Sales &

Distribution
Overview

2010 Smiths Consulting Ltd. All rights reserved. The concepts and methodologies contained herein are proprietary to Smiths
Consulting Ltd.
Duplication, reproduction or disclosure of information in this document without the express written permission of Smiths Consulting is
prohibited.8

Agenda

Sales Key Concepts

Types of SAP SD Data
SD Organizational Structures
Customer Master Data
Material Master Data (Sales)
SD Processing
SD Pricing
Ad hoc Credits & Debits
Returns

Objective
To gain an understanding of the Sales
& Distribution processes and
terminology
Have an overview of how this will fit
into the NI SAP process going forward
This is NOT a demo of the
developments so far!

SALES KEY CONCEPTS

Key Concepts
SD is about selling, shipping and billing a product
and /or service to a Business
SD integrates with other SAP modules and requires
cross-functional thinking e.g.

Finance / Controlling = financial / AR / AP / reporting processes

Materials Management = logistics / purchasing / stock processes
Production = manufacturing processes
Service = engineers / services
Project System = large project (wbs) related processes
HR = sales employees

Configuration provides SD with a lot of flexibility for

each individual business needs (e.g. pricing strategies
and modeling the sales cycle in SAP)

SD Business Concepts
Inquir
1 y
Quotatio
2 n
Sales
3
Order
Deliver
4 y

Picking/Packin
5
g
6

Post Goods
Issue

7 Billing
8

Payment

Pre Sales

Sales
Activity

Contract

Sales order
processing
Shipping

Quotation
Order

Delivery
Transportatio
n

Billing

Customer Payment /
Financial Accounting

Scheduling Ag

Goods
Issue
Shipment

Billing

Accounts
Receivable

Materials
Stock Account

Production Planning

Inquiry

Materials Management

Sales Information System

SD documents - flow

TYPES OF SAP DATA

Types of SAP Data

Organizational
Organizational
Data
Data
Sales
Sales
Sales
Sales
Area
Area
Area
Area

Master
Master Data
Data
Material
Material
Master
Master
Master
Master

Transaction
Transaction Data
Data
Dynamic
Dynamic

Organisational data
Sales Area e.g. Sales Org / Dist Channel / Division
Sales Structure e.g. Sales Office / Sales Group
Shipping Structure (Plant, Shipping Point)
Master data
Customers
Materials
Pricing

Transactional data
Sales orders
Delivery notes
Billing documents

SD ORGANISATION
STRUCTURES

Organizational Data

Organizational Data is the foundation which must exist within SAP before any SD business process
can be modeled or executed

Defines the companys organizational and physical entities

SD is organized according to sales organization, distribution channel and division. A combination of

these three organizational units forms the sales area

Sales Area Structure

Selling Structure
Shipping Structure

Sales Area Structure

.

Sales Area Structure

A Sales Area is composed of the Sales Organization, the
Distribution Channel, and the Division. All business transactions
are driven by the Sales Area including customers, sales orders,
pricing and reporting
Sales Organization
Can indicate a legal selling unit or it could be a regional subdivision of
a market
Can be linked to only one Company Code
Each SD business transaction is processed within a sales organization

Distribution Channels
Used to define how different products reach consumers.
Typical Distribution Channels are wholesale trade, customer group,
telephone sales, and direct sales from plant (e.g., wholesalers,
retailers, domestic and international)

Division
A product line or product group

Company Code

Sales Organisation
Distribution
Channel
Division

SHIPPING STRUCTURES

Shipping Structure
The following shipping functions are supported in SD:
Creation and processing of deliveries
Deadline monitoring of orders
Combined deliveries or deliveries (as per customer
master)
Monitoring availability
Picking, Packing & Goods Issue

Company
Company
Code
Code

Sales
SalesOrg
Org

Plant
Plant

Plants
Can supply one or more sales organizations with trading
goods
Multiple Plants per Company Code / Purchasing
Organisation
Plants can be a place where Stock is kept e.g. warehouse,
a manufacturing / production plant, a distribution center

Shipping
Shipping
Point
Point

Configuration of Plant
News
NewsInt
Int

Company Code

Print
PrintPlant
Plant

Plant

Storage
Location

Live
LiveNews
News

Returns
Returns

DTR
DTRHouse
HouseOvers
Overs

SAP NI Plant Structure

CUSTOMER MASTER

Customer Setup
Customer Master Data maintained in: Company Code / Sales Area

One Customer Number

if selling, shipping, billing and receiving payment from one party,
there would only be one Customer Number for all partner
functions

Complex Structures
It allows a customer to have a complex structure e.g. one Sold to,
with multiple ship tos and bill tos

One Customer in Multiple Sales Areas

One customer can be shared by many sales areas (i.e., one
customer number) with their own specific information, but the
general data will stay the same e.g. address, telephone & fax

SAP Business Partners

Where goods /
services are
delivered
Ship-to party

Place an order
(contractual)
Sold-to party
Wholesal
er Branch

Customer
Customer

Wholesaler
Retailer

Master
Master
Wholesaler
Branch

Bill-to party
Where the invoice is
sent

Wholesaler
Branch

Payer
Settles the
invoice / Invoice
queries

Customer Master Views

Master Data contains the
records that remain in the
database and used by
transactions e.g. Create
Sales Order

Customer Master Data

Accountin
g Data
Unique to
Company
Code

Master Data is centrally

stored (shared across
application modules) and
processed to eliminate data
redundancy

General
Data
(common
within a
client)

Sales Data
(Unique to
Sales Area)

Customer Master
Tabs groups logical
information
General: Create
Customer
(transaction XD01)
same information
across the board
Sales Area: Create
Customer
(transaction VD01)
allows customer
specific information
held e.g. payment
terms

NI Customer Master Data

NI Customer Master data is split into 2
Sales Areas
Wholesale (0002 sales organisation)
DTR (0009 sales organisation)

Customer Searches separate

DTR Customers
Circulation Customers = W/S
Schools (W/S)

NI Additional Fields required

Standard SAP Customer Fields
Address fields
Sales Order Processing e.g. delivering plant
Partners e.g. different ship to

New Fields will be created for various

requirements
87 attributes
RDBDAT fields
etc

MATERIAL MASTER (SALES

RELATED)

Material Master Views

Material Master Views

Basic Data Views
Applies to all organizational levels and
exists at the Client level e.g. material
number, description

Sales Views
Applies to all sales area related
information e.g. item category group,
delivering plant, product hierarchy

Plant (Purchasing) Views

Applies to Plant level e.g. base unit of
measure, purchasing group, MRP views

Accounting Views
Applies to Plant Valuation level e.g.
valuation control (standard / moving
average), split valuation

Material Master
Basic Data 1&2
Sales Org Data 1
Sales Org Data 2
General/Plant Data
Sales Text
Purchasing
Purchase Order Text
MRP 1,2,3&4
Warehouse Mngt
Accounting 1&2

NI Material Master Fields

Standard SAP Fields
Material Description
Alternative Unit of Measure eg.
Pagination / Bundle / Turn

Z Fields
Additional attributes e.g. Polywrapped

Material Master
Material Master

Details

Create (extend) MM01

Change MM02
Display MM03

Material type determines the

type of material being
created e.g. trading goods,
services, raw goods
Not all screens need to be
created (system will
recommend)
Key fields are automatically
populated e.g. price control
& item category group

NI Material Master Type

New Material Types will be created
for NI (copying SAP Standard)
Titles (per day) using a z program
Returns Materials
Generic Materials e.g. miscellaneous
Credits / Charges

Material Item Category

Group
Held within the Sales Org 2 screen

Criteria for the item category determination on the sales

order (characteristics of a sales line item e.g. billable,
deliverable)
You can define a default item category group which is
proposed by the material type

Material Item Category

Group
Examples of Item Category Groups:
NORM: Stock item (valuated)
DIEN: Service material with a delivery
LEIS: Service material without delivery not contain the
accounting data
BANC: Individual Purchase Order sourced material
delivered via company warehouse / storage location
BANS: Third-party item sourced material / service
delivered direct to the customer site (ship to)
VERP: Packaging material, i.e. not sold (no sales views)
0002: Configured material (can be used with
classification / variant configuration) e.g. one material
with many characteristics

Create Material Master

Key fields
Material No
External
System Generated (internal)

Industry Sector
Maybe Customer Specific

Material Type

Create Material Master

Org Levels

Material Master Org Levels

Important to choose the correct organisational units
Different organisational units will be activated depending on
screens chosen
Default values = screen selection can be saved

Create Material Master Screens

Material Master screens
Material type determines
which screens / tabs are
required
Not all screens have to be
created
Particular screens needs to
be created if they are to be
used in that process e.g.
Sales 1&2, Sales General for
sales order processing
Default values = screen
selection can be saved

SALES ACTIVITY

NI Customer Services
Process:
Retailers contact the LSC regarding various requests, queries
or to issue an instruction
Requirement:
Logging mechanism linked to subsequent functions and
detailed reporting
Solution:
SAP Sales Support function: Calls from the retailer
Detail of the call
Subsequent action taken
Resolution and completion

Sales Activity

Sales Activity

Create (VC01N)
Change (VC02N)
Display (VC03N)
List (VC05)

Sales Summary
Report (VC/2)

Details
Can be used to track customer
calls
Generate following documents
e.g. Sales Orders
No financial impact (statistical)
Reason for call
Outcome / Outcome Analysis

SAP Sales Support

Log all Sales Calls
Reason for call
Status of call
Perform subsequent actions
Outcome Analysis
Sales Summary

Reporting

Customer = Retailer
Contact Person =
Caller
Employee Resp =
Customer Services Rep

Sales Activity Screen

FOLLOW ON
FUNCTION
Create Sales Order
Return Order
REASON
Shortage and
Non-Delivery
Claims
Telephone
Returns
Extras Requests
New Account
Request
Account
Query/Payment
STATUS
Open
In Progress
Closed

OUTCOME / ANALYSIS
Two fields connected
linked to Reporting
Matrix

CALL DETAIL
Description of call

PRE SALES

Pre Sales (not used in NI)

Inquiry

Create (VA21)
Change (VA22)
Display (VA23)
List (VA25)

Details
Can be used to track customer
inquiries
Used as a template
No financial impact (statistical)

Create (VA11)
Change (VA12)
Display (VA13)
List (VA15)

Quotation

Details

Timescales (validity periods)

Reporting converted into Orders
No financial impact (statistical)
Can be linked to other modules
(MM e.g. purchasing, CS e.g.
service orders)
Can have Credit Limit impact (via
configuration)

SALES ORDERS

Sales Orders
Sales Order

Create (VA01)
Change (VA02)
Display (VA03)
List (VA05)

NI Sales Order
Sources:
Pressage File
Rolling Sales Order
CSV file

Details
Key information passed to other
modules e.g. MM (purchasing),
FI/CO (financials)
Can be created with reference to
a Quotation (can be made
mandatory)
Can generated subsequent
documents e.g. purchase orders,
service orders, production orders
Impacts the MRP demands

Sales Master Data

Sales Document Flow

A business process is made up of the sequence of
individual process steps recorded as documents.
This process chain is stored in the document flow
Document flows are updated for the overall
document and for individual items
Sales order
Delivery Note
Billing Document

Document Flow
Quotation

Order

Returns

Delivery

Delivery

Invoice

Credit for
returns

Document flow of an order

. Order
. . Delivery
. . . Invoice
. . Returns
. . . Returns delivery
. . . . Credit for returns

SAP SALES ORDERS

Create Sales Order initial

screen
There are key fields
required (mandatory)

Order Type
Sales Org
Distribution Channel
Division

Determines the type

of order and also
where it sits in the
organisations and the
master data it can use

Create Sales Order overview

Header Key fields
Sold to
Ship to
Customers
Purchase Order No
& Date

Item Key fields

Material
Quantity
Price (automatic or
manual)

Button to Header
details

Create Sales Order =

header
details
Individual Header Tabs
Data grouped into tabs
Sales = Organisation, pricing e.g.
currency
Shipping = delivery details e.g.
delivery block
Billing = payment terms, inco terms
And more

Create Sales order - item

details
Individual Tabs
Data grouped into tabs
Sales A = quantity, material group
Shipping = plant, shipping point, storage
location
Conditions = pricing, discounts & surcharges
And more

Header Tabs
Sales organisation, currency, created on & by
Shipping shipping type e.g. next day, complete delivery
Billing Document inco terms e.g. CIP/FOB, payment terms,
billing blocks
Accounting account assignment of customer e.g. ICC
Conditions header pricing condition e.g. header discount
Account Assignment wbs if relevant
Partners external & internal partners e.g. sold to, operator
and engineer
Purchase Order customers PO number & date
Texts header text to be printed or internal notes
Status total order status e.g. credit block, delivery, billing
Additional Data A Reporting fields
Additional Data B Customer Z fields (as required)

Item Tabs
Sales A order quantity, material
Sales B product hierarchy, material group
Shipping plant, shipping point, storage location, shipping type, partial
delivery
Billing Document- inco terms e.g. CIP/FOB, payment terms, billing blocks
(as per header)
Conditions item conditions (manual price/discounts/surcharges)
Account Assignment cost collector (SDI / WBS)
Schedule Lines delivery schedule
Partners - external & internal partners e.g. sold to, operator and engineer
(as per header)
Texts item text to be printed or internal notes
Order data customers purchase order number (as per header)
Status item status e.g. billing status, delivery status
Structure item details
Additional data A Reporting fields
Additional data B Customer Z fields (as required)

Sales processing - materials

Sales Order examples of materials

Stock (warehoused goods delivered)

Purchased (via a purchased order a/c assigned)
Manufactured (via a production order)
Bill of Material (multiple level)
Free of Charge
Value items

Delivery Plant
Determination

Plant can be proposed from various master

data (in priority order)
Customer / Material Info Record; or
Ship to Party; or
Material Master Record

Determines the shipping plant

Defined for each item on the sales order

Route Determination
Delivery Route in the sales document is

determined on the basis of:

How? Shipping Condition on the Sold to Party

What? Transportation Group of the material

From? Country and Departure Zone of the Shipping Point

To? Country and Transportation Zone of the Ship to Party

Delivery Route may be determined:

While the delivery is being created

If the Ship to Party is changed during order entry

NI will be using DSD Functionality but this is still

required to allow the Shipment process to work

DELIVERIES

Shipping process

Creating Deliveries for goods to be delivered to a customer

Packing & Loading (optional)
Transportation Planning & Shipments (optional)
Post Goods Issue (removal of stock from warehouse may
generate an accounting document)

Transportation Planning = part of the enhanced DSD

functionality which NI will be using for the routes / waves

Shipping Overview
Shipping point
Order/
Stock
transport
order

Warehouse

M
Maayy
7
3 4 5 6
1 2 011 1213 14
1

8 9 718 192
0 21
1
1516 24252627 28
2223 31
0
293

Monitoring deadlines
Checking availability
Creating deliveries

Picking

..........................
..........................
..........................
..........................
..........................
..........................
..........................
..........................
. ............................
.
...
....
...
....
...
. . . . . . . .. . .
...
....
...

Packing

Transportation Printing and sending

shipping docs

Goods issue

Delivery
Create delivery

Create (VL01n)
Change (VL02n)
Display (VL03n)
Collective (VL***)

Details
A delivery consists of Header and Item
level information
Header information applies to the entire
delivery document, whereas item-level
information applies to each line item
An item in a sales order can consist of
several subdivisions according to
delivery date and quantity (schedule
lines)

Create shipment

Create (VT01n)
Change (VT02n)
Display (VT03n)
List (/DSD/RP_VT11)

Detail
Shipment contains list of deliveries on
the same route
Identifies weight / volume capacity

Structure of Delivery
Document
Header Data

Item 10

Valid for Entire Document:

Sold-to party and Ship-to party

Shipping point

Delivery and transportation scheduling

Texts (internal notes or printed on

outputs)
Partner information (internal & external)
Valid
for To
Each
Item:
e.g. Ship
Party
Material
Quantity to be delivered
Plant and storage location
Transportation information
Picking Specifications

Item 20

Item 30

Pre-requisites to create a
Sales Order Header
Delivery

Delivery Block removed

At least one items is deliverable
Sales Order Complete
Not Credit Blocked

Sales Item/schedule lines

The schedule line is relevant for delivery

The schedule line is confirmed
No schedule delivery block
Item has not been completely delivered
Item is complete (no missing data incompletion log)
The product status permits delivery
Material is available

Creating Deliveries
1. Individually

Order

Delivery

Log

Delivery due list

Order

2. Delivery
Due List

Order
Order

3. Manually

Order
Order
Stock transport
order

Delivery
Delivery
Delivery

Delivery

Log

Create Delivery - Single

There are key fields required
Shipping Point
Date
Sales Order

Collective Delivery

Enables mass deliveries to be created automatically

Can be selected by sales order, material or customer
Traffic light list for user to select all, or choose particular
deliveries
Can be created manually (Dialog) or in the Background

BILLING

Invoicing
Create Invoice

VF01
VF02
VF03
VF05

(create single)
(change)
(display)
(billing due list)

Details
Creating invoices and credits on
the basis of sales orders or
deliveries
Creating credit and debit memos
on the basis of requests
Cancelling business transactions
(e.g. cancellation invoice)
Transferring posting data to
financial accounting e.g.
Customer Payment

Types of Billing
Pro forma
invoice
Invoice

External
transactions

Cash sale

Credit/debit
memo

Billing types

Returns

Intercompany
billing

Invoice
list
Cancellation

Invoicing
Delivery Related Billing
Billing document is created with reference to the Delivery
Note
Customer invoice quantity is directly related to the
Delivery goods issue quantity
Un-issued quantities remain on backorder until further
action is taken

Order Related Billing (NI will use this process)

Billing document is created with reference to the Sales
Order
Customer invoice quantity is directly related to the Sales
Order open quantity

Billing processes
Sales
Order

Shipping

Billing

Delivery

Invoice

Accounting
$100
$100

Order

Invoice

$100
$100

Credit memo
request

Credit memo

$10
$10

Invoice

Cancellation
invoice

$100
$100

Single / Collective Invoicing

NI Billing Process all
orders for week combined
onto 1 invoice
Sales Order 1

Sales Order 2

Sales Order 1

Sales Order 2

Customer 1

Customer 1

Customer 2

Customer 2

Customer

Collective

Billing date

Single

Invoice

Destination

Invoice

Country

Invoice

Invoice 1

Invoice 2

Customer 1

Customer 2

Customer 2

Invoices can be grouped together using selection criteria,

such as customer, billing date and destination country

Collective Billing
Enables mass invoices to
be created automatically
e.g. overnight
Can be selected by
customer, sales order,
dates
List for user to select all,
or choose individuals
Can be created manually
(Dialog), in the
Background or
collectively

NI Process: 2 billing due lists

- Monday night = Wholesale Branches
- Tuesday night = DTR Retailers

Billing Doc
split by
a) DTR
Retailer
b) Wholesale
Branch
as today

PRICING

Pricing

The term pricing is used to describe the calculation of

prices and costs while selling the finished products

Pricing in SD is divided into 3 major categories

Base price
Discounts and Surcharges
Taxes

The total price of the products in a sales document is

calculated based on the various pricing elements that exist
for the material or service

Pricing Terminology
Pricing Conditions - Represent a given set of circumstances
that apply when a price is calculated
Access sequence - A search strategy to locate the correct
condition record
Condition Type - A calculation or formula used for a
component of pricing
Condition Record - The data used by condition types to
calculate pricing (master data)
Pricing Procedure - A sequential list of condition types and
subtotals
The pricing procedure is determined based on the customer,
sales document, and the sales area within configuration

Pricing Configuration
Pricing Procedure

Base Price

DISC
VAT

(Discounts)

(Taxes)

Final Price
The Account Key is the link to Automatic Account
Assignment during billing process to determine the GL
account posting

NI Pricing Structure
New Pricing Conditions (master data) will be created
for: Cover Price
What is printed on the paper) (statistical)

Wholesale Branch
Flat Rate Discount (FRD) ( What is charged to the
Wholesale branch (Invoice)

DTR Retailer
Retail Margin

Ad hoc Credits & Debits

Ad Hoc Credits & Debits

The following processes are also available:
Credit Memo Requests

If the customer complains that the price was miscalculated (for

example, too high) or a quantity is incorrect you request a
credit memo for the appropriate sum, and you do not take the
goods back (including a billing block)
Can be created with reference to the original invoice or sales
order

Debit Memo Requests

If prices were calculated as too low, you request a debit memo

Can be used as a re-invoice

Free-of-Charge Deliveries

Not necessarily a complaint, but they are offered as part of this

component. A free-of-charge delivery is used to send a
customer a free sample of your products

Ad Hoc Credits & Debits

All these documents can be approved or rejected via a

billing block. Once a complaint has been approved, you
create either a credit or debit memo (billing document),
depending on the type of complaint

If you reject a complaint, you can specify a reason for the

rejection and this can be used as selection criteria for listing
complaints

SAP Solution: A report will be created for NI to list all those

types of sales orders with a billing block and mass remove
block or reject (with a reason)

NI Returns Process
NI Wholesale Branches and DTR Retailers send
back their unsolds as returns (sale and return
business process)
These are credited back to the Wholesale
Branch / DTR Retailer as a debit memo (with
negative prices) so it can be consolidated with
the Supply Invoice and all the other ad hoc
chargers

THANK YOU

Question & answer sessio

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