BUSINESS PROCESS

INTEGRATION AND
ENTERPRISE RESOURCE
PLANNING SYSTEMS
OPER8030
CHAPTER 5 – THE FULFILLMENT PROCESS
A BASIC FULFILLMENT PROCESS

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SALES ORGANIZATION

• Responsible for
• Distributing goods and services
• Negotiating sales conditions
• Product liability and rights of recourse
• Used to divide the market based on geographic regions
• Highest level of aggregation in sales-related reporting
• A company code must have at least one sales organization

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GBI SALES ORGANIZATIONS

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DISTRIBUTION CHANNEL

• Responsible for getting materials to customers

• Used to
• Differentiate distribution strategies or approaches
• Different pricing, responsibilities
• Wholesale sales, retail sales, Internet sales
• Statistics and reporting at the DC level

• A sales organization must have at least one distribution channel

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GBI US DISTRIBUTION CHANNELS

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DIVISION
• Used to consolidate materials with similar characteristics
• Different sales strategies, pricing agreements
• Statistics and reporting at the DC level
• Associated with product lines
• A sales organization must have at least one division
• Can be assigned to multiple sales organizations

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GBI US DIVISIONS

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SHIPPING POINT

• A physical location from which outbound deliveries are sent

• Loading dock
• Mail room
• Rail depot
• Group of employees (to handle expedited orders)

• A plant must have at least one shipping point

• A shipping point can be assigned to many plants

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SHARED SHIPPING POINTS

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MULTIPLE SHIPPING POINTS

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SHIPPING POINT EXAMPLE

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SHIPPING POINT EXAMPLE

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SHIPPING POINT EXAMPLE

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CREDIT CONTROL AREA

• Responsible for customer credit

• Centralized
• One credit control area for all company codes in the enterprise
• All customers in all company codes are managed by one credit control area
• Decentralized
• More than one credit control area in the enterprise
• Each credit control area manages credit for one or more company codes

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MATERIAL MASTER DATA

• Basic Data
• Sales: Sales Organization
• Includes data specific to a combination of sales organization and distribution channels
• Examples include: delivering plant, sales units (unit of measure), minimum quantities (order,
delivery)

• Sales: General/Plant
• Includes data specific to a plant
• Examples include: handling requirements (refrigeration), loading (hand cart, forklift)

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CUSTOMER MASTER DATA

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

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SEGMENTS OF CUSTOMER MASTER
DATA

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CUSTOMER MASTER DATA

• General data
• Account number
• Address
• Communication
• Company code data (FI)
• Reconciliation account
• Payment terms

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CUSTOMER MASTER DATA

• Sales Area data (Sales)

• Sales related
• Sales area, pricing, currency
• Shipping
• Delivering plant, priorities, methods, tolerances, partial delivery
• Billing
• Terms, tax-related,
• Partner functions: multiple roles
• Sold-to-party, ship-to-party, bill-to-party, payer

• A customer can be served by multiple sales areas

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PRICING CONDITIONS

• Prices
• Material price
• Customer specific price
• Freight
• InCoTerms
• Surcharges and discounts
• For customer, material, or combination
• Taxes

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OUTPUT CONDITIONS

• Sent to customers using a variety of media

• Examples of output
• Quotation, order confirmation, invoices
• Media
• Mail, fax, EDI
• Master data includes
• Output type, medium, time (immediate or later), partner function

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FULFILLMENT PROCESS STEPS

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PRE-SALES ACTIVITY

• CRM light – establishing and maintaining customer relationships

• Activities include
• Creating and tracking customer contacts
• Mailing campaigns
• Responding to customer inquiries and request for quotation
• Quotations
• Outline agreements
• Contracts
• Scheduling agreements

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ELEMENTS OF THE PRE-SALES
ACTIVITY

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DATA IN A QUOTATION

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ELEMENTS OF A SALES ORDER

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DATA IN A SALES ORDER

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BACKWARD SCHEDULING

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INVENTORY SOURCING

• Transfer of requirements (materials management / materials planning)

• From stock
• Materials management
• Internal procurement
• In-house production process
• External procurement
• Procurement process

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SHIPPING

• Create outbound deliveries

• Picking (optional)
• Packing (optional)
• Transfer requirement (if WM is enabled)
• Post goods issue

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ELEMENTS OF THE SHIPPING STEP

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DATA IN A DELIVERY DOCUMENT

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DELIVERIES

• One order >> multiple deliveries

• Multiple orders >> one delivery
• Constraints?
• Same customer
• Same shipping point
• Same delivery date
• Same ship-to-address

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IMPACT OF POST GOODS ISSUE

• A material document is created

• GL accounts - Stock accounts and cost of goods sold account - are updated, and
an accounting document is created
• A controlling document is created
• Fulfillment provides COGS data to profitability analysis in controlling

• The billing due list is updated

• Sales documents are updated (status)

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OUTCOMES OF SHIPPING (GOODS
ISSUE)

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FI IMPACT OF THE SHIPPING STEP

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BILLING

• Create invoices
• Create credit and debit memos
• Many deliveries >> one billing document
• Same payer, billing date and destination country
• One delivery >> many billing documents

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ELEMENTS OF THE BILLING STEP

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DATA IN A BILLING DOCUMENT

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IMPACTS OF A BILLING DOCUMENT

• GL accounts are updated and an FI document is created

• Customer account > AR reconciliation account
• Sales revenue account
• A controlling document is created
• Fulfillment provides revenue data to the profitability analysis process
• Sales documents are updated (status)

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OUTCOMES OF THE BILLING STEP

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FI IMPACT OF THE BILLING STEP

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PAYMENT

• Post incoming payment

• GL accounts are updated and an FI document is created
• Cash/Bank account
• Customer account -> AR reconciliation account

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ELEMENTS OF THE PAYMENT STEP

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DATA IN A PAYMENT DOCUMENT

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FI IMPACT OF THE PAYMENT STEP

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CUSTOMER PAYMENT WITH DISCOUNT

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PROCESSING CUSTOMER PAYMENT

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 CREDIT MANAGEMENT PROCESS
• Used to determine if credit should be granted to a customer (i.e., should
process continue?)
• Credit is checked when:
• Sales order is created or changed
• Delivery is created or changed
• Post goods issue
• Approval based on
• Credit exposure = sum of open orders, deliveries, open invoices, and current order value
• Outcomes: warn & continue, error & terminate, block delivery

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CREDIT MANAGEMENT PROCESS

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INTEGRATION WITH OTHER
PROCESSES

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REPORTING

• General SAP reporting options

• Online lists
• Work lists
• Analytics
• Fulfillment specific reporting options
• Document flow

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EXAMPLE OF STANDARD ANALYSIS

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