Business Blueprint Jesco SD V1

Business Blue Print
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Module : Sales & Distribution
Contact User Name : Mr. Majed M. Al-Dawas
Department : Sales
Business Blue Print Document

1. Global Settings:
Country : Saudi Arabia
Factory Calendar : JESCO Factory Calendar
2. Organisation Structure:
Company Plant Manufacturing Unit

Jubail Energy Services Co. Jubail Plant Jubail
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JUBAIL ENERGY SERVICES COMPANY (JESCO)
SAP
IMPLEMENTATION
Business Blueprint
Sales & Distribution (SD)
BBP_SD_V1.0
MITL Internal Use Only
The information contained herein is proprietary to MITL, and may not be used, reproduced, or disclosed to others except as
specially permitted in writing from JESCO. The recipient of this document, by its retention and use, agrees to protect the same and
the information therein from loss, theft, and compromise.
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Business Blueprint
Module – SD
Designation Name Signature Date
SAP Consultant (SD/LE) Mr. Sanjay Dewangan 29.06.11
SD – Power User & Sales Mr. Nasser Hassan Al-

Representative Omari
Sales & Marketing Mr. Majed M. Al-Dawas

Manager
Business Process Owner Mr. Abdul Aziz Al Dossary

Commercial Director
Project Manager - JESCO Mr. Parvez Sherani
Project Manager - MITL Mr. Ahmed Shaaban
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Version History
Version Document Name Date Author Reviewed by Change Control
Version No. Effective Date Nature of Change

1.0 29.06.2011 Original Version
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TABLE OF CONTENTS
1. INTRODUCTION.............................................................................................. 8
2. SAP SD MODULE KEY COMPONENTS .............................................................. 9
3. ORGANIZATION STRUCTURE OF SD ........................................................ 11
3.1. Company Code................................................................................................. 13

3.2. Sales Organizations.......................................................................................... 13
3.3. Distribution Channel ......................................................................................... 14
3.4. Division ............................................................................................................. 15
3.5. Sales Area ........................................................................................................ 15
3.6. Sales Office ...................................................................................................... 15
3.7. Plants & Storage Location ................................................................................ 18
3.8. Shipping Point .................................................................................................. 19
4. MASTER DATA ............................................................................................. 19
4.1. Material Master (Sales views) ......................................................................................... 19

4.1.1. Sales Org 1 ...................................................................................................................... 20
4.1.1. Sales Org 2 ...................................................................................................................... 20
4.1.3. Sales/Plant Data .............................................................................................................. 21
4.2. Customer Master Data ......................................................................................... 21

4.2.1. General Data ................................................................................................................... 23
4.2.2. Company Code Data ....................................................................................................... 24
4.2.3. Sales and Distribution Data ............................................................................................. 25
4.2.4. Responsibility of creating the customer master ............................................................... 26
4.2.5. One Time Customer ........................................................................................................ 26
4.2.6. Account Groups and Partner Functions .......................................................................... 26
4.2.7. Partner Functions ............................................................................................................ 27
4.3. Item Proposal ....................................................................................................... 28
4.4. Price Master Data Management ........................................................................... 28
4.5. Inco Terms ........................................................................................................... 28
4.6. Payment Terms .................................................................................................... 29
4.7. Material Number / Codification ............................................................................. 30

4.7.1. Use................................................................................................................................... 30
4.7.2. Material Code .................................................................................................................. 30
5. PRODUCT RANGE ....................................................................................... 32
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6. BUSINESS PROCESSES ............................................................................. 39
6.1. Inquiry ................................................................................................................................. 39
6.2. Quotation ............................................................................................................................ 38
6.3. Products & Attributes ........................................................................................................ 40
6.4. Sales Order Processing ................................................................................................... 42

6.4.1. Normal Sales ................................................................................................................... 44
6.4.2. Tender/Project Sales ....................................................................................................... 46
6.4.3. Return Sales .................................................................................................................... 50
6.4.4. Credit Memo Request Processing ................................................................................... 49
6.4.5. Debit Memo Request Processing .................................................................................... 50
6.4.6. Order Type ....................................................................................................................... 51
6.4.7. Functions During Sales Order Processing ...................................................................... 51
6.4.8. Item Categories ............................................................................................................... 52
6.4.9. Schedule Line Categories................................................................................................ 52
6.4.10. Incompletion Log ............................................................................................................. 53
7. DELIVERY / SHIPMENT ................................................................................ 54
7.1. Shipping Point .................................................................................................................... 55
7.2. Post Goods Issue .............................................................................................................. 56
7.2. Processing a Delivery ....................................................................................................... 56
8. INVOICE ........................................................................................................ 57
8.1. Invoicing Method ............................................................................................................... 58
8.2. Cancellation of Invoice Document .................................................................................. 58
8.3. SAP SD Interface with FI ................................................................................................. 59
9. DOCUMENT FLOW IN SALES ..................................................................... 60
10. CREDIT MANAGEMENT ............................................................................... 61
11. PRICING PROCEDURE ................................................................................ 61
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12. NUMBER RANGES ....................................................................................... 62
13. FRICE - SCRIPT & REPORT REQUIREMENTS ........................................... 64
13.1. Sales Information System ................................................................................................ 64
13.2. Output Formats .................................................................................................................. 65
13.3. FRICE ................................................................................................................................. 70

13.3.1. Report Requirements ....................................................................................................... 70
13.3.2. Output Requirements ....................................................................................................... 70
13.3.3. Functional Requirement and Enhancement .................................................................... 71
13.3.4. Interface Requirement ..................................................................................................... 71
14. AUTHORIZATION CONSIDERATION .......................................................... 72
15. MASTER DATA CONSIDERATION ............................................................. 72
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1. Introduction
Localizing seamless pipes manufacturing in the Middle East – in general, and in Saudi
Arabia – in particular, was a commercial necessity and a strategic decision. Middle East
and North Africa (MENA) is currently the most growing region related to Oil and Gas
industry. GCC is having a strong demand for seamless pipes and various projects will
sustain and even increase such demand in future. This regional development would
benefit from a local supply of seamless pipes now that JESCO comes on stream.
JESCO will benefit from its ideal location to deliver to GCC National & International Oil
and Gas Companies, shortening their Supply Chain with thousands of miles and
hundreds of days.
In 2006, Industrialization and Energy Services Company (TAQA) decided to

complement its developed business related to oil and gas industry with its new
subsidiary called Jubail Energy Services Company (JESCO), for the manufacture of
seamless pipes in Jubail 1 Industrial Area. The integration of seamless pipes
manufacturing with its already equipped services to the oil and gas industry will provide
better synergies and opportunities for Taqa as a group. From the exploration, drilling
and marine facilities for the oil and gas sector to seamless pipes manufacturing, Taqa is
an important contributor to the oil and gas industry upstream development.
The company is owned 51% by TAQA, 10% by Duferco Saudi Ltd, and the balance of
shares is made up by other, prominent Saudi investors. Saudi Industrial Development
Fund (SIDF), Public Investment Fund (PIF) and HSBC/SABB contributed to project
financing.
The company’s vision is to become ‘The leading manufacturer of high quality seamless
pipes in the Middle East’.
From its ideal location at the sea port of Jubail, JESCO will offer minimal delivery times
by both sea and land transportation, therefore catering to the ever changing and
demanding market needs.
JESCO intends to implement a ‘value added customer supply chain’ which will meet our
customers’ expectations at all times and allowing JESCO to become a preferred
supplier both locally and internationally.
JESCO intends to work closely with its customers offering ex-mill ‘short delivery time
frames’ and ‘just in time deliveries’, aiming to reduce the inventory burden currently
absorbed by customers.
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Purpose of the Document:
The purpose of this document is to create the Business Blueprint, which is detailed
documentation of the results gathered during business process design workshops.
Furthermore, the Business Blueprint documents the business process requirements of
the company. With this, you can better understand how the company intends to run its
business within the SAP System.
As well as this document describes the design of the proposed solution and implications
for the business processes. This document is to communicate the new business
solution and expected changes to the business processes. The information needs to
include:
 Enterprise organizational structures

 The proposed integrated business processes
 Associated function definitions
 Business requirements in term of reports/script and functionality
 Authorization and master data authorization
 Gaps
 Process Variances
 Change Management
With the information conveyed by this document, the business should be able to
approve the proposed solution. The Business Blueprint becomes the master
deliverable/document, which serves as a basis for the entire project.
2. SAP SD Module Key Components

SAP SD module provides flexible, automated support in processing all sales activities in
the company. The Sales system allows executing the various sales business
transactions based on sales documents defined in the system. The most important
basic functions in SD are as follows:
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Sales Order Processing
During sales order processing, the system carries out various functions, such as
monitoring of sales transactions, checking for material availability, Delivery scheduling,
calculating pricing and taxes, checking credit limits and creating output documents for a
sale order confirmation.
Delivery Processing
In its role as central object of the goods issue process, the delivery supports all shipping
activities such as picking, packing, transportation and goods issue. During the delivery
process, shipping-planning information is recorded, status of shipping activities is
monitored and the data accumulated during shipping is documented.
Invoicing
Invoicing represents the final processing stage for a business transaction in Sales and
Distribution. This component includes creation of Invoices based on deliveries, Issue of
credit and debit memos, Cancellation of billing transactions, Transfer billing data to
Financial Accounting.
Pricing and Conditions
Pricing is used for the calculation of prices. Various conditions are used to represent a
set of business scenarios that apply when a price is calculated. For e.g. a particular
customer orders a certain quantity of a certain product on a certain day. The variable
factors like the customer, the product, the order quantity, the date determine the final
price the customer gets. These factors can be stored in the system as master data in
the form of condition records.
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Automatic Credit Check
Automatic Credit Checks can be specified to meet the credit management needs.
The checks can be carried out at various times during the sales order cycle, from order
receipt to delivery.
Availability Check
When a sales order is entered, the delivery of goods for the required delivery can be
confirmed if the goods are available for all the necessary processing activities which
take place before delivery. The shipping department can ensure that freight forwarding
or another shipping company is advised early enough so that sufficient time remains for
packing and loading to be carried out.
3. Organization Structure of SD
Objectives of Proposed Structure
In SAP, several structures are used to represent the legal and organizational structure
of the company. These organizational structures form a framework in which all business
transactions are processed. That can structure from the point of view of accounting,
materials management, and sales and distribution. It is possible to combine these
structures. The Sales and Distribution (SD) module is a component of the Logistics suite
of modules which also includes Material Management (MM), Warehouse Management
(WM), Logistics Execution (LE), Production Planning (PP) and Quality (QM).
The SD Organizational structure has been conceptually designed with the following
objectives:
 Build information structure to provide reports for analysis at the level of existing
Marketing & Sales divisions.
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 Implementation should be able to bring down the redundant activities and be able
to execute the Sales operation with much more ease and efficiency resulting into
better operational accountability.
Primary Elements of Organization Structure
The primary elements of the organization structure relevant to Sales and Distribution
are provided below:
 Company Code
 Sales Organization
 Distribution Channel
 Division
In addition to the above, other organizational entities defined are :
 Plant and Storage Location

 Shipping Point
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The role of each of these entities in SAP and the manner in which these will be mapped
for Jesco is mentioned below.
3.1. Company Code

A Company Code represents an independent legal accounting entity in SAP. Balance
Sheets and Profit/Loss statements required by law will be created at the Company Code
level. In other words, Company Code is the organizational unit for which a complete
self-contained set of accounts can be drawn up for external reporting purpose. The
process of external reporting involves recording all relevant transactions and generating
all supporting documents required for financial statements.
Company Code Description

1000 Jubail Energy Services Company
3.2. Sales Organizations
An organizational unit responsible for the sale of certain products or services. The
responsibility of a sales organization may include legal liability for products and
customer claims.
The functional scope of a sales organization is given below
 Legally, a sales organization is operating in one company code.

 One or more plants can be assigned to the combination of sales organization and
Distribution channel.
 The sales organization has an address.
 Master data is always created against the sales area which allows the users to
maintain the sales area specific master data.
 The Sales document types can be limited to the sales area.
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The following set of Sales organization is created for Jesco operations:
Sales organization Name

1000 Jubail Energy Services Company
3.3. Distribution Channel
In order to service different segments of the market, a Sales Organization utilizes

various Distribution Channels. Within a sales organization, a customer can be serviced
through several distribution channels. Each of the distribution channels utilized by a
Sales Organization needs to be firstly defined and subsequently mapped on to the
relevant Sales Organization.
In order to adapt the functional scope of a distribution channel to the organization

following steps need to be followed:
 Allocate a distribution channel to one or more sales organizations.

 For a distribution channel, you can determine your own sales document types.
 All items of a sales document belong to a distribution channel. The entire sales
document is therefore entered for a distribution channel.
 The items of a delivery can belong to different distribution channels.
 All items of a billing document belong to a distribution channel.
In Jesco the broader category of Sales is done through the following means and hence
these have been taken as the Distribution channels.
Distribution Channel Name

10 Domestic
11 GCC Countries
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12 Middle East & North Africa (MENA)
13 Overseas (Excluding MENA)
3.4. Division
A division can be defined as a Product group that could be made up of a wide-ranging

spectrum of products. This entity normally groups together saleable materials and
services for the purpose of responsibility and analysis.
In order to adapt the functional scope of a division, the follow steps need to be followed:
 Allocate a division to one or more organizations.

 Allocate a division to one or more Sales Organizations.
 A material is always assigned to one division only. You specify the division on the
Sales Org 1 screen in the material master record.
The division proposed to Jesco is.
SL No Sales Orgn. Div code Div Description

1 1000 10 Casing Pipes
2 1000 20 Coupling Stock
3 1000 30 Line Pipes
4 1000 40 Green Pipes
5 1000 50 Pup Joint
6 1000 60 Coupling
3.5. Sales Area

Sales Area is a combination of Sales Org., Distribution Channel and Division. For a
Sales Area, we can assign or restrict the following:
 Customer Transactions
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 Material Transactions
 Pricing Procedures
 Payment Terms
 Pricing and Discount Terms
 Customer Specific Agreements
Sales area also helps in doing standard analyses using the Sales Information System
feature in SAP
SL No Sales Orgn. Dist Channel Division

1. 1000 10 10
2. 1000 10 20
3. 1000 10 30
4. 1000 10 40
5. 1000 10 50
6. 1000 10 60
7. 1000 11 10
8. 1000 11 20
9. 1000 11 30
10. 1000 11 40
11. 1000 11 50
12. 1000 11 60
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13. 1000 12 10
14. 1000 12 20
15. 1000 12 30
16. 1000 12 40
17. 1000 12 50
18. 1000 12 60
19. 1000 13 10
20. 1000 13 20
21. 1000 13 30
22. 1000 13 40
23. 1000 13 50
24. 1000 13 60
In sales organization 1000, sales transactions can be carried out through all distribution
channels and for all Divisions.
3.6. Sales Office

• Typically defines a territory or market area
• Linked to one or more Sales Areas
• Optional organization structure
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Sales Office Name

0001 Dammam
0002 Riyadh
0003 Jeddah
0004 Bahrain
0005 Dubai
0006 Muscat
0007 Cairo
0008 Algeria
0009 Damascus
0010 Lugano
0011 Houston
3.7. Plants & Storage Location

Plant is an organizational unit within a company code. A Plant is an organizational unit
that divides the enterprise according to production, procurement, distribution and Stock
storage area etc. It is a place where materials are produced, or goods and services are
provided
Sl No Company code Plant Plant Name

1 1000 1100 JESCO, Jubail
Storage Location is an organizational unit allowing differentiation between the various

stocks of the material in a Plant. To monitor the stock of the material, it is necessary to
have a storage location wherein the materials are stored. The proposed storage
locations for Jesco are as follows:
Plant Storage location Description
1100 100 Raw-materials
1100 200 Eng. / Spares Area
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1100 300 Intermediate
1100 400 Finished Goods - Pipes
1100 500 Finished Goods - Coupling
1100 600 Dispatch
3.8. Shipping Point

Shipping Point represents the physical location from where the shipping activities are
performed. In order to adapt the functional scope of a shipping point to the organization,
the following points are considered:
 The shipping point is the top level in the organization for shipping.
 A shipping point can be allocated to several plants.
 A shipping point can be divided into several points.
 A delivery is always initiated from exactly one shipping point. Thus, all items
of a delivery belong to one shipping point. Groups of deliveries also belong to
exactly one shipping point.
 The shipping point can be proposed automatically during order processing
depending on the plant, loading group and shipping condition.
Sl No Plant Shipping Point Shipping Point Name

1 1100 1100 JESCO, Jubail
4. Master Data
• Detailed information about customers, materials and business partners
• Flexible data structures that support the business environment
• Specialized master data to support sales order processing
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SD Master Data - Core Elements
Master
Data
Pricing
4.1. Material Master (Sales views)
Description and code of the individual materials used in an enterprise would be stored in
material master records. The following section explains some of the important views
and information a material master record contains and that are relevant for sales and
distribution:
4.1.1. Sales Org 1
In this view, we would define basic data and units of measure and tax classification (e.g.
sales units, order quantities)
Important fields:
 Base Unit of Measure - Unit of measure in which stocks of the material are
managed. The system converts all the quantities you enter in other units of
measure (alternative units of measure) to the base unit of measure. Base Unit
of measurement is Mt (Ton).
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 Sales Unit – Unit of measure in which the material is sold. This field would be
used if a unit of measure differing from the base unit of measure is used. This
would be proposed in other transactions/events, where it can be changed.
Sales Unit of measurement are Ton (Mt), Pieces (Pc), and Running
Meter/Feet (M)
However in Sales Unit only Mt shall be entered. Pieces (Pc), and Running
Meter/Feet (M) shall be entered in product characteristics as variant
configuration, if required.
 Delivering Plant - Plant from which the goods should be delivered to the
customer.
 Division – The division would be used to determine the sales areas for a
product.
4.1.2. Sales Org 2
This view contains Material groupings (e.g. material pricing group)
Important fields:
 Account Assignment group - A grouping of materials that the system uses

to determine the revenue or sale deduction account when creating an
accounting document from a billing document. This is used for determining
the accounts to which free goods values or distributions are posted.
01 Prime Pipes 07 Billet Ends
02 Secondary Pipes 08 Pipe Crops
03 Steel Scrap 09 Billet Chips
04 Mill Scales 10 Thread Chips
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05 Wire Rods 11 Sludge
06 Shells
 Item Category group - A grouping of materials that the system uses to

determine item categories during the processing of sales documents. All the
items would be grouped as Standard items for sales.
4.1.3. Sales/Plant Data
In this view Sales and shipping data (e.g. gross weight, loading group) are defined.
Important fields:
 Availability Check - Specifies whether and how the system checks

availability and generates requirements for materials planning. The system
generates the requirements for Materials planning for each sale order.
 Loading group - A grouping of materials that share the same loading

requirements basically used to derive the shipping point.
0001 Pipes
0002 Scrap
4.2. Customer Master Data
In SAP, the data on various business partners (with whom company has business
transactions) is stored in separate master records. Such business partners would
mostly include the customers of Jesco. Customer records are maintained in the
Customer Master. The Customer Master data is classified into 3 parts as follows:
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Customer Master
General
Data
Sales & Distribution Company Code

Data Data
General Data Sales Area Data Company Code Data
Address Sales Account management

Control Data Shipping Payment transactions
Marketing Billing Documents Correspondence
Payment Partner functions Insurance
transactions
Unloading points
Contact Person
Foreign Trade
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4.2.1. General Data
General data does not depend on the company code or the sales organization. General
data applies to one business partner for all company codes, and in all sales areas. It
includes:
Customer Name
Search Term
Street address, City,
Postal code, Country
Language
Telephone, Fax, Data numbers
Contact persons – Name, Telephone number, Department, First name, Function
General data is not limited to information used by both Financial Accounting and
Logistics. The name and address, for example, is unique for a customer and is relevant
for both Accounting and Sales and Distribution. Similar data is maintained as General
Data for the Customer.
If a master record is edited using the customer number without specifying a sales area,
or a company code, the system displays only general data screens.
4.2.2. Company Code Data
Company code data only applies to one company code. This data is only relevant to
Financial Accounting, and includes:
 Account management data
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It’s required to enter the customer number and company code data to edit the company
code details of the customer. It’s not possible to invoice a business transaction if the
data on the payer partner function is not entered in the Financial Accounting view.
4.2.3. Sales and Distribution Data

The data for one customer can differ for each sales area. The sales area is a
combination of sales organization, distribution channel and division. This data is only
relevant to Sales and Distribution, and includes:
 Sales order : Sales district, Sales office, Sales group, Order probability, Item
proposal, Account at customer
 Pricing / Statistics: Price group, Customer pricing procedure, Price list type,
Customer statistical group
 Shipping : Delivery priority, Shipping conditions, Delivering plant, Order

combination, Batch split allowed
 Billing : Rebate, Pricing, Billing schedule, Invoice list schedule, Inco terms,
Payment terms, Account assignment group, Tax requirements for the customer
 Partner functions: The different partners are assigned.

SP Sold-to-party
BP Bill-to-party
PY Payer
SH Ship-to-party
… additional Partner function(s)
It’s required to enter the customer number and sales area data to edit the sales area
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data of the customer master record.
The sales and distribution transactions, i.e., a sales order can only be processed, after
entering the sales and distribution data for a customer.
4.2.4. Responsibility of creating the customer master

Creation of customer master would involve entering all the details of the customer in
terms of General Data, Sales Area Data, and Company Code Data and Credit
Management data.
Sales support department is responsible for maintaining and creating the customer
master details. All the details that are required for creating a customer would need to be
captured on a Customer data sheet. The Sales team is responsible for proposing the
customer.
4.2.5. One Time Customer

For one-time customers, creating and assigning one such account for each Sales area,
will be done centrally. The Sales Team will use this account for one-time customer
transactions (inquiry / quotations only) by filling in the specific details of the one-time
customer during the transaction.
4.2.6. Account Groups and Partner Functions
The Account Group must be entered to create the master data records. The account
group determines:
 Which screens and fields are necessary for entering master data
 Whether the fields are optional or mandatory.
 How master record numbers are assigned and the number range from which
they are assigned
 Which partner functions are valid
 Whether the business partner is a one-time customer
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4.2.7. Partner Functions
Partner functions are used to define the rights and responsibilities of each customer in a
business transaction. The partner functions are assigned to the Account Group based
on the roles performed by the customer created against the Account Group.
Partner functions for the customer
 Sold-to Party: A person or company that places an order for goods or services.
 Ship-to Party: A person or company that receives goods. The ship-to party may
not necessarily be the sold-to party, the bill-to party, or the payer. Contains data
for shipping, such as unloading point and goods receiving hours
 Bill-to Party: A person or company that receives the invoice for a delivery or
service. The bill-to party may not necessarily be the payer of the bill. Contains
the address and data on document printing and electronic communication
 Payer: A person or company that pays the bill. The payer may not be the bill-to
party. Contains data on billing schedules and bank details
The company or person who places an order can be the same company or person who
receives the goods, the invoice and pays for the same. Because this customer assumes
all partner functions, create one master record for the customer. Create a customer
master record for the sold-to-party and enter the data required for the other partner
functions.
A subsidiary office can place an order and its head office can pay the invoice. In this
case, the partner functions are divided among the different offices. The corresponding
number of customer master records is required. The link between the partner functions
in the customer master record of the sold-to party is established by entering the
customer number of the respective partner functions.
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4.3. Item Proposal
Frequently occurring material combinations and common delivery quantities can be

stored as item proposals. When creating an order, the items from the item proposal can
be used. An item proposal can consist of materials of different material types.
The order entry can be processed more efficiently using item proposals. Item proposals
can be transferred into a sales order document or be selected from a selection list, for
example. Data from the current material master is always taken into account. Items
proposed from an item proposal can always be changed in the sales order.
An item proposal, containing the materials a customer usually orders, can be assigned
to that customer. When using item proposals as reference to create sales order, this
item proposal is then proposed for selection. Once selected, the data from item
proposal is copied to sales order. There is no need to enter all the data manually.
4.4. Price Master Data Management
Pricing conditions represent a set of circumstances that apply when a price is

calculated. For example, a particular customer orders a certain quantity of a particular
product on a certain day. The variable factors here - the customer, the product, the
order quantity, the date are used to determine the final price the customer gets. The
system will calculate the price automatically provided a condition record exists that is
valid on the day concerned and contains information regarding the customer, product
and quantity. Pricing not only for materials but also for, discounts and surcharges can
be automatically determined provided that a valid condition record exists.
A combination of key variables allows the creation of different types of pricing e.g.
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 A material price valid for all customers

 A material price valid for a specific customer.
Master data is required before documents can be created in sales and distribution.
Master data is copied into the sales order, which then acts as a source (reference)
document to create the delivery, shipment and billing documents.
Price Master Data Management is used in Sales & Distribution module in the following
process
1. Quotation / Sales Order Processing.

2. Billing.
4.5. Inco Terms

Transport is the essential link between supplier and receiver, and the aim is to receive
the goods in good condition, when and where they are needed. This necessitates close
collaboration between procurement staff, the supplier and the transporter. The journey
involved, whether over land, or sea, may introduce certain costs and risks that can be
mitigated by appropriate methods of dispatch, insurance coverage, suitable packaging
instructions, and by considering the roles and responsibilities of the parties involved in
the chain of transport events up until final delivery to the customer.
Inco term is a codification of international rules for the interpretation of the commonly
used terms in international trade. An international commercial term (Inco term) defines
the terms of sale and the passing of risks for import and export of merchandise.
Inco terms include the following:
 EXW - Ex Works
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 FCA - Free Carriage and Freight
 FAS - Free Alongside Ship
 FOB - Free On Board ship
 CFR - Cost and Freight
 CIF - Cost, Insurance, and Freight
 CPT - Carriage Paid To
 CIP - Carriage and Insurance Paid To
 DAF - Delivered At Frontier
 DES - Delivered Ex Ship
 DEQ - Delivered Ex Quay
 DDU - Delivered Duty Unpaid
 DDP - Delivered Duty Paid
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4.6. Payment Terms
The conditions under which a seller will complete a sale. Typically, these terms specify
the period allowed to a customer to pay off the amount due, and may demand cash in
advance, cash on delivery, a deferred payment period of 30 days or more, or other
similar provisions of letter of credit.
Payment terms include the following:
Code Description
0001 Cash in Advance

0004 Payable immediately Due net
BG30 Credit - 30 Days against Bank Guarantee
BG60 Credit - 60 Days against Bank Guarantee
CR30 Net - 30 Days
CR60 Net – 60 Days
LCST Irrevocable LC at sight
LC15 Irrevocable LC Deferred 15 days from Invoice date
L120 Irrevocable LC Deferred 120 days from Invoice date
4.7. Material Number / Codification
The SAP Material Number (18 digits) is the primary master data element of the SAP
MM module. It is used to both describe and record history of sales / purchases made.
Material Groups (represented by a 4 digit code) are the hierarchical grouping of like
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materials (Line Pipes, Casing).
The Material numbers, for each unique material, is generated by the SAP system.
When creating a sales document a material can be searched by its material number,
descriptive name or selected from drill down from Material Group name (A wild card
character/s can be used in each case). Once selected the Material short text can be
amended to more precisely describe the item and sales text is also available.
4.7.1 Use
The material number uniquely identifies a material in the SAP System.
As a rule, a material master record must exist for each material subject to inventory
management within a firm. This record is stored under the material number.
4.7.2 Material Code
SAP -Material Codification for JESCO - Semi-Finished & Finished Product

Max. Digit = 18 Max. Char = 30
Product Wall
O. D. Grade End Status Material Code Material Description
Type Thickness
C 139 062 H40 R C139062H40R C_139_062_H40_R
C 139 062 H40 H C139062H40H C_139_062_H40_H
C 139 062 H40 Q C139062H40Q C_139_062_H40_Q
C 139 062 H40 HQ C139062H40HQ C_139_062_H40_HQ
C 139 062 H40 SC F C139062H40SCF C_139_062_H40_SC_F
G 139 062 H40 SC C G139062H40SCC C_139_062_H40_SC_C
L 141 066 X80 R L141066X80R L_141_066_X80_R
L 141 066 X80 H L141066X80H L_141_066_X80_H
L 141 066 X80 Q L141066X80Q L_141_066_X80_Q
L 141 066 X80 HQ L141066X80HQ L_141_066_X80_HQ
L 141 066 X80 PE F L141066X80PEF L_141_066_X80_PE_F
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Item value Description Digit
Product Type C Casing 1
L Line Pipe 1
S Coupling Stock 1
G Coupling 1
Stand for O. D. 139.7 mm ("139" cover from 139 mm to
O. D. 139 139.9 mm) 3
Stand for O. D. 141.3 mm ("141" cover from 141 mm to
141 141.9 mm) 3
wall Thickness 062 Stand for wall thickness 6.2 mm 3

066 Stand for wall thickness 6.6 mm 3
190 Stand for wall thickness 19.05 mm 3
H40/P11
Grade 0 H40, P110 etc 5
X80 X80 5
End PE Plain End, Bevel End 2

SC Short Round Cut 2
LC Long Round Cut 2
BC Buttress Cut 2
J1 2
J2 2
J3 2
Status R HRM (Semi finished) 2
H Heat Treatment (Semi finished) 2
Quality 1 & 2 [without & with heat treatment line](Semi
Q/HQ finished) 2
F/HF Finished[without & with heat treatment line] 2
C Coupling Shop 2
Total 16
5 PRODUCT RANGE
Jesco is able to manufacture carbon steel grades and alloy steel grades up to 10% alloy
elements. From 5 1/2" (139.7 mm) up to 16" (406.4 mm) outside diameter, with wall
thickness from 6.0 mm up to 30 mm, JESCO has the capability to produce OCTG, Line
Pipes and pipes for other applications. Steel grades covered for OCTG are from J 55 to
Q 125, for line pipes from Grade B up to X 80. For specific projects JESCO has the
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capability to supply up to 30 m long pipes, depending on outside diameter and wall
thickness. In-house high-collapse testing device and sour-service laboratory allows
JESCO to provide sophisticated steel grades for severe environments.
The planned pipe specifications in terms of type, size and grade can be summarized as
follows:
Product Type Size Grade

Casing (OCTG) & 5 ½” – 13  API 5CT carbon steel grades
Couplings 3/8”  Jesco proprietary grades
Line Pipe 6” – 16”  API 5L grades (PSL1 & PSL2)
 ISO 3183 grades
 Jesco proprietary grades
 CASING AND COUPLINGS (API 5CT)
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 LINE PIPES (API 5L PSL1, PSL2)
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6 BUSINESS PROCESSES
The aim of inquiry and quotation processing is to quickly hand over a binding quotation
that is attractive for the customer and justifiable from a business point of view. An initial
specification of the product is created in line with the customer’s requirements in the
process.
Customer / Material Info Record

Defines a customer alias for a material & description, for example:
Material # : Line Pipe 14” Customer # : Aramco LP 14”
Can further define attributes of the material, shipping and partial delivery information
specific to the product and customer referenced in the sales order using the Ordering
Party overview.
Inquiry and Quotation, both of them are SD document in pre-sales activities.
6.1 Inquiry
When a client (existing customer or new customer) asks or requests information (can be
through a phone call, an email, or a Request For Quotation (RFQ) document) about the
products he needs, the sales personnel can input that request into SAP SD module by
creating an Inquiry document. An Inquiry is an internal document that records the
information about request from prospective customer for internal use only.
On receipt, the inquiry is checked for completeness, and any queries are raised to the
customer. The inquiry is then checked for its commercial and technical feasibility, and
the importance of the customer for the company is evaluated. Taking order probability
into consideration and on the basis of the information gained from the checks and
evaluations, the company decides whether to create a quotation.
Once Supply Chain management (SCM) Department receives an inquiry, it’s TDC's
(Technical delivery conditions) are checked by technical team. Inquiry consists of the
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material grade details, production type, thickness and outer diameter in which it can be
produced and the tolerances on shape, thickness and OD which are guaranteed.
Urgent delivery schedule asked by customer is consulted with SCM for production in
time.
Inquiries, which are out of scope, are regretted after consulting QA & R&D and
alternative product is suggested.
In an inquiry, we record some information such as: which customer that request
information, what products customer needs, how many products customer needs, etc.
6.2 Quotation
A Quotation is a legal document that contains information about the offering to the
customer, such as: which customer that been offered, what and how many products that
been offered to the customer, how much the price of the products, when the delivery
date of the products, how the term of payment that been offered to the customer, the
validity date of the offering, etc. A Quotation can be created by referring to the Inquiry
document (if any) or not, depends on the business scenario defined.
Once inquiry is technically confirmed along with delivery schedule through L3 system,
quotation is sent to the customer. The Quotation is referenced from the Inquiry received.
A Quotation is "What we can best offer to the customer" against his Inquiry, so when the
data of Inquiry is copied into a Quotation, there should be a scope for changes as per
our norms.
One Inquiry can have many options for quoting, based on available stock, delivery and
specialized grade, depending upon the Inquiry items & quantity.
Delivery Destination (Shipping Point) is determined. Freight terms & transporters are
determined.
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Price determination is carried out as per valid price list. Quotation Validity date is
determined. (Normally it varies from 7 to 14 days for Normal Quotation). For Tender
Quotation validity date is open.
Quotation is made based on enquiry received after seeking all clarifications from
customer (externally) and SCM/Quality/PPIC (internally).
The quotation is completed by fixing the quotation price, which is determined on the
basis of the price list valid for that period. For Normal quotation pricing shall be
determined from price list whereas for Tender quotation price shall be entered manually.
Legal terms and conditions are also part of the completed quotation. On completion of
the quotation phase the quotation itself is created and sent to the customer. Based on
quotation and order negotiation, order is finalized and formal Purchase order is
received. Quotation processing ends with either order placement or rejection of the
quotation by the customer.
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JESCO - SALES & DISTRIBUTION

INQUIRY & QUOTATION PROCESSING
INQUIRY QUOTATION
Customer (RFQ) -
Receipt of Inquiry
Create Quotation
Check for w.r.t Inquiry
Completeness
Queries are
raised to the No
customer Yes
Reject RFQ &

Check for commercial &
Inform No
Technical feasibility
Customer Pricing
Yes
Procedure –
Master Data
Yes
Inquiry
SAP à L3
Document
Interface
Check Validity, price, Approval of

Commercial terms are No Commercial
Available in approved terms
Stock
No Yes
No
Quotation
Document
SCM Process Technical
Parameters & Delivery
Schedule
Yes
Quotation sent
L3 à SAP
Interface
to Customer
Confirm Technical
feasibility & Delivery
Date
Order
Negotiation
Legends
SAP Process
L3 Process
Other information
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6.3 Products & Attributes

Apart from material code, following product attributes are defined to pass the technical
details to plant. Based on product attributes and their values, SCM department shall
dress the inquiry in L3 system. Following attributes are required to be filled during sales
document processing.
Product – Line Pipe
S.No. Attribute Name (Line Pipe) Mandatory

1 Grade Norm
2 Grade
3 Grade Designation
4 Product Specification Level
5 Main Customer Specification
6 Customer Specification #2
8 Heat Treatment
9 End Finish
10 Unit of Measurement
11 Plain End Type
12 Diameter
13 Wall Thickness
14 Length Type
15 Nominal Length
16 Order Taking Type
17 Order Total Length
18 Order Total Weight
Product - OCTG
S.No. Attribute Name (OCTG) Mandatory
1 Green Pipe
2 Grade Norm
3 Grade
4 Grade Designation
5 Product Specification Level
6 Main Customer Specification
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9 Heat Treatment
10 End Finish
11 Unit of Measurement
12 Connection Type
13 Thread Type
14 Coupling Type
15 Tubing Service
16 Diameter
17 Wall Thickness
18 Pup Joint
19 Length Range
20 Order Taking Type
21 Order Tol + Percent
22 Order Tol - Percent
23 Order Piece # or Length
24 Order Total Weight
6.4 Sales Order Processing
After Jesco sends the quotation to the customers, they will do their own purchasing
procedure to determine from where they will purchase the products or services. If
needed, they may negotiate with Jesco about quotation in terms of price, terms of
payment, delivery date. Jesco may send an updated quotation based on the
negotiation. If customer decides to purchase the material, they will send a Purchase
Order (PO). Then a Sales Order (SO) is created that refers to the Quotation sent to the
customers before. Customer’s PO number can be referred in SO.
Order is received from direct customers / business partners.
Scrutinize P.O – Order is checked with quotation for following parameters: price,
specifications, minimum order Qty, delivery, and payment terms. If order is not as per
the quotation – P.O referred back to customer for clarification/amendment. Customer
may send amendment/clarification required or stick as per original P.O
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Approval: In case of any deviation in parameters of price, delivery, payment terms,
order quantity special approval is taken from deciding authority. If Approved – Sales
order shall be entered in SAP system and sent to L3 system for order dressing. Non
approval leads to order regret.
Sales Order is entered specifying their main characteristics (finished product type,
grade, dimensions, quantity etc.) and also the required delivery date.
A standard order is used to process customer purchase orders for material. The
standard order will result in normal scheduling of deliveries and is relevant for pricing
since customer billing will occur from the delivery of materials ordered on the standard
order.
Depends on business scenario and configuration, in SAP R/3 system, SO can be

created without referring to a Quotation. For example if we have a products catalog that
can be used by customers as reference for their PO for sale from stock.
The process of creating a standard confirmed sales order begins with the customer’s
request for materials to be sent to them. Once a customer’s purchase order is received,
the order is manually entered into the SAP R/3 system. The sales area responsible for
processing the order is entered along with the sold to business partner, ship to business
partner, requested delivery date, material number and ordered quantity. The remaining
information on the sales order is derived from master data (e.g., customer, material, and
pricing conditions) and system configuration for automatic determination (e.g., shipping
point). The process of creating a standard order ends when the order is saved and all
required fields are entered (based on incompletion procedure rules).
Order reason shall be used to identify if material is offered from stock or production. It
shall be made mandatory for Inquiry, Quotation and Sales Order.
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Order Reason Description
P Order from Production
S Order from Stock
The sales scenarios of Domestic and Export to be handled in SAP are as explained
below:
6.4.1 Normal Sales
Normal sales happen with the customer without any agreement or contract.
The following steps show how the normal sales are addressed in SAP
1. Customer sends the purchase order with the requested products and the Sales
Team creates the sales order for the requisite quantity. User will be proposed
with list of material based on the customer product proposal maintained in the
system. The ordered quantities and product attributes for each material would be
manually entered.
2. Business Partner Determination - Based on the sold-to business partner, the

default ship-to, bill-to and payer partners are proposed in the order. If multiple
ship-to records exist for a Sold to, the default Ship-to number (same as sold to)
can be changed during order entry through a pop-up screen selection.
3. Credit check happens in the sales order after providing the details. If the credit
check is passed, delivery can be created against the sales order or else the
delivery is blocked until the Sales Order is released.
4. Pricing - Sales price for the item would be maintained for a combination of Sales
Organization and each material. When entering the order the system determines
the price to be used for that order as per the (access sequence). Item price can
also be changed/ entered manually.
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5. Delivery is created by the shipping team after the proposed schedule line dates
are reached. Batch determination happens at this level.
6. Post Goods Issue is done to record the actual delivered quantities which make
the delivery eligible for invoicing. Accounting department creates the invoicing
document.
7. Invoice shall be created based on PGI and released to accounting automatically.
The data flow diagram provided below depicts the process flow for the normal sales:
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6.4.2 Tender / Project Sales
The Tender Sales are based on an initial agreement in which the conditions like prices,
returns, products, and delivery terms are specified.
Jesco deals with two types of tender sales. One is for ARAMCO and the other is for
General / Private companies. In some cases tender products require special
processing/ packing / marking.
Tender is entered as quotation in SAP and print out of it would be used as an offer to
enter the tender bidding. A quotation presents the customer with a legally binding offer
for delivering a product within certain fixed conditions. This offer is legally binding for the
company within a specified time period.
Tender sales in SAP would be handled as explained below:
1. Sales department decides the tender price with lower limits. The price can be
changed manually in the quotation by the Sales team. If the tender needs to be
quoted with the price lesser than the lower limit, approval from sales higher
authority is required to change the pricing in quotation.
2. The quotation report is generated for each quotation number, which provides all
the required details.
3. If the entire tender is not accepted, the Quotation is marked as Rejected. If only
some material in the Quotation is accepted, the remaining materials in the
Quotation are rejected at the individual line item by using the Line Item
Rejections reasons. The Sales order cannot be created against the quotation or
the Line Items which have been rejected.
4. Sales order is created against the quotation which copies all the terms from
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quotation.
5. Business Partner Determination - Based on the sold-to business partner, the

default ship-to, bill-to, and payer partners are proposed into the order. If multiple
ship-to records exist for a Sold to, the default Ship-to number (same as sold to)
can be changed during order entry through a pop-up screen selection.
6. Availability Check - The system checks available to promise quantities and

allocates the ordered quantity against available stock.
7. Credit check happens in the sales order after providing the details. If the credit
check is passed, delivery can be created against the sales order or else the
delivery is blocked until the credit line is resolved by Sales or Accounting.
8. Pricing - The prices maintained in the Quotation would be copied into the sales
order. The price in the Sales Order can be changed after approval of Sales
higher authority.
9. Sales Order (SO) to be sent to the customer after completing the entries and to
be counter-signed by the customer.
10. Delivery is created against the sales order based upon the schedule lines
confirmed in sales order.
11. Post Goods Issue is performed against the delivery document and goods are
shipped to the customer by Jesco.
12. Invoice is created against the Delivery document and a copy of it is sent along
with the goods. The invoice is released to accounting department which updates
the customer receivables.
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The following data flow diagram depicts the process flow of tender sales in SAP:
6.4.3 Return Sales
Customer sends the quality complaints or list of materials which they want to return to
the Sales Team. The Sales/technical team analyzes the complaint/list and makes the
final list of materials for returns (Return Sales Order). Once the list is approved by both
the parties, customer sends the goods to the warehouse. Warehouse checks the
quantity, weight and creates the final list for returns (Returns Delivery) and do the goods
receipt (Good Receipt Notification - GRN). The returns delivery note is sent to the
accounting department which creates the return invoice (Credit Note).
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1. Returns are categorized for the various type of quality complaints. The return
sales order should always be created with the reference of previous Sales Order.
2. Pricing for returns are copied from the reference sales document.
3. Returns would have quality inspection performed before the goods are accepted
into the inventory.
4. The returns delivery would be created against the sales order. The quality
inspects the material and decision is made upon material inspection.
5. Return invoice (Credit Note) would be created by the sales department against
the returns delivery and signed by Sales & Accounting. The return invoice would
be posted immediately to the accounting which reduces the customer
receivables.
6. ‘Order reason’ will be a required field. Sales Team must pick the appropriate
reason from the drop down box. This will be used for reporting purposes and
finding the right account to which the returns amount to be posted. The reasons
are:
 Damaged in transit
 Quality Complaint
List of quality complaints shall be given by Sales team.
6.4.4 Credit Memo Request Processing
The credit is given to the customers for the given reasons:
 If the price calculated for the customer was too high (for example, due to
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incorrect scaled prices or missing a discount), a credit memo request will be
used.
 Customer registers a quality complaint with the Sales Team. As per mutually
agreed commercial settlement, credit is given to customer to use the sold goods
at the reduced price.
Credit memo request shall be created with reference to sales order / invoice. Order
reason needs to be selected in the credit memo. The reasons are as defined below:
 Price difference
 Quality complaint settlement
Credit memo request is blocked for invoice until the finance approves the same for
further processing. After the approval, credit note will be created against the request to
credit the customer receivables.
6.4.5 Debit Memo Request Processing
The customer's account is debited for the given reasons:
 If the price calculated for the customer was too low (for example, due to incorrect
scaled prices or missing a surcharge), a debit memo request will be used.
Debit memo request shall be created with reference to sales order / invoice. Order
reason needs to be selected in the debit memo. The reasons are as defined below:
 Price difference
Debit memo request is blocked for invoice until the finance approves the same for
further processing. After the approval, debit note will be created against the request to
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debit the customer receivables.
6.4.6 Order Types

Standard Document types shall be used for Sales documents.
Order Type Description Proposed Number Range

ZINQ Inquiry 10000000 to 29999999
ZQTN Quotation - Normal 30000000 to 49999999
ZQTT Quotation – Tender 50000000 to 59999999
ZSOC Sales Order 60000000 to 69999999
ZRSO Returns Sales Order 10000 to 19999
ZCMR Credit Memo Request 20000 to 29999
ZDMR Debit Memo Request 30000 to 39999
6.4.7 Functions during Sales Order Processing
During Sales Order processing the system automatically carries out the following
functions
 Availability Check
 Delivery Scheduling
 Calculating pricing and taxes
 Checking Credit Limits
Availability Check: It is proposed that Availability Check will be carried out at Order.
Proposed Mandatory Fields: Proposed Mandatory Field required to be entered while

creating a sales order is
 Sold to Party
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 Ship to Party
 Requested Delivery Date
 Order Type
 Pricing date
 Payment Terms
 INCO Terms.
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Some of these would be mandatory by default in the standard SAP system. The others
would be mapped using incompletion log.
6.4.8 Item Categories
A Sale document item category distinguishes between different types of item (for
example, free of charge items and standard items) and determines how the system
processes the item.
The following item categories would be used together with the sales document types to
represent the different business transactions.
Item
category Description
TAN Standard Item
TANN Free of Charge Item
TAC Configuration at Material Level
AFC Inquiry Configurable
AFN Inquiry Standard Item
AGC Quotation Configurable
AGN Quotation Standard Item
REN Return Standard Item
RLN Return Order
6.4.9 Schedule line Categories
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A schedule line category is a classification that distinguishes between different kinds of

schedule lines. The category determines how the system processes a schedule line, for
example, whether the system passes on requirements to materials requirements
planning.
Schedule lines for order items are relevant for delivery if a physical goods delivery is to
be made. Schedule lines for quotation items are not relevant for delivery.
Schedule line category Description

CN No Material Planning
CP MRP
6.4.10 Incompletion Log
The incompletion log reminds when the data that is important for further processing is
missing from the sales document.
The subsequent functions can only be carried out if the data in the original sales
document is complete. To guarantee completeness, the system logs all missing data in
an incompletion log. The data needed to process subsequent functions is defined for
each sales document type.
 Requested Delivery Date

 Order Rejection Reason in case of returns
 Payment Method
 Pricing date
 Payment Terms
 INCO Terms
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7 Delivery / Shipment
Once the Sales Order has been saved, the system on Availability Check gives the date
on which the goods can be delivered. The delivery functionality in SAP allows:
 Monitoring of orders due for delivery.

 Monitoring material availability and processing outstanding orders
 Creating and processing deliveries
 Planning and monitoring work lists for shipping activities
The delivery is the central shipping document to sales order. Depending upon the
requirement, deliveries can be created automatically using work lists or manual. When a
delivery is created, data is copied from the Master Records or any preceding document.
Delivery Quantity will not exceed the Sales Order Quantity. The system allows creating
partial and complete deliveries. A delivery is processed through one shipping point only.
The shipping point that carries out the processing for a delivery can be determined
automatically during order processing or can be specified manually in the order.
When a delivery is created, the system determines
 Delivery quantity of each items and checks the availability of material.

 Weight & volume of the delivery.
 Delivery situation of the order as to whether any partial delivery agreements etc.
are there for the order.
When delivery is entered with reference to an order, the system automatically proposes
the delivery type on the basis of the order. There can be various Delivery Types based
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on the order type. The delivery type determines the functionality to be invoked by SAP
for processing the order. Batch would be determined at the time of delivery.
The addition of new material and quantity cannot be done at the delivery level. If that
situation arises, it is proposed to create/change the sales order for additional quantity.
Following Delivery Types are proposed
Delivery Type Name of Document

LF Outbound Delivery
LR Returns Delivery
7.1 Shipping Point

Shipping Point: A Shipping Point is the location where delivery processing takes place.
A delivery is processed by one shipping point only. Shipping Points are assigned to
Plants. It is used to specify times that you need at the shipping point for preparing and
loading goods.
The Shipping Point is determined by the:
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 Shipping Conditions of the Sold-to-party
 The Loading Group of the Material
 The Delivering Plant (specified on the sales order)
7.2 Post Goods Issue

When the goods are ready to leave the plant, the business transaction is regarded as
completed from the point of view of shipping. The picking quantity must equal the
delivery quantity before a goods issue can be posted. Goods issue completes the
delivery process. The documents created as a result of a goods issue cannot be
changed. The documents created as a result of a goods issue are a material document
and an accounting document. These documents can be displayed from the document
flow of the delivery note.
When a post goods issue is done for an outbound delivery, the following functions are
carried out on the basis of the goods issue document:
 Warehouse stock of the material is reduced by the delivery quantity

 Value changes are posted to the accounting
 Requirements are reduced by the delivery quantity
 Goods issue posting is automatically recorded in the document flow.
7.3 Processing a Delivery

The entire order, the order items, and the schedule lines for an item must fulfill certain
prerequisites before a delivery can be created.
At the Header level the following prerequisites must be met:
 There cannot be a delivery block at header level. For example a delivery block
can be set automatically if the customer has exceeded the credit limit specified in
Credit Management.
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 The sales document must contain at least one item due for delivery before a
delivery can be created for this document.
At item and schedule line level, the following prerequisites must be fulfilled:
 The schedule line must be due for shipping on the specified selection date.
 The schedule line cannot be blocked for delivery.
 The items in the order must not be fully processed.
If they are incomplete, you must first edit the incompleteness log in the order.
Delivery shall be allowed with tolerance of –10 days and +5 days from the delivery date.
If it exceeds this limit, it shall be blocked for delivery.
8 Invoice
In Invoicing, a customer is invoiced on the basis of preceding documents, such as:
 Invoices on the basis of a deliveries

 Credit and debit memos on the basis of requests.
 Cancellation documents (for example, an invoice cancellation)
Invoice is always to Bill-to-Party or “Sold-to-Party” if both are same and the receivables
are on “Payer”.
The following invoice document types are proposed in the system for carrying out the
various business transactions in Sales & Distribution
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Billing Type Description
F2 Invoice
F5 Proforma Invoice for Order
F8 Proforma Invoice for Delivery
G2 Credit Note
L2 Debit Note
RE Credit for Returns
Invoicing is done in Metric Ton. Invoice output without price is required by some
customers.
8.1 Invoicing Method
The above methods can be used in Invoicing. We can
 Create an individual invoice document for each Delivery

 Create a collective invoice document for several delivery documents
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8.2 Cancellation of Invoice Document

An invoice document may need to be cancelled for several reasons. To cancel an
invoice document, a cancellation document is required to be created. The cancellation
document copies data from the reference document and transfers an offsetting entry to
the accounting department. After creating a cancellation document, the reference
document (for example, the delivery) can be invoiced again.
8.3 SAP SD Interface with FI
The billing process in the Sales and Distribution module is fully integrated with the FI
Module. Integration with Accounting consists of forwarding billing data to:
 Financial Accounting (FI - Accounts Receivable)
When you create a billing document, the system automatically creates all relevant
accounting documents for:
 General Ledger Account

 Customer Account
The system can forward billing data in invoices, credit and debit memos to financial
accounting and post them to the appropriate accounts.
The system automatically posts the amounts to the appropriate accounts by means of
Account Determination.
Automatic account determination: It is proposed that at the time of billing document

creation an accounting document gets automatically generated. If a billing document
cannot be passed on to the accounting department because of an account assignment
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error, maintain the relevant account assignment and then release the document to
accounting.
The standard SAP Billing will give more options and control while processing the
invoicing document as a part of the best practices.
9 Document Flow in Sales

The sales documents you create are individual documents but they can also form part
of a chain of inter-related documents. For example, you may record a customer’s inquiry
in the system. The customer next requests a quotation, which you then create by
referring to the inquiry. The customer later places an order on the basis of the quotation
and you create a sales order with reference to the quotation. You ship the goods and
invoice the customer. After delivery of the goods, the customer claims credit for some
damaged goods and you create a free-of-charge delivery with reference to the sales
order. The entire chain of documents – the inquiry, the quotation, the sales order, the
delivery, the invoice, and the subsequent delivery free of charge – creates a document
flow or history. The flow of data from one document into another reduces manual
activity and makes problem resolution easier. Inquiry and quotation management in the
Sales Information System help you to plan and control your sales.
The following graphic shows how the various types of sales documents are inter-related
and how data subsequently flows into shipping and billing documents.
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10 Credit Management
Jesco will define Credit Limits for each Customer to minimize its’ Credit risks. Automatic
Credit check will be applied for each Customer at the point of creation of Sales Order.
All Customers would be classified for the purpose of setting Credit Limits and Credit
Control.
The following risk category will be used to address the requirements in Jesco.
Risk Category Description

001 Risk Category for Jesco
In case a new Sales Order leads to the credit limit being exceeded for the Customer, a
warning message will be issued but the Sales Order will not be prevented from being
created. However, the Sales Order will be blocked for delivery till it is released by the
Authority.
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If sales order fails the credit limit check, it can be saved and released to L3 system, by
higher authority through workflow.
11 Pricing Procedure
The pricing fundamentals in SAP are based on the condition technique. The condition
technique is based on the following things.
 Condition tables
 Condition types
 Access Sequence
 Pricing Procedure
The pricing procedure is unique for a combination of the following elements is SAP
Sales and Distribution module.
 Sales Organization
 Distribution Channel
 Division
 Customer Pricing Procedure
 Document pricing procedure
The various components to be considered in case of pricing procedures are listed

below. These components will be used as condition types in the pricing procedure .The
condition types will be categorized under
 Prices
 Discounts / Surcharge
 Taxes
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The prices are derived from the following condition records and theses can be changed
manually in the Sales order.
Condition Types
Base price PR00
Outer Diameter size ZODS
OD Tolerance ZODT
Wall Thickness and tolerance ZWTH
Grade Designation ZGRD
SSC test (Sulfide Stress Cracking) ZSSC
Quantity Discount RC00
End Connection ZENC
ID Tolerance ZIDT
12 Number Ranges
Number ranges for various sales, delivery and invoice documents are given blow.
Customer Master
Customer Description Proposed Number Range

01 Domestic 100000 to 299999
02 Export 300000 to 499999
VD Ship to Party 600000 to 899999
Document Types
Doc. Type Description Proposed Number Range

ZINQ Inquiry 10000000 to 29999999
ZQTN Quotation - Normal 30000000 to 49999999
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ZQTT Quotation - Tender 50000000 to 59999999
ZSOC Sales Order 60000000 to 69999999
ZSTK Stock Order 100000 to 999999
LF Delivery Note 70000000 to 89999999
F2 Invoice 90000000 to 99999999
S1 Invoice Cancellation 90000000 to 99999999
F5 Pro Forma Inv - Order 90000000 to 99999999
F8 Pro Form Inv - Delivery 90000000 to 99999999
ZRSO Returns Sales Order 10000 to 19999
ZCMR Credit Memo Request 20000 to 29999
ZDMR Debit Memo Request 30000 to 39999
LR Returns Delivery Note 40000 to 59999
RE Return Invoice 60000 to 69999
G2 Credit Note 70000 to 79999
L2 Debit Note 80000 to 89999
FD Delivery Free (Sample) 1000 to 4999
13 FRICE – Scripts and Report Requirements

 Output — traditional forms or electronic communications produced for internal or
external partners
 Assigned to business partners & sales documents
Output formats are given for
 Quotation
 Sales Order
 Delivery Note
 Packing List
 Invoice
 MTC (From QM Module)
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 Goods Receipt Note (GRN)
 Credit Note
 Debit Note
13.1Sales Information System
 Flexible information system designed to support business planning, forecasting

and reporting
 Pre-defined catalog of performance measures and reports
 On-demand access to reports and exceptions
 5 Pre-defined drill-down reports
– Customer
– Material
– Sales Organization
– Shipping Point
– SD Documents
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13.2Output Formats (SO, Delivery in Landscape Format)
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13.3FRICE
 Form: Includes development work related to ABAP Script, PDF.
 Report: If it’s not standard, then it has to be “ABAPed”.
 Interface: relates to Idoc or ALE.
 Conversion: Tools cover BAPI, LSMW, and BDC.
 Enhancement: Methods include User Exit, Implicit Enhancement
13.3.1 Report Requirements
Req. No Requirement Purpose

SD-01 List of Inquiry / Quotation To display List of Inquiries / quotations and their
status
SD-02 Sales Order Status To display List of Sales Order/ Return Sales
Order / Debit, Credit Memo and their status
SD-03 Stock Report Inventory - Finished Goods stock with Aging
SD-04 Dispatch Report To Display Dispatch / Shipping Details
SD-05 Sales Report Customer wise , Material wise sales at the
invoice level
SD-06 Customer aging report Customer aging by invoice
13.3.2 Output Requirement
Req. No Requirement Purpose

SD-07 Quotation Quotations Printout for Customers
SD-08 Sales Order Sales Order Printout for Customer Acceptance
SD-09 Delivery Note Delivery Printout for Ship To Party
SD-10 Packing list Packing list for Bill of Lading / Export
SD-11 Invoice, Credit, Debit Printout for Payer/Bill to Party
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13.3.3 Functional Requirement and Enhancement
Req. No Functional Description ABAP

Requirement Enhancement
SD-12 Sales unit Sales unit is always in Mt (Ton). Base for Sales User Exit
calculation Unit calculation. Sales Unit to be calculated based
during on Inquiry/Sales order UOM. If customer requires
Inquiry/Sales in running meter/feet or Pieces – it shall be
Order Entry. converted to Mt based on formula for combination
of OD and Wall thickness. Formula combination
can be maintained in Z-table.
SD-13 Collective For multiple deliveries – Single invoice to be Routine
Invoice created. Invoice split based on Bill to Party, Sales
order number.
SD-14 Pricing Routines to calculate the price in the sales order. Routine
Routines
SD-15 Delivery Delivery creation shall be allowed only within the User Exit
Creation range of -10 days and +5 days from requested
delivery date.
SD-16 Release of Approval/Release of Sales Orders in system Workflow
Sales which are blocked due to credit limit.
Documents
SD-24 Change of Mass changes of attributes in Sales Documents. ABAP
Attributes
SD-25 Sales Order Sales Support à Sales Rep à Sales Manager à Workflow
Approval Director. (With Escalation for Time and Value)
SD-26 Quality Workflow for Quality complaint registration with Workflow
Complaint Escalation.
13.3.4 Interface Requirement
Req. No Functional Description Flow

Requirement
SD-17 Customer Customer Master Create / Modify. It will be created SAPà L3
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Catalogue in L4 and transfer to L3.
SD-18 Inquiry Inquiry created to be passed to L3 system for order SAPà L3
dressing and delivery schedule confirmation.
SD-19 Inquiry Check If inquiries with same Project number are created SAPà L3
for different sold to parties, then only one Inquiry
shall be passed to L3 system to avoid duplication
of MRP and stock booking.
SD-20 Inquiry When L3 accepts Inquiry, Delivery date, Remarks L3 à SAP
Technical to be confirmed back to SAP.
Confirmation
SD-21 Sales Order Sales Order created to be passed to L3 system for SAPà L3
production.
SD-22 Sales Order When L3 accepts Sales Order, Delivery date, L3 à SAP
Confirmation Remarks to be confirmed back to SAP in case of
changes.
SD-23 Delivery After creation of delivery Note and PGI in SAP – SAPà L3
Creation L4, delivery confirmation message shall be passed
to L3 system to reduce the inventory in L3 system
and update the order status.
14 Authorization Consideration
No Transaction Authorization Level Authorization
1 Create customer Client level, Sales Organization Sales Team
2 Pricing Condition Records Sales Organization Sales Team
3 Create Inquiry Sales Organization Sales Team
4 Create quotation Sales Organization Sales Team
5 Create Sales order Sales Organization, Document Type Sales Team
6 Change Sales order Sales Organization, Document Type Sales Team
7 Create Delivery Shipping Point, Delivery Type Shipping Team
8 Change/Reverse Delivery Shipping Point, Delivery Type Shipping In charge
9 Create Invoice Document Type Finance Dept.
10 Create Debit Notes Sales Organization, Document Type Finance Dept.
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11 Create Credit Notes Sales Organization, Document Type Finance Dept.
15 Master Data Consideration

No Master Data Consideration Remark
1 Material Master Sales View Material registration Sales View - To be
maintained for each
Finished Product – field to
be identified
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Company Plant Manufacturing Unit

JUBAIL ENERGY SERVICES COMPANY (JESCO)

MITL Internal Use Only

SAP Consultant (SD/LE) Mr. Sanjay Dewangan 29.06.11

SD – Power User & Sales Mr. Nasser Hassan Al-

Sales & Marketing Mr. Majed M. Al-Dawas

Business Process Owner Mr. Abdul Aziz Al Dossary

Project Manager - JESCO Mr. Parvez Sherani

Project Manager - MITL Mr. Ahmed Shaaban

Version No. Effective Date Nature of Change

2. SAP SD MODULE KEY COMPONENTS .............................................................. 9

3. ORGANIZATION STRUCTURE OF SD ........................................................ 11

3.1. Company Code................................................................................................. 13

4. MASTER DATA ............................................................................................. 19

4.1. Material Master (Sales views) ......................................................................................... 19

4.2. Customer Master Data ......................................................................................... 21

4.3. Item Proposal ....................................................................................................... 28

4.4. Price Master Data Management ........................................................................... 28

4.5. Inco Terms ........................................................................................................... 28

4.6. Payment Terms .................................................................................................... 29

4.7. Material Number / Codification ............................................................................. 30

5. PRODUCT RANGE ....................................................................................... 32

6.1. Inquiry ................................................................................................................................. 39

6.2. Quotation ............................................................................................................................ 38

6.3. Products & Attributes ........................................................................................................ 40

6.4. Sales Order Processing ................................................................................................... 42

7. DELIVERY / SHIPMENT ................................................................................ 54

7.1. Shipping Point .................................................................................................................... 55

7.2. Post Goods Issue .............................................................................................................. 56

7.2. Processing a Delivery ....................................................................................................... 56

8.1. Invoicing Method ............................................................................................................... 58

8.2. Cancellation of Invoice Document .................................................................................. 58

8.3. SAP SD Interface with FI ................................................................................................. 59

9. DOCUMENT FLOW IN SALES ..................................................................... 60

10. CREDIT MANAGEMENT ............................................................................... 61

11. PRICING PROCEDURE ................................................................................ 61

13. FRICE - SCRIPT & REPORT REQUIREMENTS ........................................... 64

13.1. Sales Information System ................................................................................................ 64

13.2. Output Formats .................................................................................................................. 65

13.3. FRICE ................................................................................................................................. 70

14. AUTHORIZATION CONSIDERATION .......................................................... 72

15. MASTER DATA CONSIDERATION ............................................................. 72

In 2006, Industrialization and Energy Services Company (TAQA) decided to

 Enterprise organizational structures

2. SAP SD Module Key Components

Sales Order Processing

Pricing and Conditions

Automatic Credit Check

Objectives of Proposed Structure

Primary Elements of Organization Structure

In addition to the above, other organizational entities defined are :

 Plant and Storage Location

3.1. Company Code

Company Code Description

3.2. Sales Organizations

The functional scope of a sales organization is given below

 Legally, a sales organization is operating in one company code.

Sales organization Name

3.3. Distribution Channel

In order to service different segments of the market, a Sales Organization utilizes

In order to adapt the functional scope of a distribution channel to the organization