Q&A in Class (2025-04-07) S4SD1

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Question: What is the Inco term recommendation when using TM for MM Inbound Delivery & SD Outbound Delivery?

Answer: The following is as at S/4HANA 2023:

• As at S/4HANA 2023, The Freight Order in the TM module can be at both Header and Item level but you will have to be very careful of the Integration points between SD and TM and How the Sales Department would perform the Billing for the Product to the Customer vs how the Freight Costs are to be billed to the Customer from the TM module.
• In SAP Transportation Management (TM) Freight Order, Incoterms are typically maintained at the header level, although some functionality might exist for item-level Incoterms in specific scenarios or future releases (from SAP help.sap.com Documentation). 
• It is very important to note that some Organizations prefer to "Split Billing" using the Inco Term as a criteria; so that in One Outbound Delivery with different Delivery items that contain different Inco Terms, the Organization to split the Billing of the Delivery items based on the "Inco Term" which result in One Billing Document only have One Inco Term. (In fact, the "Split Billing" based on Inco Term is really a common practice as Incoterm determines which party (buyer or seller) is responsible for various costs (freight, insurance, etc.) and risks, and these responsibilities are reflected in the Billing Header which would make more sense. 
• As this point in time (as at S/4HANA2023 which is the only version available for Simulations), it is probably a better decision to combine Freight Units (from Outbound Delivery items) that contain the same Inco Term to ONE Freight Order, so that the Freight Order itself matches the intended Billing Document for both Product and Transportation Services. 
• However, if there is a desire to still have Item level INCO terms at both Product Billing and TM Freight Order Billing (which from both business and system aspect may not be a good decision), then it must be tested thoroughly; BUT I personally don't recommend.
  SAP's recommendations statement: "While not strictly mandatory, using the same Incoterms for all freight items within a single S/4HANA freight order can simplify the process and reduce potential errors. However, if different freight items have distinct shipping requirements or contractual obligations, using different Incoterms may be necessary."

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Question: What is the latest Architecture on S/4HANA with Distributed TM and EWM ? 

Answer: It is of course the "Best" architecture to be using both Embedded TM and Embedded EWM systems; however, for larger Multinational Organizations; there are multiple business and technical reasons for having a Distributed Architecture. 

For example, a Customer using an ECC system already integrated to S/4HANA TM, and the Customer is only using the Classic WM (and not the EWM system); the company also outsourcing some of its Warehouse and Transportation activities to 3rd party in a more complex Warehousing scenario. In an effort to migrate from ECC to S/4HANA may face multiple challenges of security, data management and system performance; one of the decision would be:

• Multiple S/4HANA to One-or-More TM system.
• Link One-or-More TM system to One-of-More EWM system.
• The S/4HANA maybe also integration to some existing SAP SCM APO system until future migration to a possible Embedded PPDS and Cloud-based IBP.

See further presentation in the following Link: 

https://froggysap.blogspot.com/2025/03/blog-post_24.html

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Question: The importance of knowing which Licensing of specific S/4HANA modules signed with SAP (eg S/4HANA EWM)

Answer: With the most recent news just March.2025, SAP announced the classic LE-WM in S/4HANA no longer supported and all customers "must" move to the StRM (Stock Room Management Solution); customer previously using the Cross-Docking, Basic Yard Management, Wave Picking will be able to use them anymore. AND if the customer business must use CD, YM, and Wave Picking; then, the customer must acquire not just the EWM Basic Licensing version BUT the "Advanced EWM" Licensing where only in this version SAP allow to switch on CD, YM, and Wave Picking. 

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Question: Is the LE-WM 2-Step Picking is still possible in the S/4 StRM option ? 

Answer: 2-step picking can be part of the WAVE Picking feature in SAP LE-WM. First we have to check the features of both: 

WAVE Picking (LE-WM-TFM-CP):

• Definition: Wave picking is an order fulfillment strategy where orders are grouped into "waves" based on factors like due date, order size, or product availability, and then picked simultaneously instead of individually. .
• Purpose: To improve efficiency and reduce idle time by scheduling picking activities around common factors, such as shipping deadlines.    
• SAP: VL35 facilitates the creation of "wave picks," which are essentially work packages for picking, grouping deliveries that are to be processed at roughly the same time. 
• Example: Grouping orders with the same shipping date or destination into a single wave

2-Step Picking: 

• Definition: A picking process divided into two steps: a withdrawal step (collectively picking products for multiple deliveries) and an allocation step (distributing the picked products to individual orders).
• Purpose: To optimize picking processes, especially in warehouses with intermediate storage areas or high racks, by minimizing travel distance and picking operations.
• SAP: Use transaction code LT72 to determine the two-step picking process for a group, and LT0E to create transfer orders for the group.
• Example: Picking all the required quantity of a product for multiple deliveries in the first step, then allocating those products to the specific orders in the second step. 

StRM (Stock room management) allows you to use almost all LE-WM functions except the list below:

• Task & Resource Management (LE-TRM),
• Value Added Service (LE-WM-VAS),
• Yard Management (LE-YM),
• Cross-Docking (LE-WM-CD),
• Wave Management (LE-WM-TFM-CP),
• Decentral Warehouse Management (LE-WM-DWM),
• Warehouse Control Unit Interface (LSR)

The next question to determine is that did SAP park the 2-Step Picking feature under the Wave Management (LE_WM-TFM-CP. 

However it doesn't mean that the transactions will vanish. They are there in S/4HANA and will be there. You are just not entitled to use them in S/4HANA anymore.

You can use the STOCKROOM_COMPLIANCE_CHECK report to check if your usage is within the stock room management limitations 

See SAP note: 

• SAP Notes 2881166 - SAP is not planning to invest in Stock Room management, strategic product for SAP is EWM.
• SAP Notes 2882809 - Scope Compliance Check for Stock Room Management.
• SAP Notes 2270211 - WM is still part of S/4HANA but in a compatibility mode. 
• SAP Notes 2269324. With the compatibility mode SAP allows customers to migrate their existing solutions smoothly into S/4HANA.
• SAP Notes 2577428 - SAP also restricts the usage of components which are in a compatibility mode till 31.12.2025.
• SAP Note 2269324 -  titled "Compatibility Scope Matrix for SAP S/4HANA," provides a detailed overview of the compatibility scope, including information on available alternative functionality, license material numbers, and business impact notes for each compatibility scope item, helping customers plan their transition to SAP S/4HANA. 

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