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Sales & DistributionSales & Distribution Processes Processes
EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration Spring, 2013 Spring, 2013
January 2008January 2008
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Sales & Distribution Process Sales & Distribution Process
1. Engage in pre-sales activities2. Create quotations and send to customers3. Create sales orders 4. Schedule & deliver5. Bill customer (by invoice)6. Receive payment from customer7. Handle sales order return
Sales & DistributionSales & Distribution Process Process
SAP Implementation SAP Implementation
EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration
January 2008January 2008
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Business Process IntegrationBusiness Process Integration
FI
MM
SD
Rules
FI
MM
SD
Master D
ata
FI
MM
SD
FI SDMM
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Pen Incorporated Pen Incorporated Procure for Sales OrderProcure for Sales Order
Pre-Sales Activity
Sales OrderDelivery Billing
General Ledger Accounts
Purchase Requisition
Purchase Order
Goods Receipt
In Inventory
Plant or Warehouse
Invoice Receipt
Availability Check
NO
YES
Goods to Delivery
Goods from Purchase Order
InventoryPostings
AccountsReceivable
AccountsPayable
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Business Process IntegrationBusiness Process Integration
SD Process
SalesProcess
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SAP Sales Order Process(Order-to-Cash)
Integration
Sales OrderEntry
Post Goods Issue
Invoice Customer
Delivery Note &Pick Materials
Receipt ofCustomer Payment
Pack Materials
Check Availability
Pre-Sales Activities
Sales QuotationEntry
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SAP SD Process SAP SD Process
1. Engage in pre-sales activities2. Create quotations and send to customers3. Create sales orders, item proposal, or
scheduling agreement 4. Schedule delivery and create delivery
note5. Create/send invoice to customer (billing)6. Receive/post payment from customer7. Handle sales order return
SD3: Create Sales OrderSD3: Create Sales OrderA sales order contains all of the information
needed to process customers request. The steps for creating a sales order:
1. Pricing2. Credit limit check3. Availability Check4. Delivering Schedule5. Shipping point and route determination 6. Transfer of requirements to MRP7. foreign trade and license processing
SD3-1: PricingSD3-1: Pricing SAP can display pricing information at both the header and
the line item level for sales order.
It enables the user to program varied pricing procedures to meet individual organizations needs.
The pricing is extendable; it can be attached, or extended to external pricing programs or elements outside SAP for pricing.
It also allows Gross to Net pricing: This allows discounts and reductions from the ‘master’ price.
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SD3-2: Credit CheckSD3-2: Credit Check
SAP provides an efficient means to implement credit management
It is integrated with Financial Accounting (FI), via credit control area
It automatically alerts when a credit check fails
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SD3-2: Credit CheckSD3-2: Credit CheckA large number of outstanding receivables or bad
debts can have a considerable impact on company performance.
The user may minimize credit risk by defining a credit limit for customers by using Credit Management.
This is especially important if a company does business with customers in financially unstable sectors or countries, or engages in trading with countries that are politically unstable or that adopt a restrictive exchange rate policy.
SD3-3: Availability CheckSD3-3: Availability CheckAvailability Check
◦ Determines the material availability date
◦ Considers all inward and outward inventory movements
Allow for 3 methods of deliveryOne-time delivery ( on-
time one-time delivery)Complete delivery
(possibly delayed one-time delivery)
Delayed proposal (allows partial delivery schedule)
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SD3-3: Availability CheckSD3-3: Availability Check
In determining the material availability the following elements can be included in the availability check◦Safety stock◦Stock in transfer◦Quality inspection stock◦Blocked stock◦Restricted use stock◦All movements of stock
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SD3-3: Availability CheckSD3-3: Availability CheckAvailability are affected by inward &
outward movements of goods:◦purchase orders ◦purchase requisitions ◦planned orders ◦production orders ◦reservations ◦dependent reservations ◦dependent requirements ◦sales requirements ◦delivery requirements
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SD3-3: Availability CheckSD3-3: Availability Check
One-time delivery• Deliver on the requested delivery date
• In this section, SAP checks whether the requested delivery date can be kept to. If stock of the material is available to make a delivery on the requested delivery date, the stock quantity is confirmed here.
• If there is no stock available, confirmed quantity zero is displayed.
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SD3-3: Availability CheckSD3-3: Availability CheckComplete deliveryIn this section, SAP checks whether there will be
sufficient stock for complete delivery at a later date:If there is sufficient stock available at a later
date to cover the required quantity in the sales document, the system proposes the date here.
If the system determines that complete delivery cannot be made at a later date, no date is proposed in this section.
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SD3-3: Availability CheckSD3-3: Availability CheckDelayed proposalIn this section, SAP checks whether and for which
dates partial deliveries can be made. Partial deliveries are displayed for different dates. These dates are based on the planned inward and outward movements of stock.
During an availability check which takes replenishment lead time into account, the date on which replenishment lead time ends is displayed if insufficient stock means that no partial deliveries can be made before replenishment lead time ends.
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SD3-4: Delivery SchedulingSD3-4: Delivery Scheduling
SAP can automatically schedule essential shipping activities, using backward and forward scheduling rules.
It uses defined activity times to schedule delivery activities.
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SD3-4: Delivery SchedulingSD3-4: Delivery SchedulingTerms used in scheduling are defined below. Transit time is the time in days that is required to deliver goods from your premises to the customer location. It is defined for a route. Loading time is the time in days that is required for loading a delivery item. It is determined from the shipping point, the route, and the loading group of the material. Pick/pack time is the time in days that is required for allocating goods to a delivery as well as the time in days that is required for picking and packing. It is calculated using the shipping point, the route, and the weight group of the order item. Transportation lead-time is the time in days that is needed to organize the shipping of the goods. This might include booking a ship and reserving a truck from a forwarding agent. It is defined for a route.
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SD3-4: Delivery SchedulingSD3-4: Delivery SchedulingThe following 5 deadlines are of importance for delivery scheduling:1.Material availability deadline: must start picking and packing activities on the material availability deadline. This deadline must be selected early enough in advance so that the goods are ready by the given loading deadline.
2. Transportation scheduling deadline: the date on which you must start to organize the transportation of the goods. This deadline must be selected early enough to ensure that the means of transport is available by the loading deadline.
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SD3-4: Delivery SchedulingSD3-4: Delivery Scheduling
3. Loading deadline: the date on which the goods must be available for loading and on which all vehicles that are required to ship these goods must be ready for loading. After the time required for loading the goods (loading time) has expired, goods issue can be carried out.
4. Goods issue deadline: the date on which the goods leave the company in order to arrive punctually at the customer location.
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SD3-4: Delivery SchedulingSD3-4: Delivery Scheduling
5. Delivery deadline: the date on which the goods are to arrive at the customer location. The difference between the goods issue deadline and the delivery deadline is calculated from the transit time required for the route between the delivering plant and the customer.The delivery deadline can be the customer's requested delivery deadline or the confirmed delivery date (that is, the earliest date on which you can deliver goods to the customer).
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SD3-4: Delivery SchedulingSD3-4: Delivery SchedulingAn item consists of one or more schedule lines. The schedule line contains all the data that is needed for a delivery.
For example, a customer orders 20 units of a particular material which you enter as one item in the sales order. However, you can only deliver 10 pieces now and the remaining 10 pieces next month. So you need to schedule two deliveries. The data for these deliveries (dates, confirmed quantities) are stored in two separate schedule lines.
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SD3.4: Delivery SchedulingSD3.4: Delivery Scheduling
Structure of sales documents
Header
Line Item # 1
Line Item # 2
Schedule Line # 1
Schedule Line # 1
Schedule Line # 2
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SD3-5: Shipping Point and Route SD3-5: Shipping Point and Route DeterminationDetermination
A shipping point is determined for each line item
A delivery can only be processed from one shipping point
Routes - route to be traveled & transit time are determined using customized rules
Routes can be used to simply define transit time
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• Sales order is transferred to MRP as a Customer Independent Requirement (CIR). If a deficit is found, SAP will propose a purchase req. or planned order to fulfill the shortage after running MRP or MPS.
• Sales and distribution requirements reduce existing stock or inward movements of stock on the material availability date to ensure that other outward movement of stock elements cannot access the quantity reserved in this way.
SD3-6: Transfer of requirements to MRPSD3-6: Transfer of requirements to MRP
SD3-6: Transfer of requirements to MRPSD3-6: Transfer of requirements to MRP
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SD3-7: Foreign Trade and License SD3-7: Foreign Trade and License ProcessingProcessing
Predefined trade areas — NAFTA, EUAutomated reporting for trade areasAutomated controls
◦License management◦Embargo lists◦Control by customer, country, product, point in
time
SD3: Create Sales OrderSD3: Create Sales OrderThe sales order document is
made up of three primary areas:◦ Header
Data relevant for the entire sales order: customer data, total cost of the order, number of the sold-to party, number of the ship-to party and the payer, document currency and exchange rate, pricing elements for the entire document, delivery date and shipping point order
◦ Line ItemInformation about the specific
product: Ex: material and quantity, cost of an individual line
◦ Schedule LinesUniquely belongs to a Line
Item, contains delivery quantities and dates for partial deliveries
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SD3: Create Sales OrderSD3: Create Sales Order
Item DataWhereas data in the document header applies to all items in the document, some data applies only to specific items. This data is stored at item level and includes the:•Material number•Target quantity for outline agreements•Number of the ship-to party and the payer (an alternative ship-to party or payer can be defined for a particular item)•Plant and storage location specifications•Pricing elements for the individual items•Schedule line data
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DS3: Create sales order: item DS3: Create sales order: item proposalproposal
If a customer frequently orders the same combination of materials, SAP can store the frequently used data as an item proposal in the system.
During sales order processing, the user can copy all or some of the materials and quantity data from the item proposal directly into the sales order (document)
Item proposal can be assigned to one or multiple customer master records
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SD4: Schedule delivery and create SD4: Schedule delivery and create Delivery notesDelivery notesInitiates the delivery processControl mechanism for the processChanges to delivery are allowable - products, quantitiesIntegrated with the Material Management (MM) and
Finance (FI) modules
Picking
Packing
Loading
Post Goods Issue
Delivery Note
Each step in the delivery process updates the delivery note status
DeliveryDelivery/ Goods Issuing/ Goods IssuingReconciliation AccountReconciliation Account
Sales quotation
Sales order
Materials Management (MM) and Financial Accounting (FI)
Delivery/Goods Issuing
No impact onFinancial Accounting (FI)
SD4: ShippingSD4: Shipping
OrderCombination
Sales Order 1
Sales Order 2
Sales Order 3
Delivery 8…12
PartialDelivery
Sales Order 4
Delivery 8…13
Delivery 8…14
Delivery 8…15
CompleteDelivery
Sales Order 5
Delivery 8…16
DS5: Billing OverviewDS5: Billing Overview
SAP has the functions of processing credit/debit memos and rebates
It automates invoicing, based on sales orders and/or deliveries
It can create pro forma (paper) invoicesIt is integrated with Finance (FI) &
Controlling (CO)It updates customer’s credit data
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DS5: BillingDS5: Billing
Sales Invoice
Sold To:Rushmore Group
Sales Org: S001Dist Channel: REDivision: 01
Conditions/Price:$120
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DS5: Billing MethodsDS5: Billing Methods
Collective Invoicing
Delivery based Invoicing
Delivery 8…34
Delivery 8…33
Order 14
Order 9
Delivery 8…56
Invoice 9…68
Order 6Delivery 8…20
Delivery 8…21
Invoice 9…45
Invoice 9…46
SplitInvoicing
Order 32 Delivery 8…86
Invoice 9…92
Invoice 9…91
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DS5: Billing DocumentsDS5: Billing Documents
Billing document is the umbrella term for invoices, credit memos, debit memos, etc.
Billing due list — builds a work list of invoices that should be generated
Automatic posting to Financial Accounting (FI): debit to customer sub-ledger account and credit revenue account.
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DS5: Billing PlansDS5: Billing PlansPeriodic — total amount for a planned
billing periodMilestone — distributing the total amount
over multiple billing dates - typically used with the project system (PS)
Installment — evenly proportioned amounts and defined payment dates
Resource related — consumed resources such as service or consulting
SD6: PaymentSD6: PaymentPayment is the final step in the sales order
process.
SAP posts payments against invoices.
The posting clears the liability in the A/R account and increases your bank account.
SalesProcess
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SD7: Handle Customer ReturnSD7: Handle Customer Return
Customer ReturnOrder received
GoodsReceipt
CreateCredit Memo
QualityInspection
Paymentto Customer
DeliveryNote
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SD7: Handle Customer ReturnSD7: Handle Customer Return
1
2
3
Order 14 Delivery 8…56
Return Order Return Delivery
Invoice 9…68
PaymentCredit Memo
QualityInspection
Return to Inventory
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SD7: Handle Customer ReturnSD7: Handle Customer Return
Returns document◦Billing block can be proposed◦Use the Order reason field to identify the
reason for the return◦Full access to pricing and ability to re-price
Return delivery◦Issues a goods receipt to place material into
inventory
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SD7: Handle Customer ReturnSD7: Handle Customer Return
Credit memo◦Billing block must be cleared from Return◦Posts to Financial Accounting (FI)◦Can be processed in batch (background)◦Can be processed collectively (grouped)
PEN, Inc. PEN, Inc.
EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration
Sales & Distribution Processes
Sales QuotationSales Quotation
Sales OrderSales Order
SD Process: Billing DocumentsSD Process: Billing DocumentsAt this point
that the sales process is passed over to Financial Accounting to await payment.
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Document FlowDocument Flow
The document flow feature allows you to find the status of an order at any point in time. The SAP system updated the order status every time a change is made to any of the documents created in the customer order management cycle (Order to Cash).
Exercises: Exercises: (due date 3/6/2013)(due date 3/6/2013)144a. Create customer quotation144. Create sales order from sales quotation145. Check stock status146. Create delivery note for sales order147. Check stock status148. Picking materials on delivery note 149. Post goods issue150. Check stock status151. Bill customer152. Post receipt of customer payment153. Review document flow154. Create Customer Material Info Record155. Create sales order using customer info record156. Create delivery for sales order157. Pick materials on delivery note
Exercises:Exercises:158. Post goods issue159. Bill customer160. Post receipt of customer payment161. Create a scheduling agreement162. Process deliveries for a scheduling agreement163. Display scheduling agreement164. Check stock status165. Bill customer166. Run customer credit check167. Post receipt of customer payment