many shipping points. A delivery is created from one shipping point only. Shipping points are determined based upon the configuration settings. Use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination | Assign Shipping Points

The shipping point is the location from which a delivery originates. Whether that location be a physical or a systemic location, no delivery may be made without a shipping point. The shipping point is determined by the system based on the shipping conditions, which are either entered manually in the sales order or copied from the customer master record. (Shipping conditions may also be copied from the sales document type if not maintained on the customer master.) The loading group, which is copied from the material master record, and the delivering plant of the line item in the sales order are also shipping conditions. This determination is illustrated in Figure 6-6, in which we see that shipping conditions 01 plus loading group Z001 plus plant IN03 propose shipping point IN01.

Should a customer ask for a complete delivery, it makes sense that you should not have multiple shipping points manually entered for each line item in the sales order, or else the customer will receive multiple deliveries.

As each delivery is created via a shipping point, and each run of the delivery due list is made with reference to a particular shipping point, you may want to have an express shipping point. This way, you are able to run the due list every half hour for one shipping point only to create deliveries for that particular plant. Likewise, in the sales order the user knows that if he manually enters a specific express shipping point, he will have the delivery created within half an hour. The remainder of the deliveries may be created via the delivery due list in the normal processing run.

Configuring the Shipping Point Determination

To configure the shipping point determination, use the following steps:

Define Shipping Conditions Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination| Define Shipping Conditions

The shipping conditions are entered in the customer master record in the shipping screen and in the sales document type. These settings are then copied into the sales document during order creation and are used to determine the shipping point. The shipping conditions may be manually changed in the sales order, or they may be defaulted to a particular sales document type. Should they be defaulted to a particular sales document type, the system will ignore the setting on the customer master record. Proceed with copying a shipping condition and changing the name to represent your requirements, using the prefix Z. The shipping condition is a two-character alphanumeric key, as seen in Figure 6-7.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination| Define Shipping Conditions by Sales Document Type

As discussed earlier, the shipping conditions defined by sales document type override the shipping conditions automatically proposed by the system from the customer master record. This is useful, for example, in returns.

In returns processing a returns delivery must be made with a shipping point that represents the incoming goods. It would not be recommended to use the same shipping point for returns or receiving goods as you do for outgoing deliveries. Thus you may assign all returns sales document types their own returns shipping condition and thus promote a returns shipping point.

Having a returns shipping point allows greater visibility of material movements in the system and in the plant, as well as allowing the processing of the delivery due list for returns orders only.

Defining Loading Groups

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination| Define Loading Groups

The loading group is used in the determination of the shipping point and is copied from the material master record.

As a delivery is not possible without a loading group, it is recommended you ensure that the field loading group of the material master record is a mandatory field. This way, no material master record may be created without a respective loading group.

The loading group, as seen in Figure 6-8, is a four-character alphanumeric key, which you may copy and rename with a prefix of Z.

Assigning Shipping Points

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination | Assign Shipping Points

First, it is worthwhile to do a background check on your organizational data. Ensure your correct delivering plants have been maintained in the system as well as the correct shipping points. Use the following menu path.

Menu Path SAP Customizing Implementation Guide | Enterprise Structure | Definition | Logistics Execution | Define, Copy, Delete, Check Shipping Point | Define Shipping Point

Also ensure you have allocated your shipping points to the respective plants, using the following menu path.

Menu Path SAP Customizing Implementation Guide | Enterprise Structure | Assignment | Logistics Execution | Assign Shipping Point to Plant

Now, to assign the shipping points, use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination | Assign Shipping Points

Assign the proposed shipping point and the allowed manual shipping points to the combination of shipping condition, loading group, and plant, as illustrated earlier in Figure 6-6.

Delivery Creation Process It is possible to create a delivery individually via the menu path, from the sales document, or via the delivery due list (as previously mentioned).

To create an individual delivery document, use the following menu path.

Menu Path SAP Menu| Logistics | Sales and Distribution | Shipping and Transportation | Outbound Delivery | Create | Single Document | With Reference to Sales Order (Create Delivery Document)

[VL01N]: Create Delivery Document
[VL02N]: Change Delivery Document
[VL03N]: Display Delivery Document

Enter the shipping point, the selection date, and the sales document number, should the delivery be created with reference to a sales document.

To create a delivery from within the sales document, from the sales document overview screen while in sales document change mode select Sales Document | Deliver.

When creating individual deliveries, you may find that the system does not create an individual delivery, due to one or a combination of reasons. Generally, the help message offered in these cases is not beneficial in discovering the problem in order to fix it. In cases where you would like a more detailed explanation of the problem, it is advisable to use the delivery due list and then only select the individual sales order you would like to process. The system will then offer you a more detailed note on the problem being experienced.

When having problems creating an individual delivery, it is worthwhile to check the following:

  • Is the sales document number correct?
  • Is the shipping point selected equal to the one on the line item in the sales order?
  • Has the line item in the sales order already been fully delivered?
  • Does the schedule line have a confirmed quantity and date?
  • Is the selection date correct? The selection date should be equal to or later than the confirmed delivery date at schedule line level in the sales order.
  • Is there a delivery block on the line item in the sales order?
  • Is there a delivery block on the schedule line in the sales order?
  • What is the status of the sales order and the line item in question? This can be seen from the sales order by selecting Goto | Header | Status and Goto | Item | Status.

Using the transaction code [SE16] or [SE16n] one may use the "table" VBAKUK, which is actually a combined view of selected fields from the VBAK and VBUK tables. However, it allows you to access the statuses of the sales documents, as well as being useful in generating queries of data at header and item level.

Picking and Interfacing with Warehouse Management

Picking is the process in which the stock is selected from the storage facility to fulfill a delivery. One needs to pick the correct quantity of the right items for the delivery.

First, not all items are relevant for picking. You may have items such as text items or return items that are not picking-relevant. Picking is always carried out from a particular storage location, so for a delivery to be picking-relevant, a storage location must always be entered. If interfacing with warehouse management, the storage location in the delivery determines which storage location to use in the warehouse.

Picking is configured using the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Picking

Defining Relevant Item Categories
SAP Customizing Implementation Guide | Logistics Execution | Shipping | Picking| Define Relevant Item Categories

Here you indicate to the system which item categories are relevant for picking. This indicator may either be set here, or when defining the delivery item category. Should the item not be relevant for picking, it is not necessary to have a storage location determined for the item either. Thus when creating the delivery item category, you would not need to indicate "determine storage location" or "storage location required."

Interface with Warehouse Management
If you have defined a warehouse in SAP and assigned it to a storage location, and you use this storage location in a delivery, then you must use Warehouse Management to do the picking for that delivery.

Warehouse Management is a module in its own right. In this section I'll introduce you to simple warehouse management processes.

The process for placing goods in the warehouse is as follows: The goods are received into the interim storage area for goods receipts (for example, from production). A transfer order is then created in WM to move the goods into the warehouse. This tells the warehouse staff where to put the stock. When the stock is put into the warehouse in the correct place, the transfer order is confirmed, which tells SAP that the goods have been moved out of the interim storage area (i.e., the loading and unloading area) into the warehouse.

The process for extracting the goods from the warehouse is as follows: You can create a transfer order [LT03] from the delivery, and SAP will choose stock from the warehouse to be delivered. This choice is based on a number of inventory methods, such as LIFO (last in, first out) and FIFO (first in, first out). The transfer order will instruct the warehouse staff where to get the stock from, and to deliver it to the interim storage area for goods issues.

Once all the stock has been picked, the transfer order is confirmed [LT12], which informs the system that the stock has been taken out of the warehouse and made available for loading in a loading bay or other such place.

If you created the transfer order from a sales delivery, SAP will confirm that the delivery has been picked when you confirm that you have fulfilled the stock quantity in the transfer order.

During confirmation of the transfer order [LT12], select Pick Quantity 2. This will result in the system automatically picking and post goods issuing the delivery document.

The order can now be loaded onto the truck, and the goods issued.

Should picking be done using Warehouse Management, once the delivery is created, you need to create a transfer order. To create a transfer order from the delivery from within the delivery select, select Subsequent Functions | Create Transfer Order.

It is also possible to create a transfer order for a delivery by using the following menu path.

Menu Path SAP Menu | Logistics| Sales and Distribution| Shipping and Transportation | Picking | Create Transfer Order | [LT03] - Single Document

After the transfer order number has been created, it is necessary to confirm the transfer order by selecting Shipping and Transportation | Picking | Confirm Transfer Order [LT12].

Determining Storage/Picking Locations
The picking location is an area in which all picking is carried out in the same manner. The storage condition refers to the storage of the material in the plant or warehouse. It is found on the Plant Data/Warehouse 1 tab of the material master record.

Defining Rules for Picking Location
To define rules for the picking location, use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Picking | Determine Picking Location | Define Rules for Picking Location Determination

The entry maintained here is copied into the delivery header data. This entry here allows the system to determine the storage location automatically, should the storage location not have been maintained in the delivery manually.

Proceed in assigning a storage location rule—for example, MALA—to the delivery document type. (As previously discussed storage location rules, for example MALA are covered by materials and warehouse management modules and are not in scope for this book.)

Defining Storage Conditions

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Picking| Determine Picking Locations | Define Storage Conditions

The storage condition is a two-character alphanumeric key that is used by the system to indicate the storage conditions for a material. This field is then used in combination with the plant and shipping point to determine the storage location.

Assigning Picking Locations

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Picking| Determine Picking Locations | Assign Picking Locations

The picking location must be carried out from a storage location. The system bases the automatic determination of the storage location on the combination of the determination rule MALA assigned to the delivery document type with the shipping point and the delivering plant plus the storage condition on the material master record, as seen in Figure 6-9.

Backward and Forward Scheduling

The customer specifies a requested delivery date that is placed into the schedule line of the sales order. The business must determine if it is able to carry out the associated functions in procuring the requested quantity and delivering it to the customer by the requested delivery date in the sales order.

The business functions required to be performed before a delivery date may be met are the following:

  • Time taken to procure materials, such as obtaining materials from a supplier
  • Time taken to plan the transportation, such as obtaining space on a ship
  • Time taken to pick the items
  • Time taken to pack the items
  • Time taken to load the materials
  • Time taken to transport the materials to the customer

This process of scheduling the business process from the requested delivery date backward in order to meet a specified delivery date is called backward scheduling and is illustrated in Figure 6-10.

For example, suppose you have a sales document with a requested delivery date on the 20th of January for a sales order placed on the 14th of January. The system carries out backward scheduling from the date of the requested delivery date:

  • Let's say the transit time (the time taken to move the materials to the customer's site) is four days. 
  • The loading time in the warehouse is one day. 
  • The transportation lead time is one day (the time taken to schedule the containers, shipping companies, etc. to move the materials, which usually falls into the time taken for the material to become available). 
  • We now sit at a delivery date of January 20th less four days, less another one day, less another one day = 14th of January. 
  • Should the material be available on the 14th, we could confirm a delivery date of the 20th.

However, should the materials not be available on the 14th and indeed the system finds the materials will only be available at a later date, it immediately carries out forward scheduling, projecting the earliest possible delivery date based on the scheduling of the business processes from the material availability date forward.

Forward scheduling takes the availability date of the material in the future, and adds the business processing scheduled times required to meet the requested delivery date.

Thus, should the stock be available on the 18th in the above example, the materials will arrive at the customer's site on the 18th plus six days (4 + 1 + 1) = the 24th (less the time taken for transportation lead time, one day, as this step could have been carried out during the period waiting for the materials availability). Therefore, the delivery date based on forward scheduling would be the 23rd of January. An illustration of forward scheduling is shown in Figure 6-11.

If the route is not used when the pick/pack time or loading time is determined, the shipping point and the weight are the only factors used in determining the pick/pack time.

The shipping point and the loading group are used for determining the loading time.

The route is used to determine the transportation lead time and the transit time for transportation scheduling.

Delivery Blocks
Delivery blocks are very powerful in that they have the ability to not only block the delivery from being created but they may also block available stock from being assigned to a sales document that is blocked.

Blocking Reasons
There are many areas available in the Sales and Distribution module for blocking. Shipping or delivery blocks are commonly used and may be manually entered or automatically proposed in the sales order and the delivery documents.

One may configure these delivery blocks using the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping| Deliveries | Define Reasons for Blocking in Shipping | Deliveries: Blocking Reasons/Criteria

Transaction code [OVLS]
Figure 6-12 shows the configuration of the delivery block with the following checkboxes:

  • Order This setting will permit this block to be used to block a sales order for delivery processing. This block may be defaulted from the customer master record or placed manually in the sales order.
  • Confirmation This setting will block the confirmation of stock after an availability check. This means the schedule line of the sales order will have a confirmed quantity of 0. The requirement will still be passed to the MRP list but will not consume stock, which ensures the stock is available to be confirmed for other sales orders. Note that the confirmed schedule lines will be set to 0 only once the block is set and the document is saved.
  • Print This setting will block the output of the document. For example, if you have a document with a failed credit check, you may wish to block the order confirmation output.

  • Delivery Due List This setting will block the sales document from being processed automatically by the delivery due list. It seems confusing to some people that a delivery block set manually in the sales document may block the delivery from being created individually, but does not block the delivery from being created with the delivery due list. If you wish to block both, then check this checkbox as well as the Order checkbox.
  • Picking This setting will block the picking. (This block is always effective, regardless of the assignment of the delivery block to the delivery document type seen in Figure 6-13.)
  • Goods Issue This setting will block the goods issue for the delivery document. (This block is always effective, regardless of the assignment of the delivery block to the delivery document type seen in Figure 6-13.)

After you have defined the delivery blocks, you must assign them to the delivery types for which they function, using the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping| Deliveries | Define Reasons for Blocking in Shipping | Delivery Blocks

Once set, delivery blocks must be removed manually from the sales order.

A delivery block set at header level in the sales document blocks the confirmation and sets it to 0. If you look in [MD04] the requirement is there, however, it does not consume ATP quantities. If you look in [CO09] the requirement does not reduce ATP quantities. A delivery block set at schedule line level in the sales document does not block the confirmation. If you look in [MD04] the requirement is there. If you look in [CO09] the requirement does reduce ATP quantities.

Delivery Blocking at Header Level
Delivery blocks may be assigned manually in the sales order by entering the desired block in the header, using the following path.

Menu Path From within the sales document | Goto | Header | Shipping | Then enter the delivery block

Should you desire the block to be automatically proposed for specific sales document types, you may set the delivery block in the sales document type which you wish to automatically block. This is done in the shipping area of the Maintain Sales Order Types screen, as seen in Figure 6-14.

However, this delivery block is only effective if it has been assigned in the respective delivery document type, as seen earlier in Figure 6-13.

Delivery Blocking at Schedule Line Level

Delivery blocks are also available at the schedule line level. These are simply delivery blocks that are manually entered in the sales document at the schedule line level.

It is possible to have the system automatically propose a delivery block in the sales document for particular schedule lines. This may be done by allocating the delivery block to the Schedule Line Categories screen, as seen in Figure 6-15.

This delivery block at schedule line level is always effective, regardless of whether the delivery block is assigned to the respective delivery document type or not.

The schedule line category block is very useful, as it is not copied in to the sales document item level but is effective only at the schedule line level. This allows you, for example, to create a sales order item and manually set the delivery block for some schedule lines due for delivery with a delivery date of over one month, while still allowing deliveries for unblocked schedule lines to be created within the month and both sets of schedule lines originate from the same line item.

Delivery Blocks at the Customer/Header Level

You may also block a customer master record for a particular sales area, or for all sales areas as far as deliveries are concerned. This is done in transaction code [VD05], as seen in Figure 6-16. To set this block, use the following menu path.

Menu Path SAP Menu | Logistics | Sales and Distribution | Master Data | Business Partner | Customer | [VD05] - Block

You can block the customer for a particular sales area or for all the sales areas for which the customer belongs. This block is then copied into the sales document.

Packing
Packing is carried out at the item level. One is able to determine that it is mandatory for a specific item to be packed or that it is only packed when necessary. This packed item then in turn may be packed again into a handling unit, which in turn may be packed into another handling unit, thus having the ability of creating a multiple level procedure.

Packing by Item Category
Packing is carried out at the item level. Thus, some items may be relevant to be packed, and other items may be forbidden to be packed. Each item category for which packing is to be carried out must have its corresponding setting at the item category level.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Packing | Packing Control By Item Category

  • For those item categories for which packing must be carried out, set the indicator to A.
  • For those item categories that cannot be carried out, set the indicator to B.
  • For those item categories that do not have to be packed but for which packing may be carried out, leave the assignment blank, as shown in Figure 6-17.

You may select that should there be a batch split in the delivery, the system is to pack the main item with the accumulated batch quantity or the batch split items only. Should you wish the main item to be packed, leave the Pack Accumulated Batch field blank.

If handling unit inventory management is in use for a storage location, then the Pack Accumulated Batch setting has no impact.

Packing Requirements

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Packing | Define Requirements for Packing in the Delivery

You may wish to create a requirement for packing. This requirement performs in the same way as all other requirements in the Sales and Distribution module, in that the criteria stipulated must be met in order for packing to be carried out. An example of a requirement here could be that no packing is to be carried out for items that have a credit block.

Returnable Packaging
Not all packaging materials are inexpensive enough for the cost of the sale to include the cost of the packaging as well. One may have packaging materials that are valuable, and should a customer decide to keep or destroy the packaging items, he should reimburse the business.

Thus returnable packaging is used in the process whereby the business sells items to the customer. These items are packed into handling units such as boxes and crates. The customer may then keep the boxes or crates for a certain period, by which time he must have returned the items. Should the customer not have returned the shipping units specified by that set date, or should he have destroyed the shipping units, the business may bill the customer.

Special Stock
The stock you deliver incorporates packaging materials. This packing is kept at the customer's location, but will remain the property of your company. The stock is recorded automatically as special stock at the customer's location.

This special stock may be seen using the stock overview screen using transaction code [MMBE]. Returnable packaging has the stock indicator of V. It is very similar to consignment stock, which was dealt with in Chapter 4.

You may also view returnable packaging at the customer's site by selecting SAP Menu | Logistics | Materials Management | Inventory Management | Environment | Consignment | [MB58] - Consignment at Customer. Then select Returnable Packaging at Customer, as seen in Figure 6-18.

There is no special sales document required to use returnable packaging. However, you should use the sales order view of a double line entry. This will permit you to view the main item as well as the returnable packing stock item, which may be seen as the lower level item to the item it packs. This is merely for display and traceability in the sales order. The packaging material may also be the main item of a sales order.

The packaging's material master record should use the material type VERP for packaging and the item category group LEIH. The item category group LEIH is the SAP standard for returnable packaging.

If you enter a packing proposal in the order (by selecting Extras | Packing Proposal from within the order document), it is copied into the delivery if the packing materials are inventory managed and are relevant for a delivery, which must be the case for returnable packaging.

You may see details relating to the handling unit and packing materials by selecting the handling unit from within the packing proposal. Then select Goto | Detailed HU | General Details, as seen in Figure 6-19.

The returnable packaging material follows the same rules as a standard material in that you must define an item category for it as well as the necessary copy control rules. SAP standard uses item category TAL.

Should you wish to create your own sales document item categories, you may copy and change the SAP standard that uses the item category LAN for the returnable packaging pick up and use the item category LNN for the returnable packaging issue. Do not forget to give your returnable packaging material a price. This price may be used when you create a returnable packaging issue, similar to a consignment issue where you invoice the end customer for the stock of returnable packaging.

The standard ECC ERP returnable packaging item categories are

TAL: Ret. Packag. Shipment
LAN: Ret. Packaging Pickup
LNN: Ret. Packaging Issue

Special Stock Partners

A special stock partner is a partner who is assigned to the customer master record in the sales order. You can have special stock partners for both returnable packaging and consignment stock. You may create a new customer for them by using the same account group as if you were creating a sold to party.

This partner need not be the sold to (SP), ship to (SH), bill to (BP), or payer (PY) partner. This partner instead may be the partner who actually "consumes" the materials.

For example, should a large organization have a central depot where all consignment stock goes to, then the consignment stock is shipped directly to each customer's plant as needed. The central depot would be registered in the system as a partner. One must then assign these special stock partners to the relevant Sold-to Party's customer master records. The special stock partners have the partner function key SB.

When materials are "consumed" by the special stock partner, should there be any consignment stock or returnable packing, the system automatically picks up the special stock partner and records the stock in the system as being stored at their site. You may view these allocations of stocks in the same ways as previously discussed using transaction code [MMBE] or [MB58].

Routes
Some companies use the same regular routes to ship goods to their customer. If you use the same routes for your shipping, it would be beneficial to use automatic route determination to control your logistics execution transportation.

Defining Routes
Route determination is automatically proposed for each sales document item in the sales order. It is a process whereby one is able to assign a specific route with transportation legs using different shipment types and carriers.

Route determination may also be redetermined in the delivery. This will use the weight group of the item, which may, if configured, propose a different route to be used.

Before one can assign the route determination to be used by the sales or delivery document, one needs to define the data that is used in the route determination. The configuration is carried out using the following steps.

Defining Routes

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Define Routes| Define Modes of Transport

The modes of transport are self-explanatory. They may be, for example, road or plane. Define the mode of transport used in the business, and assign a two-character alphanumeric key with a meaningful description, as seen in Figure 6-20. This mode of transport has a mode of transport category assigned to it (seen in column SType).

In the SAP Customizing Implementation Guide, proceed to define shipping types.

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Define Routes| Define Shipping Types

In this assignment, as seen in Figure 6-21, you assign the shipping types (column PT) along with the previously defined modes of transport (column MdTr) and a shipping type procedure group (STPG).

The shipping types are the actual "vehicles" used to transport the materials, and may be defined as a train, mail, etc. 

The modes of transport are the types of transportation used to transport the materials, and may be defined as a road, etc.

The shipping type procedure group is used to calculate the costs relating to the transportation.

In the SAP Customizing Implementation Guide, use the following menu path.

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Define Routes| Define Transportation Connection Points

Transportation connection points, as seen in Figure 6-22, may be airports, railway stations, border crossings, etc. They define points where transportation types connect, or where a transportation type crosses a border.

After completing the transportation connection points, proceed with Define Routes and Stages.

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Define Routes| Define Routes and Stages

In this activity, as displayed in Figure 6-23, one defines the route with its associated route stages and transportation connection points.

Define a route with a six-character alphanumeric key with a description.

For the defined route you are able to set a forwarding agent or carrier (column ServcAgent), as well as define the transit times and the transit lead time, which is the number of days (column TransLdTm) or hours and minutes (column Tr.lead tim.) required for organizing a shipment for an item that is to be delivered via a certain route. One is also able to specify the distance to be traveled and the total transit duration.

After defining the route proceed with defining the route stages by selecting the route and the Route Stages folder in the file structure on the left side of the screen.

Select your departure point from the list of transport connection points previously defined. Then select your destination point—for example, an airfield—which is also a connection point as previously defined. Proceed with a new entry and continue with the assignments.

Now that the route has been defined, you are able to proceed with an optional step of maintaining the stages for the routes. This would have been carried out for each individual leg. However, once you have many routes in the system and you need to define some "global" changes, you may proceed to the Maintain Stages for All Routes screen. This can be done by using the following menu path:

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Define Routes| Maintain Stages For All Routes

In the selection screen enter the data you wish to change. For this example, I have entered all stages defined as transport legs for route 000001, WHICH offers me the transport legs seen in Figure 6-24.

One is now able to expand these legs and select all of them. You will notice a red traffic light. After selecting them all, click on the Change button (shown with the pencil icon).

This will offer you a number of attributes, which you may now select and change. These changes will be assigned to all the originally selected legs. For example, one can set the shipping type to truck. Click the Execute button.

You will notice the traffic signal is displayed as yellow. After again selecting all of the items and clicking Save, you will notice the traffic signal indicates green. This signaling is merely there for one to use as an indicator of which items have been processed and which are still to be processed when working with a very large number of entries.

Now that the routes have been maintained, you are able to proceed with defining the route determination.

Route Determination

We have defined the route. Now one needs to define how the route is determined in the system. Route determination occurs in the SAP system based on the following items:

  • The country and departure zone (taken from the shipping point)
  • The country and receiving zone of the Ship-to Party
  • The shipping conditions as in the sales order
  • The transportation group of the material master record
  • The weight group (optional and only relevant in the delivery)

The system then copies the route as proposed in the sales order into the delivery document header.

The route already determined in the sales order and copied into the delivery may be redetermined in the delivery document. This redetermination may use the weight of the materials and must be indicated for each relevant delivery document types in customizing. Proceed to the Define Transportation Zones screen.

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Route Determination| Define Transportation Zones

For route determination, you divide a country up into transport zones. A customer exists in a transport zone, and so does a shipping point. SAP determines the route for moving from a shipping point in the one zone, to the customer in the other zone (also taking into account other conditions like the weight of the materials and the shipping conditions of the customer).

Here you assign all the zones you require to use in route determination. Each zone has a description and an assignment to a country key. This country key is later used to detrmine what zones are relevant for what shipping points.

Now select Maintain Country And Transportation Zone For Shipping Point from the SAP Customizing Implementation Guide.

Here you assign the departure zone to the shipping points you use. Note that the shipping point is maintained for a plant and the plant resides in a country. You must also enter the country key of the shipping point here. This country key, as seen in Figure 6-26, determines what departure zones you are allowed to select from, based on the previous settings.

After defining the transportation departure zones, you may now proceed with the definition of the transportation group by selecting Define Transportation Groups from the SAP Customizing Implementation Guide.

The transportation group is assigned to the material master record sales/plant view. This transportation group is then copied into the delivery item.

As the transportation group is a prerequisite for the determination of the route, it is advisable to include it as a mandatory field for the material master record to ensure during the maintenance of the material that the field is never left empty.

Defining Shipping Conditions
The shipping conditions, are held on the customer master record. They are used to define the route determination as well as used in determining the shipping point. One is able to assign a shipping condition to a sales document. If this has been maintained the system will not copy the shipping condition from the customer master record.

Use the following menu path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Shipping Point and Goods Receiving Point Determination | Define Shipping Conditions

(We used shipping conditions to determine the shipping point earlier in this chapter.)

Shipping Weight Groups and Routes

You can use the weight group to further refine the route determination in the delivery.

This is configured by selecting SAP Customizing Implementation Guide | Sales and Distribution| Basic Functions | Routes | Route Determination | Define Weight Groups.

For example, let's say the customer shipping condition is "As soon as possible." It makes sense to send the stock by air. But this might be too expensive if the weight is more than 50KG.

So you can say for the customer that the shipping condition is: Up to 50KG, use the route that has a transportation type by air; over 50KG, use a road or sea route.

The weight group can therefore be used to determine the route, taking into consideration the weight of the delivery. This is very important when sending stock by rail or truck, for example.

It is generally cheaper to send the stock by truck rather than rail if the quantity is small, but for very large quantities, it is usually cheaper to use rail. For the smaller quantities, determine a route that is defined for road shipments; for large quantities, determine a route that is defined for rail shipments.

Define weight groups with a short meaningful description. We will see their use in the route determination.

Always use the weight group as defined in "up to…" as this offers greater ease of use later.

Now that we have all the components, we can now derive the route determination.

Maintaining Route Determination
Proceed back to the SAP Customizing Implementation Guide path.

Menu Path SAP Customizing Implementation Guide | Logistics Execution | Shipping | Basic Shipping Functions | Routes | Route Determination | Maintain Route Determination

Note that you are also able to locate this configuration area in the following path. Menu Path SAP Customizing Implementation Guide |Sales and Distribution | Basic Functions | Routes | Route Determination | Maintain Route

Determination
By referring to Figure 6-27 we can see that the key to the routes is the country of departure plus the departure zone, plus the destination country, plus the receiving zone—for example, in the figure Austria and Region East is shipping to Austria and Region East.

Select the entry and then select the Route Determination with Weight Group (Delivery) folder. In the file structure on the left side, you are able to see the configuration shown in Figure 6-28.

This assignment may now have all the proposed routes for further combination of shipping condition, weight group, and transportation group. We are now able to assign the route we previously maintained to this determination.

Should you wish the route in the delivery to be redetermined, proceed with the menu path:

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Route Determination | Define New Route Determination By Delivery Type

You are now able to assign an indicator of:

  • Blank Indicates no new check
  • A Indicates new route determination without check
  • B Indicates new route determination with check

The check performed is the comparison of the proposed route with the actual routes allowed in.

Menu Path SAP Customizing Implementation Guide | Sales and Distribution | Basic Functions | Routes| Route Determination | Define Allowed Actual Route By Proposed Route

In this assignment you merely assign additional routes to the proposed route that the system determines automatically. These additional routes may be entered manually or they may be used to determine if they are valid in the redetermination of the route in the delivery.

Posting Goods Issue in the Delivery

Goods issue is posted for a delivery causing the goods to be transferred into the hands of the carrier. In other words, the ownership of the goods leaves the business and transfers to the carrier. The carrier then relieves himself of ownership of the goods once the customer signs for the articles. Once goods issue is posted in a delivery, the system updates numerous records.

The posting of goods issue causes the system to update the stock quantities—that is, the warehouse or plant stock is decreased by the quantity of goods that have left the warehouse.

The system also automatically updates the posting to the general ledger accounts. Based on the account determination for the inventory posting, the system decreases the value of the stock on hand and increases the cost of goods sold. Later, when the invoice is created, SAP will update the revenue accounts and the amount to be received from the customer. This completes the sales transaction from an accounting perspective.

The system also updates the requirements in the stock requirements list. That is, once goods issue has occurred, there is no longer a need for a customer's delivery requirement to sit in the stock requirements list [MD04].

The system then proceeds to update previous documents with a status displaying that goods issue has been posted.

The system updates the deliveries relevant for billing, adding the delivery, if billing-relevant, to the billing due list.

You can reverse a goods movement/issue posting. To do this, use the following menu path.

Menu Path SAP Menu | Logistics | Sales and Distribution | Shipping and Transportation | Post Goods Issue | Cancellation/Reversal

Transaction code [VL09]
Enter in the selection criteria you wish, and click the Execute button. You will then see the deliveries that match your selection criteria as seen in Figure 6-29. Select the deliveries that you wish to cancel and click Cancel/Reverse. After the cancellation has taken place you will see a dialog box like the one shown in Figure 6-29, which confirms the reversal.

Read other excerpts and download more sample chapters from our manufacturing ERP bookshelf

This was first published in September 2008

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