Sales and Distribution Q & A : Corporate Structure

  1. In R/3 you can represent a company’s structure by defining and assigning corporate structure elements. What is the purpose of doing that?
    Enterprise organization diagram. Chart showing the organizational structure of an enterprise, its organization units and how they are related. A combined structure can be created from the point of view of accounting, MM, SD. This structure forms a framework in which all business transactions can be processed.
  2. Which three organizational elements make up a sales area and briefly explain their function?
    Sales organization: An organizational unit that sells and distributes products, negotiates terms of sale, and is responsible for these transactions.
    Distribution channel: Channel through which salable materials or services reach customers. Typical distribution channels include wholesale, retail and direct sales. You can assign a distribution channel to one or more sales organizations.
    Division: Product groups can be defined for a wide-ranging spectrum of products. For every division you can make customer-specific agreements on, for example, partial deliveries, pricing and terms of payment. Within a division you can carry out statistical analyses or set up separate marketing.

  1. Name the three internal organizational elements within a sales organization and briefly explain their function.
    Sales Office. Geographical aspects of the organization in business development and sales are defined using the term sales office. A sales office can be considered as a subsidiary.
    Sales offices are assigned to sales areas. If you enter a sales order for a sales office within a certain sales area, the sales office must be assigned to that area.
    Sales Group. The staff of a sales office may be subdivided into sales groups. For example, sales groups can be defined for individual divisions.
    Salespersons. Individual personnel master records are used to manage data about salespersons. You can assign a sales person to a sales group in the personnel master record.
  2. What does the term “business area” refer to and how can it be used?
    Business Area. The system posts costs and revenue according to the business area. The business area can be equivalent to the:
    sales area (if the accounts are to be posted according to sales)
    plant/division (if the accounts are to be posted according to products)
    The business area is defined in Customizing for Sales.
    • Business area. A unit in an enterprise, grouping product and market combinations as homogeneously as possible for the purpose of developing unified business policy.
    • Financial Accounting (FI). A business area is an organizational unit within financial accounting which represents a separate area of operations or responsibilities within an organization. Financial accounting transactions can be allocated to a specific business area.
  3. Briefly explain the relationship between sales organizations and company codes.
    Many to One.
  4. What is the central organizational element in purchasing?
    Purchasing Organization.
  5. Explain the relationship between sales organizations and plants.
    Many to Many.
  6. Explain the relationship between sales organizations, plants and company codes.
    Many to Many to One.
  7. Can one business area be assigned to several company codes? Which (sub) module of SAP could make business areas obsolete?
    Yes in CO .
  8. What is a credit control area? What relationship exists between credit control areas and company codes?
    Credit control area. Organizational unit in an organization that specifies and checks credit limits for customers. A credit control area can include one or more company codes. It is not possible to assign a company code to more than one credit control areas.
  9. Which organizational element is central in shipping? Give a definition of it.
    Shipping Point: Organizational unit at a fixed location that carries out shipping activities. A shipping point could, for example, be a company’s mail department or a plant’s rail depot. Each delivery is processed by only one shipping point.
  10. Give a definition of plant (in SAP).
    Organizational unit within Logistics, serving to subdivide an enterprise according to production, procurement, maintenance, and materials planning aspects.
    A plant is a place where either materials are produced or goods and services provided.
    Classification: Business object
    Structure: A plant can assume a variety of roles:
    As a maintenance plant, it includes the maintenance objects that are spatially located within this plant. The maintenance tasks that are to be performed are specified within a maintenance planning plant.
    As a retail or wholesale site, it makes merchandise available for distribution and sale.
    As a rule, the plant is the organizational unit for material valuation.
    The preferred shipping point for a plant is defined as the default shipping point, which depends on the shipping condition and the loading condition.
    For the placement of materials in storage (stock put-away), a storage location is assigned to a plant. The storage location depends on the storage condition and the stock placement situation.
    The business area that is responsible for a valuation area is determined as a function of the division. As a rule, a valuation area corresponds to a plant.
  11. Can you assign two different sales organization to the same company code?
    Yes.
  12. To what do you assign distribution channels and divisions?
    Sales Organizations.
  13. What are the highest organizational units in SD, MM.PP,FI,CO?
    SD: Sales Organizations.
    M: Plant
    PP: Plant
    FI: Company Code
    CO: Controlling Area
  14. Can you further subdivide a plant? If yes into what ?
    A plant can be subdivided into storage locations, allowing stocks of materials to be broken down according to predefined criteria (e.g., location and materials planning aspects).
    A plant can be subdivided into locations and operational areas. Subdivision into locations takes geographical criteria into account, whereas subdivision into operational areas reflects responsibilities for production.
  15. Can a sales organization sell from a plant belonging to a different company code?
    Yes.
  16. How many shipping points can you assign to a plant?
    Many.
  17. How many shipping points can you assign to a sales organization?
    None.
  18. If you have a warehouse management system active, to what would you assign the warehouse number?
    Plant & Storage Location.
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