ERP Design and Implementation IST 346 BUS 326

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ERP Design and ImplementationIST 346 / BUS 326
R/3 Hands-OnSales Order Processing10/11/2006
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Outline

• Organization Structure
• Sales org, distribution channel, division, sales
  area and shipping point
• Customer Order Cycle
• Pre-sales
• Sales order
• Inventory sourcing
• Delivery
• Billing
• Payment

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Organizational Structures

• Sales organization
• Distribution channel
• Sales division
• Sales area
• Shipping

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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

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Distribution Channel

• Identifies how products and services reach the
  customer
• Can be assigned to one or more Sales Organizations

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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

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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

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Shipping Point

• Location that performs all delivery related
  activities
• A delivery can be processed from only one
  shipping point
• One plant can have multiple shipping points.
• A shipping point can serve multiple plants.
• Lead times for determining delivery dates are
  associated with shipping points.

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Fitter Snacker Sales Organization
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Customer Order Cycle
Sales Order Processing
Pre-Sales Activities
Inventory Sourcing
Payment
Billing
Delivery
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Pre-Sales Activities

• There are two categories of presales activity
  Sales Support and Pre-sales Documents.
• Sales Support allows for tracking of customer
  contacts by including sales visits, phone calls,
  letters and direct mailings. Mailing lists can
  be generated based on specific customer
  characteristics.
• Pre-sales contacts include inquiries and quotes.
• Inquiries document customer requests for
  information (how much is . . ., is the product
  in stock . . .)
• Quotes are binding documents to a customer
  offering a specific quantity of material at a
  specific price if accepted within a specific
  period.
• Both Inquiries and Quotes can be used as a
  starting point to create a customer order.

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Sales Order Processing

• Customers place orders with a customer service
  representative who create a document with
  information on
• Customer
• Material Ordered - material and quantity
• Pricing conditions for each item
• Schedule lines - delivery dates and quantities
• Delivery Information
• Billing information
• Information is pulled from master data on
  customers and materials to minimize data entry
  errors.

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Inventory Sourcing

• Inventory Sourcing determines
• If a product is available (availability check).
• How the product will be supplied
• From stock on hand.
• From purchase orders that should be available.
• From make-to-order production.
• Shipped from an external supplier.
• Shipped from another plant or warehouse.

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Inventory Sourcing

• Inventory sourcing occurs when
• An order is created.
• An order is changed.
• When the delivery document is created.

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Delivery

• Delivery activities include
• Creating delivery documents
• Creating transfer orders for material picking
• Provide packing information (if required)
• Goods issue (updating accounting and inventory
  data)

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Billing

• A Billing Document is created by copying
  information for the sales order and delivery
  document into the billing document which is used
  to create the invoice.
• Creating a Billing Document will automatically
  debit the customers accounts receivable account
  and credits the revenue account. Postings may
  also be made to other accounts.

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Payment

• Payment is the final step in the customer order
  management cycle.
• Final payment includes
• Posting payments against invoices.
• Reconciling differences, if necessary.
• The Cycle may not always go as planned (material
  not in stock, defective material returned for
  credit, etc.). SAP has procedures to deal with
  these possibilities.

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Document Flow

• The sales order management process consists of a
  chain of steps. Each step in the process causes
  the creation of a document which can be used to
  track the progress of the sales order. All
  changes to documents (sales orders, delivery,
  etc.) creates a document to keep track of the
  changes.

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Document Flow
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Fitter Snacker Exercise
Sales Order
Inquiry
Sales and Distribution
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Availability
Pricing
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Fitter Snacker Exercise
Goods Issue
Pick
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Materials Management
Sales Order
Delivery
Delivery
Delivery
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Fitter Snacker Exercise
Invoice
Sales and Distribution
Delivery
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Accounts Receivable
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Post
Receivable
Receivable