SAP Sales and Distribution or as shortly called, SAP SD, is a central part of the SAP ECC (ERP Central Component) that basically helps companies to stock and regulate data related to both their consumers and their products. This data, in turn, helps the companies in handling every function related to sales- from ordering to shipping to billing and invoicing of their products and services. As a component of the logistic functions of SAP ECC, it combines with other modules including Plant Maintenance, Production Planning, Finance and Controlling, Human Resource and Quality Management.
Key Components of SAP Sales and Distribution:
The fundamental components of SAP SD module include:
- Sales Support
- Master Data (of both the customers and the vendors)
- Transporting the goods
- Billing and invoicing system
- Shipping of materials
- Finance handling
- Management of contracts
- Foreign trade functionality
Types of Data in SAP SD:
Like every other SAP ECC modules, SAP SD is mostly centred on the master data which is kept in centralised master data tables. In SD the types of master data include data related to consumers, price and materials. In ECC overall, there are two other types of data that exist, namely transactional data and customizing data. The transactional data is created from the master data- hence creating, for example, sales orders in SD or purchase order in MM. On the other hand, customizing data is created only when a business decides to customize SD to serve its particular and unique needs.
The Sub-modules of SAP SD:
Each of various functions of the SAP SD module is handled by a sub-module present under it. These include:
- SD Master Data (SD-MD) which keeps a track of every single transaction that can influence the data of the module, including customer data, price condition records and credit management.
- SD Basic Functions (SD-BF) is the sub-module that establishes basic functions across the whole module including pricing, tracking product availability and handling credit.
- SD Sales (SD-SLS) is that sub-module that works with the data involved in the sales process including customer data and feedback.
- SD Shipping (SD-SHP) allows businesses to track the whole shipping process including the time and type of commute involved in the delivery process.
- SD Transportation (SD-TBA) is a sub-module that works hand in hand with the SD SHP sub module and tracks the data involved in the whole shipment process.
- SD Foreign Trade (SD-FTT) keeps record of all the foreign trade transactions, both imports and exports.
- SD Billing (SD-BIL) handles all types of data related to billing, from the amount of the transactions to the payment methods.
- SD Sales Support (SD-CAS) tracks and manages all the data that is gendered from the interactions between consumers and the sales representatives of the company.
The Organizational Structure of SAP SD:
The organizational structure of SAP SD is mainly divided into two primary parts-
- Generating organizational elements in the module
- Linking those elements as the need arises
Sales organization is the top priority of this organizational structure that handles the distribution of the product or service that a business is offering. Ideally, the number of sales organization in an organizational structure should be one, as minimum number of sales organization means better efficiency of the reporting process. Next comes the channel of distribution, which tracks how the goods and services are reaching the end users.
A sales area, or entity is needed to handle any order at an organization and it is constituted by sales organization, channel of distribution and a division. In the SAP SD organizational structure a company code is attributed to every single sales organization. Then the channels of distribution and divisions are allocated to these sales organizations and the total system comes together to form a sales area.
The SAP Sales and Distribution Cycle:
The SAP Sales and Distribution cycle consists of the following functions:
- Raising sales orders
- Availability check
- Outbound delivery
- Product pick-up
- Issuing the products
- Payment processing
Working along with other modules the SAP SD module allows a business cycle process of order-to-cash pattern. The SD module tackles the whole of sales and distribution portion of this cycle. In a generic pattern, SD would produce a sales quote and then a customer would place their order. Then, the products are picked up from the warehouse or the manufacturing bodies and sent to the customer. The shipped package also usually has the invoice attached to it and the payments are settled with the consumer through the accounts receivable. Each of these steps create transactions in the SAP SD module which in turn creates more transactions in all the other associated ECC modules.
The key characteristics of SAP SD:
- It deals with the implementation of business processes that are involved in selling and billing of products and services
- It incorporates the data flow of the other modules of SAP ECC
- A user can access SAP SD in multiple languages. Automatic conversion between currencies is made more effective by the connection to SAP’s real-time currency rate database in Germany.
- It enables a comprehensive system of reporting by allowing data to be stock, merge and reported upon by the user in different formats.