1. 1 - Organizational Structures -

2. Organizational Data  A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions  Are static data and are rarely changed  The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured 2

3. 3 R/3 FI Financial Accounting CO Controlling PS Project System WF Workflow IS Industry Solutions MM Materials Mgmt. HR Human Resources SD Sales and Distribution PP Production Planning QM Quality Mgmt. PM Plant Maintenance SM Service Mgmt. Client / Server Integrated Business Solution EC Enterprise Controlling AM Fixed Assets Mgmt. Sales and Distribution (SD)

4. Components of Sales and Distribution 4 Sales and Distribution (SD) Sales Support Sales Credit Mgmt. Shipping Transport Billing Foreign Trade Sales Information System Master Data

5. Sales Organization  Sales Organization  Sells and distributes products  Negotiates terms of sales  Responsible for these business transactions  Critical organization element to the definition of business markets  A sales transaction is linked to only one Sales Organization 5

6. Sales Organization – (continued) 6 India Sales S000

7. Distribution Channel  Identifies how products and services reach the customer  Can be assigned to one or more Sales Organizations 7

8. 8 Distribution Channel – (continued) Retail Dist Channel (RE) Wholesale Dist Channel (WH) India Sales S000

9. Division  Often times used to define product line distribution  Organization level to which customer specific information and requirements are maintained (e.g. pricing, partial delivery)  Assigned to one or more Sales Organizations 9

10. Division – (continued) 10 Medical DivisionChemical Division India Sales S000

11. Sales Area  Sales Area comprised of:  Sales Organization  Distribution Channel  Division  Will be used to link together the organizational aspects of sales to customers  Used for statistical analysis 11

12. Sales Area – (continued) January 2008 12 Retail Dist Channel (RE) Wholesale Dist Channel (WH) India Sales S000 Medical Division Chemical Division Medical Division Chemical Division

13. Sales Area – (continued) 13 Retail Dist Channel (RE) Wholesale Dist Channel (WH) India Sales S000 Medical Division Chemical Division Medical Division Chemical Division

14. Internal Sales Organization  Typically defines a territory or market  Linked to one or more Sales Areas  Optional organization structure 14

15. Sales Office 15 South India SalesNorth India Sales India Sales S000

16. Sales Group  Sales Group  Sub-division of a sales office, territory or market 16

17. Sales Person  Sales Person  Defined in Human Resources (HR) — Personnel Admin.  Specifically defines an individual rather than a position (sales rep.) in sales processing 17

18. Internal Sales Organization 18 South India SalesNorth India Sales India Sales S000 Tamilnadu Sales Group Kerala Sales Group UP Sales Group MP Sales Group Salesperson 1 Salesperson 4 Salesperson 3 Salesperson 6 Salesperson 5 Salesperson 8 Salesperson 7 Salesperson 2

19. Shipping and Loading Points  Shipping Point  Location that performs all delivery related activities  Assigned a factory calendar  A delivery can be processed from only one shipping point  Loading Point  A subdivision of the shipping point used for more specialized handling 19

20. Shipping Organization 20 Plant P000 Freight Dock FD00 Express Dock ED00 Rail Dock RD00 Loading Point 3 Loading Point 2 Loading Point 1 Loading Point 4

21. Group 1 – Exercises 114. Create Sales Organization 115. Assign Sales Organization to Company Code 116. Define Distribution Channels 117. Assign Distribution Channels to Sales Organization 118. Define Division 119. Assign Division to Sales Organization 120. Setup Sales Areas 121. Define Common Distribution Channels 122. Define Common Divisions 21

22. Group 2 – Exercises 123. Define Loading Groups 124. Create Shipping Point 125. Assign Plant to Sales Organization and Distribution Channel 126. Assign Shipping Points to Plant 22