Sales & Distribution Processes EGN 5620 Enterprise Systems Configuration Fall, 2015

Sales & DistributionSales & Distribution Processes Processes

EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration

Fall, 2015 Fall, 2015

January 2008January 2008

© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All The Rushmore Group, LLC 2008. All rights reserved. rights reserved. 22

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

Sales & Distribution Process Sales & Distribution Process

Sales & DistributionSales & Distribution Process Process

SAP Implementation SAP Implementation



Business Process IntegrationBusiness Process Integration

FI

MM

SD

Rul

esFI

MM

SD

Mas

ter D

ata

FI

MM

SD

FI SDMM



Business Process IntegrationBusiness Process Integration

SD Process

SalesProcess



SAP Sales Order Process(Order-to-Cash)

Integration

Sales OrderEntry

Post Goods IssueInvoice

Customer

Delivery Note &Pick Materials

Receipt ofCustomer Payment

Pack Materials

Check Availability

Pre-Sales Activities

Sales QuotationEntry

1: Engage in Pre-Sales Activities 1: Engage in Pre-Sales Activities Pre-sales Activities:

◦Initiate customer contacts and communications (sales activity) via:

Phone call recordsOn-site meetingLettersCampaign communication

◦Implement and track direct mailing, internet, and trade fair campaigns based on customer attributes

Pre-sales documents : Inquiries and Requests for Quotation from customers.

1: Engage in Pre-Sales Activities (Inquiry) 1: Engage in Pre-Sales Activities (Inquiry)

2: Create quotation to customer2: Create quotation to customerQuotation presents

the customer with a legally binding offer to deliver specific products or a selection of a certain amount of products in a specified time frame at a pre-defined price.

2: Create quotation to customer2: Create quotation to customer



Customer-Specific Material Info Record Customer-Specific Material Info Record Customer material information records is

used to store data on a material defined for specific customer.

It contains customer-specific:◦Material number, ◦Material description, and ◦Data on deliveries and delivery tolerances

3: Create Sales Order3: Create Sales OrderA sales order contains all of the information

needed to process customers request. The process for creating a sales order has the following steps: 3.1 Pricing3.2 Credit limit check3.3 Availability Check3.4 Delivering Schedule3.5 Shipping point and route determination 3.6 Transfer of requirements to MRP3.7 foreign trade and license processing

3: Create Sales Order3: Create Sales OrderThree primary areas of a sales order:

◦ HeaderData relevant for entire sales order: customer data, total cost of order, number of sold-to party, number of ship-to party and 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



3: Create Sales Order3: Create Sales OrderItem 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



3: Create sales order: item proposal3: Create sales order: item proposalIf a customer frequently orders the same

combination of materials, system 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

3.1: Pricing3.1: Pricing SAP can display pricing information at both the header for

entire sales order and the line item level for individual material.

Pricing is extendable; it can be attached, or extended to external pricing programs or elements outside SAP for pricing.

It allows Gross to Net pricing: This allows discounts and reductions from the ‘master’ price.

3.1: Pricing3.1: Pricing

3.1: Pricing (discount applied for 3.1: Pricing (discount applied for entire sales order)entire sales order)

3.1: Pricing (Discount for 3.1: Pricing (Discount for individual item)individual item)



3.2: Credit Check3.2: Credit CheckSAP provides an efficient means to implement

credit management

It is integrated with Financial Accounting (FI), via credit control area

This is especially important if a company does business with customers in financially unstable sectors or countries, or trade with countries that are politically unstable

It automatically alerts when a credit check fails

3.3: Availability Check3.3: 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 with one-time delivery)

Complete delivery (possibly delayed one-time delivery)

Delayed proposal (allows partial delivery schedule)

3.3: Availability Check3.3: Availability Check



3.3: Availability Check3.3: Availability CheckInward/Outward movement of goods

Supply side:◦purchase orders ◦purchase requisitions ◦planned orders ◦production orders Demand side:◦reservations ◦dependent reservations ◦independent/dependent requirements ◦sales requirements ◦delivery requirements◦safety stock



3.4: Delivery Scheduling3.4: Delivery SchedulingSAP can automatically schedule essential

shipping activities, using backward and forward scheduling rules.

It uses defined activity times to schedule delivery activities.



3.4: Delivery Scheduling3.4: Delivery Scheduling



3.4: Delivery Scheduling3.4: Delivery SchedulingAn item can 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 15 pieces now and the remaining 5 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.



3.4: Delivery Scheduling3.4: Delivery SchedulingStructure of sales documents

Header

Line Item # 1

Line Item # 2

Schedule Line # 1

Schedule Line # 1

Schedule Line # 2



3.5: Shipping Point and Route 3.5: 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 - SAP system determines routes automatically for each sales document item

Routes can be used to simply define transit time



3.5: Shipping Point and Route 3.5: Shipping Point and Route DeterminationDetermination

3030

• 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.

3.6: Transfer of requirements to 3.6: Transfer of requirements to MRPMRP

3.6: Transfer of requirements to MRP3.6: Transfer of requirements to MRP



3.7: Foreign Trade and License 3.7: Foreign Trade and License ProcessingProcessingPredefined trade areas — NAFTA, EU, TPP

(Trans-Pacific Partnership) Automated reporting for trade areasAutomated controls

◦License management◦Embargo lists◦Control by customer, country, product, point in

time

January 2008January 2008© SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. reserved. 3333

4: Schedule delivery and create 4: 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

PickingPacking

LoadingPost 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)

4: Shipping4: 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

5: Billing Overview5: Billing OverviewSAP has the functions of processing

credit/debit memos and rebatesIt automates invoicing, based on sales

orders and/or deliveriesIt is integrated with Finance (FI) &

Controlling (CO)It updates customer’s credit data


© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All The Rushmore Group, LLC 2007. All rights reserved.rights reserved. 3636



5: Billing5: Billing

Sales Invoice

Sold To:Rushmore Group

Sales Org: S001Dist Channel: REDivision: 01

Conditions/Price:$120


5: Billing Methods5: 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



5: Billing Documents5: Billing DocumentsBilling 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.

6: Payment6: PaymentPayment is the final step in the sales order

process.

SAP posts payments against invoices.

Posting clears the liability in the A/R account and debit your bank account.

SalesProcess


7: Handle Customer Return7: Handle Customer Return

Customer ReturnOrder received

GoodsReceipt

CreateCredit Memo

QualityInspection

Paymentto Customer

DeliveryNote




1

2

3

Order 14 Delivery 8…56

Return Order Return Delivery

Invoice 9…68

PaymentCredit Memo

QualityInspection Return to Inventory




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




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)

GBI, Inc. GBI, Inc.

Sales & Distribution Processes



Global Bicycle Incorporated (GBI) Global Bicycle Incorporated (GBI) Procure for Sales OrderProcure for Sales Order

Pre-Sales Activity

Sales Order Delivery 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



Document FlowDocument Flow

Document flow feature allows user to find the status of an order at any point in time. 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: 10/26/2015)(Due date: 10/26/2015)1. Create sales quotation2. Check stock status3. Create sales order from sales quotation4. Check stock status5. Create outbound delivery 6. Check stock status7. Ship materials 8. Create invoice9. Receipt payment10. Review document flow of sales order11. Move materials between plants12. Create second sales order 13. Create outbound delivery for second sales order14. Ship materials15. Create invoice 16. Receive payment