EGN - 5620 - Enterprise - Sys - SD Process Fall 2012

Sales & Distribution
Processes
EGN 5620 Enterprise Systems Configuration

(Professional MSEM)
Fall, 2012
Sales & Distribution Process

1.
2.
3.
4.
5.
6.
7.
Engage in pre-sales activities

Create quotations and send to customers
Create sales orders
Schedule & deliver
Bill customer (by invoice)
Receive payment from customer
Handle sales order return
January 2008
SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All
rights reserved.

Process
SAP Implementation
(Professional MSEM)
Fall, 2012
Business Process Integration

FI
MM
SD
Data
Master
Rules
FI
MM
SD
FI
FI
MM
MM
SD
SD
January 2008

rights reserved.
Pen Incorporated
Procure for Sales Order
Pre-Sales
Activity
Sales Order
Delivery
Availability
Check
In
Inventory
Accounts
Receivable
Goods to
Delivery
YES
NO
Purchase
Requisition
Billing
Plant or
Warehouse
General
Ledger
Accounts
Inventory
Postings
Goods from
Purchase Order
Purchase
Order
Goods
Receipt
Invoice
Receipt
January 2008
Accounts
Payable

rights reserved.
Business Process Integration

SD Process
January 2008

rights reserved.
Integration
SAP Sales Order Process

(Order-to-Cash)
Check
Availability
Sales Order
Entry
Sales Quotation
Entry
Pre-Sales
Activities
Receipt of
Customer Payment
Delivery Note &

Pick Materials
Sales
Process
Pack
Materials
Invoice
Customer
Post Goods
Issue
January 2008

rights reserved.
SAP SD Process
1.
2.
3.
4.
5.
6.
7.
Engage in pre-sales activities

Create quotations and send to customers
Create sales orders, item proposal, or
scheduling agreement
Schedule delivery and create delivery
note
Create/send invoice to customer (billing)
Receive/post payment from customer
Handle sales order return
January 2008

rights reserved.
SD3: Create Sales Order

A
sales order contains all of the information

needed to process customers request. The
process for creating a sales order has the
following steps:
1.
2.
3.
4.
5.
6.
7.
Pricing
Credit limit check
Availability Check
Delivering Schedule
Shipping point and route determination
Transfer of requirements to MRP
foreign trade and license processing
SD3-1: 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 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
January 2008

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11
SD3-2: Credit Check

A
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 trade with countries that
are politically unstable or that adopt a restrictive
exchange rate policy.
January 2008

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12
SD3-3: Availability Check

Availability Check
Determines the material
availability date
Considers all inward and
outward inventory
movements
Allow for 3 methods of

delivery
One-time delivery ( ontime one-time delivery)

Complete delivery
(possibly delayed onetime 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 stock
All movements of stock
January 2008

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Inward/Outward
movement of goods
purchase orders
purchase requisitions
planned orders
production orders
reservations
dependent reservations
dependent requirements
sales requirements
delivery requirements
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15

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.
January 2008

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16

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.
January 2008

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17

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.
January 2008

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18
SD3-4: Delivery Scheduling

SAP
can automatically schedule essential

shipping activities, using backward and
forward scheduling rules.
It
uses defined activity times to schedule

delivery activities.
January 2008

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19

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.
January 2008

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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.
January 2008

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21

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.
January 2008

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22

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).
January 2008

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23

An 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.
January 2008

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SD3.4: Delivery Scheduling

Structure
of sales documents
Header
Line Item # 1
Schedule Line # 1
Schedule Line # 2
Line Item # 2
Schedule Line # 1
January 2008

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25
SD3-5: Shipping Point and Route

Determination
A
shipping point is determined for each line item
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
January 2008

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26
SD3-6: Transfer of requirements to MRP
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.
January 2008

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27
SD3-6: Transfer of requirements to MRP
SD3-7: Foreign Trade and License

Processing
Predefined
trade areas NAFTA, EU

Automated reporting for trade areas
Automated controls
License management
Embargo lists
Control by customer, country, product, point in
time
January 2008

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29

The 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 Item
Information about the specific

product: Ex: material and
quantity, cost of an
individual line
Schedule Lines
Uniquely belongs to a Line

Item, contains delivery
quantities and dates for
partial deliveries

Item Data
Whereas 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
January 2008

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31
DS3: Create sales order: item proposal

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 2008

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32
SD4: Schedule delivery and create

Delivery notes
Initiates the delivery process

Control mechanism for the process
Changes to delivery are allowable - products, quantities
Integrated with the Material Management (MM) and
Finance (FI) modules
Picking
Packing
Loading
Post Goods Issue
Delivery
Note
January 2008
Each step in
the delivery
process
updates the
delivery
note status
SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights
reserved.
33
Delivery/ Goods Issuing

Reconciliation Account
Sales quotation
No impact on
Financial Accounting (FI)
Sales order
Delivery/Goods
Issuing
Materials Management (MM)

and Financial Accounting (FI)
SD4: Shipping
Sales Order 1
Sales Order 4
Sales Order 2
Delivery 813
Sales Order 3
Delivery 814
Delivery 812
Order
Combination
Sales Order 5
Delivery 816
Delivery 815
Partial
Delivery
Complete
Delivery
DS5: 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) invoices
It is integrated with Finance (FI) &
Controlling (CO)
It updates customers credit data
January 2008

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36
DS5: Billing
Sales Invoice
Sold To:
Rushmore Group
Sales Org: S001
Dist Channel: RE
Division: 01
Conditions/Price:
$120
January 2008

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DS5: Billing Methods

Delivery based
Invoicing
Delivery 820
Invoice 945
Delivery 821
Invoice 946
Order 6
Delivery 833
Collective
Invoicing
Order 9
Delivery 834
Order 14
Split
Invoicing
January 2008
Invoice 968
Delivery 856
Invoice 991
Order 32
Delivery 886
Invoice 992
reserved.
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DS5: Billing Documents

It
explicitly specifies documents

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.
January 2008

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39
DS5: Billing Plans

Periodic
total amount for a planned

billing period
Milestone 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
January 2008

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40
SD6: Payment
Payment
process.
SAP
The
is the final step in the sales order
posts payments against invoices.
posting clears the liability in the A/R account

and increases your bank account.
SD7: Handle Customer Return

Customer Return
Order received
Delivery
Note
Sales
Process
Goods
Receipt
Payment
to Customer
Create
Credit Memo
January 2008
Quality
Inspection
reserved.
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Order 14
Delivery 856
Invoice 968
Return Order
Return Delivery
Quality
Inspection
Return to Inventory
Credit Memo
Payment
January 2008

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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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44

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)
January 2008

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45

Processes
PEN, Inc.
(Professional MSEM)
Fall, 2012
Sales Quotation
Sales Order
SD Process: Billing Documents
At this point
that the
sales
process is
passed over
to Financial
Accounting
to await
payment.
Document 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).
January 2008

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50
Exercises:
144a. Create customer quotation
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
Create sales order from sales quotation

Check stock status
Create delivery note for sales order
Check stock status
Picking materials on delivery note
Post goods issue
Check stock status
Bill customer
Post receipt of customer payment
Review document flow
Create Customer Material Info Record
Create sales order using customer info record
Create delivery for sales order
Pick materials on delivery note
Exercises:
158. Post goods issue
159.
160.
161.
162.
163.
164.
165.
166.
167.
Bill customer
Create a scheduling agreement
Process deliveries for a scheduling agreement
Display scheduling agreement
Check stock status
Bill customer
Run customer credit check

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Sales & Distribution

EGN 5620 Enterprise Systems Configuration

Sales & Distribution Process

Engage in pre-sales activities

SAP AG - University Alliances and

Sales & Distribution

Business Process Integration

SAP AG - University Alliances and

SAP AG - University Alliances and

Business Process Integration

SAP AG - University Alliances and

SAP Sales Order Process

Delivery Note &

SAP AG - University Alliances and

Engage in pre-sales activities

SAP AG - University Alliances and

SD3: Create Sales Order

sales order contains all of the information

SAP can display pricing information at both the header and

It enables the user to program varied pricing procedures to

The pricing is extendable; it can be attached, or extended to

It also allows Gross to Net pricing: This allows discounts

SD3-2: Credit Check

provides an efficient means to implement

is integrated with Financial Accounting (FI), via

automatically alerts when a credit check fails

SAP AG - University Alliances and

SD3-2: Credit Check

large number of outstanding receivables or bad

user may minimize credit risk by defining a

is especially important if a company does

SAP AG - University Alliances and

SD3-3: Availability Check

Allow for 3 methods of

One-time delivery ( ontime one-time delivery)

SD3-3: Availability Check

determining the material availability the

SAP AG - University Alliances and

SD3-3: Availability Check

SAP AG - University Alliances and

SD3-3: Availability Check

Deliver on the requested delivery date

In this section, SAP checks whether the

If there is no stock available, confirmed

SAP AG - University Alliances and

SD3-3: Availability Check

SAP AG - University Alliances and

SD3-3: Availability Check

SAP AG - University Alliances and

SD3-4: Delivery Scheduling

can automatically schedule essential

uses defined activity times to schedule

SAP AG - University Alliances and

SD3-4: Delivery Scheduling

SAP AG - University Alliances and

SD3-4: Delivery Scheduling

SAP AG - University Alliances and

SD3-4: Delivery Scheduling

SAP AG - University Alliances and

SD3-4: Delivery Scheduling

SAP AG - University Alliances and

SD3-4: Delivery Scheduling