SD Flashcards
Sales Org
The sales organization has an enterprise structure in logistics that’s defined for
distributing goods and services. This structure can mirror the business presence
of your sales organization and mimic regional structure or international layout.
The SAP system requires at least one sales organization to be defined for the SD
functionality to work. A sales organization has to be assigned to the company
code for accounting to be integrated.
Bear in mind that more than one sales organization can be assigned to a single
company code. All activities within this structure are reported at the sales organization level as a summation level. The sales organization has its own address, currency, and calendar that can be different and unique to each sales organization
you’ve defined.
Distribution Channel
The distribution channel identifies a unique way for your customers to obtain
goods and services from your company, such as wholesale, retail, Internet sales,
and so on. By design, to use the SD functions, you need at least one distribution
channel. A distribution channel doesn’t have addresses, calendars, or currencies
to maintain. They’re defined in the parent object: the sales organization. Each distribution channel can span across one, some, or all of your sales organizations.
You can also assign one or more plants to a combination of sales organization and
distribution channel, but you need at least one for SD to function. After you
define the distribution channel, you’ll be able to do the following:
Define materials and services master data.
Create and maintain your customer master data.
Allow for complex pricing strategies.
Define determination of sales document types.
Use the channel in sales statistics.
Division
This SAP enterprise structure is usually based on a wide group of products or services. Just like a distribution channel, a single division can be assigned to multiple
sales organizations, and you need exactly one division for SD to function. Your
material and customer master data has parts that are specific to the division,
therefore allowing you to maintain business activity limited to a narrow group of
goods and services.
Note
A material master record can belong to only one division and is maintained on the master data tab Sales: Sales Org. Data 1.
You can make customer-specific agreements, set pricing, set terms of payment, and
perform statistical reporting that limits the data selection to a specific division.
Note
Customer master data is specific to a division and is one of the key structures used in
master data maintenance.
Sales Office
In the SAP system, the sales office is optional. You can use SD without creating
sales offices. If your organization needs this granularity of data, you should know
the following:
A sales office can be assigned to one or more sales areas.
A sales office can consist of sales groups, usually representing a salesperson or
a group of salespeople.
You can maintain an address for the sales office.
The sales office acts as a selection criterion for sales document maintenance.
You can use a sales office to determine the output for your sales documents.
Sales Group
In the standard SAP system, the definition of sales groups is optional and usually
represents the salesperson or a group of salespeople. You can use the SD functionality without creating any sales groups. However, if you’re using this in your system, it allows you to do the following:
Assign a salesperson to the code representing a sales group.
Assign a sales group to one or more sales offices.
Select the sales group as a criterion for sales documents.
Use this structure to influence printer determination for your sales documents
output.
Sales Area
Sales Area The main component required for SD to function is the sales area. A sales area is built from a combination of sales organization, distribution channel, and division described earlier. Basically, the sales area defines the distribution channel that a specific sales organization can use to sell products or services of a particular division. See Figure 1.6 for a layout showing the basic sales area. In this figure, you should identify three sales areas: Sales Area 1: Sales Organization: 1000 Figure 1.6 Basic Sales Area Structure Division Distribution Channel Sales Organization 1000 USA 10 Wholesale 20 Retail 10 Fasteners 20 Moldings 10 Fasteners Distribution Channel: 10 Division: 10 Sales Area 2: Sales Organization: 1000 Distribution Channel: 10 Division: 20 Sales Area 3: Sales Organization: 1000 Distribution Channel: 20 Division: 10
Credit Control Area
The credit control area is a Financial Accounting organizational unit that maintains and monitors credit limits for customers. A credit control area can be
assigned to one or more company codes. It isn’t possible, however to assign a
company code to multiple control areas. Multi-currency credit limits aren’t supported within single credit control areas.
Plant, Storage Location, and Warehouse
To procure, store, and distribute goods and services, you need a Materials Management structure called a plant, which we discussed earlier in this chapter. The
plant is linked to the company code, which is defined in SAP ERP Financials
Financial Accounting. It’s also linked to the Sales Organization and Distribution
Channel, integrating all three together—Materials Management (material inventory) and Financial Accounting (where all transactions are recorded on the company books).
To inventory your products, you also need a storage location or multiple storage
locations representing your warehouses, including at least one for SD to function
and fulfill the deliveries.
To get down to the bin level management of your goods, you also create a warehouse structure that can be assigned to one or more storage locations
Shipping Point
The enterprise structure component responsible for the distribution activities is a
shipping point. This logical definition can mirror your physical shipping dock,
mail depot, or a group of people responsible for distribution activities. You can
have multiple shipping points per plant, but you need at least one for the shipping functionality to be available. More than one plant can also be assigned to a
shipping point, although this is recommended only for plants that are close to
each other. A shipping point has its own address and calendar, influencing the
scheduling and processing of deliveries to customers, as well as your own replenishment deliveries. The shipping point also influences the pick storage location
determination together with plant and shipping condition. The organizational
assignment of the shipping point is carried out at plant level.
Order Processing
Order processing is built on myriad activities and usually starts with recording
the actual sales order, then procurement steps if goods or services aren’t available, followed by delivery picking, packing, and shipping to the final destination.
The sales order document stores the data of customer’s firmed request for your
goods or services. The system uses master data you’ve maintained and established
to fulfill this request. Sales orders are recorded either by your own sales force or
directly by customer via web front, EDI, or XML interface messages.
The sales order contains customer information, partner data (sold-to, ship-to, billto), material, quantity, pricing, delivery date, and shipping and transportation
information required for delivery. A goods availability check is performed at the
time of the order entry, triggering the potential procurement requests as needed.
The requirements created by the sales order can be filled from available on-hand
stock inventories, procured by replenishment that is processed by internal source
such as stock transport orders or production orders or by external sources such as
purchase orders replenishing your in-house stock levels, or via third-party delivery—performed by external supplier shipping goods directly to your customer on
your behalf.
On the shipping due date, the delivery documents are created, and the route is
determined if you are using the SAP Transportation Management software. You can then start the process of picking, packing, staging, and loading, if you’re using
all of these steps in your business process. If you are using SAP WM functionality
(lean warehouse management or standard Warehouse Management in SAP ERP),
you’re using transfer orders to initiate picking. The transfer order includes data
copied from the delivery document. Standard SAP functionality provides some
complicated picking methods such as grouped deliveries, wave picking, and twostep. Transfer orders can be processed as printed pick tickets or in electronic form
using RF devices on the warehouse floor. The confirmation of the transfer order
completes the picking activities. If you use the transportation functionality, you
can also start collaborating with freight service providers, start the tendering process, and finish up by creating the shipment cost document, which captures the
payable activities related to the delivery of goods to your customers. Delivery
packing list and bill of lading output are usually triggered at the completion of
these steps.
The posting of the goods issue completes the process and results in stock movement or a confirmation of service that changes your on-hand inventory balance,
reducing it and updating the balance sheet accounts in Financial Accounting
Billing
The last step before collecting your customer’s payment is creating a billing document or invoice that is sent to the customer’s bill-to party for payment request.
Just as with the delivery document, data is copied from either the sales document
or the delivery document and other billing documents, creating credit or debit
memos. When you create the billing document, account determination is performed, and appropriate GL account postings are executed that debit the customer’s receivables and credit the revenue account.
Financial Accounting
As we touched on earlier in this chapter, the integrated philosophy of SAP is
showing you how all activities, in one form or another, end up recorded in the
balance sheet accounts in Financial Accounting.
The material documents recorded when the goods issue was posted, and a subsequent accounting document stored the stock movement data. The transportation
service provider purchase order ended up as an entry for accounts payable, and the incoming payment from the customer was also posted against the invoice
(billing document) submitted in the earlier steps.
Additional activities may also be performed when differences are reconciled and
potentially resolved with either credit or debit memos.
All activities in the SD process end up reflected in the system as documents, master data, and pricing records, and they are used as a foundation for the sales info
system (SIS) or SAP Business Warehouse for reporting
Sales Document Components
As mentioned before, all of your sales transactions occur within the organizational structures that you defined in configuration; will use pieces of master data you’ve maintained, as described in the previous chapter; and will finally come together in a business transaction recorded in the system as sales documents. These documents can be grouped into four distinct categories, and then within each category there are several document types (see Table 3.1) for details: Presales documents (inquiries and quotations) Sales orders Outline agreements (contracts and scheduling agreements) Customer complaints (free-of-charge orders and credit memos)
Item Categories
AP item categories are defined to arm you with additional controls during sales
document processing. Basically, the same material can behave differently when processed by different order types. Just like with the document types, item category settings can give you completely different end results, depending on your
business scenarios.
For example, the behavior of your normal standard order item can be totally different for returns order or cash sales. In real life, you may create the quotation for
your customer’s inquiry. The item category on the quotation isn’t subject to delivery or billing. Then you create a subsequent sales order with reference to your
quotation, so the item is deliverable by a third party. During your order creation,
Customizing settings were accessed, and the destination order type and item categories were determined. Of course, you can create your own item categories by
making the settings in Customizing to fine-tune controls and to match your
needs. Table 3.2 lists some of the available standard delivered item categories. Also, you maintain the assignment of the item categories to your document types
in Customizing by defining which item categories can be used with certain document types. Then you set up copy controls that allow subsequent documents to
be generated with reference, where allowed combinations of source and target
document types and item categories are maintained. You control what is getting
copied for you from inquiry to sales order, and creating shipping and billing documents
item Category - Important Items
The following are some of the most important functions controlled by item category Customizing:
General Data
Item Type: You can define whether the item is to be a material or a text
item; for example, by changing how the system will perform certain functions such as tax determination.
Special Stock: If you need to process special stocks in a different way, you
have to select stock in scope.
Pricing: You can define whether set pricing for the item will be carried out.
Business Item: You can select all item data to deviate from those at the
header level of the document.
Schedule Line Allowed: You can define whether schedule lines will be
allowed for the item.
Returns: You can determine whether the item is a return item
Credit Active: You can specify whether the item will be subject to credit
management controls and updates.
BOM and Configuration: You can define controls around variant configurable materials.
Shipping Data
Item Relevant for Delivery: If you set this flag, the item category is subject
for delivery.
Weight/Volume Relevant: You can determine the weight and volume of an
item.
