1.

Route Determination:

Routes are very important in Warehouse shipping activities. In SAP systems, route has a vital role in
Order to Cash Process. This blog post is basically to explain the concept of SAP Route and Route
determination in the Logistics Execution process and also provides important resource links at the
end.
Route is a fundamental basis to create and plan shipments in SAP systems and also a basis for
selection of upcoming Deliveries. You can use routes to determine the itinerary (leg), means of
transport like truck, train, plane or ship.
Routes have generally fixed departure point (shipping point) and a destination point ( ship-to-party,
ports etc.). Routes enable you to plan transport scheduling.
SAP Route determination criteria is a as follows
1) the country and transportation zone of the shipping point —- Customization
2) the shipping condition —- Default value based on Sales Document Type or from Customer Master
of Sold-To Party
3) the transport group —Default Value from Material Master
4) the country and transportation zone of Ship-To-Party —- Default Value from the Customer Master
of Ship-To-Party.
5) the Weight group ( if the route determination is carried out again at the delivery note level ) —
Customization
The route determination takes place at the item level of sales order or of the stock transport order.
When you create a delivery, the route is copied in to the delivery header.
Before starting the route determination configuration, you must divide the locations of your
customers into transportation zones for each country wide at
IMG>Logistics Execution>Shipping>Basic Shipping Function>Routes>Route Determination>Define
Transportation Zones
Because the route determination depends on the transportation zone of the shipping point, you
must assign the right transportation zone to shipping point .at
IMG>Logistics Execution>Shipping>Basic Shipping Function>Routes>Route
Determination>Maintain country and Transportation Zone for Shipping Point.
Transport Groups are required based on the form in which material will ship like pallets or liquid
form or container etc. at
IMG>Logistics Execution>Shipping>Basic Shipping Function>Routes>Route Determination>Define
Transport Groups.
If you want to consider weight of the delivery to determine new route determination at delivery
then configure Weight Group.
IMG>Logistics Execution>Shipping>Basic Shipping Function>Routes>Route Determination>Define
Weight Groups.
In order to maintain routes, start Tcode OVTC or
SAP menu>Logistics>Logistics Execution>Mater Date>Transportation>Routes>Define
Routes>Define Routes and Stages
Once we finish all necessary steps and information, then we can configure a route determination
IMG>Logistics Execution>Shipping>Basic Shipping Function>Routes>Route
Determination>Maintain Route Determination
Departure country and Zone with country of destination and receiving zone.
Now we can see how sales order is going to determine the route. First we must maintain the
relevant transportation zone( General data- Address tab) and shipping condition( Shipping tab) in
the customer master of the relevant ship-to party. Now we must enter the sales order and the result
could be route determined in the sales order.
Route Determination with weight:
Route Determination without weight:

2.Concept of Sales documents and Delivery documents type.

Sales Document type:

A. Pre sale: Inquiry, Quotation

B. Sale:
C. Agreement
D. Compliance

Sales Document Types

The standard SAP R/3 System includes a variety of pre-defined sales document types. During the
implementation of your system, these standard definitions may be modified to suit the particular
needs of your organization. In addition, you may add your own sales document types. The sales
document types in the standard system include the following:

Type of processing Sales document type Abbreviation

Presales Inquiry IN

Quotation QT
 Free-of-charge delivery FD

Sales orders Standard sales order OR

Cash sale BV

Rush order SO

Outline agreements Quantity contract CQ

Maintenance contract WV

Rental contract MV

Scheduling agreement DS

Complaints Credit memo request CR

Debit memo request DR

Subsequent delivery, free-of-charge SD

Returns RE

Control Elements in Sales Document Types

You can use control elements, configured in Customizing for Sales and Distribution, to define each
sales document type in such a way that it is provided with its own range of functions. The document
types can be tailored to meet the requirements of your company. You can modify the existing
document types or you can create your own if those specified in the standard version of the SAP R/3
System do not meet the needs of your sales organization. Your system administrator is responsible
for maintaining control elements.

Your answers to the following questions help to decide how to define a particular sales document
type:

General data

 Can the document be entered only with reference to a preceding document?

 Should the existing customer-material info record be taken into consideration?

 Should the delivery date be proposed?

 Must a customer number be entered when creating a document? For example, assortment
modules can be entered without reference to a particular customer.

 Which order probability is defined?

  Should the division be taken from the material master record for every item or should an
alternative division specified in the header take precedence over the item specifications?

 How should the system respond if the division entered in the header deviates from the
division in the items?

 Should a credit limit check be made?

 From which number range should the document number for internal or external number
assignment come?

 Which fields are relevant for the incompletion log? The validity period, for example, is
important for contracts and must therefore be specified in the document.

 Can an incomplete document be saved or must all data be complete?

 Which partner functions are allowed and which ones are mandatory?

Shipping data

 Which delivery type should the delivery resulting from the order have?

 Should delivery scheduling be carried out?

 Should transportation scheduling be carried out?

 Should a delivery block be set automatically for a specific reason? For example, a delivery
block may be appropriate for a free-of-charge delivery.

 You can define shipping conditions for a sales document type. These are copied into the
document regardless of what is defined in the customer master record.

Billing data

 Which billing type should the invoice resulting from the order or the delivery have?

 Should a billing block be set automatically for a specific reason? For example, a billing block
may be appropriate if a credit memo request should first be checked before it is used as the
basis for a credit memo.

Delivery Types
You can use the various delivery types to deal with the different kinds of business transactions
necessary for delivery processing. In the standard version of the SAP System, delivery types include:
Name Delivery type
Outbound delivery LF
Outbound delivery without reference LO
 Returns delivery LR
Replenishment delivery NL
Outbound deliveries from projects LP
Outbound delivery for subcontractor LB
Inbound delivery EL
WMS outbound delivery WOD
WMS inbound delivery WID
Replenishment WMS WNL
Customer returns WMS WRD
Delivery for stock transfer UL
R/2-R/3 Link LD
When you enter an outbound delivery with reference to a sales order, for example, the system
automatically proposes the delivery document type on the basis of the underlying order.

Control Elements
Specific functions can be defined for each delivery document type. This is done using control
elements that are specified in tables. The document types can be tailored to meet the needs of your
company. New document types can also be defined if you find that your business needs a wider
selection than those specified in the standard version of the SAP System. Your system administrator
is responsible for maintaining control elements.
You can distinguish between delivery document types according to the following criteria:
 Which number range does the document number come from for internal and external number
assignment?
 Which partner functions are allowed and which must be entered?
 Does an order have to be based on a preceding document?
 Which requirements must items fulfill to be included in the delivery?
 Should the route be redetermined? Should a check then be carried out to determine whether the
new route is permissible?
 According to which rule should the storage location be determined for an item if a storage
location is not specified?
 Which output types are allowed for the business transaction and according to which procedure
are they proposed?

SAP SD Tables:

SAP Sales and Distribution (SAP SD) module works based on tables and saves data in them.

SAP SD Tables
SAP SD Tables for Customer
Let’s start within the SAles and Distribution Tables with Customer Tables in SAP SD.
Note that the main tables for a customer in SAP SD is KNA1.
A Customer in SAP SD is identified by KUNNR.

Here the main Customer Tables in SAP SD:

 Delivery Doc Tables Description

KNA1 Customer Master: General Data

KNB1 Customer Master: Company Code Data

KNB4 Customer Payment History

KNB5 Customer Master: Dunning data

KNBK Customer Master: Bank Details

KNBW Customer Master: Wwithholding tax types

KNKA Customer Master: Credit Mgmt.

KNKK Customer Master: Credit Control Area Data – credit limits

KNVA Customer Master: Loading/Unloading Points

KNVD Customer Master: Record sales request form/documents

KNVH Customer Hierarchies

KNVI Customer Master: Tax Indicator

KNVK Customer Master: Contact Partner

KNVL Customer Master: Licenses

KNVP Customer Master: Partner Functions

KNVS Customer Master: Shipping Data

KNVT Customer Master: Record Texts for Sales

KNVV Customer Master: Sales Data

KLPA Customer/Vendor Link

Check also for SAP SD Customer

  Credit Limit for Customer in SAP SD
 SAP KNVV: Customer Master Sales Data
 The 3 ways to Mass Update Contacts of Customer in SAP
SAP Material Master Data Tables
You can find the whole list of SAP Material Tables in The Main Important SAP Material Master Tables
( Data & Customizing )

SAP SD Tables for Sales Documents

Once Customer is defined, let’s check the list of Sales Documents tables in SAP SD.
The SAP SD Table for Sales Document Header is VBAK. The items details are stored in VBAP.

Check the list of usefull related Tables to Sales Document in SAP SD:

SD Sales Doc Tables Description

VBUK Header Status and Administrative Data

VBAK Sales Document – Header Data

VBKD Sales Document – Business Data

VBUP Item Status

VBAP Sales Document – Item Data

VBPA Partners

VBFA Document Flow

VBEP Sales Document Schedule Line

VBBE Sales Requirements: Individual Records

You may also check

 Read SAP Document flow in SAP SD

 SAP Order Delivery Status for Sales Documents
SAP SD Tables for Delivery Documents
After sending a sales document to customer comes the Delivery.
The main Tables for Delivery Documents in SAP Sales and Distribution are:

Delivery Tables in SAP SD Description

LIPS Delivery Document item data includes referencing PO

 Delivery Tables in SAP SD Description

LIKP Delivery Document Header data

Check more about SAP Order Delivery Status for Sales Documents

SAP SD Tables for Billing Document

Once the delivery is done, a billing document is issued. Here the list of Billing Document Tables in
SAP SD:

Billing Doc Tables Description

VBRK Billing Document Header

VBRP Billing Document Item

Check more about Billing Document in SAP SD:

 The Main SAP Invoice Table for Accountiing Document and Material Document
 The full list of SAP Billing Document User Exit for transfer to accounting
Shipping Tables in SAP SD
Find bellowing he list of Shipping Unit Tables in SAP SD

Shipping Tables in SAP SD Description

VTTK Shipment header

VTTP Shipment item

VTTS Stage in transport

VTSP Stage in transport per shipment item

VTPA Shipment partners

VEKP Handling Unit – Header Table

VEPO Packing: Handling Unit Item – Contents

SAP Pricing Tables

Here the list of the most important tables for Pricing in SAP :
 PricingTables in SAP SD Description

KOMK Pricing Communications: Header (Structure)

KOMP Pricing Communication: Item (Structure)

KONV Conditions: Transaction Data

KONP Conditions: Item

KONH Conditions: Header

KOND SAP Contracts Table in SAP SD

VEDA Contract Data

Others usefull tables for SAP SD

Here I regrouped some usefull when dealing with SAP SD ( Sales and Distribution):

 NAST : Document Output- Message Status

 STXH : Document Texts Table Header
 STXL : Document Texts Table Line
 JSTO : PP status
 JEST : Status Table
 SADR : Address Table
Source:

Condition Technique:

The condition technique refers to the method by which the system determines
prices from information stored in condition records fetched

Pricing Procedure: Define the conditions permitted and the sequence in which the system takes
these conditions into account during sales processing.

Condition type: Condition type is characteristics of a condition

Access Sequence: Define the order in which the system searches for condition records

Condition tables: Contains key fields for which condition records are created

Condition record: A data record that stores a condition is called as condition record.

Ex: Customer ,Material, Material Group & customers

CONDITION TECHNIQUE IN SAP

Condition technique is THE most pervasive and a very flexible methodology used by SAP to aid the
consultant in configuring complex business rules. Some modules ( SD, MM ) are more dependent on
it than others. We are taking Pricing as an example here, but will not enter into the domain of Pricing
(which is pretty large by itself ). This article is also useful for consultants working in other modules
like FICO who might require an understanding of Condition Technique before they understand
Pricing

What is Condition Technique

Condition Technique is an SAP configuration technique/methodology that is used to configure

complex business rules. Consider it as a rules engine. For example, in SD it is used across multiple
functionalities - Pricing, Outputs, Texts etc. In MM the same technique is used to configure Schemas (
Same as Pricing ).

Why is Condition Technique Used

Condition technique is used when a complex, ever-changing set of business rules need to be
configured as generically as possible in the system. Nothing could capture the essence of this
statement more than the complex rules that businesses use to Price their products/services. For
example, in pricing, each organization has their own set of business rules including base price, margins,
discounts, taxes, surcharges, deals/promotions, price lists etc. For a single system to be generic
enough to cater to all of these complex needs is a challenge in itself and that is exactly what condition
technique tries to solve.

Condition Technique at a Very High Level

There are 7 key components of Condition Technique. Not all of the components are used all the time.
But it is beneficial to learn all of them just in case you want to solve complex problems like pricing. .

Field Catalog consists of all the possible set of fields that play a role in
Field Catalog
determining the business rules

Condition table is a database table that is created from a small subset of the field
Condition Table
catalog as part of the customization.

Access sequence comprises of a sequence of condition tables prioritized in a

Access Sequence
particular order.

Each condition type represents a logical component of the condition technique.

For example, excise tax could be one of the logical components of pricing and it
Condition type
could be represented using one condition type or a combination of multiple
condition types.

A procedure is a combination of multiple condition types. For example, in output

Procedure determination procedure, all the sequence of condition types might exist - Like
EDI, Print, Fax etc.
Procedure Finally the procedure is assigned to the final document type that is effected by
Determination the business rule.

It may not make much heads or tails just yet. But continue to read and you will be surprised how
simple and powerful this is. Condition technique could be learnt either bottom up or top-down.
However, we are trying to explain it here using the bottom-up approach. Also, it is much easier to
explain condition technique using a standard SAP functionality as an example. We will take the most
complicated example/use ( Pricing ) and that way all of the aspects of the condition technique will be
covered. The menu path to be followed is under [ SPRO -> Sales & Distribution -> Basic Functions ->
Pricing ].

Condition: The state of something with regard to its appearance, quality, or working order.
‘the wiring is in good condition’
in singular ‘the bridge is in an extremely dangerous condition’

Technique: 1A way of carrying out a particular task, especially the execution or performance of an
artistic work or a scientific procedure.
‘new surgical techniques mean a shorter hospital stay’
‘the techniques used by Turner, Rembrandt, and Degas’
To discuss the Condition technique in sap,
The condition technique is used to define pricing across applications. For example, it is used in
the SAP SD (Sales & Distribution) module as well as in the SAP MM module. The goal of the
condition technique is to calculate the effective price in a purchase order. Master conditions are
simply conditions defined with the condition technique. While this section is not essential to your
understanding of master conditions in purchase orders, it does provide useful background
information on the mechanism for determining pricing in Purchasing.

The Basic elements of the condition technique,

The condition technique consists of four main elements:

 Condition types
 Condition tables
 Access sequences
 Calculation schema (pricing procedure)

These concepts are important for understanding how the system determines pricing in master
conditions.
Condition type is a representation of a pricing element. Condition types exist for discounts,
surcharges, and freight costs, for example. You use condition types to enter pricing in purchasing
documents. You learned how to specify condition types when entering pricing in quotations and
purchase orders, for example.
Condition table defines the combination of fields (the key) that identifies an individual condition
record. The system stores the condition data you enter in the form of a condition record. For
example, when you enter a vendor’s pricing in a purchasing info record with reference to a material
master record, the key of the condition table includes the vendor number and the material number.
The actual pricing information – such as the gross price and any discounts – is stored in a condition
record under this key.
Access sequence is a search strategy that the system uses to find condition records for a particular
condition type. The access sequence determines the sequence in which the system searches
condition records for a valid price.
Price calculation schema (pricing procedure), The calculation schema (also known as a pricing
procedure, but the same mechanism can also be used to calculate tax amounts, period-end rebates,
or costs, for example) is a group of condition types, defined in a particular sequence. It enables the
system to determine that a particular set of condition types, in a specified sequence, apply in given
circumstances. For example, the calculation schema determines which condition types apply to the
gross price. The calculation schema also determines that the condition types for discounts are
calculated in the effective price automatically.
With SAP MM Customizing, you can define price calculation schemas for specific vendors and/or
purchasing organizations. The system searches for pricing data in condition records. The criteria it
uses in the search depend on the keys in the condition table. The sequence of the search depends on
the access sequence specified for the condition type. Which condition types are used in the search
are defined in the calculation schema.
For example, suppose that you have just created an info record that specifies a 10% discount from
the gross price. This condition is then stored in a condition record under the vendor and material
number. When the material is ordered from the vendor in a PO, the system searches for the
discount using the access sequence. The calculation schema ensures that the 10% discount is
deducted from the gross price instead of the net price during the price calculation process.

The different ways of maintaining master conditions, you can maintain conditions in the following
ways:

Prices, As this method you can list or maintain the conditions that determine the net price in a single
info record or contract. You can enter the going market price for a material.

Discounts and surcharges, As this method, you can enter discounts or surcharges that apply to all
info records or contracts meeting your pricing criteria.
Other condition types,If your company has defined its own condition types, access sequences, and
condition tables, you can define master conditions that use these pricing elements.
Price changes, You can change pricing by a fixed amount globally.

What are the fields in pricing procedure in SAP ?

There are 16 fields in pricing procedure

1. Step
2. Counter
3. Condition type
4. Description
5. From
 6. To
7. Manual
8. Mandatory
9. Statistic
10. Print
11. Subtotal
12. Requirement
13. alternative calculation type
14. Alternative condition base value
15. Account key
16. Accrual

What is Condition type in SAP SD ?

Condition type is a pricing element such as discount, freight, surcharge.This are used in pricing
procedure to represent condition record.

What are the Important 'Customer Master Records' in SAP ?

Added on June 15th 2015 by Ashok Kumar Reddy

Some of the important customer records are:

 Sold-to-Party record
 Ship-to-Party record
 Bill-to-Party record
 Payer record

What is difference between SD account key and FI account key?

Added on June 15th 2015 by Ashok Kumar Reddy

As far as account key concern both are the same to find the right G/L Account through condition
technique.SD account key will be from pricing procedure. On the other hand, FI account key will be
from tax procedure.
What is Pricing procedure?
The main concept of pricing procedure is combination of different type charges, like Gross price,
freight, discount, surcharges etc etc.

We use pricing procedure to determine these all conditions into one procedure, where we can
find the sub-total for net amount.

To understand pricing procedure, we have to be comfortable about these below things :

1. Condition Table

2. Access Sequence
3. Condition Type

4. Condition Record.
5. Schema Group
6. Calculation Schema

7. Schema Determination

Let’s discuss about all these points in details.

1. Condition Table
It’s a table where system saves the all fields with the combination for individual condition record.
Suppose if I use Plant as condition table, then the condition record will be created for plant only.
We can use many fields in one condition tables.

2. Access Sequence
The main concept of Access sequence is, it searches condition record for condition type from
condition table.

One access sequence can contain one or multiple condition tables.

Suppose we maintain 4 condition tables in one access sequence. Then when a condition type
will search for condition record via this access sequence, the access sequence will allow to
search only these 4 condition tables.

3. Condition Type
In simple term, condition type is used for different type of charges. Like gross price, discount,
freight, rebate etc etc.

Suppose we purchase a material for price 10, we get a discount of price 2. Then the price 10 will
be going to a condition type and the price 2 will be going to another condition type.

4. Condition Record
Condition record contains the record which is maintained against condition table with regards to
condition type.

It can be fetched via access sequence and condition type.

Suppose we maintain a condition record against condition table (vendor) with regards to
condition type. Then whenever the vendor used this condition type, the condition record will be
fetched.

5. Schema Group
It’s assigned to our vendor and Purchase Organization, It helps the vendor and purchase
organization to choose pricing procedure.
One schema group will be assigned to vendor and one schema group will be assigned to
Purchase organization. With this combination, system will fetch the pricing procedure.

6. Calculation Schema
 Here we maintain sequence for the pricing calculation, like gross price, discount, rebate,
surcharges etc. Here we maintain the calculation for all condition types and group together all
required condition types for our pricing procedure.

7. Schema Determination
Here we maintain the pricing procedure for purchasing document. We maintain calculation
schema combination of per each vendor – schema group and each purchase organization –
schema group.
In general, below image will give the concept how a condition type will search for the condition
records :

CO

Enterprise Structure

As per SAP Help definition, it portrayal of an enterprise's hierarchy.

There are the following types of enterprise structure:

 Logical enterprise structure, including the organizational units required to manage the SAP System
such as plant or cost center.
 Social enterprise structure, description of the way in which an enterprise is organized, in divisions or
user departments.The HR application component portrays the social structure of an enterprise

In other words, SAP enterprise structure is organizational structure that represents an enterprise in
SAP R/3 system. It consists of some organizational units which, for legal reasons or for other specific
business-related reasons or purposes, are grouped together. Organizational units include legal
 company entities, sales offices, profit centers, etc. Organizational units handle specific business
functions.
Organizational units may be assigned to a single module (such as a sales organization assigned to
Sales and Distribution (SD) module, or to several modules (such as a plant assigned to Materials
Management (MM) and Production Planning (PP) module).
Following are some of the organizational units related to SAP SALES & DISTRIBUTION module.

CLIENT

 A client is an independent organizational unit.

 A client is considered synonym for a group.
 A client is self-contained technical unit.
 General data & tables used for several organization structure are stored at client level.
 Client is positioned in the highest level in Enterprise Structure.
 Several company code can be uniquely assigned to a client.

COMPANY CODE

 A Company Code is a legal entity & independent accounting unit.

 Balance Sheet & Profit & loss account are created at Company Code level.
 Company Code is organizational unit prepared by FI.
 Several Company Code can be uniquely assigned to a Client.
 Several Company Code under same client can have same chart of accounts.
 SALES ORGANIZATION

 Sales Organization is an organizational unit of Logistics, which groups the enterprise according to the
requirement of Sales & Distribution.
 Sales Organization distributes goods & services.
 Sales Organization is liable for sold products, responsible for the customers right of recourse &
negotiating sales condition.
 One or more Sales Organization can be uniquely assigned to a Company Code.
 Sales Organization can be assigned to one or more plant. This assignment is not unique, so several
Sales Organizations can also be assigned to one plant.
 Each Sales Organization has its own master data, for eg customer & material master data, as well as
conditions, pricing & output type.
 A Sales Organization is the highest level (after the Client) to which sales figure are summed for SD
with statistics currency.
 Sales Organization can be used as selection criteria for listing of sales document, as well as for
creating delivery & billing worklist.
 Different output type can be defined for sales & billing document, for each Sales Organization.
 Sales Organization is also used to take regional, national, international sub-division of the market
into account.

DISTRIBUTION CHANNEL

 A Distribution Channel is a mean through which saleable material or services reach the customer.
 A Distribution Channel represents the strategies to distribute goods and / or services to the
customers. Eg: wholesale, retail, institutional, etc.
 Distribution Channel can be assigned to one or more Sales Organization.
 Same customer can be served through one or more Distribution Channel, within a Sales
Organization.
 Distribution Channel can be set as per company's marketing strategies or internal organization.
 Master data can vary (Customer & material Master data, Prices, discounts / surcharge, output type,
etc) for each Sales Organization & Distribution Channel, i.e, within Distribution Channel master data
can be defined separately.
 Master data created for one Distribution Channel can also be used in other Distribution Channel.
 Different sales document type can be defined for Distribution Channel.
 Sales Office can be assigned to Distribution Channel.
 Items in a delivery & billing documents can belong to different Distribution Channel.
 Distribution Channel can be used as selection criteria for creating lists.

DIVISION

 Division represents a product line or grouping of materials or services.

 Division can be assigned to one or more sales organization.
 Division can be assigned to one or more distribution channels.
 Material always belongs to only one Division.
 Master data can vary from Division to Division.
 Different Division can share same master data, if shared master data is created.
 Sales Office can be assigned to Division .
 In sales document type, if Item Division is not activated, it will accept material from the Division at
header level only & if material at item level is from different Division from header level, the same is
not accepted.
 Item in delivery or billing can belong to different Division.
 Division can be used as selection criteria in sales document & also for creating delivery worklist.
 Different output type can be used for printing sales document for each Division.

SALES AREA

 Sales Area is made up of combination of Sales Organization, Distribution Channel & Division.
 It defines the distribution channel a sales organization uses to sell products from a certain division.
 A Sales Area belongs to only one Company Code.
 During the processing of SD documents, system accesses various master data, according to Sales
Area. The system also carries out various checks concerning the validity of certain entries according
to Sales Area.
 Sales document, delivery document & billing document is always assigned to Sales Area.
 Each SD document is assigned to exactly only one Sales Area. This assignment cannot be changed.
 Various analyses can be carried out within Sales Area. So, Organization structure should be as simple
as possible.
 Sales Area is used for reporting & pricing.
 The customer data record contains pages (views) with the data that is specific to Sales Area.

PLANT & STORAGE LOCATION

 In SD, a Plant represents the location from which material & services are distributed & correspond to
a distribution centre. Which is also known as Delivering Plant. The relevant stocks are kept here.
 In SD, the Plant has a central function:
 At least one Plant is necessary in order to be able to use SD module.
 A Plant is uniquely assigned to a Company code.
 Assignment between Sales organization & Plant is not unique.
 Delivering Plant is important for determining shipping point.
 For a Plant to deliver goods to the customers, it must be configured appropriately as a delivering
plant in SD customizing.
 It is possible that a Plant in one company code may have transaction with sales organization in
another company code within same client. This is known as *cross company sales.
 Plant & Storage location are organizational units that can be used by all logistic area in the system.

DELIVERING PLANT
For a plant to be a Delivering Plant, following are essential, i.e,

 A plant is referred as delivering plant, when the said plant is assigned to a combination of Sales
Organization & Distribution Channel.
 Plant should be uniquely assigned to a company code.
 Plant should also be assigned to sales organization & distribution channel.
 During sales process, the Delivering Plant is first used to verify stock (availability check) & later to
supply the goods the customer has ordered.
 Only if plant is a Delivering Plant, a shipping point can be assigned to a plant. Material cannot be
despatched without a shipping point.
 SHIPPING POINT

 The Shipping Point is highest level organizational unit of shipping that controls shipping activities.
 Material can enter or leave the premises of an organization through Shipping Point.
 System determines Shipping Point on the bases of Delivering Plant, Shipping Condition from Sold to
Party & Loading Group from material master.
 The transaction code OVL3 is used to maintain the determination of shipping point
 Shipping Point can be changed manually, only if it is in close proximity & relevant changes are
permitted by the system in customizing setting.
 Each outbound delivery is processed by only one Shipping Point . For example, Loading ramp, mail
depot, rail depot, group of employees, etc.
 Shipping Point is assigned to a plant.
 Shipping Point is a physical place & should be near delivering plant.
 Shipping Point can be assigned to more than one plant & a plant can also have more than one
shipping point. Assignment between plant & shipping point is not unique.

WAREHOUSE
For efficient processing of goods receipt & goods issue, Warehouse is made up of:

 Warehouse number: The entire warehouse structure is managed under one warehouse number.
 Storage type: The different warehouse area, which differ with respect to their organizational &
technical features, are defined as storage types.
 Picking area: The picking area groups storage bins together in the storage type.
 Staging area: The staging area is an area in the warehouse where the goods are stored immediately
after unloading or shortly before loading.
 Doors: A door within a warehouse can be used both for inbound delivery as well as outbound
delivery of goods.
For Sales & Distribution, Lean Warehouses are applicable. This b'coz lean warehouse have fixed bins
as storage type.

BUSINESS AREA

 Business Area represents an organizational unit, which can carry out internal reporting.
 A company code can be divided into multiple Business Area.
 A Business Area may also be shared by several company code & in such case, business area must
have same description in all company code.
 Business Area can be used to prepare balance sheet & Profit & loss statement not only for company
code, but also for other internal area (eg: division).
 Determination of BUSINESS AREA takes placed based on following rules:

Rule no 1:
Plant / Item Division

Rule no 2:

Sales Organization / Distribution Channel / Division, i.e Sales Area.

 Rule no 3:

Sales Organization / Distribution Channel / Item Division.

SALES OFFICE

 Sales Office is organizational unit responsible for sales & distribution, within geographical area.
 Sales Office establishes contact between company & customer.
 Sales Office can be assigned to one or more sales area.
 A Sales Office can be sub divided into several sales groups.

SALES GROUP

 Sales Group is an organizational unit that carries out sales & is responsible for the process internally.
 Sales Group can be assigned to one or more sales office.

SALES PERSONS

 A sales group consists of certain number of Sales Person.

 A Sales Person is assigned to a sales office & sales group in the sales employee record.

SAP R/3 system can represent a complex enterprise structure. Its flexibility can integrate the
structure of an enterprise by linking its organizational unit. Enterprise structure design is a
fundamental process in a SAP implementation project. The design is mainly determined by the
business scenarios performed in an enterprise. Once the design is determined, it will affect many
things such as how to perform a transaction and generate reports on SAP system. Although it’s
possible, it requires great effort to change the enterprise structure. So , we must ensure that the
enterprise structure designed in the SAP implementation project can accommodate all business
scenarios and enterprise’s requirements for current and future situation.

Shortly:

Client: Company is nothing but it is a client to whom we are going to implement SAP. It is represent a
corporate Group. It is highest org unit in Enterprise structure.

Company code: Independent accounting unit.

Sales Are: It is the combination of Sales Org, Distribution channel & Division.

Sales Org: Selling goods and services, where sales negotiation can happen

Distribution channel: A distribution channel is a channel through which materials or services reach to
customers.

Division: Product Group or Line Product

Sales Office: This is the Geographical representation across the country within the sales Area

Sales Group: It is represents by sales lead or sales Manager within sales Group.
Plant: Plant is decided on the basis of factory and warehouse. Where we manufacture or kept goods
and services.

Storage Location: It is sub division of Plant, Storage is for the stock in Plant.Plant can have many
storage Locations.

Shipping Point: It is independent org unit and it is the place for departure or receiving point for
products. The deliveries Inbound/Outbound should can takes place from single shipping point.

Organization structure: An organizational structure defines how activities such as task

allocation, coordination and supervision are directed toward the achievement of organizational
aims.[1] Organizations need to be efficient, flexible, innovative and caring in order to achieve a
sustainable competitive advantage.[2] Organizational structure can also be considered as the
viewing glass or perspective through which individuals see their organization and its
environment.[3]
Organization: A organized group of people with particular purpose, such as Business or Government
Department

Structure: Structure is an arrangement and organization of interrelated elements in a material

object or system, or the object or system so organized. shape design etc.