Order Fulfillment in SAP SD

Order fulfillment in SAP SD (Sales and Distribution) involves the process of receiving and processing
customer orders, managing inventory, and delivering products or services to customers. Here's an
overview of how order fulfillment typically works in SAP SD:

Sales Order Creation: The process begins with the creation of a sales order in SAP SD. A sales order
contains information such as the customer's name, shipping address, the products or services
ordered, quantities, prices, and delivery dates.

Availability Check: Once a sales order is created, SAP SD performs an availability check to ensure that
the ordered products or services are in stock or can be delivered by the requested delivery date. This
involves checking inventory levels and production schedules.

Order Confirmation: After the availability check is completed, SAP SD confirms the sales order and
provides the customer with an order confirmation document. This document outlines the details of
the order, including the expected delivery date.

Picking and Packing: Once the order is confirmed, SAP SD generates picking lists to retrieve the
ordered items from the warehouse. These items are then packed into shipping containers based on
the customer's requirements and shipping method.

Goods Issue: After the items are picked and packed, SAP SD records a goods issue to remove the
items from inventory. This update ensures accurate inventory management and allows for real-time
tracking of stock levels.

Shipping and Delivery: SAP SD coordinates the shipping and delivery process, including generating
shipping documents such as packing slips and bills of lading. It also manages transportation planning
and scheduling to ensure timely delivery to the customer.

Billing and Invoicing: Once the order is shipped, SAP SD generates invoices based on the order details
and pricing information. These invoices are then sent to the customer for payment.

Payment Processing: SAP SD manages the process of receiving and recording payments from
customers. It updates the accounting records to reflect payments received and tracks outstanding
invoices.

Order Completion: Once the payment is received and processed, the order is considered complete in
SAP SD. The system updates relevant records and reports to reflect the successful fulfillment of the
order.

Throughout the order fulfillment process, SAP SD provides real-time visibility into order status,
inventory levels, and delivery schedules, enabling businesses to efficiently manage their sales
operations and meet customer expectations. Additionally, SAP SD integrates with other modules such
as Materials Management (MM), Finance (FI), and Controlling (CO) to ensure seamless end-to-end
business processes.