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 During sales order processing, the system carries out basic functions, such as:Monitoring sales transactionsChecking for availabilityTransferring requirements to materials planning (MRP)Delivery schedulingCalculating pricing and taxesChecking credit limitsCreating printed or electronically transmitted documents (confirmations and so on) Depending on how your system is configured, these functions may be completely automated or may also require some manual processing. The data that results from these basic functions (for example, shipping dates, confirmed quantities, prices and discounts) is stored in the sales document where it can be displayed and, in some cases, changed manually during subsequent processing. Business Process Integration

In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These hold up the transactions. Transactions cannot be run unless these are setup. The legs are typically configured during the implementation process. During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.

We can start out with a pre-sales activity. Then to Order processing, became an order. Check inventory If not Buy, Receive GoodsAssign to sales order, Send to customer, Bill customer. Pay VendorAccount for all activities. General ledger either the balance sheet or income statement

Not unlike the procure to pay process, this is completely configurable. You decide how you want the order to cash process to work and configure the system appropriatelyMay start with Sales Order. Check inventory, If you do not have inventory procurement process or production process. Pick materials from inventory. Pack material: (optional) pack in box appropriate box or other. Post Goods Issue (Title transfer). Invoice Customer Create Accounts Receivable. Collect Money

During sales order processing, the system carries out basic functions, such as:Monitoring sales transactionsChecking for availabilityTransferring requirements to materials planning (MRP)Delivery schedulingCalculating pricing and taxesChecking credit limitsCreating printed or electronically transmitted documents (confirmations and so on)Depending on how your system is configured, these functions may be completely automated or may also require some manual processing. The data that results from these basic functions (for example, shipping dates, confirmed quantities, prices and discounts) is stored in the sales document where it can be displayed and, in some cases, changed manually during subsequent processing.

SD3-2: 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 A large number of outstanding receivables or bad debts can have a not inconsiderable impact on company performance. Using Credit Management, you can minimize your credit risk by defining a credit limit for your customers. This is especially important if you do business with customers in financially unstable sectors or countries, or trade with countries that are politically unstable or that adopt a restrictive exchange rate policy.

IntegrationIf you implement the Accounts Receivable (FI-AR) application component to manage your receivables, but a non-SAP system for sales and distribution processing, Credit Management enables you to assign a credit limit to each customer. When you post an invoice (in FI-AR) the system then checks whether the amount exceeds the credit limit. Facilities like the credit master sheet or early warning list help you monitor the customers credit situation.If you implement both the Accounts Receivable (FI-AR) and Sales and Distribution (SD) application components, you can specify in Customizing when (at the point of order, delivery, goods issue and so on) and to what extent a check on the customers credit limit is to take place.You can define automatic credit limit checks according to a range of criteria and in line with your companys requirements You can also define at what point the system carries out these checks (order, delivery, goods issue, and so on). The credit representative is automatically alerted to a customers critical credit situation as soon as order processing starts. The relevant employees can be automatically notified of critical credit situations via internal mail. Your credit representatives are able to check a customers credit situation quickly and reliably, and, in line with the appropriate credit policy, to decide whether the customer should be granted credit. Using Credit Management you can work in distributed systems. A distributed system is one with central financial accounting and non-central sales and distribution on several sales and distribution computers.Credit and risk management takes place in the credit control area. According to your corporate requirements, you can implement credit management that is centralized, decentralized, or somewhere in between.For example, if your credit management is centralized, you can define one credit control area for all of your company codes. If, on the other hand, your credit policy requires decentralized credit management, you can define credit control areas for each company code or each group of company codes. Credit limits and credit exposure are managed at both credit control area and customer level. Credit and risk management takes place in the credit control area. According to your corporate requirements, you can implement credit management that is centralized, decentralized, or somewhere in between.For example, if your credit management is centralized, you can define one credit control area for all of your company codes. If, on the other hand, your credit policy requires decentralized credit management, you can define credit control areas for each company code or each group of company codes. Credit limits and credit exposure are managed at both credit control area and customer level.SD3-3: Availability CheckAvailability Check Determines the material availability date Considers all inward and outward inventory movementsAllow for 3 methods of delivery One-time delivery ( on- time one-time delivery) Complete delivery (possibly delayed one-time delivery) Delayed proposal (allows partial delivery schedule) 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 stockAll movements of stockThe following elements can be included in the availability check:Stocksafety stock stock in transfer quality inspection blocked stockInward/Outward movement of goodspurchase orders purchase requisitions planned orders production orders reservations dependent reservations dependent requirements sales requirements delivery requirementsRequirements in sales and distribution (sales requirements and delivery requirements) result from all transactions which forward a requirement to Materials Management (MM) or to Production Planning (PP). For example, this could include sales orders or deliveries and quotations as well. 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 wayOne-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.Complete delivery In 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.

Delayed proposal In 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.

During order entry, each schedule line for an item can contain a requested delivery deadline. The goods should arrive at the customer on this date. At the order processing stage, the system can automatically schedule when the essential shipping activities such as picking, loading and transporting must be started so that the requested delivery date can be kept.The terms used in scheduling are defined below. You must distinguish betweentimes (time duration) needed to carry out certain activities dates that are calculated on the basis of these timesTimesValues based on past experience of the shipping department are entered in the system in the form of transit times, loading times, pick/pack times, and transportation lead times: The 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. The 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. The 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. The 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.The following deadlines are of importance for delivery processing:You 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. The transportation scheduling deadline is 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. The loading deadline is 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. The goods issue deadline is the date on which the goods leave the company in order to arrive punctually at the customer location. The delivery deadline is 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).If backward scheduling determines a date in the past as the date on which a schedule line becomes due for shipping or if the material will not be available on the date calculated, the system automatically carries out forward scheduling to determine the earliest possible shipping deadline.For example, starting from the current date, the system calculates the loading deadline, the goods issue deadline, and then the confirmed delivery date. It does this by adding together the shipping times mentioned above.When you change a sales document, such as adding schedule lines or rescheduling, the system carries out delivery scheduling for all the schedule lines, new and old. Because the material availability date lies in the past for backlog schedule lines, the system performs forward scheduling. This may have the undesired affect of the system rescheduling lines that may have already been confirmed. You can specify for each sales document type that the system is to schedule deliveries only backwards. With no forward scheduling, you can better recognize backlogs in production and the customer receives goods on time.Terms 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.

The 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. 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. 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 customerAn 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. The 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. The 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. The 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. The 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.

All sales documents have basically the same structure. They are made up of a document header and any number of items. The items can in turn be divided into any number of schedule lines. Header dataThe general data that is valid for the entire document is recorded in the document header. For example,Number of the sold-to partyNumber of the ship-to party and the payerDocument currency and exchange ratePricing elements for the entire documentDelivery date and shipping pointItem 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 numberTarget quantity for outline agreementsNumber 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 specificationsPricing elements for the individual itemsSchedule line dataAn 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. In sales documents where delivery data is not relevant, for example, contracts, credit and debit memo requests, the system does not create any schedule lines.Data recorded in the schedule lines includes the:Schedule line quantityDelivery dateConfirmed quantity

In this step, you define the shipping points in your company or edit shipping points that already exist. In order to adapt the functional scope of a shipping point to the organization in your company, you should process the following check list:The shipping point is the top level in the organization for shipping.A shipping point can be allocated to several plants.A shipping point can be divided into several loading points. A delivery is always initiated from exactly one shipping point. Thus, all items of a delivery belong to one shipping point. Groups of deliveries also belong to exactly one shipping point.You can influence delivery scheduling via allocation to departure zones.The shipping point can be proposed automatically during order processing depending on the plant, loading group and shipping condition.A shipping point has an address.The shipping point is used as a selection criterion for lists of deliveries and the work list deliveries.The shipping point is used as a selection criterion for processing deliveries like printing, picking or goods issue. You can determine the printer destination for messages differently for every shipping point on account of shipping documents.Using routes, you can combine sales order items according to shipping criteria.The system determines routes automatically for a sales order item and can repeat the procedure for a delivery (see section Route determination).In order to define routes, proceed as follows:Define the modes of transport.Define the shipping types.Define the transportation connection points and maintain the relevant data on the detail screen.Define the routes and route stages.You can also maintain the route stages for several stages.The SAP System determines routes automatically for each sales document item. It determines the itinerary and mode of transport in shipping.Routes are determined depending on the following criteria:Country and departure zone (departure zone of the shipping point)Shipping conditions agreed in the sales orderThe shipping condition is defined in shipping point determination. Transportation group of the materialCountry and transportation zone (receiving zone) of the ship-to partyThe SAP System copies the route from the sales document item into the delivery at header level.To define route determination, you must edit the following points:Define transportation zones for each country. These transportation zones can be either departure zones for the shipping point or receiving zones for the ship-to party.Assign the departure zones to the shipping points.Define transportation groups for the materials.Specify the routes to be selected according to the given criteria in sales processing.Define the delivery types for which route determination should be repeated and set the necessary indicator in the appropriate delivery types.Define the weight groups.

Requirements in sales and distribution (sales requirements and delivery requirements) result from all transactions which forward a requirement to Materials Management (MM) or to Production Planning (PP). For example, this could include sales orders or deliveries and quotations as well. 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.

The 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. The 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. The 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. The 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.

If a customer frequently orders the same combination of materials, or if you recommend a particular selection of products for an opening order, you can store the frequently used data as an item proposal in the system. If you wish, the item proposal may also include proposed order quantities. During sales order processing, you can then copy all or some of the materials and quantity data from the item proposal directly into your document (sales order, quotation, and so on). In addition, you can assign a particular item proposal to one or more specific customer master records. The system can then automatically propose the number of the assigned item proposal whenever you process sales orders for the relevant customers