21.04.2026

SAP LGM for SMEs: Processes, Architecture and Logistics Overview

Jonte Matthiessen VESLOG
by Jonte Matthießen

What is SAP LGM and where does it fit?

 

SAP LGM fills an important gap in the SAP ecosystem for small and medium-sized warehouses. It is important to note that the implementation of SAP Logistics Management does not replace EWM or TM, but will generally complement them within the existing IT systems landscape, as illustrated in the following diagram.

 

If we focus on the standardized processes provided in the new LGM module, it quickly becomes clear that they differ significantly from SAP EWM and SAP TM.

 

SAP LGM Architecture and Process Overview

 

But what does the LGM architecture look like, and which logistics processes can be mapped?

 

The processes provided can generally be grouped into the following categories:

  • Goods Receiving
  • Transport Planning & Execution
  • Goods Issue

 

INBOUND Process in SAP LGM

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If we take a closer look at these scenarios, the inbound process for inbound goods movements is triggered by a purchase order or an inbound delivery, which can be transferred from a standard SAP S/4HANA system (see figure above) to the LGM.

 

In this process, goods receipt is handled by the system, ensuring seamless stock management. During putaway, only warehouse activities are performed on the LGM side, which means that inbound transportation cannot be planned on the LGM side.

 

 

OUTBOUND Process in SAP LGM

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The outbound process for SAP LGM is currently divided into four different shipping types.

 

The selection of the shipping type determines, for example, whether a package is to be shipped to the customer—in which case transport planning is carried out as part of the process—or whether it is an order that the customer will pick up in person, in which case no transport planning is required. In total, there are six different process flows:

 

Outbound Process Flow

 

The outbound process is initiated by the Outbound Delivery and covers the following processes:

  • Parcel / LTL (Cut off based Consolidation +Warehouse Driven)
  • Direct LTL (Cut off based Consolidation + Without Consolidation)
  • Customer Pickup (Warehouse Only)
  • FTL (Cutoff-based Consolidation)

 

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Extending SAP LGM with SAP Business Network for Logistics

 

The provided processes cover the most common logistics requirements. When connected to BN4L, the LGM can also communicate with external carriers, thereby delivering significant added value that brings a holistic supply chain approach a major step closer.

 

Adapting SAP LGM to your business needs

 

As with many cloud solutions, the standardized workflows must be reviewed against your existing processes and adjusted as necessary. Feel free to contact us; we’d be happy to assist you on this journey.

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To learn more about SAP LGM, visit our solution page: SAP Logistics Management

or visit SAP’s product page: SAP Logistics Management.