SAP Sales and Distribution is one of the essential modules in SAP ECC (ERP central component). It enables the organization to manage and store the data related to the customers and the products. Understanding the SAP SD enterprise structure is very important to the candidates who want to move their career into SA SD and the Consultants and Analysts who focus on SAP SD. SAP enterprise structure includes some of the organizational units that are mapped to the business structure according to the requirements of the business like Company code, Sale organizations, storage locations, plants, divisions, distribution channel, shipping points, etc. organizational units consist of Legal company entities, profit centers, sales offices, etc. They manage various business functions. In this blog, let us learn about SAP Sales and Distribution Enterprise structure in detail.
Some of the organizational units of the Sales and distribution module are:
The sales organization is at the highest level of the sales organization. It is the legal selling unit that negotiates the terms and conditions of the contract, liability of the product, and handles the consumer's complaints. It carefully plans the sales strategies that must be executed to improve market shares. The sales organization is frequently referred to as the geographical subdivision of a sector. A company code, one or more plants are assigned to the sales organization. Sales organizations have the customers' master data, material master data, and so on. It enables us to search sales documents and create billing worklists and deliveries. For every sales organization, we may set different output types.
Distribution Channel is the medium by which the goods and services are delivered to the customers. A distribution channel can be assigned to one or more sales organizations. It can be set according to the market policy of the Company or according to the internal organization. Master data of one distribution channel can be used by the other distribution channel. A Sales office can be assigned to the distribution channel.
In other words, the distribution channel represents the strategy by which you enter the market with the product or service. It indicates the way we would like to reach our end users. In order to continue sales processing, at least one distribution channel is needed. Sales to a wholesale, direct sale, internet sale, retail sale, fair price sale, etc., are some of the distribution channels and are not limited to only these. Various types of customers are reached through the distribution channels.
A division represents the group of services or materials or the product line. A division can be assigned to at least one sales organization. The product will be assigned to the Division. A sales office can also be assigned to a division. Different organizational units like Sales area, shipping point, delivery point, warehouse, etc., can be mapped to the SAP modules. There should be at least one Division in the SAP Sales and Distribution module. The material that will be sold to the customers must be assigned to one Division. Master data may be varied from one Division to another. Same master data can also be used in different divisions if we have created shared master data. Products in the billing or delivery stage may belong to the other Division. Division as the section criteria, Delivery worklist, and sales document may be created.
The Division is the cross-application component in Logistics. It acts as the connecting point to material management(MM), Production Planning(PP), Sales and Distribution(SD) applications.
A Client is a separate organizational and legal unit. Various tables and Generic data are recorded at the client level for various organizational structures. In the structure of the enterprise, the Client will be at the top. Multiple company codes can be assigned to a client.
A company code is also an independent legal unit in the organization that will be created in Finance accounting. At the company code level, Profit and Loss statements and Balance sheets can be created and can be maintained. For a single client, multiple company codes can be created.
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Sales Area is one of the minimum requirements for processing a sales transaction in the Sales and Distribution module. Sales Area brings together the Sales organization, Division, and Distribution channel that we have created. Sales Area indicates that a particular Sales organization has used a specific market reach strategy, that is, a distribution channel for selling a particular product or service that belongs to a particular division. All the Sales documents related to Sales and Distribution will be assigned to a Single sales area. Sales reports may be refined and enhanced when we narrow and select a particular sales area in SAP. Sales Area is not formed when we create Sales Organization, Division, and distribution channel; we must set up the Sales area. A sales area will only be part of a single company code. This relationship will be created when we assign the sales organization to the company code. Every Sales and distribution document will be assigned to only one sales area. We cannot change this assignment. The sales office will be assigned to the Sales area. A sales office includes employees who are assigned to the sales group. The sales group will be assigned to the Sales office.
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Some companies set up branches called sales offices in different localities apart from their main office branch for reaching the customers. A sales office is referred to as an organizational unit that includes sales groups and salespersons. A sales group refers to a group of persons who work directly or indirectly to perform sales. This Sales office will be assigned to the Sales area. The Sales office will execute sales reports to analyze Sales office performance. The sales Office acts essentially as a liaison office between the head office of the Company, the Client, and the sales department.
Group of employees within the Sales office who perform sales activities are referred to as the Sales Group. These employees are called Salespersons who work for different purposes. A Sales group will be assigned to a Sales office. A Sales office can have one or more Sales groups. These sales groups are divided according to their responsibilities.
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A shipping point in the organization represents the place where we manage the collection of products, control the deliveries and distribute the products. Single loading point deals with shipments. A shipping point can be further divided into loading points. For Shipping a particular product, there must be a shipping point. The employees at the shipping point are involved in the transportation activities. In the Sales and distribution Enterprise structure, Shipping points will be assigned to Plant. According to the dispatch activities that are necessary for shipping, there will be several shipping points in the Plant. For example, some of the material is very sensitive, which needs extra care which needs manual labor.
Plant is an important organizational unit for logistics operations. A plant can be a production factory, a place to stock the material, or a repair shop. From the Sales and Distribution enterprise structure's perspective, the Plant can be defined as the place to stock material from where we source the delivery of goods to the customers. In the Production planning, the Plant can be referred to as the place where the production of goods is performed. In the Material management module, a Plant is a place where we will stock and store material and maintain the inventory.
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In the Sales and Distribution Module, the storage location refers to the location in the Plant where the goods will be stocked. The stock will be maintained at the storage level. The stock quantity at the storage level will increase when goods are received and decrease when the goods are delivered. The storage location will be set scoring to their properties like finished goods storage location, raw material storage location, temperature-controlled storage location, return sales storage location, spare storage location, etc.
All the above are some of the organizational units of the SAP Sales and Distribution module Enterprise structure. We hope you found this information helpful. For more blogs on SAP Sales and Distribution and other modules, stay tuned to HKR trainings. If you want us to write a blog on any other topic related to the SAP SD module, comment the topic in the comment section. We will get back to you with it.
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