SAP SD Module: Sales and Distribution

SAP Sales and Distribution (SD) Module

• Allows organizations to store and manage customer- and product-related data.

Key Entities in SAP SD

• Client: An independent environment within the system.
• Company Code: The smallest organizational unit for maintaining a legal set of books.
• Credit Control Area: Grants and monitors credit limits for customers.
• Sales Organization: Responsible for the sale of specific products or services.
• Distribution Channel: How products or services reach the customer (wholesale, retail, or direct sales).
• Division: Groups materials, products, or services.
• Sales Area: Combination of Sales Organization, Distribution Channel, and Division, determining conditions for sales activities like pricing.
• Plant: Where goods are delivered to the customer (Delivering Plant).
• Other SD organization units: Include Shipping Point, Loading Point, Sales Office, Sales Group, and Sales Person.

Master Data in SAP SD

• Customer Master: Contains necessary information for processing orders, deliveries, invoices, and customer payments.
• Material Master: Contains all information a company needs to manage about a material.
• Condition Master (Pricing): Includes prices, surcharges, discounts, freights, and taxes.

Output and Output Type

• Output: Information sent to the customer via email, mail, fax, and Electronic Data Interchange (EDI).
• Output Type: Defines how the output should be transmitted; examples include order confirmations, freight lists, and invoices.

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

Pre-Sales Activities Details

• Includes past sales activity, communication, contact information, general company information, credit limits and usage, and current backorders.
• Inquiry: A customer's request for information or a quotation without obligation to purchase.
• Quotation: A legally binding offer to deliver specific products or a selection of products within a specific timeframe at a predefined price.

Sales Order Entry

• Sales order processing can originate from various documents and activities like customer contact via phone or e-mail, existing contracts, and quotations.
• Header: Contains data relevant to the sales order, such as customer data and total order cost.
• Line Item: Contains information about the specific product, quantity, and cost of an individual line.
• Scheduled Line: Uniquely belongs to a Line Item and contains delivery quantities and dates for partial deliveries.

Sales Order Entries

• Delivery Schedule: The requested delivery date for the order or each line item must be entered.
• Shipping Point and Route Determination: System determines the shipping point and route from the warehouse to the customer's location during sales order creation.
• Pricing: Displays pricing information for all sales documents.
• Header Pricing: Valid for the whole order and is the cumulative total of all line items.
• Line Item Pricing: Specific to each material.
• Credit Limit Check: Manages credit exposure and risk for each customer by specifying customer limits.
• Availability Check: Determines material availability date, considering inward and outward inventory movements.

Three Types of Availability Check

• One-Time Delivery
• Complete Delivery
• Delayed Proposal

Shipping and Delivery

• Shipping & Transportation: Begins when the delivery document is created for the sales order.
• Delivery Creation: Checks orders and materials to determine delivery feasibility and identifies any delivery blocks.
• Delivery Document: Initiates the delivery process and controls Picking, Packing, Loading, and Posting Goods Issues.

Picking

• Involves quantities based on delivery note and an assigned date for when picking should begin.
• Includes automated storage location assignment, serial/lot number tracking, batch management, and warehouse management integration.

Loading and Packing

• Involves tracking packed products by container, ensuring weight/volume restrictions, and assigning items to transportation.

Goods Issue and Incoterm

• Goods Issue: An event indicating a legal change in ownership of the products.
• Incoterm: Internationally recognized rules defining seller and buyer responsibilities and sales order terms.

Billing Process and Document

• Billing Process: Generates the customer invoice and updates the customer's credit status.
• Billing Document: Created by copying data from the sales order and/or delivery document.

Two Types of Billing Documents

• Order-Based Billing
• Delivery-Based Billing

Billing Methods

• Delivery-Based Invoicing
• Collective Invoicing
• Split Invoicing

Payment and Document Flow

• Payment: The final step in the sales order process, managed by the Financial Accounting department.
• Final Payment: Includes posting payments against invoices and reconciling differences.
• Document Flow: Helps in finding the order status at any point using the order status feature in SAP, which gets updated whenever a change is made in the customer order management cycle (Order-to-Cash).

Key Entities in Purchasing

• Client: An independent environment in the system.
• Company Code: The smallest organizational unit where a legal set of books can be maintained.
• Plant: An operating area or branch within a company, including manufacturing, distribution, purchasing, or maintenance facilities.
• Storage Location: Differentiates material stocks in a plant.
• Purchasing Organization: Responsible for services and material procurement with vendors.
• Purchasing Group: Unit representing the buyer responsible for purchasing activities.
• Vendor Master: Contains all information for business activities with an external supplier.

Data Levels and Information in Purchasing

• Client Level: Includes the vendor address, vendor number, and preferred communication.
• Company Code Data: Includes reconciliation account, terms of payment, and bank account.
• Purchase Org Data: Includes purchasing currency, salesman's name, and vendor partners.
• Material Master: Contains the information a company needs to manage a material, the same as the MM Material Master.

Purchasing Information Record

• Allows buyers to quickly determine which vendors have offered materials.
• Includes data on pricing and conditions, last purchase order, tolerance limits for delivering, specific lead times, availability periods, and vendor evaluation data.

MM (Materials Management) Processes / Procure-To-Pay

• Purchase Requisition
• Vendor Selection
• Purchase Order
• Notify Vendor
• Vendor Shipment
• Goods Receipt
• Invoice Receipt
• Payment to Vendor

Purchase Requisition Details

• An internal document instructing the purchasing department to request a specific good or service for a specific time.
• Can be Direct or Manual, where a person determines what, how much, and when; or Indirectly or Automatically, including MRP, Production Order, Maintenance Order, and Sales Orders.

Requisition Sourcing

• Once assigned to a Source of Supply, it can be released for processing through Internal Sourcing Requirements, Source List, Outlines Agreement, or Request for Quotation (RFQ).

Source List

• Specifies the allowed means for procuring material for a certain plant within a given period. If the list contains a sole source, the system assigns the vendor; otherwise, it displays a list of vendors. If no source is established, the system searches information records and outlining agreements.
• Outline Agreement: Requisitions can be satisfied through contracts and scheduling agreements. Contracts consist of items defining individual materials, groups, or services with prices in quantities.
• Scheduling Agreements: The total material amount is spread over a period in a delivery schedule.

Request for Quotation (RFQ)

• Invitation to a vendor by a Purchasing Organization to submit a bid.
• RFQ Process: Accepted quotations generate Purchasing Information Records.

RFQ Process

• Perform Quotation Price Comparisons
• Select a Quotation
• Quotation for Vendor: Legal invitation to the vendor, containing prices and conditions.
• Vendor Evaluation: Helps evaluate vendors for sourcing and monitor vendor relations.
• Purchase Order: Formal request to a vendor for a specific material or service.

Goods Receipt and Movement Types

• Goods Receipt: The goods movement wherein goods are accepted into the system shown by three-digit keys.

Examples of Movement Types

• 101: Goods receipt into the warehouse.
• 103: Goods receipt into Goods Receipt blocked stock.
• 122: Return to delivery vendor.
• 231: Consumption for a sales order.
• 561: Initial entry of stock.

Post Goods Movement Events

• Material Document is created.
• Accounting Document is created.
• Stock Quantities are updated.
• Stock Values are updated.
• Purchase Order is updated.
• Output generates in Goods Receipt slip or pallet label.

Invoice Processing and Payment

• Invoice Processing: References against a Purchase Order verify content, prices, and arithmetic.
• Payment to Vendor: Can be done automatically or manually.

Effects of Payment Transaction

• Payment Method
• Bank from which they get paid
• Items to be paid
• Calculate Payment Amount
• Print Payment Medium