The Fulfillment Process
Introduction to Fulfillment
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The fulfillment process involves
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Creating customers
Creating sales orders
Receiving purchase orders from customers
Shipping orders
Sending and processing invoices
Processing payments
Managing credit
Organizational Units
(SD Summary)
Client
Global Bike
Global Bike Inc.
US West
San Diego
Global Bike Germany GmbH
US East
Dallas
Miami
Germany North
Hamburg
Company
Code
Germany South
Sales
Organization
Heidelberg
Sales Office
Organizational Units
(Company Code)
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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)
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Table T001 contains the company code
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A company has a currency (fields LAND1 WAER)
Organizational “grouping”
Units
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Divisions categorize what we sell (TSPA)
Distribution channels categorize how we sell
what we sell (TVTW)
Organizational Units
(Division)
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Division
 A way of grouping materials, products, or services
 SAP uses the division for logistics functions
 Global bike has two divisions
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Bicycles and accessories
Organizational Units
(Division)
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Table TSPA stores divisions
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Divisions are create for the entire client
Various organizational units are assigned to
divisions as you will see
Organizational Units
(Distribution Channel)
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Distribution channel
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This is the means by which goods are delivered
to the customer
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Wholesale, retail, online, are typical distribution
channels
See Figure 5-3 Magal
Organizational Units
(Distribution Channel)
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Defined in table TVTW
Organizational Units
(Sales Organization)
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Responsible for sales and distribution of goods for a
geographical area
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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)
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One sales organization can have many
distribution channels or just one
Table TVKOV
Organizational Units
(Sales Organization)
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One sales organization can sell through many
divisions
Table TVKOS
Organizational Units
(Sales Area)
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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
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Much more later
Defined in table TVTA
Organizational Units
(Sales Area)
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Table TVTA
STATUS REPORT
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A company is organized into sales areas
Those sales areas sell materials to customers
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A sales area is a unique combination of a sales
organization, distribution channel, and division
Here we focus on the customer
Master Data (Customer)
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Contains all information about a customer
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Every customer must have a master record
Customer master data is divided into three
areas
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General data (table KNA1)
Company code / accounting (table KNB1)
Sales area (table KNVV)
Customer (General Data)
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General data is defined at the client level
(name, address, account number)
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It applies to all company codes and sales areas
The other tables assign customers to sales
areas and accounting areas
Customer (General Data)
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Table KNA1 contains customer, address
information, and global customer
classification information
Customer (Company Data)
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Mostly made up of accounting data (also
called the accounting segment) for a
particular company (US00) (DE00)
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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)
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Combination of a sales organization,
distribution channel and division
Describes HOW we sell materials to a
customer
Customer (Sales Area Data)
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The data relates to
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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
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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)
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Plant from which the goods are produced and /
or delivered
Global Bike has manufacturing and distributing
plants
Organizational Units (Plant)
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Table T001W stores the list of plants
Organizational Units (Other)
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Other SD organization units:
 Shipping Points are responsible for scheduling and
processing deliveries to customers
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Loading Point
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Shipping points apply to plants
Think of a loading point as a loading dock at a
warehouse
Sales Office
Sales Group
Sales Person
STATUS REPORT
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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)
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Remember that vendors sell us materials
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We make materials for resale too
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These are the same materials discussed in the
previous chapter
Trading goods
Finished goods
Again, materials are stored and displayed in
functional segments called views
Relevant Material Views
(Sales 1)
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Basic data
Sales organization data
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Item category group defines the kind of item
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Standard material / packaging
The delivering plant and responsible sales
organization
Plant data
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Describes how the material will be shipped
Loading methods
Relevant Material Views
(Sales 2)
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What if two plants distribute the same
material?
There must be a unique material for every
combination of
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Sales organization
Distribution channel
The Fulfillment Process
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Presales activities (these are optional)
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Sales activity
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Generate sales order
Shipping
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Quotations
Outline agreements
Picking documents, delivery, goods issue
Payment
Pre-sales Activities
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Sales support and CRM
Quotation
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It’s our offer to the customer to supply selected
products and at a specific price with specific
delivery instructions
Sales Order
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It’s a binding contract between our company
and the customer
Created though
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Internet orders
Existing contracts
Sales quotations (just discussed)
Sales Order (Contents)
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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)
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As usual it contains a header, line items, and
detailed schedule lines
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Header – sales order information
Line Item(s) – product and quantity information
Schedule line – delivery and partial delivery
information
Sales Order
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The sales document is made up
of three primary areas:
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Header
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Line Item(s)
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Data relevant for the entire sales
order: Ex: customer data, total
cost of the order
Information about the specific
product: Ex: material and
quantity, cost of an individual
line
Schedule Line(s)
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Uniquely belongs to a Line Item,
contains delivery quantities and
dates for partial deliveries
Delivery Scheduling
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Orders don’t necessarily ship immediately
We must often request a delivery date
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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)
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Backward
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Work from the requested delivery date back to
the order date
Forward
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Work form the order today toward an expected
deliver date
Shipping and Routing
Information
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Determines the shipping point for each line
item (material)
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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
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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
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Contains all pricing information for each
specific material
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Taxes and freight can be calculated
automatically
Customers can have defined credit limits
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SAP can be configured to block orders
Shipping (Deliver)
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The process begins when the sales orders
delivery documents are created
The process is make up of
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Picking
Packing
Loading
Confirmation (post goods issue)
Picking
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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
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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)
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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
Goods Issue
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It’s the change of ownership of our products
from our company (Inventory) to their
company
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(FI) Goods are transferred from inventory to
cost of goods sold
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GL accounts are updated
The shipping process ends
Billing (Introduction)
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The data is gathered from the sales order and
delivery documents
SAP supports two types of billing
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Order-based billing
Delivery-based billing
Outcome is the customer’s invoice
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Credit status is updated
Billing Methods
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Delivery-based
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Collective-based
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1 invoice per delivery
1 invoice for several deliveries
Split invoicing
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Multiple invoices for one delivery
Billing Documents
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When posted,
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Accounts receivable is debited
Revenue accounts are credited
The document is passed to financial
accounting (FI) awaiting payment
Payment
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Payment is the final step in the sales order
process, this step is managed by the Financial
Accounting department.
Final payment includes:
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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