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Explaining Processes in Sales and Distribution

Objective

After completing this lesson, you will be able to explain the processes in sales and distribution, define dependencies depending on sales document category or type.

Processes in Distribution

Business Process Integration

The following figure gives you an overview of a possible make to order process.

Flowchart depicting the steps of integration logistic chain from sales inquiry to shipping, including steps like order processing, demand planning, and production procurement. The chart highlights key activities such as configuration, MRP, production order, and billing.

There's usually a quotation phase involved in the make-to-order business process.

Variant configuration can be used within the quotation phase.

Order BOMs can be used for the make-to-order quotations to create a technically complete product structure, which can be used as the basis for product costing and pricing.

In addition to the processes in Sales and Distribution, material requirements planning and production also work with an availability check.

Material requirements can be planned only after the quotation has been converted to a sales order.

Subordinate assemblies, components, and raw materials may be preplanned and already available or not planned (direct production).

If the direct production method is used, collective orders may also be used to simplify the production and costing processes.

Finally, all related production orders are settled.

Process Overview

The following video gives you an overview of a possible sales process. A quotation and order is used.

Quotation

Flowchart showing a quotation process. It includes elements like order type, item details, and dependencies with arrows indicating the sequence.

The quotation must be complete. Otherwise, you cannot create orders with reference to the quotation.

The quotation must not generate requirements. See the following slides for more information.

You can run pricing in a quotation. You can use the sales order costing function to do this.

You can also maintain order BOMs and order task lists in the quotation. You could then use them for sales order costing.

Sales order costing can run in either unit costing or product costing. In unit costing, you can use the result of product costing and other manually created costing elements.

Create Order

The following video explains the creation of a Sales Order based on a Quotation.

Processes in SD: Handover Requirements

This figure gives you the right information for checking the requirements transfer inside customizing.

Flowchart showing requirements type determination according to material and sales, with pathways influencing transfer to orders or quotations. Includes elements like strategy groups, item categories, and control sources with conditions for requirements transfer.

How to Check the Transfer of Requirements

The following simulation gives you a detailed information on all necessary steps to be done inside customizing.

ExerciseStart Exercise

Processes in SD: Strategies — Requirement Types — Requirement Classes

The following figure explain some strategies with their customer requirement types and requirement classes, their planning requirement types and requirement classes.

A table displays strategies linked to customer and planning requirements for different assembly order processes, including production and variant planning. Key columns include strategy, requirement type, and class.

Requirements class 103: Planning without final assembly contains the following settings:

Planning indicator	3 = Single item planing
Consumption indicator	2 = Consumption planning without final assembly
Configuration allowed /Required	-
Configuration consumption	-
Requirements reduction indicator	- = No reduction of independent requirements (only for sales order issue)
Requirements type	1 = Planned independent requirements

Requirements class 105: Assembly planning contains the following settings:

Planning indicator	1= Net requirements planning
Consumption indicator	1= Consumption planning with final assembly
Configuration allowed /Required	-
Configuration consumption	-
Requirements reduction indicator	- = No reduction of independent requirements (only for sales order issue)
Requirements type	1 = Planned independent requirements

Screenshot showing the settings of requirement classes in customizing.

You use requirement types to identify different requirements (for example, order requirement, delivery requirement, or individual customer requirement). One requirements class is assigned to each requirements type.

A requirements class controls all functions in logistics that are relevant to requirements. The requirements class defines the following sales-relevant points:

Whether there's an availability check and requirements transfer for a transaction
Whether the requirement is relevant to MRP
The assignment indicator from the sales side that controls how customer requirements
Whether an item is to be posted to auxiliary account assignment

Reqmts class	46	200	201	202	212	43	42
Availablilty	X	X	X	X	X
Transfer of Reqmts	X	X	X	X	X	X	X
Allocation indicator						Planning without assembly	Planning without assembly
Configuration	Required	Optional		Optional	Optional	Required	Required
Cons. confble matl.						Chars planning	Chars planning
Assembly type		4 = planning order	2= production order	2 = Network	2 = Network
Order type			PP04	PS04	PS04

Schedule Line and Item Categories

Watch the following video, and listen to the explanation of schedule line categories.

Standard settings:

Character 1 = (A Inquiry, B Quotation, C Order, D Returns).

Character 2 = (T No inventory management, N No MRP, P Deterministic MRP, V ,X ).

Schedule line category	CP = Deterministic MRP	CN =No MRP	CT = No inventory management, no GI
Item is relevant for delivery	X	X	X
Movement Type	601	601
Incompletion procedure	30	30	31
Require /Assembly	X
Availability check	X
Product allocation active	X

Watch the following video, and listen to the explanation of item categories of sales documents defined inside customizing.

item category	TAC = variant configuration	TAM	TAE	TAN
Sched. Line allowed	X	X	X	X
Billing Relevance	A = delivery related billing document	A		A
Pricing	X = yes, pricing standard			X
Configuration Strategy	01	01
Variant Matching	X
Mat. Variant Action	1 = note — only in append
ATP material
Structure scope	D	D
Application		SD01

Pricing Types in SD

Watch the following video, and understand the pricing derived from costing.

Please note:

Multilevel pricing is not possible.
The characteristics of lower-level assemblies do not affect pricing.
Changes made in order BOM maintenance do not affect pricing (exception – indirectly via product costing).
Product costing for an item is carried out from the sales order (on the basis of the BOM and task list).

The following video gives you an explanation on the relevant settings for costing and pricing.

How to Perform Product Costing

The following simulation shows you the display of stock requirements list, the analysis of item conditions, and a recosting.

ExerciseStart Exercise

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