Chapter 5 The Fulfillment Process

Chapter 5
The Fulfillment Process
Magal and Word | Integrated Business Processes with ERP Systems | 2011
General recap
1.
Client: is the highest organizational level in SAP ERP

1.
2.
Better knows as the Enterprise level
Company Code: each company within the enterpeise is

represented by a company code (CC)
- A client can have multiple company codes, but a company

code must belong to only one client.
Learning Objectives
1.
2.
3.
4.
5.
Describe the organizational levels associated with the fulfillment

process.
List and explain the master data associated with the fulfillment
process.
Identify the key steps in the fulfillment process and the data,
documents, and information associated with each step.
Discuss the role of the credit management process in
fulfillment.
Explain how and why fulfillment is integrated with other
processes.
A Basic Fulfillment Process
Mainly focusing on these steps of the fulfillment process
Organizational Data
Client
Company code
Sales organization
Distribution channel
Division
Plant (shipping plant)
Storage location
Shipping point
Credit control area
Sales Organization
Responsible for
Distributing goods and services
Negotiating sales conditions
Product liability and rights of recourse
Used to divide the market based on geographic regions
Highest level of aggregation in sales-related reporting

A company code must have at least one sales organization
GBI Sales Organizations
Distribution Channel
Responsible for getting materials to customers
Differentiate distribution strategies or approaches
Different pricing, responsibilities
Wholesale sales, retail sales, Internet sales
A sales organization must have at least one distribution
channel to reach customers
DC = Distribution Channel
8
GBI US Distribution Channels
Division
Used to consolidate materials with similar characteristics
Typically divisions are associated with a companys
product line
Div_1 = Accessories Vs.
Div_2 = Bicycles
Different sales strategies, pricing agreements
Associated with product lines
A sales organization must have at least one division
10
GBI US Divisions
11
Distribution Chain
A unique combination of sales organization and division
Some master data are maintained at this level
Material master
Pricing conditions
12
Plant
Plant
Manufacturing facility
Warehouse
Others..
A plant can be assigned to deliver products or services for
multiple distribution chains.
13
Plants and Distribution Chains
14
Shipping Point
A physical location from which outbound deliveries are sent
Loading dock
Mail room
Rail depot
Group of employees (to handle expedited orders)
A plant must have at least one shipping point

A shipping point can be assigned to many plants
15
Shipping Point Example
16
17
18
Credit Control Area

Responsible for customer credit
Centralized
One credit control area for all company codes in the enterprise
All customers in all company codes are managed by one credit
control area
Decentralized
More than one credit control area in the enterprise
Each credit control area manages credit for one or more
company codes
19
Centralized Credit Control Area
20
Decentralized Credit Control Area
21
Master Data
(in fulfillment)
Material master (what views?)

Customer master (what segments?)
Conditions
Output master data

Credit management master record
22
Material Master Data

Basic Data
Which are relevant to all processes, are defined at client level
Sales: Sales Organization

Includes data specific to a combination of sales organization and
distribution channels
Examples include: delivering plant, sales units (unit of
measure), minimum quantities (order, delivery)
Sales: General/Plant
Includes data specific to a plant
Examples include: handling requirements (refrigeration),
loading (hand cart, forklift)

23
Customer Master Data

General Data
Specific to a client
Valid across company code and sales area
Financial/ Accounting data

Specific to a company code
Sales Area data

Specific to a sales area
24
Segments Of Customer Master Data
25

General data
Account number
Address
Communication
Company code data

Reconciliation account
Payment terms
26

Sales Area data (Sales)
Sales related
Sales area, pricing, currency
Shipping
Delivering plant, priorities, methods, tolerances, partial delivery
Billing
Terms, tax-related,
Partner functions: multiple roles
Sold-to-party, ship-to-party, bill-to-party, payer
A customer can be served by multiple sales areas
27
Multiple Definitions of a Customer
28
GBI Customers
29
Pricing Conditions
Prices
Material price
Customer specific price
Freight
InCoTerms (International Commercial Terms)
Trade terms published by the International Chamber of Commerce (ICC)
that are commonly used in both international and domestic trade
contracts
Surcharges and discounts

For customer, material, or combination
Taxes
30
Output Conditions
Sent to customers using a variety of media
Examples of output
Quotation, order confirmation, invoices
Media
Mail, fax, EDI
Master data includes

Output type, medium, time (immediate or later), partner
function
31
Credit Management Master Record

- Extension of the customer master record that includes data
relevant to managing credit for that customer

General data (client level)
Address, communication, total credit at the enterprise level
Credit control area data (credit control area level)

Credit limit for the credit control area
Risk category (how risky it is to extend credit to the customer)
Overview (key data from other areas)
32
Fulfillment Process Steps
33
Pre-sales Activity
CRM light establishing and maintaining customer
relationships
Activities include
Creating and tracking customer contacts
Mailing campaigns
Workshops
Responding to customer inquiries and request for quotation
Outline agreements
Contracts
Scheduling agreements
34
Elements of the Pre-sales activity
35
Data in a Quotation
36
Elements of a Sales Order
37
Sales Order Processing

Typical data in a sales order
Customer and material data
Delivery dates and quantities
Pricing conditions
Shipping information
Billing information
Source of data
Customer order
Master data
Contracts
38
Data in a Sales Order
39
Structure of a Sales Order
40
Sales Order Document

Header
Dates, terms, customer data, etc
Line items
Item number
Quantity
Schedule lines (illustration next slide)

Date
Order quantity
Delivery quantity
41
Backward Scheduling
42
Inventory Sourcing
- Related to material staging (prepare materials for shipment)
- Transfer of requirements (materials management / materials
planning)
From stock
Materials management
Internal procurement
In-house production process
External procurement
Procurement process
43
Shipping
Create outbound deliveries (plan transportation)
Picking (optional)
Packing (optional)
Transfer requirement (if WM is enabled)
How best to transport the materials
Goods Issue (recording the financial impact of shipping
goods)
44
Elements of the Shipping Step
45
Data in a Delivery Document
46
Structure of a Delivery Document
47
Delivery Document Structure

Header
General data
Line Item
Item number
Material
Quantity
Weight
48
Relationship between Schedule Lines

and Delivery Items
49
Deliveries
One order >> multiple deliveries
Multiple orders >> one delivery
Constraints?
Same customer
Same shipping point
Same delivery date
Same ship-to-address
50
Relationship between Sales Order and

Deliveries
51
Relationship between Delivery

Documents and Transfer Requirements
52
Packing Options
53
Impact of Post Goods Issue

A material document is created
GL accounts - Stock accounts and cost of goods sold account
- are updated, and an accounting document is created

A controlling document is created
Fulfillment provides COGS data to profitability analysis in
controlling
The billing due list is updated
Sales documents are updated (status)
54
Outcomes of Shipping (Goods Issue)
55
FI Impact of the Shipping Step
56
Billing
Create invoices
Crete credit and debit memos
Many deliveries >> one billing document
Same payer, billing date and destination country
One delivery >> many billing documents
57
Elements of the Billing Step
58
Data in a Billing Document
59
Relationship between Deliveries and

Billing
60
Structure of a Billing Document
61
Billing Document Structure

Header
Payer, billing date, totals, etc.
Line items
Item number
Material
Quantity invoiced
Value
62
Impacts of a Billing Document

GL accounts are updated and an FI document is created
Customer account > AR reconciliation account
Sales revenue account
A controlling document is created

Fulfillment provides revenue data to the profitability analysis
process
Sales documents are updated (status)
63
Outcomes of the Billing Step
64
FI Impact of the Billing Step
65
Payment
Post incoming payment
GL accounts are updated and an FI document is created
Cash/Bank account
Customer account -> AR reconciliation account
66
Elements of the Payment Step
67
Data in a Payment Document
68
FI Impact of the Payment Step
69
Customer Payment with Discount
70
Processing Customer Payment
71
Credit Management Process

Used to determine if credit should be granted to a customer
(i.e., should process continue?)

Credit is checked when:
Sales order is created or changed
Delivery is created or changed
Post goods issue
Approval based on
Credit exposure = sum of open orders, deliveries, open
invoices, and current order value

Outcomes: warn & continue, error & terminate, block
delivery
72
Credit Management Process
73
Integration with Other Processes
74
Reporting
General SAP reporting options
Online lists
Work lists
Analytics
Fulfillment specific reporting options

Document flow
75
Document Flow
76
Work Lists
77
List of Sales Orders
78
Information Structures
79
Example of Standard Analysis
80

Chapter 5 The Fulfillment Process

Uploaded by

Copyright:

Available Formats

You might also like

Chapter 5 The Fulfillment Process

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 5 The Fulfillment Process

Uploaded by

Copyright:

Available Formats

Chapter 5

The Fulfillment Process

Client: is the highest organizational level in SAP ERP

Better knows as the Enterprise level

Company Code: each company within the enterpeise is

- A client can have multiple company codes, but a company

Describe the organizational levels associated with the fulfillment

A Basic Fulfillment Process

Mainly focusing on these steps of the fulfillment process

Credit control area

Used to divide the market based on geographic regions

Highest level of aggregation in sales-related reporting

GBI Sales Organizations

A sales organization must have at least one distribution

channel to reach customers

GBI US Distribution Channels

Typically divisions are associated with a companys

A plant can be assigned to deliver products or services for

multiple distribution chains.

Plants and Distribution Chains

A plant must have at least one shipping point

Shipping Point Example

Shipping Point Example

Shipping Point Example

Credit Control Area

Centralized Credit Control Area

Decentralized Credit Control Area

Material master (what views?)

Output master data

Material Master Data

Sales: Sales Organization

loading (hand cart, forklift)

Customer Master Data

Financial/ Accounting data

Sales Area data

Segments Of Customer Master Data

Customer Master Data

Company code data

Customer Master Data

A customer can be served by multiple sales areas

Multiple Definitions of a Customer

Surcharges and discounts

Master data includes

Credit Management Master Record

relevant to managing credit for that customer

Credit control area data (credit control area level)

Overview (key data from other areas)

Fulfillment Process Steps

Elements of the Pre-sales activity

Elements of a Sales Order

Sales Order Processing

Data in a Sales Order

Structure of a Sales Order

Sales Order Document

Schedule lines (illustration next slide)

Goods Issue (recording the financial impact of shipping

Elements of the Shipping Step

Data in a Delivery Document