The Fulfillment Process

Slide 2

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

Slide 3

Organizational Units (SD Summary)

Global Bike

Global Bike Inc. Global Bike Germany GmbH

US West US East Germany North Germany South

Dallas Miami Hamburg Heidelberg

Client

CompanyCode

SalesOrganization

Sales OfficeSan Diego

Slide 4

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

Slide 5

Organizational Units (Company Code) Table T001 contains the company code

A company has a currency (fields LAND1 WAER)

Slide 6

Organizational “grouping” Units Divisions categorize what we sell (TSPA)

Distribution channels categorize how we sell what we sell (TVTW)

Slide 7

Organizational Units (Division) Division

A way of grouping materials, products, or services

SAP uses the division for logistics functions Global bike has two divisions

Bicycles and accessories

Slide 8

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

Slide 9

Organizational Units (Distribution Channel) 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

Slide 10

Organizational Units (Distribution Channel) Defined in table TVTW

Slide 11

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

Slide 12

Organizational Units (Sales Organization)

Global Bike has the following sales organizations

Slide 13

Organizational Units (Sales Organization) One sales organization can have many

distribution channels or just one Table TVKOV

Slide 14

Organizational Units (Sales Organization) One sales organization can sell through

many divisions Table TVKOS

Slide 15

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

Slide 16

Organizational Units (Sales Area) Table TVTA

Slide 17

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

Slide 18

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)

Slide 19

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

Slide 20

Customer (General Data) Table KNA1 contains customer, address

information, and global customer classification information

Slide 21

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

Slide 22

Customer (Sales Area Data) Combination of a sales organization,

distribution channel and division Describes HOW we sell materials to a

customer

Slide 23

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

Slide 24

Customer (Sales Area Data)

Slide 25

Master Data (Customer)

Slide 26

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

Slide 27

Organizational Units (Plant) Plant from which the goods are produced

and / or delivered Global Bike has manufacturing and

distributing plants

Slide 28

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

Slide 29

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

Slide 30

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

Slide 31

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

Slide 32

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

Slide 33

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

Slide 34

The Fulfillment Process Presales activities (these are optional)

Quotations Outline agreements

Sales activity Generate sales order

Shipping Picking documents, delivery, goods issue

Payment

Slide 35

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

Slide 36

Sales Order It’s a binding contract between our

company and the customer Created though

Internet orders Existing contracts Sales quotations (just discussed)

Slide 37

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

Slide 38

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

Slide 39

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

Slide 40

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

Slide 41

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

Slide 42

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

Slide 43

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

Slide 44

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

Slide 45

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)

Slide 46

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)

Slide 47

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

Slide 48

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) Updates sales order

Slide 49

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

Slide 50

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

Slide 51

Billing Methods Delivery-based

1 invoice per delivery Collective-based

1 invoice for several deliveries Split invoicing

Multiple invoices for one delivery

Slide 52

Billing Documents When posted,

Accounts receivable is debited Revenue accounts are credited

The document is passed to financial accounting (FI) awaiting payment

Slide 53

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

Slide 54

Following the Document Flow