Contributed by Mr. Malik Imtiyaz

Sales and Distribution Structure: Unit-1

What is Company: Company is nothing, but is a client to whom we are going to implement SAP .It represents a corporate group

What do you means by IDES: Internet Demonstration and Evolution System.

·        In SAP ERP highest organization unit is client

·        Company code is Highest organizational unit in FI

What is the Use of Organizational Structure in SAP ERP?

SAP ERP uses a range or organizational units designed exclusively for mapping sales and Distribution Process

What is Company Code?

Company Code: is Legal entity and independent accounting unit

At company code level you create:

·        Balance Sheet Required by Law

·        Profit and Loss account

A complete independent accounting unit can be represented as the smallest organizational unit of external accounting.

What is the Function of Sales organization?

Responsible for –

·        Distributing Goods and services

·        Negotiating Sales Conditions

·        Product Liability and rights of recourse

Ø     Sales Organization is the Highest organizational unit in SD

Ø     Sales organization is uniquely assigned to a company code

Ø     The sales organization is also used to take for example, a regional, national or international subdivision of the market into account

Ø     To use the sales and Distribution functions in the system, you need at least one Sales Organization

Ø     All sales and Distribution documents, that is, all orders, outbound deliveries, and billing documents are assigned to a sales organization

Can you assign a sales organization to multiple company codes: No

What is Distribution Channel?

·        Distribution Channel means through which sales Materials reach the customer

·        Represents your strategies to distribute goods and services to your customers

·        Several Distribution Channel can be assigned to a sales organizations

·        To use the Sales and Distribution Functions in the system, you need at least one distribution channel

For Example you:

·        Define responsibilities

·        Carry out flexible price structuring

·        Differentiate sales and statistics

What is Division?

Ø     Division is Logical grouping of product,

Ø     A division can represent a certain product group, For Example, Therefore, you can for example, restrict price agreement with a customer to a certain division, in addition, you can conduct statistical analysis by division

·        Represents a product line-e.g.: Motorcycles, spare parts, services and so on,

·        You can group materials and services with the division

·        Several Division can be assigned to a sales organization

·        To use the sales and distribution functions in the system, you need at least one division

·        ‘00’is Cross division to include products from various other divisions

What is Sales Area?

v    Sales Area is Combination of the Sales organization, distribution channel, and division,

·        It defines the distribution channel a sales organization uses to sell products from a certain division

·        Each sales and Distribution document is assigned to exactly one sales Area. This assignment cannot be changed

·        A sales area can belong to only one company code .This relationship is created by assigning the sales organization

Ø     When processing sales and distribution documents, the system accesses various Master data depending on the sales area. This master data includes for example, Customer master data, Material Master data, Prices and discounts. The system also carries out a number of check concerning validity of certain entries according to sales area

Ø     Sales and distribution processes in the system are always uniquely to sales area

What is Plant?

The plant is location where material stock is kept and could be, for example represent a production facility in the system

·        The plant and storage location are organizational units that can be used by all logistic areas of the system

·        In Sales and Distribution, a plant represents the location from which materials are distributed and services are provided and corresponds to a distribution center. The relevant stocks are kept here.

·        To use the sales and distribution functions in the system, you need at least one plant

·        Each plant is uniquely assigned to a company code

·        A plant can be assigned to several combination of sales organizations/distribution channels, and vice versa

·        The plant is essential for determining the shipping point

·        Plant and Shipping Relationship: One to Many, and many to one

·        Combination of warehouse can also termed as plant

·        Warehouse is combination of storage Location and Plant

·        Delivering plants need to have combination of sales organization and Distribution channels assigned:

What is shipping point?

·        Shipping point is responsible for scheduling and processing deliveries

·        Shipping point control your shipping activities

·        Shipping point responsible for organize and process outbound deliveries to different locations[For example, Loading ramp or Rail depot]

·        Shipping point is the highest organizational unit in shipping process

·        Shipping take care of outbound delivery and inbound delivery

·        1-Loading point belong to 1-shipping point, but a shipping point can have many loading point

·        One shipping point is mandatory for Delivery

·        Each outbound delivery is processed by exactly one shipping point

·        The organizational assignment of the shipping point is carried out at plant level

·        More than one shipping point can be assigned to a plant

·        More than one plant can also be assigned to a shipping point, although this is only recommended for plants that are close to each other

·        The Delivery is organized by various shipping points which are assigned to the delivering plants:

Which organizational units represent Sales and Distribution?

·        Sales area [Sales organization, Distribution Channel, Division]

·        Shipping point

Relationships:

·        Company to Company Code: One-Many

·        Company code to Sales organization: One-Many

·        Sales organization to Distribution channel: Many-many

·        Sales organization to division: many –many

·        Distribution channel to Division-Many-Many

Note: Division is always Sales organization specific

If sales organization wants to use a plant that plant must be assigned to sales organization

Overview of Sales processes: [Unit-2]

Presales activities include:

·        Entering and tracking customer contacts

·        Mailing campaigns

·        Answering Customer telephone queries

·        Inquiries

·        Quotations

Ø     Specific marketing measures(direct mailing campaigns, Internet campaigns, Trade fair sales activities, or telephone campaign for example)can trigger sales process

Inquiry: not a legally binding document

Quotation: Legally binding document with a valid period of time

Standard order normally contains:

·        Customer and Material Information

·        Price Information for all financial statement items

·        Information about delivery dates and delivery quantities

·        Information about shipping processing

·        Information about billing

What is Sales order?

·        A Sales order is an electronics document that captures and records your customers request for goods and services

Ø     The sales order contains all pertinent information to process the customer’s request throughout the whole process cycle

·        When Sales order is Saved, Inventory Stock is Lock

·        It also trigger Procurement

What is procurement?

The way in which a material is obtained for a customer order can depend on the material itself as well as on the sales transaction

·        Check the availability of the ordered goods and

·        Transfer the requirements to materials planning

Material panning (MM) organizes and monitors the actual procurement process: This include

·        In-house-produced and or

·        Purchased

The procurement can, for examples:

1.     Result form available stock

2.     Be guaranteed by replenishment [Purchase requisition or Purchase order, Planned order or production order]

3.     Trigger a make to- order production

4.     Order the outbound delivery via external supplier[Third party business transaction]

5.     Organize the outbound delivery via another warehouse(stock transfer)

Shipping processing supports:

·        Creating outbound  deliveries

·        Picking [by creating transfer orders]

·        Packing

·        Posting the good issue

Ø     If there is no warehouse related activities there cannot be picking/Packing process, hence it is optional

Ø     If you don’t do PGI Stock will not be updated

·        Shipping Processing in sales and distribution begins when you create the delivery document.

·        The Delivery Document controls, supports and monitors numerous sub process for shipping processing, such as

1.     (optional) Picking and confirming( transfer order)

2.     (optional) Packing

3.     (optional) Planning and monitoring of transport(shipment document)-optional

4.     Posting the goods issue(goods issue document)-Mandatory Function

v    Creating a Delivery document -Copy Control for Sales order-To Delivery Document [Material/Quantity]

v    Creating a transfer order-Copy Control for Delivery document-to the Transfer order

[for processing within warehouse]

·        The Transfer order is essential for controlling the movement of goods within your warehouse.

v    The posting of the goods issue can bring about a change based on a quantity basis as well as on a value basis in stock. Value based changes are made to the relevant balance sheet accounts in financial accounting

Billing Supports:

·        Creating Invoices for goods and Services

·        Creating credit and debit memos

·        Cancelling previously posted billing document

·        Automatically transfer billing document data to accounting

Creating a Billing Document: copy control-sales order/Delivery –on to Billing Doct.

·        The Billing document serves as data source for FI to help  you to monitor and process customer payments

When you create a Billing Document:

v    A debit posting on the customer’s receivables account

v    A credit posting on the revenue account[G/L Account automatic Determine when you create billing Document ]

Payment Supports:

·        Posting payments against invoices

·        Reconciling differences

When you post an incoming payment:

v    A Debit posting on the Cash account[The data on the relevant G/l is posted Automatically

v    .A Credit Posting on the Customer’s Receivables account

Ø     Contract and Scheduling Agreement are part of Order Processing

Ø     Billing is the Last activity in SD

·        Contact and actions are document for Sales Support within presales

·        Sales Documents are documents that are entered during presales and order processing. Inquiry, Quotation, Contracts, Scheduling agreements and Standard orders are examples of Sales Document types

·        Outbound Deliveries, Transfer requests and Shipments are documents within Shipping processing

·        <The goods issue document contains changes involving stock and is the basis for the relevant accounting documents>

·        Billing Document is a document in the Billing area and is the basis for the relevant accounting document

SALES PROCESSING

·        A sales document is Always created within a sales area

·        Therefore, an order can refer to a Business Transaction that already exists.

·        One or more inquires and/or quotations can be reference documents

·        Similarly, a quotation can lead to several sales orders

A Sales Document is divided into Three Levels: Header/Item/ Schedule line

·        The Data for the Document Header is Valid for the entire Document. This contain-Customer Related Data

·        Each item in the sales Document contains its own data. This includes: Data about Materials and Quantities order

·        Schedule line Contains: Delivery quantities and delivery dates, they clearly belong to an item.

·        The item can have several schedule line

·        Over views Screen: Header/Item  [To ensure that Sales Document are processed efficiently]

Shipping Processing

Outbound deliveries are created for orders that are ready to be shipped. The system copies the relevant data from the order to the outbound delivery

·        You can create one or more outbound deliveries from the order

·        You can also combine items from more than one order in an outbound delivery.

Combine Many order to one Delivery

·        Shipping point

·        Due Date [Material Availability Date/Transportation Planning Date]

·        Ship to Address

Delivery Document is grouped into Two Levels: Header and Item

·        The Data for the document Header is valid for the entire Document

·        This includes, for example, data for the Ship to party, and Deadlines for Shipping   processing.

·        Each item in the delivery document contains its own data.

·        This includes, for examples, data about Material, quantities, weight, and Stock information.

·        Each delivery document can contain several items, whereas the individual items can be controlled differently [Examples includes material items, free-of charge items, items, or text items.

Ø     Each schedule line in the sales document can become an item in the delivery document

You create a transfer order for an outbound delivery

·        A transfer order is generated for a warehouse Number. During this process, only the deliveries that are necessary for picking are taken into account.

·        The system can combine more than one outbound delivery in a group of transfer orders provided that the same warehouse number is used

·        To optimize picking- create picking lists that contains materials from multiple outbound deliveries

·        To relive the work for picker, you can sort list-Storage bin, Material, Calculate the quantity per material.

·        The system can create Transfer orders either on-line or as a background job to be executed during off-peak hours.

Effect of Post Good Issue:  [Important]

1)    The quantity in inventory management and the delivery requirements in materials planning are updated(reduced)

2)    The value change in the balance sheet accounts for inventory accounting is posted (the postings from the relevant accounting document are based on the cost of the material)

3)    The System creates further documents for Financial accounting

4)    The billing due list is generated

5)    The status in all associated sales documents is updated.

Billing Document Processing

You can create an invoice for a single delivery or sales order.

Combine many outbound delivery in One Billing Document

·        Payer

·        Billing date

·        Destination Country

The system can create invoices either on-line or as a background job to be executed during off-peak hours

A billing document is grouped into two levels: Header and Item.

·        The data for the document Header is valid for the entire document. This includes, for example, data about the payer and billing date

·        Each item in the billing document contains its own data. This includes, for example, details about the material, billing quantities, and net values for the item. Each billing document can have several items

The Document Flow is updated at the document header and line item level

·        Schedule lines are only in sales documents. Since each schedule line contains its own delivery date, each deliverable schedule line becomes an individual item in a delivery document

Which steps are carried out in sales and distribution processes?

1-Presales Activity/2-Sales order processing/3-Procurement/4-shipping/5-Billing/6-Payment

v    Shipping process starts with the creating of delivery document i.e. outbound delivery & end with the creation of Billing document

What are the effects of creating a billing document?

·        Accounting document is created

·        Further documents are created for accounting

·        Status in all relevant sales documents is updated

·        The sales Information system is updated

·        The customer credit management account is updated

Master Data in Sales and Distribution processes: unit-3

Origin of Data in Sales Document

·        Customer Master Data

·        Material Master Data

·        Customer /Material Information[Customer Specific Material Info records]

·        Output Master data

·        Condition Master Data[pricing]

These Source of data include, for example

·        Customer Master Data

·        Material Master Data

·        Condition Master Data [you create and maintain this master data in the sales and distribution master data for automatic pricing. This could be a material price or a customer discount, for example]

·        Output [is information that is sent to the customer via various media, such as mail, EDI, or fax, Examples includes the printout of a quotation or an order confirmation, order confirmations via EDI, or invoices by fax

·        Control tables: you can create and maintain control tables in customizing. Depending on the table settings the proposal can be controlled by a variety data in the sales document

Ø     A previous sales document can serve as a source of data for another sales Document. Example: a quotation can serve as a data source for a sales order

Customer Master Data:

The Customer master groups data into categories:

General data: Relevant for Sales and accounting [Valid for all organizational Units]

Ø     It is stored centrally (client Specific) to prevent data redundancy, It is valid for all organizational units within a client.

v    General Date: maintained at client level hence can be uses by all company codes

Ø     Within a client you can have many company codes

Ø     Customer created in General Data Can be Extended across company codes and sales area data

Sales Area Data: Relevant for sales and distribution [valid for: Sales org, Distribution channel, Division

v    Tax liability comes from ship to party and maintained in sales area data

Company Code Data:   [Relevant for Accounting, Valid for: Company Code]

The customer Master includes all data necessary for processing orders, deliveries, invoices, and customer payments.

Customer Master General Data:  Stored at client Level [Client -Specific]

1.     Address                         : Name, Address, Language

2.     Control Data                 : Tax information

3.     Payment Transaction   : Bank Details

4.     Marketing                     : Industry, Customer, Classification

5.     Unloading Point           : Good receiving hours

6.     Export Data                  : Data for export control

7.     Contact Persons            : Address of business partners

Customer Master Sales Area Data   [Relevant for Sales and Distribution]

1.     Sales : Sales office, Currency, sales District, Price Group[Pricing Procedure]

2.     Shipping: Shipping Condition, Delivering plant, Transportation Zone...[Sales area Level]

3.     Billing: Output tax classification, Payment condition,…[Account Assignment Group]

4.     Partner Functions: Sold to party, ship to party, Bill to party, payer

Ø     If POD is defined to any customer then we cannot Bill that customer until we get the POD

Ø     We have to extend the sold to party customer to ship to party Sales Area

Ø     Account assignment group: Determines the G/L account in which revenue processing takes place.

v    Tax Liability Comes from Ship to party & is maintained in Sales area data

Mandatory partner Function:     Sold to party/Ship to party/Bill to party/payer

Ø     Ship to party- Good Recipient while creating ship to party in the system

Customer Master Company Code Data:

1.     Account Management: Reconciliation account

2.     Payment transactions : Payment methods, Payment block

3.     Correspondence         : Dunning procedure, accounting clerk

4.     Insurance                    : Amount Insured[Value Insured]

Effects of Changes in the Customer Master:

Changes that you make to a customer’s master data do not affect any sales documents that have already been entered for the customer in the system. Except Address

v    When you change a master record after having used it to create different document, the changes do not affect the documents already created.

v    Inco Terms (part 1) define rules for shipping, while Inco Terms ( part 2) contain additional information on the primary Inco terms.

v    In the customer master, you have maintained a language Spanish for specific customer john. It means that when the order confirmation for john will be printed in Spanish.

v    By using ‘extras administrative data’ you can check in the system when and by whom the customer master was created

v    By using Environment-List of documents-orders, you can display a list of orders for the customer from the customer master

v    You cannot maintain different address for same sold to party in multiple company code in the master data.

v    When creating customer master through menu path, default value for account group depends on business partner.

v    If you have 4 Sales organization, 2 distribution channel,1divion,then 8 Sales areas are created.

v    Sold to party specifies Inco terms, which defaults in the sales order

Is it possible in the customer record to maintain various addresses for the sold to party in multiple company codes?

No, The address of the sold to party is maintained independently of the organizational units. [It is possible to assign several ship to parties to a sold to party]

Material Master Data

1.     Basic Data1:Relevant for all area    [valid for all organizational Units]

2.     Sales: sales organization: Relevant for sales[valid for Sales org, Dist Channel]

3.     Purchasing: Relevant for Material Management [valid for Plant]

4.     Sales: General/plant: Relevant for Sales[Valid delivering plant]

5.     Further: Relevant of construction, Requirement planning, other pieces of data for engineering/design, accounting, costing, warehouse management, and so on…

v    Basic data is relevant to all areas: It is valid for all organizational units within a client

v    The Sales organization data is relevant for sales and distribution. It is valid for the respective sales organization and the distribution channel.

v    Sales Plant data is also relevant for sales and distribution and is valid for the respective delivering plant.

v    Loading Group helps to determines Shipping point

Material Master Relevant for Sales:

1.     Basic Data1: Material number, material short text, base unit of measure, division, & so on

2.     Sales :Sales org1:Delivering plant, Material group, Tax classification, and so on

3.     Sales: Sales org2: Material group, bonus group, Product hierarchy, and so on.

4.     Sales: Gen/Plant: Availability check, transport group, loading group, and so on.

5.     Foreign trade Export: Export/Import group, region of origin, and so on

6.     Sales Text: Item text for sales

v    25 Tabs in Material Master

v    You create material Master : For Sales organization, Distribution channel, Plant and storage location.

v    Basic Data and General Data are Stored at Client Level

v    Division related information is stored at Client Level

1.     Basic data is relevant to all area. It is maintained independently of the organizational units.

2.     Data for Sales: Sales org.1 and Sales org.2 and the sales text are valid for the sales organization and distribution channel.

3.     Sales: General/plant data and Foreign Trade: Export data is valid for Delivering plant

Service Material

Standard material Type: DIEN=Services

Schedule line Category for Services is: CD-> [order/No inventory Management]

Item Category Group: LEIS [No delivery, Order related Billing]

Material Master Views: For Services

1.     Basic Data

2.     Classification: optional

3.     Sales and Distribution data

4.     Purchasing: only when the service is obtained from a third party

5.     Accounting: only for internal valuation with prices.

Cross Division Sales: You can use this kind of processing to enter multiple materials with various divisions in a sales order.

Division Specific Sales: you cannot use this kind of processing to enter multiple materials with various Divisions in an order.

You can control the following in customizing, according to the sales document type: In IMG of Sales Document Type [we have Item Division & Check division]

·        Whether it is possible to enter multiple materials with various divisions for and order.

·        The way the system is to respond [with or without warning message]

·        Whether the division on item level is copied from the material master record or whether the division in the document header is also copied into the item.

Characteristic and control of material type includes:

·        Views

·        Default item category group

·        Number Ranges

Ø     Only Material type Determines which Material Master views are available

Ø     Material Master Can vary by: Sales organization, Distribution channel, Plant and Storage Location

Ø     On a Material Master data, Division is at Client level

Ø     MRP type and Loading Group are plant level fields in Material Master

Ø     ROH is externally produced material.

Ø     You can find product hierarchy in Sales: Sales area org2 tab

Ø     Cross divisional sales is controlled by sales document customizing

Account group in Material Master control:

·        Field selection

·        Customer account number

·        External and internal number Range

·        Output and texts

·        One time customer or not.

Ø     Product hierarchy can be extended up to 9 levels

Ø     During order processing, packing can be done.

Ø     CMIR is having priority over CM and MM for plant determination

Ø     CMIR can have texts.

CMIR includes:

·        Customer material Number, Partial Delivery Indicator , Delivery Tolerance, Delivery priority and Delivering plant

Common Master Data:

Representative Distribution Channel: used for

 Customer/Material/or condition master data will be shared [if you do not need the master data (customer/Material and condition master data) to be differentiated according to distribution channels, you have to set up a representative distribution channel.

Representative Division:  Customer and Condition Master Data will be shared

·        For Customer: Based on Distribution Channel and Division

·        For Material: Based on only Distribution Channel

·        For Condition Record: Based on Distribution channel and Division

Ø     There can be texts in condition record

Ø     VD05 T. code is used for blocking a customer

Customer-Material Info Record

Is used for storing [Customer-specific Material data]

You can use the Customer-Material information record to maintain the following data:

·        Cross reference: From your customer material number to your material number and the customer’s material description.

·        Specific shipping information for this customer and material                         [such as Delivery tolerances, partial deliveries, or the default delivering plant]

Ø     Sales orders can be placed with the customer’s material number by using the ordering party tab page

Condition Master Data for Pricing

Condition Master Data includes:

1.     Prices: Material price, price List, Customer-specific, Other

2.     Surcharges /Discounts: For the Customer, For the Material, For the Price group, For the Material group, For the Customer/Material, For the Customer/Material group, For the price group/Material group, other

3.     Freight: Inco-Term1-2,other,

4.     Taxes: Value added Tax

 Depending on the Condition Type:

·        Quantity

·        Amount

·        Surcharge/Discount

·        Percentage

You Can maintain values within a condition record [price, surcharge, discount] according to a scale. There is no limit to the number of scale levels.

·        Define of condition type is done in IMG but condition Records are maintained in Easy Access.

·        PR00 is Mandatory condition type for price

Additional Master Data

Output Master Data:

Output Type:

1.     Partner function

2.     Transmission medium

3.     Time

4.     Language

Standard Output Program: RSNAST00

Incompleteness Check Master Data:

a)     Automatically when data is saved or

b)    By choosing Edit-Incompletion Log

Ø     The incompletion log functions are available in the sales order and in the delivery.

Sales and Distribution Processes-Data Determination and Collective Processing: unit-4

Sales Document Types:

1-Standard order, 2-Contract, 3-Cash Sales, 4-Rush Order Sales, 5-Free of Charge Delivery, 6-Return, 7-Consignment, 8-Credit/Debit memo request

·        Standard order for invoiced sales on fixed delivery dates

·        Rush order and cash sales for sales from the plant[with or without invoice]

·        Free deliveries for sales on fixed delivery dates[without invoice]

·        Return for return goods[credit memo/replacement delivery]SDF

·        For Free Deliveries Credit memo is the invoice

Ø     Sales document type controls:  Sales documents.

Ø     Delivery document type controls: Shipping Documents [Delivery Document]

Ø     Billing document type controls: Billing Document

Functions of Sales Documents

1-Availability Check, 2-Delivery Scheduling, 3-Transfer of Requirement, 

4-pricing,5-Sales information system, 6-Crdit Check, 7-Message, 8-Texts.

Which function to activate in the document type is Done in IMG

Ø     Depending on the transaction, certain functions are carried out automatically. These functions are activated or deactivated directly or indirectly through the Sales document type. Examples

Ø     For your normal sales process, you would like the system to automatically determine the time your customer receives the ordered goods. To do so, activate the shipment scheduling and availability check functions. However these functions are not necessary for credit memo request

Ø     Pricing does not need to be carried out for free deliveries.

Ø     Define an output group that can be used for processing sales orders and then create another output group for processing contracts.

Plant, Shipping Point, and Route Determination

Plant Determination:

For every item the search is carried out separately

For Plant: [Priority]

1.     Customer material info record:[Always created for Sold to party]

2.     Customer Master Data [Ship to party]

3.     Material Master Data [Material]

The plant plays a central role in Logistics. In Sales, it is the delivering plant.

If nothing is found no delivering plant is set in the sales document item.

Without a plant:

·        an item cannot normally be processed further: For example

Ø     Automatically determine the shipping point or Tax is unsuccessful, the availability cannot be checked. And an outbound delivery cannot be made.

Shipping Point:

Shipping point is organizational unit in the system that is responsible for processing shipping.

What is the purpose of shipping point?

The Shipping point is organizational unit, whose employees are responsible for the complete shipping processing

What is the purpose of the route?

The route establishes the path and the method of transportation a delivery item takes to reach the customer location. The route is also an important criteria for the selection of shipping wordlists.

Shipping point Determination:

1.     Shipping condition-Sold to party-[customer master: Shipping tabs]

2.     Loading Group-Material Master[Sales: Gen/Plant Data]

3.     Delivering plant [customer/Material info sold-to party, Ship -to party, Material]

Route:

Route is the path an outbound delivery follows from the delivering plant to the ship to party

Transit Time: Length of time for which goods are “on the Road”

Transportation Lead Time: is time taken to arrange the transport

Route Determination:  4 factors to determining Route

1.     Departure zone in customizing for the shipping point

2.     Shipping condition form the sold to party[customer master: shipping]

3.     Transportation group in the Sales-specific Material data[View: sales: Gen/plant]

4.     Transportation zone in the general data for the ship to party

Shipment Scheduling:

In Shipment and Transportation Scheduling, You define the time at which the receipt of the goods at the customer can be acknowledged [Confirm delivery Date].

Different lead times are taken into account: In Shipment or Delivery Scheduling

1.     Preparation time [pick pack time]

2.     Loading time

3.     Transportation lead time

4.     Transit time

The following data is used in shipment scheduling:

1.     Order date: Date on which the order is placed

2.     Material availability date: Date by which a sufficient quantity of goods must be available for picking and packing

3.     Loading date: Date on which the goods picking and packing process is completed(and the mode of transport is available) so that loading can begin on time

4.     Good issue date: Date on which the goods must leave the delivering plant

5.     Delivery date: Date on which the goods arrive at the customer.

Ø     Pick pack time and loading time comes from shipping point

Ø     Transit time comes from Route[always displayed in number of days]

Ø     Date Scheduling and Precise scheduling is defined in [Shipping point] Route

Delivery Date is Determined: you can also take into account the times required for delivering goods to a customer via a particular route

Total time includes:

1.     Transit Time: [The time required for transporting the goods to the customer]

2.     Transportation Lead Time: [The time required for preparing the goods for transportation]

Backward Scheduling:  The customer’s requested delivery date is used to calculate the material availability date and the transportation lead time. The outbound delivery must be created at the earliest of the two dates [material availability date/Transportation planning date].if both dates are after the order date, the customer requested delivery date can be confirmed.

Forward Scheduling: if both of dates not come after order date, customer request delivery date cannot be confirmed.

Now system confirm the quantity on the basis of New Material Availability date,

The earliest date at which the material is available in the warehouse

Ø     Two schedule line are generated for the sales line item

1.     The date of first schedule line corresponds to the customer’s required delivery date and has no confirmed quantity.

2.     The date of schedule line shows the confirmed delivery date and the confirmed quantity

Ø     Every line item will have 2 schedule line

Forward Scheduling: Takes into consideration the time parallels of the work flows for transportation planning and picking/packing of materials. The longer of two periods is relevant for scheduling. The Selection date of the outbound delivery is the earlier of the material availability or the transportation planning date

Ø     The earliest date at which the material is available in the warehouse is the new material availability date.

Ø     You can deactivated Forward Scheduling, But you cannot deactivate Backward Scheduling

When must the responsible shipping point start shipping processing so that the goods arrive at customer’s location on time?

Ø     On the Material Availability Date

Which of the steps for shipping and Transportation processing must be completed so that the goods can be loaded on the correct loading date?

Ø     Preparation(picking/Packing) and transportation planning must be completed so that loading can be begin on time

·        The System controls the creation of outbound delivery Via  the Shipping point

2 Sales document in presales:

·        Inquiry

·        Quotation

Collective Processing:

Outbound Delivery: [Through Delivery due list]

The System automatically combines the items in the selected sales orders to minimize the number of outbound deliveries.

This function can be used as follows:

·        Online processing

·        Background job to be executed during off peak hours.

The system controls the creation of outbound deliveries via the Shipping point, the selection data (picking date)

From the list [Delivery Due list] you can create outbound deliveries online or in the background and call up the document

Complete delivery:  Order should be delivered in one single delivery

Partial Delivery: If the customer does not require complete delivery, you can define a partial delivery agreement with the customer [in customer-Material Info –also max partial delivery is 9]

Order Combination:   Several orders to one outbound Deliveries

1.     Ship to party

2.     Route

3.     Shipping Point

4.     Delivery Due list

5.     Inco-Terms

Picking: [Through work list for outbound delivery]

Picking is carried out when Transfer orders triggers and monitors the stock movements are generated. The items in the transfer orders contains the materials and quantities to be picked ,which correspond to the delivery quantities

·        Transfer order triggers and monitors the stock movement

·        External picking can be confirm through lean warehouse management

·        Instead of pointing the picking list, you can also forward the transfer order data to an external warehouse management system by means of portable data capture(PDC)

From the transfer order, you can print the pick list for use in the warehouse.

Collective processing can be executed as follows

Manually (online)

Creating a background job

The system controls the creation of transfer orders via Shipping point, the selection data [picking date] and other criteria.

v    No Transfer order- No Picking

Invoice Split:

·        Payer and payment terms

·        Material group

·        Billing date

·        Billing address

From the transfer order, you can print the picking lists for use in the warehouse. This step can be carried out automatically.

Instead of printing the picking list, you can also forward the transfer order data to an external warehouse management system by means of portable data capture [PDC]

·        External picking can be confirmed through [Lean warehouse management]

If the total quantity cannot be picked you can:

·        Pick the open quantities by means of another transfer order

·        Reduce the delivery quantities in the outbound delivery by copying the picked quantities[Partial Delivery]

Goods issue: [ Through good issue work list of outbound deliveries]

The goods issue can also be posted via collective processing. To do so, select a work lists from all the outbound deliveries for which goods issue is ready to be posted and simultaneously post more than one goods issue.

Collective processing can be executed

Manually [online]

Background job [off peak hours]

The system controls the posting of the goods issue via the shipping point, the selection date, and other criteria [forwarding agent or route]

Billing:

Billing due list [Collection of deliveries due for billing]

To speed up the process of creating billing documents, you can use the billing due list to process more than one billing document simultaneously. The system combines items for billing to create as few billing documents as possible

This function can be used as follows:

·        Manual processing of the billing due list(online processing)

·        Collective processing via a background job(batch) at off –peak hours

Invoice Split:

Ø     If payment terms are different at header level then invoice split will take place

Ø     If materials are from different materials groups then also invoice split will take place

Ø     If any value of Header of reference document is different then billing document will be split

·        Payer and Payment terms

·        Material group

·        Billing date

·        Billing address

Collective Processing of:

1.     Outbound deliveries

2.     Transfer order[picking]

3.     Good issue

4.     Billing document [Also carried out manually(online) and in the background.

Availability Check: Unit-5

An availability Check is carried out during Sales order processing if.

·        The material requires an availability check[Material Master]

·        The availability check is set in Customizing for the Transaction[Order & Del]

·        Order: IMG of Schedule line Category & IMG of Sales Document Type

·        IMG of Delivery Item Category

On the Sales and Distribution Tab Page in the Material Master you can: enter in Gen/Plant in the availability check field, which and/ or what type of availability check should be carried out for this material during order Processing.

There are also various settings in customizing that influence the process flow of the availability check.

The material availability date is determined from delivery Scheduling on this date enough material has to be available in time for delivery, to the customer for their requested delivery date

·        The Material availability date is determined from delivery Scheduling

·        System calculates the time required for picking, Packing, Loading and Transporting the goods

·        Availability is checked on the material availability date

·        An agreement you made with customer about deliveries also affect the result of the availability check.

Complete Delivery Switch: is in Customer Master & Sales order at header level

Partial delivery switch appears in:

·        Customer Master [Shipping Tab]

·        Customer Material Info [The proposal for the item level comes from the CMI]

·        Sales order [at item level]

·        Partial deliveries are maximum (9)

The availability check includes:

·        Current stock

·        Planned- inward movement [such as Purchase orders, Purchase requisitions, Planned orders]

·        Forecast outward movements [such as existing sales orders, deliveries]

Ø     By availability check, you can come to know about material availability.

Ø     The availability is checked on the material availability check.

Ø     During sales order, you can overwrite the plant

Ø     Delivering plant on the material master is found in Sales: Sales order tab.

Ø     Complete delivery or Partial delivery Preferences affect availability results

Ø     Availability check includes Current stock, Planned inward movement, Forecast outward movements

Ø     The system firstly carries out delivery scheduling (backward) based on the customer’s requested delivery date and determines the material availability date. After this, it runs availability check for this date.

Ø     Availability check is done at plant level. You can also at check other plant level.

Ø     If quantity of an order item is not totally confirmed then an order item is backdated.

Ø     If the requested delivery dates for an order item cannot be kept then and an order item is backdated.

Ø     Material availability date must be determined by system before carrying out availability check.

Ø     By selecting appropriate option, you can include storage locations in the availability check

v    Availability check is Generally Switch off for KANBAN-relevant Materials. Bulk material, slow –moving inventory materials.

v    You can maintain indicator to allow partial deliveries and allowed number of partial deliveries directly in the sales document’s shipping tab, OR in the Shipping Tab’ of the customer master sales data view.

v    If partial deliveries are allowed, system may confirm two schedule lines for two different dates.

v    Requirement Class 041 is order/Delivery requirement class already present in system

v    If MRP type if not available with given item category, then system uses only item category to determine requirement type.

v    VOV6 can also be used to activate availability check and transfer of requirement.

v    By configuration of checking group( Total Sales Requirement Column), you can choose system to generate and pass requirement to MRP from Monday of following week every week(summarized requirement)

v    SAP’s SD application predefines checking rule, you cannot change it.

v    One way to select “fixed date and quantity” is by sales area.

v    You can define checking rule ( A- Sales order, B-Delivery) for specific plant

v    Availability check is on and you enter the material in the sales order with quantity 50. But enough quantity is not available of that material, then system will immediately show availability check overview screen.

v    During back order processing, you can give priority to order by different criteria’s

v    You can set up the delivery block for a quantity confirmation with any number of day’s deferral. So, the system will consider no. of deferral days of lead time while confirming quantities in the sales order.

v    You can process a delivery with a zero quantity only if it is permitted in delivery type customization.

v    In the availability check overview screen ( can be seen during sales order processing), system will give three options for to choose delivery.1-One time delivery proposal,2- Full delivery, 3. Partial Delivery proposal.

Transportation Processing:

The Shipment function is optional.

·        You can use it (Shipment) to combine deliveries with the same transportation requirements such as forwarding agent, destination, route, or means of transport

·        Normally, you create a shipment before you post goods issue.

·        The settlement of shipment costs from the shipment is also optional.

Ø     Transportation planning point carries the shipment process in (Real Time) and is assigned to company code.

Ø     It can also group of people.

Ø     “Create Shipment” function, the system determines the deliveries due for transportation and creates the shipments required

Ø     The individual deliveries can be assigned to the shipments manually

Ø     The sequence of the deliveries within a shipment is determined automatically. From the sequence in which they are listed

Ø     The Shipment cost is posted in FI as Freight Cost.

Ø     Unlike packing in the delivery, Packing in the shipment can be carried out for several deliveries.

Ø     You can invoice the customer for shipment costs, which are based on effective shipment costs, that have been calculated in the transportation and shipment cost processing areas for settlement with the forwarding agent. The freight costs then appear as an additional entry in the customer billing document

Explain how financial information is transferred from the billing document into the accounting document?  Through account determination

Account Determination: To determine G/L account

1.     Chart of account -[List of all G/L accounts

2.     Sales organization

3.     Account Assignment group of the payer - [customers can be categorized, for example, according to whether they are domestic or foreign customer]

4.     Account Assignment group of the material-[materials can be categorized, for example, according to whether they are services or retail goods.]

5.     Account key -[ it is possible to divide this up into the different price, surplus, and discount elements]

What is the Difference between a shipment document and a transfer order?

Ø     The shipment document is created and used to group together several deliveries for one shipment to a customer. For example, for one lorry driver.

Ø     Transfer order(transfer request) acts as a basis for picking, it is created for a delivery, to control internal material movement

Explain the function of the shipment document?

Ø     Created and group together several deliveries for one shipment to a customer.

Describe how shipment costs are billed to the customer?

Ø     Shipping cost are calculated in Transportation and shipping cost processing area this is an additional entry in the customer billing document.

Sales and Distribution Processes with Make-to-Order Production: Unit-6

Presales Processing:

2- Sales document in Presales Processing:

·        Inquiry

·        Quotation

Sales support System:

·        Prepare information about customer, Prospective customer, Contact People, Competitors, and their products.

·        Manage sales activities, such as telephone calls and customer visits

·        Carry out direct mailing campaigns.

·        Direct access to the sales information system (SIS) with a wide range of evaluations for things such as sales volume figures and the number of incoming orders.

Ø     Any Document given completed status cannot be referred again

Ø     It is given in completion rule in item category

Ø     Inquiry is taken as being completely referenced as soon as the customer receives a quotation referring to the inquiry-Except if there are multiple items and the entire quantity of any item is not referred to quotation

Ø     Inquiry get complete with the very first reference to Quotation[Except for multiple items]

Quotation will be termed as complete:

·        When the quantity is completely order

·        Validity period get over.

What is item category?

Ø     Item category is a key instrument for controlling sales and distribution process.

Function of the item category:

1.     Pricing

2.     Billing Relevance[For Service-Sales order/For Materials-Delivery order]

3.     Incompletion log

4.     Partners-[Whether partner, Texts are allowed at item level or not]

5.     Texts

6.     Delivery Relevance-[if Delivery Relevance is activated S. Line will come]

7.     Schedule line permitted[S. Line permitted activated then S. Line will come]

8.     Item-

Item Categories can influence, for example: [important]

1.     Whether the system runs automatic pricing

2.     Whether the item appears on an invoice

3.     Which fields are recorded in the incompletion log if they were not entered in the order

4.     Which partner functions belong to the item

5.     Which text types belong to the item

6.     Whether the item appears on a delivery

7.     Whether you can create schedule lines for the item

Item category Determination:

1.     Sales document type

2.     Item category group

3.     Usage

4.     Higher level item category

Ø     You always need referenced document for creating Billing document

What is item Category?

The item category in Sales document is found using the Sales document type

Ø      item category : Determines the category of the item like Trading goods, service goods, Finished good

What is Item category group, where do you maintain it?

The item category group is maintained in the Material Master on the [Sales: Sales org2 tab page]

Item category group is define the features of item and it represent the function and how will work in sales process

Ø     Item category is used for SD to configure the item category and how this item behaves in sales orders

Difference between Item Category and Item Category Group:

Based on which criteria is the item category in the sales document usually found?

Ø     The Item Category: is found dependent on the Sales Document Type            [Inquiry, Quotation, Standard order….]

Ø     The Item Category Group of the Material Master sales org2 tab page

Assembly Processing:

Make –to-order production is characterized by the fact that materials are not stored in the warehouse but produced especially for a particular sales order.

Make to order Flow given below

·        Based on sales order –

·        individual customer requirement –[Requirement quantity, delivery date & configuration specification]-(Requirement are passed from the sales order to material planning in make to order scenario)

·        Material Planning

·        Production order[ production take place in pp]

·        Good Receipt[pp]

·        Sales order Stock[which is special stock-for specific sales order]-(PP)

·        Delivery-[SD]

·        Good issue[SD]

·        Reduce sales order stock[pp]

·        Billing[SD]

An individual customer requirement is generated from the sales order item and transferred to Material planning [pp]

We can use materials planning to plan requirements. Once this has been done, production is carried out. After the product has been manufactured, you post it by good receipt to sales order specifically for this sales order item.

As soon as the delivery is due, you can enter the delivery in SD and post Good issue. This reduces the sales order stock. Then you enter a billing document in SD

Make-To-Order production without Assembly Processing

[MRP Run/Production order with ref to planned order/multi level BOM is exploded]

·        Production order is generated from  planned order

·        Make to order without assembly processing is characterized by the fact that materials are not available in the warehouse but produced especially for a particular sales order.

·        An individual customer requirement is generated from the sales order item and transferred to material planning

·        We can use Material Requirement planning Run to plant requirement, once this has been done production is carried out. The system returns the confirmed quantity and delivery date from production order to sales order

·        After the product has been manufacture, goods receipt is posted in the sales order stock which is a special stock, and which can only be used for a specific sales order.

·        The System returns the confirmed quantity and delivery date from the production order to the sales order

·        Assembly order is used as reference to post the good receipt

Make to Order with Assembly processing:

·        Production order generated directly from sales order [No need material planning run]

·        The individual components for the final product have already been produced; we only need to assemble the component according to the customer’s requirement.

·        Single level BOM

·        The system returns the confirmed quantity and delivery date from the production order to the schedule line in the sales order

Ø     Item Category Group for Make to order material:0001

Ø     Item category: TAK

Ø     Item category group for configurable material is 0002

Ø     Item category :TAC

Ø     Packaging is controlled by Delivery item category

Ø     It is pack by handling unit

Ø     Multi level packing is possible

Cost Management per Item:

In Sales order processing, the cost and Sales revenue for a sales order item are collected in a controlling object for that item and settled in a profitability analysis.

Pricing in the sales order determines the planned revenues [net value 2] and the actual sales revenue is posted in the billing document.

The planned costs are compared to the revenues. They arise from product or unit costing, or from the valuation price in the material master [Standard price or moving average price]

The actual costs are calculated from the withdrawal, production orders, internal activity allocation and surcharges]

The accrued actual sales revenues and costs are settled in the profitability analysis to determine the profit or loss.