The Fulfillment Process

Introduction to Fulfillment The fulfillment process involves Creating customers Creating sales orders Receiving purchase orders from customers Shipping orders Sending and processing invoices Processing payments Managing credit

Organizational Units (SD Summary) Global Bike Client Global Bike Inc. Global Bike Germany GmbH Company Code US West US East Germany North Germany South Sales Organization San Diego Dallas Miami Hamburg Heidelberg Sales Office

Organizational Units (Company Code) Smallest org unit for which you can maintain a legal set of books (financial accounting) Global Bike has two company codes

Organizational Units (Company Code) Table T001 contains the company code A company has a currency (fields LAND1 WAER)

Organizational “grouping” Units Divisions categorize what we sell (TSPA) Distribution channels categorize how we sell what we sell (TVTW)

Organizational Units (Division) A way of grouping materials, products, or services SAP uses the division for logistics functions Global bike has two divisions Bicycles and accessories

Organizational Units (Division) Table TSPA stores divisions Divisions are create for the entire client Various organizational units are assigned to divisions as you will see

Organizational Units (Distribution Channel) This is the means by which goods are delivered to the customer Wholesale, retail, online, are typical distribution channels See Figure 5-3 Magal

Organizational Units (Distribution Channel) Defined in table TVTW

Organizational Units (Sales Organization) Responsible for sales and distribution of goods for a geographical area A sales organization can sell through many distribution channels We can restrict a sales organization to specific distribution channels

Organizational Units (Sales Organization) Global Bike has the following sales organizations

Organizational Units (Sales Organization) One sales organization can have many distribution channels or just one Table TVKOV

Organizational Units (Sales Organization) One sales organization can sell through many divisions Table TVKOS

Organizational Units (Sales Area) Combination of Sales Organization, Distribution Channel and Division A sales area sells materials to customers through a distribution channel for a division of the company Determines conditions (i.e. pricing) for sales activities Much more later Defined in table TVTA

Organizational Units (Sales Area) Table TVTA

STATUS REPORT A company is organized into sales areas Those sales areas sell materials to customers A sales area is a unique combination of a sales organization, distribution channel, and division Here we focus on the customer

Master Data (Customer) Contains all information about a customer Every customer must have a master record Customer master data is divided into three areas General data (table KNA1) Company code / accounting (table KNB1) Sales area (table KNVV)

Customer (General Data) General data is defined at the client level (name, address, account number) It applies to all company codes and sales areas The other tables assign customers to sales areas and accounting areas

Customer (General Data) Table KNA1 contains customer, address information, and global customer classification information

Customer (Company Data) Mostly made up of accounting data (also called the accounting segment) for a particular company (US00) (DE00) Payment terms Company reconciliation accounts It defines the rules by which the accounting department for the company must abide Defined in table KNB1

Customer (Sales Area Data) Combination of a sales organization, distribution channel and division Describes HOW we sell materials to a customer

Customer (Sales Area Data) The data relates to Shipping, exchange currency, preferred delivery plant, delivery policies If a customer is serviced by multiple sales areas, a separate sales area data must be maintained Sales areas maintained in table KNVV

Customer (Sales Area Data)

Master Data (Customer)

STATUS REPORT A company is organized into sales areas Those sales areas sell to customers Materials are stored in plants Customers buy materials from a sales area, which ships those materials from a plant

Organizational Units (Plant) Plant from which the goods are produced and / or delivered Global Bike has manufacturing and distributing plants

Organizational Units (Plant) Table T001W stores the list of plants

Organizational Units (Other) Other SD organization units: Shipping Points are responsible for scheduling and processing deliveries to customers Shipping points apply to plants Loading Point Think of a loading point as a loading dock at a warehouse Sales Office Sales Group Sales Person

STATUS REPORT A company is organized into sales areas Those sales areas sell to customers Materials are stored in plants Customers buy materials from a sales area, which ships those materials from a plant

Master Data (Material) Remember that vendors sell us materials These are the same materials discussed in the previous chapter Trading goods We make materials for resale too Finished goods Again, materials are stored and displayed in functional segments called views

Relevant Material Views (Sales 1) Basic data Sales organization data Item category group defines the kind of item Standard material / packaging The delivering plant and responsible sales organization Plant data Describes how the material will be shipped Loading methods

Relevant Material Views (Sales 2) What if two plants distribute the same material? There must be a unique material for every combination of Sales organization Distribution channel

The Fulfillment Process Presales activities (these are optional) Quotations Outline agreements Sales activity Generate sales order Shipping Picking documents, delivery, goods issue Payment

Pre-sales Activities Sales support and CRM Quotation It’s our offer to the customer to supply selected products and at a specific price with specific delivery instructions

Sales Order It’s a binding contract between our company and the customer Created though Internet orders Existing contracts Sales quotations (just discussed)

Sales Order (Contents) Customer specific Contains customer information, pricing, and material information Order specific Pricing Shipping point Material information Delivery information Credit limit check MRP transfer

Sales Order (SAP) As usual it contains a header, line items, and detailed schedule lines Header – sales order information Line Item(s) – product and quantity information Schedule line – delivery and partial delivery information

Sales Order The sales document is made up of three primary areas: Header Data relevant for the entire sales order: Ex: customer data, total cost of the order Line Item(s) Information about the specific product: Ex: material and quantity, cost of an individual line Schedule Line(s) Uniquely belongs to a Line Item, contains delivery quantities and dates for partial deliveries

Delivery Scheduling Orders don’t necessarily ship immediately We must often request a delivery date This delivery date must be “possible” The system helps perform the delivery scheduling Scheduling is performed using backward and forward scheduling rules

Delivery Scheduling (types) Backward Work from the requested delivery date back to the order date Forward Work form the order today toward an expected deliver date

Shipping and Routing Information Determines the shipping point for each line item (material) An order can be shipped from multiple warehouses The route determination is used to define the transit time from the shipping point to the destination

Availability Check We can check the material availability considering inbound and outbound inventory movements It’s possible to deliver partial orders You – the company, define the rules

Order Pricing Contains all pricing information for each specific material Taxes and freight can be calculated automatically Customers can have defined credit limits SAP can be configured to block orders

Shipping (Deliver) The process begins when the sales orders delivery documents are created The process is make up of Picking Packing Loading Confirmation (post goods issue)

Picking Quantities based on delivery note Assigned date when picking should begin Automated storage location assignment Supports serial number/lot number tracking and batch management Integrated with Warehouse Management (WM)

Packing and Loading Identifies and updates accounts associated with returnable packaging Tracks the packed product by container Insures weight/volume restrictions are enforced All packed items are assigned to the required means of transportation

Shipping (steps) Generates packing proposal Calculates weight and volume Checks scheduling Considers partial deliveries Updates route assignment Assigns picking location Updates sales order Determines batches Quality check (if needed)

Goods Issue It’s the change of ownership of our products from our company (Inventory) to their company (FI) Goods are transferred from inventory to cost of goods sold GL accounts are updated The shipping process ends

Billing (Introduction) The data is gathered from the sales order and delivery documents SAP supports two types of billing Order-based billing Delivery-based billing Outcome is the customer’s invoice Credit status is updated

Billing Methods Delivery-based Collective-based Split invoicing 1 invoice per delivery Collective-based 1 invoice for several deliveries Split invoicing Multiple invoices for one delivery

Billing Documents When posted, Accounts receivable is debited Revenue accounts are credited The document is passed to financial accounting (FI) awaiting payment

Payment Payment is the final step in the sales order process, this step is managed by the Financial Accounting department. Final payment includes: Posting payments against invoices. Reconciling differences between payment and invoice. Payment will create a posting clearing the liability in the A/R account and increases your bank account

Following the Document Flow