ORGANIZATIONAL STRUCTURE

Krishna

Feb’2013

Agenda

• Creating Org Structure in SAP

• Master Data

– Customer Master

– Material Master

– Vendor Master

Organizational Structure

• Org Structure is generally under the ownership of FI team.

• It is recommended that as an SD consultant you are aware of the definitions and assignments of organizational entities.

Enterprise Structure

• Enterprise structure is a representation of legal and organizational structure of the company.

• It helps to map a company’s structure into SAP.

• Organizational entities have to be defined for all different business areas in a company.

Best practices

• Enterprise structure is the foundation for the complete implementation. Decisions taken at the implementation level will have ‘lifetime’ repercussions.

• A good design has to accommodate company’s current needs and be flexible for future business expansions.

Client & Company Code

• Client represents a group. General data and tables that are used for all the organizational structures are stored at this level.

• Company code represents a company in sense of accounting unit.

• Company code is a independent accounting unit that can be represented as smallest organizational unit of external accounting.

Sales Organization

• Sales organization is an org unit in Logistics that groups the enterprise according to the requirement of sales and distribution.

• It is the highest level of organizational entity in SD. • Can be geographical, regional or other logical subdivision

of a company/market. • Legal selling unit responsible for revenue and product

liability. Has it’s own master data for customers, condition records and pricing.

• A Sales org can only be assigned to one company code where as a company code can have multiple sales org’s.

Sales Organization -- 2

• All the SD documents such as Sales order, delivery and invoice are created at Sales Org level.

• A sales organization can have more than one plant assigned. .

• The address maintained in sales organization is used for document printing.

• Path: IMG -> Enterprise structure Definition Sales and Distribution.

• Best Practice: Keep the number of sales organizations to a minimum. More unnecessary organizational entities, more pain managing the data.

Distribution Channel

• DC is a means through which sales-related materials reach the customer.

• Represents characterizes the way in which goods and services are distributed.

• Several distribution channels can be assigned to a sales organization.

• Example: Wholesale,Online, Dealer, Retail

Distribution Channel –2

• A Distribution channel can be used by more than one sales organization.

• Example: Apple can sell it’s products online, in store or through channel partners. All these represent different distribution channels.

• In sum, a distribution channel represents identifiable ways to reach a customer.

Division

• Division is used to group materials and services. • Several divisions can be assigned to a SO. • A division can be assigned to multiple sales

organizations. • Material is assigned to one division only. • Mainly used for reporting. • Path: IMG Enterprise Structure Definition

Logistics – General. • Example: Apple has different product divisons such as

iPods, iPhones, Mac’s etc… All these represent different divisions.

Plant

• Plant is a location where materials are stored. • It can also be a location where materials are produced. • A plant can have multiple storage locations. • A plant can be assigned to only one company code where

as a company code can have multiple plants. • In SD, plant corresponds to location from where materials

and services are delivered, i.e., a distribution center. • Implementation tip: Additional plants can be added to a

company code as necessary, however, it is difficult to change the existing plant structure once the materials have been added at a plant.

Shipping point

• This is a key organizational entity that controls all the shipping activities. It is a physical location (ex. A loading ramp) from which items are shipped .

• Each outbound delivery has exactly one shipping point.

• Examples: a loading ramp, rail depot.

• A shipping point can be assigned to more than one delivering plant.

• During delivery processing, shipping point is the most important criterion to select deliveries.

Sales area

• Combination of Sales organization, Distribution Channel and Division is called as a Sales area.

• All the sales documents are created for a sales area.

Sales Office and Sales group

• Sales office: It represents the sales office or branch in a company. Different sales areas can use one sales office.

• Use of sales office is optional unlike a sales area. For example, Apple retail group will have a office which is represented as SO in SAP.

• Sales group: Represents a grouping of sales persons.

Best practices

• Always keep the number of organizations entities as minimum as possible.

• This reduces the amount of master data that has to be maintained in the system and improves system performance.

• Organizational structure is the base for any SAP implementation. Utmost care has to be taken in defining the organizational structure. It is very difficult (almost impossible, in some cases) to change the org structure once the realization phase is done.

Assignment -- 1

Assignment -- 2

Assignment -- 3

Assignments – 4

• Assign sales organization to a company code. • Assign distribution channel to sales

organization. • Assign division to sales organization. • Set up sales area

– Assign sales office to sales area – Assign sales group to sales office

• Assign plant to a company code • Assign shipping point to a plant. • Create storage locations in a plant.

Master data

• Important master data in SD. –Customer Master

–Material Master

–Vendor Master

–Condition Master

–Output control

Customer master data

Master data – Customer master

• Customer master data can be grouped into three categories. – General Data: Valid for all the organizational

units within a client. Contains address details, control data etc..

– Company code data: Financial related information. Key data for payment processing in FI accounting is captured. Ex: Terms of payment, reconciliation account.

– Sales area data: It is maintained for a sales area. It is divided into sales, shipping and billing data.

Customer master

Customer master -- Configuration

• Allows you to hide certain fields on the end user screen or make them required entry fields.

• Define account group and assign a number range.

• Assign texts for an account group.

• One time customer??

Partner functions

• Different roles that a business partner can play.

• Sold to Party: Places the order. • Ship to Party: Receives goods or services. • Bill to Party: Receives invoice for goods or

services. • Payer: Responsible for paying the invoice. • Account group defines the type of the

customer.

Customer Master

• Other partner functions, such as contact person or forwarding agent are not mandatory for sales order processing.

• As the ship to can be in a different place than sold-to, delivery address and tax information are taken from ship-to party’s master record.

• As the payer is responsible for paying your receivables, payment conditions comes from payer’s master record.

• Bill to party contains the address to whom the invoice should be sent. Address could be different from payer.

Customer master

• Creating a customer master

– VD01 Create

– VD02 Change

– VD03 Display

– XD01 FI view create

– VD05 Block a cust.

– VD06 Flag for deletion

• Important customer master tables

– KNA1 General data

– KNVV Sales view

– KNB1 Company code data

– KNVP Customer master partner functions

– KNVS Shipping data.

Business Partners

• Defines all of the parties involved in a business transaction and differentiates between their roles – customer, carrier, employees, customer contact etc.

• Through customizing the system automatically assigns partners to customer master and to all transactions.

Business Partners – Sold to & Ship to

Sold to:

• Customer that orders the goods.

• Can perform all the primary partner functions such as sold-to, ship-to, payer and bill-to.

• Primary type of business partner.

• Cannot be linked to other sold-to partners.

Ship to:

• Party that receives the goods.

• Can be created as an independent partner and linked to one or more sold-to partners.

Material master

• Material master contains key data is process materials in various business applications such as sales, purchasing and accounting.

• It contains all the information about the product or service being sold. This information is shared across an organization and maintained by different departments.

• Material can be restricted for a distribution channel.

Material master

• Material master comprises of the following areas – Basic Data Relevant for all the areas

– Sales and Distribution data Valid of SO and DC

– Purchasing data Specific to plant

– Accounting

– Costing

– Warehouse Management

• MM01 Create

• MM02 Change

• MM03 Display

Material master

• Material master comprises of the following areas – Basic Data Relevant for all the areas

– Sales and Distribution data Valid of SO and DC

– Purchasing data Specific to plant

– Accounting

– Costing

– Warehouse Management

• MM01 Create

• MM02 Change

• MM03 Display

Material master tables

• MARA General material data

• MARC Plant specific data

• MVKE Sales relevant data.

• In a organization, different types of materials are managed such as raw materials, semi-finished goods and finished goods. Materials with similar set of attributes are grouped under a material type.

• Examples: – FERT Finished products

– HALB Semi – finished products

Material master views

• Basic Data: View contains data that is common to the entire organization.

• Sales org view 1

• Sales org view 2

• Sales General/Plant data view

• Purchasing view

• Material requirement planning view