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Optimizing Business Processes Using SAP Sales and Distribution

Today’s business environment is fast moving and ever changing, one which enterprises are constantly in a state of flux and must adapt quickly and evolve in order to gain a competitive advantage. The new economy is defined by global competition, widespread change, more rapid flow of information and communication, increasing business complexity, and continual globalization. Enterprises business processes must be defined by one which is efficient and creates value through maximizing resources, productivity and profitability. As an enterprise you must equip yourself with the necessary tools to meet the demands of the modern business world and be competitive in the marketplace. Many companies meet these demands by using SAP to optimize their business processes.

SAP is a business solution comprised of many different modules equipped to meet your enterprises needs. SAP Sales and Distribution is designed to streamline and optimize your sales processes. It coordinates all resources, information, and activities that are needed to complete core business processes within sales and distribution; from quotations, to sales order, and finally billing the customer. Using SAP SD data flow is more efficient, and the information is consistent, reliable, and accessible. If software cannot grow with the needs and requirements of a company, the company will find itself very restricted. SAP is flexible and is designed to support and evolve with any business process. Each implementation is unique and is customized to the client’s needs and their processes. Using SAP SD will increase efficiency, improve productivity, and optimize profitability. Some basic functional features in the SD module are: – Pricing – Shipping – Availability Check – Billing – Customer Master Data – Tax Determination – Material Master Data – Account Determination -Material Determination -Transportation Planning

Organizational units in SD represent the structure of an enterprise organization. SD uses a range of organizational units designed exclusively for mapping sales and distribution processes, such as sales organization, distribution channel and division. The organizational structure is designed to meet legal and business requirements of your company. These are clearly defined flexible units designed to simplify and make explicit even the most complex global company structures.

Master records play a significant role in the sales process. A master record is permanent record that contains key information about a business partner or a material. When an order is placed information is accessed from both the customer and material master records. In SAP SD information is uniquely defined within deferent sales organizational units which allows you to sell the same product worldwide but with different master data, pricing, currencies, and conditions supporting the individual countries requirements for sales. SD enables companies to fulfill orders from all channels on time through optimized manufacturing, warehousing and transportation processes. This includes transportation planning, execution and tracking of individual shipments using real time global availability checks. Order management with SAP SD gives you the tools to complete your sales cycle with transparency, from the creation of quotations, sales orders and billing. Billing represents the final stage in the Sales and Distribution process. Information on billing is available with preceding documents connecting it at every stage of the order and delivery process.

Think of the sales processes in your enterprise at the moment. An order is placed to one of your sales agents. How often will this order be entered into various systems during the sales process; from sales, to the warehouse, to shipping, to accounting? How long will it take for your agent complete all the customer information in the order? Can your accounting department quickly find in the system if the order has left the warehouse and whether to issue an invoice? This is not only time consuming but it also creates the opportunity for errors. With SAP SD, the process and master records are predefined and the person creating the order is asked for only a minimum amount of information. Order information is entered only once and is then updated throughout the sales process and available to all relative departments. Whatever your business process may be, from the initial order to invoicing can be automated. To achieve this you can use scheduling of tasks and collective processing of documents. Likewise you can place checks and balances on certain tasks to be approved or reviewed before processing. Current and complete information in any phase of the process is easily accessible. The document flow feature shows a sales document and all subsequent documents relating to it. This shows clear relations between documents in a proceeding sequence, so if there is a mistake it can easily be found and corrected.

Consider this same sales order that has been placed. How does the agent know if the material the customer is ordering is actually available and how long will it take to arrive? If the material is not available, the SD system interacts with the materials management or production planning module and uses scheduling to automatically propose an availability date. Whether this material is procured or produced all factors are considered in accordance with duration when an availability date is proposed. If the material is available, a delivery date is automatically proposed. The delivery date takes into account processing time within the warehouse before the goods are shipped, and takes into account shipping time based on type of transportation and route. Special instructions or requirements may also exist for the customer such as handling instructions, method of loading, packing, type of transport, shipping point, route, payment conditions, or delivery instructions. These are automatically taken from the material and customer master records and can vary for the same customer in different sales organizational units and for different materials.

All processes in business are connected and overlap with each other. SAP Sales and Distribution is no different and integrates with a variety of other business areas. Key integration modules with Sales and Distribution are Financials, Materials Management, and Production Planning. For example, during the billing process in Sales and Distribution by creating an invoice, the system will create correlating accounting documents and post it to the necessary accounts automatically. In materials management, to control inventory a purchase requisition can be automatically created when a material ordered reduces the stock below a specified threshold. When a material is not in stock an availability date will be proposed based on production planning, and the production process of the material will begin. Statistics are gathered and reports are created based on sales information and are available to your marketing department for analysis. Key information is passed to your CRM solution and sales representatives allowing you to establish relationships with and maximize effectiveness with every customer interaction. The integration of other business areas and SD interacts seamlessly and is automated distributing the right information, through the right channels, to the right segments with real time updates.

SAP Sales and Distribution will give your enterprise the tools to compete in today’s global marketplace. By optimizing business processes SAP Sales and Distribution increases efficiency, improves productivity, and maximizes profitability. SAP SD does not limit you but is adequately flexible to support any process enabling it to evolve and grow with the needs of your company. Interaction between modules in other business areas provides you with a seamless and transparent processes and flow of information. In any company people are your most valuable asset. Not only does SD streamline your business processes but also empowers your team by giving them rapid access to information. Giving your people the resources they need to do their work effectively and efficiently will have a profound impact and greatly benefit your organization.

Author:

Brandon Martinovic
SAP Logistics Consultant