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How to create Transportation Management based service products for a charge type in S/4HANA CE?

SAP S/4HANA CE does not support MM-SRV which is primarily used today for freight settlement integration to MM. Material management road map for Service Procurement is to have Only Lean Service Management in S/4HANA Cloud and External service management (MM-SRV) is no more supported in S/4HANA Cloud. In simplified service procurement, a service can now be modelled as a material. Hence, there is a need to use Service Products to represent transportation services.

Transportation services in Transportation Management can be classified into two types:

  • Independent services like Base freight, loading charges and so on.
  •  Dependent services like Fuel surcharge, discount etc which is not service by itself but rather they are components of an Independent service.

Transportation services too can be modelled as service in MM. In transportation world, services which are procured from the service provider (LSP or carrier) such as haulage/Basic freight, loading, unloading, cleaning, etc.  In TM the service entity is implicitly defined and represented in the transaction (i.e. in Freight order or freight booking implicitly, but explicitly in service order) and coupled directly as a pricing components i.e. the charge types.  Hence in TM, Charge types are considered in general to represent the transportation services procured (in most cases ) and their corresponding prices are derived from them.

Example:

(Charge type) Base Freight   charged at 1 USD / KM for 100 KM haulage for a freight order amounts to 100 USD.

However, there are exceptions to this for charge types which are discounts or surcharges.  Example if a Freight order has the following charges

Base Freight @ 1 USD / KM for 100 KM                         =            100 USD

Fuel Surcharge @ 10% of Base Freight                          =             10 USD

Loading Charge@ 50 USD per loading event                  =             50 USD

Discount @ 10 USD or 10% of Base Freight                    =            10 USD

Total                                                                                 =            150 USD

Then from the above example, it is interpreted that the freight order is requesting implicitly the following services

  1. Transportation service (Base) freight which has 2 pricing components the base freight and fuel surcharge. Fuel Surcharge is usually part of component for basic freight to account for the current fuel price change compared to the fuel price based on which the base freight was agreed with the customer as part of the freight agreement.
  2. Loading

Discount is another such charge which a pricing component and as in this case relating to the Base Freight or can be also a flat discount.

Charge types can be classified into two categories depending on if the charge type is representing a pricing component or a service.

1) Charge types representing Services like Base freight, loading charges, haulage, documentation, etc.

2) Charge types representing (Dependent) Pricing components like Fuel surcharge, discount etc. which is not service by itself but are pricing components associated with one or more services.  Example Fuel Surcharge is usually part of component for basic freight to account for the current fuel price change, a discount is applied on one or more service from a pricing perspective.

In Service Procurement (MM-PUR-SVC), the Purchase order represents the order and its items represent the services being procured.

Hence following this model, TM charges in the purchase order will be represented as below:

Each charge type representing independent transportation service will now be a PO item represented using a combination of:

  1. Service material: will be used to represent the logistical information (qty and UOM) of the transportation service and to determine account for posting the cost (using the valuation class assigned to the material)
  2. Condition type: will be used to represent the transportations service details like rate, rate currency, price/unit, invoice amount and invoice amount currency

Example

Representing this freight order cost in MM module in the purchase order.

Invoice view

Steps to create Service Product:

Login with user “TRANSP_MDSPEC” and go to app “Create and Update Service Products“.

The Job template worklist is displayed, click Create.

Job page opens and enter the Job Template “Create and Update Service Products from Charge Type”

Next, set the Scheduling Options whether you would like to run it immediately or on specific date and time.

Enter the required parameters and click Schedule button.

It takes to Jobs worklist where the status of the job will be in process.

Once the job is executed, you will be able to view and the log and result.

In the log, the service material created for the charge type will be displayed.

If the Service Material exists for the charge type then you will get a message that “Material already exists for charge type and plant”.

Note down the service material and check the material in the app “display material”.

Note:

  • If the Charge type input is not provided in the report, the system would create Service Products for all the available charge types for which a Service Product doesn’t exist in the system.
  • If we try to create Service Product with charge types which are marked as dependent, Service Product should not get created.
  • We can also Create Service Product at once for multiple charge types and Multiple plants.
  • Once the Service Product is created using the batch report, if the customer adds new plant, the material can  also be extended in the newly added plants. The customer can run the Batch by giving the list of newly added plants so that the already created Service Products is also extended to the newly added plants.

Summary:

You should be able to create a service material and map the same to a charge type.