SAP SD Overview - SAP SD

The SD enterprise structure in SAP ERP represents the structure of the sales and distribution entity of an organization. To map this structure into the SAP ERP software, you use various building blocks provided by SAP. You use a sales organization to replicate the selling entity into the SAP system; distribution channels to represent various channels being used by the enterprise to distribute goods to market; divisions to represent various product divisions that exist in the organization; sales areas to define the relationship among selling entity, channels of distribution, and product divisions; sales offices , sales groups, and sales districts to represent the geographical locations; and sales employee maste rs (from SA P HR application) to denote sales employees and their positions in the hierarchical sales reporting structure. The organizational element for setting up a plant and the plant assignments to other organizational elements such as storage location, shipping/receiving point, and loading point, helps you set up the distribution structure. This structure defines where and how the goods will be stored and how they will be shipped to the customers. Both the sales organization and the plant are assigned to the company code so that the accounting entries resulting from the sale of goods and services, as well as those resulting from the material movements in the plant, are posted to accounting. Finally, the plant is assigned to the combination of the sales organization and the distribution channel, allowing the sales organization to use the assigned plant structure when distributing goods and services to the customers and completing the typical enterprise structure setup in SAP SD application.

Enterprise structure in SAP SD does not exist in isolation. It has dependencies with enterprise structures from other modules too. Dependencies with financial accounting and materials management enterprise structure is of vital importance because it impacts the use of materials in the SD application as well as the accounting posting of the sales transactions. Therefore, before you set up your SD structure, you should work with an SAP FICO consultant to make sure that the company code, chart of accounts, fiscal year, and other enterprise structure customizations related to the financial accounting application of SAP ERP are already set up. A company code represents your organization’s legal entity, a chart of accounts represents the ledger accounts that you will use to post the sales transaction into accounting, and a fiscal year represents the financial reporting year for your company code. The bare minimum setup you need before you can start setting up the SD enterprise structure is the company code and fiscal year.

Setting up an enterprise structure is the foundation of your SAP implementation. It is therefore essential that you carefully analyze the structure of your client’s organization before you map it into the SAP ERP software. You need to understand how your selling entity is structured and how it operates by considering whether it is centralized or decentralized; what products the sales entity deals in; how the sales are made (directly or via partners); what the various methods of distribution of goods to the customers are; how many plants/distribution centers there are and what geographical locations they belong to; the structure of the sales team; the geographical locations (how many regions, territories, sales offices, and branch offices there are); and what kind of internal reports, MIS reports, and external reports (if any) are generated. It is a good practice to analyze the enterprise’s business requirements and draw a blueprint of the enterprise structure on paper before applying it to the SAP system.

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