How to create SAP SD Enterprise Structure in simple steps

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This SAP SD Tutorial we will explains about SAP SD organizational structure. After following the tutorial, you will learn how to model enterprise structure in SAP SD (Sales and Distribution) module of SAP ERP. Knowledge of SAP SD organizational structure is fundamental for analysts and consultants that specialize in SAP SD, and here you will learn about each of the SD Enterprise Structure.

Understanding SAP SD organizational arrangement is essential for analysts and consultants that focus on SAP SD & we’ll learn about all of the SD Enterprise Structure. I’ll learn how to portray the specific organizational structure of business in the R/3 System & this will help build company structure; different Accounting, Logistics, and Human Resources organization units are provided.

The thumb rule is first to analyze the structures and business procedures for the company and then match them to the SAP structures. In the standard version, there are different organizational elements defined. Normally these would not cover all your needs. Extend the elements as required.

During the implementation stage, work with the structures delivered by SAP. To obtain a high degree of identification and acceptance from project members and user departments from the start, you may have to change some of SAP’s terminology based on business requirements. 

Sales organizations can be used to subdivide the market by region. In legal terms, the sales organization is a sales unit. It is responsible for product responsibility, customer complaints, and sales terms (pricing, payment terms). When performing any SD business transactions, a sales organization needs to be specified.

enterprise structure in SAP SD
enterprise structure in SAP SD

What is Sales Organization in SAP SD

Sales Organization

Sales Organization stands for The legal selling unit responsible for negotiating the terms of a contract, product liability, and addressing consumer complaints. Often represents a geographic subdivision of a sector.

  •  Sales Organization assigned to only one company code.
  • Exactly one company code is assigned to a sales organization.
  • One or more plants are assigned to a sales organization

What are the functions of sales Organisation?

It’s the highest level of an organizational unit in SD, responsible for selling certain products or services. Legal responsibility for products and customer claims may be the responsibility of a sales organization. The sales organization, for example, has its master data, customer and material master data, and conditions.

How do you create a sales organization in SAP?

SAP Customizing Implementation Guide Enterprise Structure Definition Sales and Distribution Define, copy, delete, check sales organization Sales Organization

Define sales organization in sap sd
Define sales organization in sap sd
  • A  two character alphanumeric key and a description.
  • A distribution channel does not have its own address.
  • You cannot allocate your own employees to a distribution channel.
  • One  distribution channel can be allocated to one or more sales organization.
  • One or more plants can be allocated  to a distribution channel.
    • Distribution Channels can be set up according to the company’s market strategy or internal Org.
    • In addition, you can modify the master information for each sales organisation and distribution channel, such as customer master data, sales master data and prices and additional / discounts.For a distribution channel, you can determine your own sales document types.
  • Typical examples of distribution channels are:
    •  wholesale,

What is distribution channel in sap

Distribution channel

A distribution channel represents the way you spread your goods into the market. It may be retail, retail, or OEM, for example. In other words, a distribution channel is a grouping of Various distribution methods a company uses to distribute products to its Clients.

Several distribution channels might be used inside the SD module. Some common causes of supply channels are retail, retail, or direct earnings (i.e., the producer sells directly to the client ). It’s Potential for a client within a specified sales organization to use multiple distribution channels. Distribution methods that the sales organization will use to distribute products and services to its customers. Distribution channels are available across the sales organizations. Tis means you can assign the same distribution channel to multiple sales organizations

  • Distribution Channel represents the method to market.
  • Assigned to sales organizations.
Enterprise Structure
Enterprise Structure

What is the purpose of the distribution channel?

Every combination of the sales organization and distribution channel will have different master data in SAP. This could lead to changes in pricing, standard order, distribution amounts, or the delivery of plants, for example. Cross-company distribution networks are possible.

  • To provide the best possible service, we can utilize different distribution channels in S&D.
  • Distribution channels provide a general distribution structure. Typical examples of distribution channels are wholesale trade, sales to industrial customers, or direct sales from the facility.
  • One or more distribution channels in a sales organization can be supplied to customers.
  • You can define your master data for customers or materials and your pricing and pricing through a distribution channel.

How do you create a distribution channel in SAP?

Configuring a distribution channel is a two-step activity

SAP Customizing Implementation Guide Enterprise Structure Definition Sales and DistributionDefine, copy, delete, check distribution channel.

Distribution channel in sap
Distribution channel in sap
  • A  two character alphanumeric key and a description.
  • A distribution channel does not have its own address.
  • You cannot allocate your own employees to a distribution channel.
  • One distribution channel can be allocated to one or more sales organization.
  • One or more plants can be allocated  to a distribution channel.
  • Distribution Channels can be set up according to the company’s market strategy or internal Org.
  •  You can also change the master data for sales, such as customer master data, sales master data, prices and surcharges/discounts for each Sales Organization and Distribution Channel
  • For a distribution channel, you can determine your own sales document types.Typical examples of distribution channels are:
    •  Wholesale
    •  Retail
    • Direct sales.

What is Division in sap

Division

Division in SAP denotes the product division which exists in client business. It’s a means to group similar product or product lines in SAP. When we produce a material master record in SAP,  we can make it to get a Division specific.

Division is a cross-application component within Logistics. Division is a cross-application component within Logistics. It also serves as a connection point for the MM, PP, and SD applications. We use divisions to establish a distribution area in SD, but MM and PP consultants are usually in charge of deciding the product divisions need to be set up. Before creating a division in SAP SD, make sure to collaborate closely with your MM and PP counterparts.

  • Represents a product line.
  • Assigned to sales organizations.
  • A division can be allocated to one or more sales organizations.
  • A division can be allocated to one or more distribution channels.
  • The area for the material is determined via the plant and the division defined in the material master record.

What is the purpose of the Division?

  • The company is referred to as divisions as a broad range of products.
  • Only one division shall always be allocated to the material.
  • For each combination of sales organization and division there is a reference division for master data and sales document types. This also allows data to be used in the original section in the reference section

How do you create a division in SAP?

Enterprise Structure Definition Logistics -General Define, copy, delete, check divisionDivision.

  • How products or services reach the client.
  • A two-digit alphanumeric key and a description.
Division in sap sd
Define Division

What is sales area in SAP?

Sales Area

In the SD module, a sales area is the bare minimum Structure needed to process a sales transaction. It brings together the sales organization, distribution channel, and division that we’ve developed so far. Without a sales area, you can’t build a sales document or enter a customer master record in SD. We’ve only made two sales so far.

Sales area in sap
Sales area in sap

How do you create a Sales area in SAP?

Enterprise Structure Assignment Sales & Distribution Set up Sales area

Setup Sales area
Setup Sales area

What is Shipping points in SAP?

Shipping points

Shipping points are self-contained organization structures that handle the collection and control of deliveries as well as the distribution of products. Just one loading point processes a shipment.

  • A location or group of employees who process a deliveries.
  • Can further sub-divided into loading points.
  • Shipping points are assigned to plants.
  • A group of employees who organize transportation activities.

How do you create a Shipping Points in SAP?

Enterprise StructureDefinition Logistics ExecutionDefine, copy delete, check shipping points

Shipping Points in SAP
Define Shipping Points

What is Plant ?

Plant

Plant is an organizational entity central to the logistics operation. A plant could be a factory for production, a material stock, or a repair shop.. From the point of view of SAP SD, a plant can be defined as a material stock location from where you can source the delivery of goods to your customers.

  • Materials Management and MRP requires the use of plants.
  • Sales Organizations sell goods from plants.
  • Plants can be assigned to multiple sales organization and distribution channel combinations.

If a plant is assigned to a sales organization within a different company code, then the set up is for an intercompany sale.

sales organization structures
sales organization structures

How do you create a Plant in SAP?

Enterprise Structure Definition Logistics GeneralDefine Plant

Plant in sap
Define Plant

What is Storage Location in SAP

A storage location in SAP represents the location in the plant where the goods are stored. The stock is maintained at this level. When the goods are received, the stock at the storage location goes up in the quantity received, and when the goods are sold, the stock at storage location is reduced according to the quantity delivered.

How do you create a Storage Location in SAP?

We can  define the storage location using transaction code OX09 or using menu path or

IMG ➢ Enterprise Structure ➢ Definition ➢ Materials Management ➢ Maintain Storage Location.

  • A storage location is always set up with respect to a plant, and
  •  Allow for the differentiation of material stocks within a plant
 Storage Location in sap
Define Storage Location

What is Internal Organisational Units in SAP?

What is Sales office ?

Sales office

A sales office can be thought of as a subsidiary and is assigned to sales areas.we can maintain various sales-related geographical locations of client organization as sales offices. we can set up a sales office in SAP to represent a branch office or even a sales territory.

Customization screen for defining a sales office by using transaction code OVX1 or by following menu path IMG ➢ Enterprise Structure ➢Definition ➢ Sales And Distribution ➢ Maintain Sales Office. Once you are at the customization screen, click the New Entries button to open the New Entries screen,

What is Sales group ?

Sales group

In this step, you define your business sales groups. The definition of sales groups is optional.A sales group represents the staff who actually perform the sales activities. A sales group represents the grouping of your sales staff. Sales groups are assigned to sales offices. Generally, this grouping is based on areas of responsibility.

We can set up a sales group in the SAP system either by using the transaction code OVX4 or by following the menu path IMG ➢ Enterprise Structure ➢ Definition ➢ Sales And Distribution ➢ Maintain Sales Group. Once you are at the customization screen,

What is Sales Person?

Sales Person

A person who is selling products or services is a salesperson.A salesperson belongs to a sales group. Not directly assigned to other organizational units.

Sales area & Internal Organisational Units
Sales area & Internal Organisational Units

Hope this article helps you enterprise structure in SAP SD, Here are a couple of other articles that you check

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