sales & distribution processes egn 5620 enterprise systems configuration spring, 2013

Sales & DistributionSales & Distribution Processes Processes

EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration Spring, 2013 Spring, 2013

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

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



Business Process IntegrationBusiness Process Integration

FI

MM

SD

Rules

FI

MM

SD

Master D

ata

FI

MM

SD

FI SDMM



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



Business Process IntegrationBusiness Process Integration

SD Process

SalesProcess



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



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.



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



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)



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



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



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.



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.



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.



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.



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.



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.




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 customer).



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.



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



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



• 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



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



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



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

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

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


© 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



DS5: BillingDS5: Billing

Sales Invoice

Sold To:Rushmore Group

Sales Org: S001Dist Channel: REDivision: 01

Conditions/Price:$120


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



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.



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


SD7: Handle Customer ReturnSD7: 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)

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.



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

sales & distribution processes egn 5620 enterprise systems configuration spring, 2013

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sap sd process

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