Understanding Sales Functions

The plant plays a central role in sales and distribution processes. As a result, it is already relevant during the creation of sales orders. Among other things, the plant is relevant for the following functions:

• Tax determination
• Availability check
• Determination of the shipping point that will be responsible for delivery of the order

Because the delivering plant is of vital importance to the whole process, when sales orders are created, the system automatically attempts to determine the correct plant (at the sales order item level) from the master data.

The figure, Plant Determination, shows the possible sources that can be used to determine the plant automatically from master data. It also shows the corresponding search sequence. You can change the value of an automatically-determined plant manually in the sales order.

If no valid plant can be found in the master data records (for example, because the field is not maintained there), no delivering plant is set in the sales order item. This means that the specific functions mentioned above (for example, tax determination) cannot be performed, and the document is incomplete.

The shipping point is the organizational unit that is responsible for shipping processing. If you sell physical products that must be delivered to the customer, when a sales order is created, the appropriate shipping point is automatically determined for each order item.

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The following diagram summarizes the shipping point determination logic.

Determination of the correct shipping point is critical, as the following functions are dependent on it:

• Delivery scheduling
• Route determination
• Delivery creation

From an organizational point of view, shipping points are assigned to delivering plants. The figure, Shipping Point Determination, shows the criteria that are used to determine the correct shipping point for each sales order item.

The loading group can be found on the Sales: General/Plant Data tab in the material master record. The shipping conditions is determined from the business partner master record (Shipping tab) of either the sold-to party or the ship-to party (depending on the Customizing of the sales order type). The plant is determined in the sales order from master data entries as previously indicated.

If no corresponding delivery document already exists, you can manually change the value of the automatically determined shipping point in the sales order.

The route describes the journey a delivery takes from a shipping point to the region of the customer's location. The route can comprise one or more stages and legs, as shown in the figure, Route Structure.

Route is used in several transportation planning functions, including transportation scheduling. To influence transportation scheduling, the route is the source of the following values:

• Transit time: the amount of time the goods are in transit to the customer
• Transportation lead time: the amount of time needed to organize the means of transport

Route determination is performed automatically for each delivery-relevant item in the sales order.

The figure, Route Determination, shows the different criteria used to determine a route for shipping in sales documents.

The departure zone is taken from the Customizing table for shipping points. The shipping condition is determined from the business partner master record (Shipping tab) of either the sold-to party or the ship-to party (depending on the Customizing of the sales order type). The transportation group can be found in the material master data (Sales: General/Plant Data tab). The transportation zone is taken from the business partner master record of the ship-to party (general data).

The route can be redetermined (if required) in the delivery document.

Using delivery and transportation scheduling, the system can check, in a sales document, whether a customer's requested delivery date can be met. To check delivery dates, several time components are taken into account as shown in the figure, Delivery and Transportation Scheduling: Components.

If the necessary time components are available, the system can use two kinds of scheduling (backward and forward) to calculate the following dates:

• Material availability date: When the required quantity of goods must be available for picking and packing

• Transportation planning date: When transportation planning should begin

• Loading date: When the loading should begin

• Goods issue date: When the goods must leave the delivering plant so that they reach the customer on time

• Delivery date: When the goods arrive at the customer

  In backward scheduling, the customer's requested delivery date is assumed to be the relevant delivery date. In forward scheduling, the delivery date is calculated.

Backward scheduling is the first type of scheduling performed for a sales order item. The figure, Backward Scheduling, shows the concept of backward scheduling.

The system uses backward scheduling to check whether the customer's requested delivery date can be met. Starting with the requested delivery date, the system calculates the other relevant dates (such as the goods issue date and material availability date) by working backwards in time using the available lead times.

During backward scheduling, the system recognizes that the processes of picking and packing and transportation planning can be performed in parallel. The calculated material availability date and transportation planning date are of special importance as, depending on how these two dates compare to the order creation date, there are the following possibilities:

• After the order creation date

  If both dates occur on or after the order creation date (that is, today or in the future) and the material is available on the material availability date, the customer's requested delivery date can be confirmed. A corresponding confirmed schedule line is created for the sales order item. This schedule line shows that the confirmed delivery date is the same as the customer's requested delivery date.

  The corresponding outbound delivery must be created on the earlier of the two following dates: material availability date and transportation planning date.

• Before the order creation date

  If one or both of these two dates occur before the order creation date (that is, in the past), the customer's requested delivery date cannot be confirmed. In this case, the first schedule line of the corresponding item is not confirmed. The system can then attempt to determine a confirmable delivery date using forward scheduling.

During forward scheduling, the system again recognizes that the processes of picking and packing and transportation planning can be performed in parallel. First the system identifies the earliest date when the material is available in the warehouse, and defines this as the new material availability date. The pick and pack time is added to that date. Then the system adds the transportation lead time to the order creation date. The later of the calculated dates is the new loading date, to which the loading time can be added to determine the goods issue date. The transit time is added to establish a confirmable delivery date. The figure, Forward Scheduling, shows the concept of forward scheduling.

If the full quantity of the ordered material can be confirmed for the calculated new material availability date, two schedule lines are generated for the corresponding sales order item:

• The date of the first schedule line corresponds to the customer's requested delivery date and has no confirmed quantity.
• The date of the second schedule line shows the confirmed delivery date and confirmed quantity.

If the full quantity of the ordered material cannot be confirmed for a single date and partial deliveries are necessary, the system creates further schedule lines for the corresponding additional delivery dates.

When you create an order, you need information about the available quantity of the ordered materials. Without this information, you cannot confirm a sales order with certainty.

You can influence the scope of the availability check within the material master data. You can do this because you have different availability check requirements for different materials. On the material master record on the Sales: General/Plant Data tab, select the Availability check field to determine whether and how the availability check is performed for a material during order processing.

There are also various settings in Customizing control tables that influence the nature of the availability check. The material availability check can be executed using different strategies (for example, using product allocations). The most important strategy is Available To Promise (ATP).

Using delivery and transportation scheduling, and calculating backwards from the customer's requested delivery date, the system calculates several dates for each item in the sales order. The relevant date for the availability check is the material availability date. On this date, sufficient material must be available in stock to meet the confirmed customer delivery date.

The material availability check in sales orders is performed at the plant level for the corresponding item. The plant can be determined automatically or maintained manually. During automatic determination, the system looks for a valid default value for the plant in the relevant master data. If you enter the delivering plant manually during order processing, your entry overwrites the default value.

You can influence the scope of the availability check with entries in certain customizing control tables. Among other things, you can configure the information that is included in the availability check.

You define the following information that is taken into account:

• Types of stock - for example, safety stock, stock in transfer, or stock in quality inspection
• Inward movements - for example, purchase orders or production orders
• Outward movements - for example, sales orders, deliveries, reservations from materials management

When a customer orders a material (or materials) and a sales order is created, the supply of the corresponding material quantities must be ensured. To achieve this, the material requirements arising from the material quantities in sales order items are automatically transferred and made available for Material Requirements Planning (MRP). This process is known as the Transfer of Requirements (TOR).

Based on this information, the responsible employee(s) can decide, depending on master data settings, how to obtain the material. It may be obtained through external procurement using purchase orders, or alternatively through in-house production using production orders.