Sales and Distribution Overview <Site> Right Solution, Right Time, Right Price

Business Process Workshop The objectives of the Sales and Distribution Overview workshop is to: Provide an overview of the Sales and Distribution Business Process Demonstrate how SAP will be used to manage this process

Agenda Topics: Master Data in Sales & Distribution The SD Business Process Collection Reporting and Analysis

I. Master Data in SD

Master Data in Sales & Distribution Master Data is centrally stored (shared across application modules) and processed to eliminate data redundancy. These three master data records are critical to sales order processing: Customer Master Material Master Pricing Condition The material master is equivalent to the item master in BOSS. We need to get used to calling our product materials rather than items

Customer Master Record Consists of the following views: General Data There are three views on the customer master: General data contains company name/address and phone information, while company code is mainly used for financial purposes. Sales area used to define sales-related information. Company Code Data Sales Area Data

Sales & Distribution data Customer Master The customer master contains all customer-related data necessary for processing orders, deliveries, invoices, quotation and customer payments. A customer number will be automatically assigned to a new customer at the time of customer creation. 99% of our customers will belong to one Sales Area. If a customer belongs to more than one Sales Area, SAP will prompt you to choose one at order entry. A customer number is required for all quotes, inquires and order related transactions. All active customers from BOSS will be loaded into SAP prior to go-live. We will no longer have intelligent numbering or sort names in our customer numbers, since there will be one customer number regardless of the products/services that the customer purchases. Customers can be searched using wildcards in SAP ex: mag*, and all choices will be shown right on the screen. In addition, customers can be searched by address, city, state. Customer setup will be limited to a select group of individuals. The customer number will be a 7-digit number in most cases, except for Yaskawa subsidaries (YEC, Motoman) General data Sales & Distribution data Company code data

Customer Master Record Client General data Bank details General data Company code - Y012 Reconciliation acct 121000 Payment terms NT30 Sort key 001 Sales district 00001 Sales office 01 Price group 01 Company code data Sales data General data is shared and can be accessed through the financial and sales views of the customer Accounting data Sales area data

Customer Master View Field Groups Address Communication Account Control Tax Information Reference Data/ Area Control Data Address Communication Tax Jurisdiction View Field Groups General Data: Recommend showing SAP live and show the 3 views and how each view is broken down into several tabs or categories of data (as shown above) Each tab has many fields. Approximately 35 different fields will be used when we go-live. Marketing Not implemented in current Stage

Customer Master Not implemented in current Stage Contact Person Unloading Point Customer Factory Calendar Unloading Points View Field Groups Payment Transactions Bank Details Payment Transactions General Data:

Customer Master View Field Groups Account Management Account Interest Calculation Reference Data Account Management Payment Data Automatic Payment Transactions Payment Advice Notes Payment Transactions Export Credit Insurance Insurance Dunning Data Correspondence Payment Notices To Company Code Data:

Customer Master View Field Groups Sales Office Sales Group Customer Group Orders Delivery Priority Delivering Plant Partial Delivery Indicator Shipping Terms Of Payment Tax Classification Billing Sales and Distribution Data:

Customer Master Forwarding Agent Sales Employee 3rd Party Rep View Field Groups Partner Function Sold To Customer Ship To Customer Bill To Customer Payer Customer Sales and Distribution Data: Partner Function Customers are also known as partners. The various partners need to be defined within the customer master, these partner functions include sales employee, forwarding agent, and 3rd party commissible rep (if applicable).

Business Partners Sold-to party Ship-to party Bill-to party Payer Customer master records can be defined as business partners. The following four partners are mandatory in the sales order (when creating a Sold-To customer all 4 are automatically created): Sold-to party Ship-to party Customer Master Sold-to party is the customer who is responsible for the purchasing of goods/services Ship-to party is the customer who is receiving the goods and servicing (often used for drop shipments) Bill-to party is the customer who is where the billing document (invoice) is to be mailed Payer is the party who is responsible for payment of the billing document (usually the same as the bill-to) Bill-to party Payer

Account Group Create sold-to party ACCOUNT GROUP Field selection Customer : 1000012 Sales organization : 0010 Distribution Channel : 10 Division : 02 Account Group : 0001 All customers are assigned at a account group and a sales area. Each different customer type has a different account group so that searches can be performed based on if the customer is a sold-to, ship-to, bill-to or payer. YEA has also set up a fifth account group, related party, to separate sales from our subsidiaries from sales from our true customers. ACCOUNT GROUP Field selection Number Assignment One-time account: yes/no Output Proposal 0001 Sold-to party 0002 Ship-to party 0003 Payer 0004 Bill-to party Z001 Related Party

Material Master The material master contains all data required to define and manage material. It integrates data from engineering, manufacturing, sales and distribution, purchasing, accounting, and other departments. The material master is used as a source of data for sales order processing throughout the customer order management cycle. General data Purchasing data Accounting data Sales data Manufacturing data (etc.) Again, mention that the material master is equivalent to the item master.

Go to Material Master to review – There are many views and more fields than today in the material master

Every material must have a material pricing group – allows sales to group products together with similar pricing conditions

Pricing Condition Record Condition Type: PR00 Condition types determines selling price of materials Automatically copied into Sales Order Pricing condition records exist in SD. Material price will be set up in SD and can be found within an inquiry, quotation or sales order, or by displaying pricing conditions. Pricing Master Records are located in condition types in Sales and Distribution. Material Price (known as List Price in BOSS) is no longer maintained in the Material Master Record.

Discounts/surcharges Prices and Discounts Conditions Prices Discounts/surcharges Price list Material price Customer/material Customer Customer/Material pricing group 3rd Party Commissions There will be 3 types of price conditions set up in SAP. Material price = List price Customer/material = Net price Price list (new) – allows us to use the same sell price a group customers (ex: Honda), without having to set up customer/material records for each customer. Discounts will either be set up on the customer level or the customer/mat price group level as they are today. 3rd party commissions % and accruals will be set up within pricing. Pricing is carried out automatically based on predefined prices, discounts, and surcharges. Prices can be manually overrode on the sales order (when applicable).

Sales & Distribution Overview Review Questions In SAP, a customer is also referred to as this. What is the means through which material/services reach the customer called ? What is the combination of the sales organization/distribution channel and division referred to as ? What are the 3 views in the customer master called? Where is the material price (known as list price today) stored in SAP? What is the physical location where material is managed called? Review Questions: 1. Name one of the 3 critical types of Master Data on a sales document? Customer Master Material Master Pricing Conditions

II. The SD Business Process

Business Processes Cycle Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Payment Delivery Billing Billing

Business Process Summary Pre-Sales S S A A L L M M E E Contract Contract Quotation Quotation Inquiry A A S S T T Sales Order Processing E E I I Order R R N N I I F F Inventory Sourcing A A O O L L R R Delivery S S M M Delivery Delivery Picking Picking Goods Issue Goods Issue A A M M T T A A I I N N Billing O O A A Invoice N N G G E E S S Customer payment/ Financial Accounting M M Y Y E E S S N N Accounts Accounts Material Stock Material Stock T T T T Receivable Receivable Account Account E E M M

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Pre-Sales Data from Inquiry…

Pre-Sales Can be used to generate a Quote, Order, etc…

Sales Which can be used to generate a Sales Order

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Sales Order Processing Customers place orders Standard orders normally contain: Customer and material information Pricing for each item Delivery schedules and requirements Billing information

Business Process Flow in SAP Order Delivery Invoice Payment Document flow of a sales document Order 900 . Delivery 80000459 . . Picking request 17951109 . . GD goods issue: delvy 49001828 . . Invoice 90000333 . . . Accounting document 100000276 Sales documents represent transactions in the system. They form a chain of related documents. The entire chain of documents creates the document flow. The system copies data from one document into another to reduce data entry and make problem resolution easier.

Material SGMAH-02BAF41 SH10VA-S50 Creating an Order Material master Customer master Sold-to party 1000016 Item 1 2 Material SGMAH-02BAF41 SH10VA-S50 Quantity 10 20 When you create a sales order without reference, the system automatically copies the: Sold-to party and its partner data from the Customer Master records Line item or material data from the Material Master record

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Availability Check in Order Processing Availability check occurs during sales order, rescheduling and delivery processing: It occurs in the plant determined for the customer/material

Availability Checking in SAP Advantages of the Availability Check: Real-time status of inventory allocation Accurate delivery dates Automatic scheduling Configurable scope of check for inward and outward movements Considers lead times

Inventory Sourcing Inventory Sourcing determines: If the product is available (availability checking) How the product will be supplied: From stock on hand By replenishment activities (production order, purchase order) Make to order Shipped by an external supplier (3rd Party) Shipped from another warehouse

Backorder Processing Backorder processing is a manual process of reallocating stock from one sales order to another. Stock allocated and confirmed for one sales order can be moved manually to another sales order. You should use an availability check indicator in which requirements are processed individually. This makes the sales order number visible on the backorder processing screen.

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Delivery Warehouse Creating delivery documents Picking Manual Packing Sales order Delivery document Creating delivery documents Picking Manual Packing .......................... . . . . . . . .......................... . . . . . . . .......................... . . . . . . . Shipping papers Goods issue Updating inventory Updating general ledger

Creating Delivery Documents Sales Order 1 Customer 1 Sales Order 2 Customer 1 Sales Order 3 Customer 2 Shipping point Due date Customer Delivery Delivery The delivery document is used to initiate all activities relevant to shipping, such as picking, packing, and transportation. A delivery document is created for a shipping point for an order that is due for delivery. The system copies the relevant data from the order.

Different Types of Order Fulfillment Sales order Delivery Complete delivery Delivery Sales order Delivery Partial delivery Delivery Sales order Delivery Order combination Sales order

Collective Processing in Delivery Delivery due list Delivery Sales order Sales order Sales order Delivery Sales order Sales order Sales order Delivery The delivery due list allows you to create more than one delivery at a time. This function can be executed by: Online processing of the delivery due list Creating a batch job in the background to be executed during off-peak hours

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Billing Billing supports: Creating invoices for deliveries and services Creating credit and debit memos on the basis of requests Canceling business transactions Transferring posting data to financial accounting Invoice

Options for Creating Invoices Invoice split Sales order Delivery Invoice Delivery Invoice Separate invoice per delivery Sales order Delivery Invoice Sales order Delivery Delivery Collective invoice Invoice Sales order Delivery The system can create a separate invoice for each sales order or part of a sales order, an invoice for each delivery, or an invoice for a combination of sales orders and deliveries.

Collective Processing in Billing Billing due list Invoice Delivery Delivery Delivery Invoice Delivery Delivery Delivery Invoice The billing due list allows you to create more than one invoice at a time. This function can be executed by: Online processing of the billing due list Creating a batch job in the background to be executed during off-peak hours 3. Name one of the 3 places automatic availability check takes place? Sales Order Entry Rescheduling Processing Delivery Processing 4. What process is used to process the deliveries in batch? Delivery Due List

III. Collections (Returns / Credit)

Review of Business Processes Sales Order Processing Sales Order Processing Inventory Inventory Sourcing Sourcing Pre-Sales Activities Quotation Invoice Delivery Payment Delivery Payment Billing Billing

Customer Payment Final step of the cycle Customer Payment includes: Posting payments against invoices Reconciling differences, if necessary

Returns and Credits Overview Damaged Return Order Processing Receipt Billing Credit Memo Payment

When Do Credit and Debit Memos Occur? Order Delivery Billing Return order (authorization) Return Delivery Credit memo

How Are Returns Processed? Invoice Return request (authorization) Returns delivery Credit memo Sales Order Accept returned goods (Post goods issue) Place in restricted stock Order reason required to create Return Order Credit memo created after removing the billing block. Invoice Billing block

Credit and Debit Memos Credit Memos Debit Memos Credit memo request Invoice Credit memo request Credit memo Invoice Sales Order Debit Memos Billing block Invoice Review Questions: What information is required when entering a return order request? Order Reason Code 2. What process needs to take place for a Credit Memo to be generated from a Credit Memo Request? SD documents blocked for billing (release) 3. Who processes the delivery on the return order? Warehouse management Debit memo request Debit memo Invoice Sales Order

IV. Reporting and Analysis

Reporting and Analysis in SAP R/3 Standard Reporting Lists documents and master data Provides analysis through sorting and totals Displays details List Processing Lists selected documents Allows you to branch to documents and return to list Helps organize work Billing Due List Delivery Due List Incomplete Sales Documents List SAP reporting has been designed to allow the user to view reports right on the screen, instead of having to download to an excel file. Drill-down capability allows you to get details on every level, and even lets you go to the orginal document that was created. Several custom reports will be designed in order to give us further flexibility

Initial List Customer Analysis-New Selection: Initial List Key figures The standard analysis initial list shows key figures according to the characteristics and time period specified. From this screen, you can access different evaluation functions (e.g., ABC analysis, classification, dual classification, totals curve) to further analyze the key figures.

Initial List Customer Analysis-New Selection: Initial List By double-clicking on an individual customer, you can drill down and view all of the totals by period for this customer.

With a double-click, you can drill down for even more detail.

Editing the List You can further edit the list. This example shows: Customer Analysis-New Selection: Top Five Customers NOTE: Credit Memos was used due to insufficient data at time of course development. You can further edit the list. This example shows: The top five customers (View > Top N) Other figures (Edit > Choose key figs)

Sales & Distribution Overview Review Questions When are the 3 times that availability checking occur? What is the chain of SD documents called? What information is required when entering a return order request? What process needs to take place for a Credit Memo to be generated from a Credit Memo Request? Who processes the delivery on the return order?

This course was developed with the assistance of: Right Solution, Right Time, Right Price