Sales and Distribution (SD) Module

Sales and Distribution (SD) Module

• Enables organizations to store and manage customer- and product-related data
• Includes functionalities like sales support, shipping, billing, credit management, and foreign trade

SD Organizational Structure

• It comprises several organizational units:
• Client: An independent environment within the system
• Company Code: The smallest unit where a legal set of books is maintained
• Credit Control Area: Grants and monitors customer credit limits
• Can include one or more company codes
• Sales Organization: Responsible for selling specific products/services and related legal liabilities
• Distribution Channel: How products/services reach the customer (wholesale, retail, direct sales)
• Division: Grouping of materials, products, or services
• Sales Area: Combination of Sales Organization, Distribution Channel, and Division
• Determines conditions for sales activities like pricing
• Plant: A plant from which goods are delivered
• Other SD units: Shipping Point, Loading Point, Sales Office, Sales Group, Sales Person

SD Master Data

• Consists of three types: Customer Master, Material Master, and Condition Master

Customer Master

• Contains necessary information for processing orders, deliveries, invoices, and payments
• A one-time customer is a customer the business does not deal with regularly
• Divided into three areas: General Data, Company Code Data, and Sales Area Data
• General Data is relevant to the entire organization, like client name and address
• Company Code Data are specific keywords assigned to the company or a process, such as payment and bank
• Sales Area Data includes the Sales Office Currency of the sales organizations

Material Master

• Contains all information a company needs to manage a material
• Used by most components within SAP (Sales, Distribution, Materials Management, Production, etc.)
• Stored in functional segments called "Views"
• Divided into three areas:
• General Information: Material name, weight, unit of measurement
• Sales: Delivery Plant and Loading Group details
• Storage Location: Stock Quantity information

Condition Master (Pricing)

• Includes prices, surcharges, discounts, freights, and taxes
• Defined as dependent on various data or any document field

Outputs

• Information sent to the customer via email, mail, fax, or EDI
• Output type defines how the output is transmitted during SD processing
• Examples are order confirmations, freight lists, and invoices

SD Processes

• Order-to-Cash process steps:
• Pre-sales Activities
• Sales Order Entry
• Check Availability
• Pick Materials
• Pack Materials
• Post Goods Issue
• Invoice Customer
• Receipt of Customer Payment
• Known as the Sales Order Process

Pre-Sales Activities

• Assist in sales, distribution, and marketing
• Fulfill functionalities such as:
• Creating and tracking customer contacts and communications
• Implementing and tracking direct mailing, Internet, and trade fair campaigns
• Equip sales technicians with the information needed to negotiate sales
• Relevant information includes: past sales activity, contact information, credit limits, and current backorders
• Includes inquiries and quotations

Inquiry

• Customer's request for information or a quotation without obligation
• Centers around cost and material/service availability, and contains quantities and dates

Quotation

• Addresses questions for the potential customer
• A legally binding offer to deliver products/services within a timeframe at a predefined price

Sales Order Entry

• Originates from various documents/activities
• Electronic document should contain: customer information, material/service and quantity, pricing, delivery dates/quantities, shipping and billing information
• The sales document is made up of three (3) primary areas:
• Header: Relevant to the sales order, contains customer data and total order cost
• Line item(s): Information about the specific product, such as the material, quantity, and cost of an individual line
• Scheduled line(s): Uniquely belongs to a Line Item and contains delivery quantities and dates for partial deliveries

Elements of Sales Order Entry

• Delivery Schedule: System determines delivery timeline based on requested date and ATP data
• Shipping Point and Route Determination: System determines the shipping point and route
• Pricing: Displayed on pricing screens, with header pricing for the entire order and line item pricing for each material
• Pricing can be manually manipulated

Credit Limit Check

• Manages credit exposure for each customer
• Alters sales reports and may block orders/deliveries

Availability Check

• Determines material availability date considering inventory movements
• Delivery methods are one-time, complete, or delayed proposal

Shipping and Transportation

• Begins when the delivery document is created for the sales order
• Controls and monitors processes like Picking, Packing, and Post Goods Issues
• Delivery creation checks orders and materials and considers factors such as availability, weight, batch determination, and quality

Delivery Document

• Initiates the delivery process and controls Picking, Packing, Loading, and Posting Goods Issues

Picking Process

• Considers: quantities based on delivery note, assigned date, storage location assignment, serial/lot number tracking, and warehouse management integration

Loading and Packing

• Identifies packaging used for products and updates accounts associated with returnable packaging
• Includes tracking packed products and ensuring weight/volume restrictions

Goods Issue

• An event that signals a legal change in product ownership based on Incoterms and sales order terms
• Indicates goods have left the seller's premises

Billing Process

• Generates the customer invoice and updates the customer's credit status
• The billing document is created by coping data from the sales order and/or delivery document
• Types: order-based and delivery-based billing
• Creates a debit posting to the customer's sub-ledger and credits the company's revenue account
• The sales process is then passed to Financial Accounting until payment is received
• Billing methods include delivery-based, collective, and split invoicing

Payment

• The final step (managed by Financial Accounting)
• Clears the liability in Accounts Receivable and increases the company's bank account
• Involves posting payments against invoices and reconciling differences

Document Flow

• The document flow and order status feature in SAP can be used to find the status of an order at any point in time
• SAP updates the order status whenever a change is made to any document created in the customer order management cycle (Order-to-Cash).