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How to create SAP S/4HANA SD Enterprise Structure in simple steps

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 the SD Enterprise Structure. I’ll learn how to portray the specific
organizational structure of business in the SAP System & this will help build company structure; different
Accounting, Logistics, and Human Resources organization units are provided.

The thumb rule is first to analyse 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.

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.
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• One or more plants are assigned to a sale organization.

What are the functions of sales Organization?

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.

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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.

• 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
organization 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,
• retail
• direct sales

Define, copy, delete, check sales organization

In this step, you define the sales organizations in your company. In order to bring the functional scope
of a sales organization in line with your organization, you should edit the following check list:
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• Legally, a sales organization is included in exactly one company code.

• You can assign one or more plants to one sales organization.

• The sales organization has an address.

• Within a sales organization, you can define your own master data. This allows a sales
organization to have its own customer and material master data as well as its own conditions
and pricing.

• You can define your own sales document types within a sales organization.

• You assign sales offices and your own employees to a sales organization.

• All items in a sales & distribution document, that is, all items of an order, delivery or a billing
document belong to a sales organization.

• A sales organization is the highest summation level (after the organizational unit Client) for
sales statistics with their own statistics currency.

• The sales organization is used as a selection criterion for the lists of sales documents and for
the delivery and billing due list.

• For each sales organization, you can determine the printer for output differently based on
sales and billing documents.

A sales organization cannot share any master data with other sales organizations. The master data
must be created separately. The data for a distribution channel or a division can, however, be created
for several distribution channels or divisions.

Note

If you do not distinguish different sales organizations in your company, use sales organization "0001"
as a "general sales organization". Specify the value in the user master record as a parameter. The user
then will not have to make further entries.

Actions

To define a sales organization, enter a four-character alphanumeric key and a description. Enter an
address as well.

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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. This means you can assign the same
distribution channel to multiple sales organizations.

• Distribution Channel represents the method to market.

• Assigned to sales organizations.

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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

Distribution➢Define, copy, delete, check distribution channel.
Distribution channel in sap

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• 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.

Define, copy, delete, check distribution channel

In this IMG activity you define distribution channels in your company or edit distribution channels that
already exist. In order to adapt the functional scope of a distribution channel to the organization in
your company, you should process the following check list:

• You allocate a distribution channel to one or more sales organizations.

• You allocate one or more plants to a distribution channel.

• Within a distribution channel, you can define your own master data for customers or
materials as well as your own conditions and pricing.

• You can create master data for a representative distribution channel which is then also used in
other distribution channels. To do this, you have to additionally create the allocation of the
representative distribution channel to the other distribution channels.

• For a distribution channel, you can determine your own sales document types.

• You can determine sales offices for a distribution channel.

• All items of a sales document belong to a distribution channel. The entire sales document is
therefore entered for a distribution channel.

• The items of a delivery can belong to different distribution channels.

• All items of a billing document belong to a distribution channel.

• The distribution channel can be used as a selection criterion in lists.

• You can determine the printer destination for messages differently for every distribution
channel on the basis of the sales and billing documents.

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A distribution channel does not fulfill the following criteria:

• A distribution channel does not have its own address.

• You cannot allocate your own employees to a distribution channel.

You specify the representative distribution channels in the menu option "Define common distribution
channels ".

Recommendation

• Please use the sales division "01" as "general sales division" if you do not differentiate
between different sales divisions in your company.

• If you enter the value 01 as a parameter in the user master record, the user does not need to
make further specifications.

• Define the master data for a representative sales division if you do not need to differentiate
master data by sales division. The data can then be used in several sales divisions.

Activities

1. Select the type of processing:

o To define a distribution channel, specify a two character alphanumeric key and a

description.

o Copy, delete or check the settings for a distribution channel.

2. Use the project IMG view to process data that has been changed automatically.

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What is Division in sap?

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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 division➢Division.
• How products or services reach the client.
• A two-digit alphanumeric key and a description.

Define Division

Define, copy, delete, check division

In this step, you define the divisions in your company

or you edit divisions that already exist.

The division is one of the organizational units in Sales & Distribution and is also required for business
area account assignment for logistics transactions in Financial Accounting. The business area for the
material is determined via the plant and the division defined in the material master record.

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In order to adapt the functional scope of a division to the organization in your company, you should
process the following check list:

• Allocate a division to one or more sales organizations.

• Allocate a division to one or more distribution channels.

• Allocate a business area to a division from a plant. This way, business area account assignment
can be carried out for transactions in Materials Management. As of Release 3.0, the business
area is determined in Materials Management from the division and the valuation area.

• A material is always assigned to one division only. You specify the division on the first sales &
distribution screen in the material master record.

• You can define your own master data within a division for customers as well as your
own conditions and pricing.

• You can also create shared customer master data and conditions, which apply to several
divisions, using a common division.

• You can define sales offices for a division.

• You can define for each sales document type that all items of a sales document must belong
to the same division.

• The items of a delivery or a billing document can belong to different divisions.

• The division is used as a selection criterion for lists of sales documents and the work list for
deliveries.

• You can determine the printer destination for messages differently for every division on the
basis of the sales documents.

SAP Recommendation

• Please use the division "01" as a "general division" if you do not differentiate between
divisions in your company.

• If you enter the value 01 as a parameter in the user master record, the user does not need to
make further specifications.

• Define the master data for a representative division if you do not need to dinstinguish
customer master data and pricing elements by division. You can then use this data in several
divisions.

Activities

1. Select the type of processing:

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o To define a division specify a two-digit alphanumeric key and a description.

o Copy delete or check the settings for a division.

2. Use the project IMG view to edit data changed automatically.

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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.

How do you create a Sales area in SAP?

Enterprise Structure➢ Assignment ➢ Sales & Distribution ➢Set up Sales area

Setup Sales area

Set up sales area

In this step, you set up the sales areas. You can create a sales area for any combination of sales
organization, distribution channel and division.

Requirements

First you must make the following allocations for a sales organization:

• You have to allocate the distribution channels (see "Assign distribution channel - sales
organization).

• You have to allocate the divisions (see "Assign division - sales organization").

Actions

To set up sales areas, assign columns and distribution channels to sales organization.
The divisions and distribution channels that you have previously assigned to a sales organization are
proposed for selection.

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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 delivery.

• 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 Structure➢Definition ➢ Logistics Execution➢Define, copy delete, check shipping points.

Define Shipping Points

Define, copy, delete, check shipping point

Define the place or location that goods are shipped from.

Use

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You can define or edit detailed settings for shipping points that already exist. To adapt the functional
scope of a shipping point to the organization in your company, you should ensure that:

• The shipping point is the top level in the organization for shipping.

• A shipping point can be allocated to several plants.

• A shipping point can be divided into several loading points.

• A delivery is always initiated from exactly one shipping point, meaning all items of a delivery
belong to one shipping point. Groups of deliveries also belong to exactly one shipping point.

• The shipping point can be proposed automatically during order processing depending on the
plant, loading group, and shipping condition.

• A shipping point has an address.

• The shipping point is used as a selection criterion for lists of deliveries and the delivery
worklist.

• The shipping point is used as a selection criterion for processing deliveries like picking or
goods issue.

Activities

1. Select the type of processing:

o To define a shipping point, enter a four-character alphanumeric key and a description

and maintain the address.

o Copy, delete, or check the settings for a shipping point.

2. Use the project IMG view to edit data changed automatically.

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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.
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• 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.

How do you create a Plant in SAP?

Enterprise Structure➢ Definition ➢ Logistics General➢Define Plant

Define Plant

Define, copy, delete, check plant

The plant is an operating area or branch within a company.

The plant is embedded in the organizational structure as follows:

• The plant is assigned to a single company code. A company code can have several plants.

• Several storage locations in which material stocks are managed can belong to a plant.

• A single business area is assigned to a plant and to a division.

• A plant can be assigned to several combinations of sales organization and distribution

channel.

• A plant can have several shipping points. A shipping point can be assigned to several plants.

• A plant can be defined as a maintenance planning plant.

A plant has the following attributes:

• A plant has an address.

• A plant has a language.

• A plant belongs to a country.

• A plant has its own material master data. You can maintain data at plant level for the following
views on a material master record in particular: MRP, Purchasing, Storage, Work scheduling,
Production resources/tools, Forecasting, Quality management, Sales, Costing.

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The plant plays an important role in the following areas:

• material valuation

If the valuation level is the plant, the material stocks are valuated at plant level. If the
valuation level is the plant, you can define the material prices for each plant. Each plant can
have its own account determination.

• inventory management

The material stocks are managed within a plant.

• MRP

Material requirements are planned for each plant. Each plant has its own MRP data. Analyses
for materials planning can be made across plants.

• production

• costing

In costing, valuation prices are defined only within a plant.

• plant maintenance

If a plant performs plant maintenance planning tasks, it is defined as a maintenance planning

plant. A maintenance planning plant can also carry out planning tasks for other plants
(maintenance plants).

Further notes

Choose "Administer" or "Copy, delete, check plant" to work on a plant. The system changes the plant
table and all dependent Customizing and system tables where the plant occurs as a key. For more,
see Copy/Delete/Check / Edit Project IMG.

Recommendation

Plant 0001 is already preset in all dependent tables. SAP recommends that you change only the
attributes and not this number. For further settings, this enables you to access the sample entries,
considerably reducing the time required for maintenance. To create new plants, use the Extended
Copyer to make copies of Plant 0001.

Activities

1. Create your plants and their respective local data, referring closely to the reference (plant
0001) provided by SAP.
2. You can also copy, delete or check environment data.

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3. You the Project IMG view to work on the data the system has changed. The generated
project view is retained so you can do this work later.

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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.

Define Storage Location

Maintain storage location

A storage location is the place where stock is physically kept within a plant.

A storage location has the following attributes:

• There may be one or more storage locations within a plant.

• A storage location has a description and at least one address.

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• It is possible to store material data specific to a storage location.

• Stocks are managed only on a quantity basis and not on a value basis at storage location level.

• Physical inventories are carried out at storage location level.

• A storage location can be assigned to a warehouse number in the Warehouse Management

System. You can assign more than one storage location to the same warehouse number within
a plant.

• With the field Validity you can mark a record as Valid, No longer valid or Obsolete.

o An entry marked as Valid can be used to create a material in the material master.

o An entry marked as No longer valid cannot be used in the material master to create a
material.

o An entry marked as Obsolete can be used to create a material in the material master,
however, a warning is issued.

Storage locations are always created for a plant.

Activities

Maintain your storage locations.

If you have integrated the inventory management of your manufacturing execution system (MES) with
the system using the data replication framework (DRF) and message INVCON, assign the relevant
business system from the replication model to the production storage locations that are managed by
the MES. If relevant, choose the type of inventory management, in order to activate the respective
checks on goods movements to this storage location.

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What is Internal Organizational Units in SAP?

What is Sales office?

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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,

Maintain sales office

In this step, you define the sales offices in your company. The definition of sales offices is optional. You
can use the SD System without creating sales offices. In order to bring the functional scope of a sales
office into line with your organization, you should use the following check list:

• You assign a sales office to one or more sales areas.

• A sales office can be divided into several sales groups.

• You can assign colleagues to a sales office.

• A sales office has an address.

• All items in a sales document belong to a sales office.

• The items in a delivery or an invoice can belong to different sales offices.

• The sales office acts as a selection criterion for lists of sales documents.

• For each sales office, you can determine the printer for output based on the sales documents
in different ways.

A sales office is not:

• a selection field for the delivery and billing due list.

• a selection field for lists of deliveries and billing documents.

Actions

1. To define a sales office, enter the following information:

o a four-character alphanumeric key

o a description

2. Also maintain the address.

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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.

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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,

Maintain sales group

In this step, you define sales groups in your company. The definition of sales groups is optional. You
can use the SD system without creating sales groups. In order to bring the functional scope of a sales
group into line with your organization, you should use the following check list:

• You can assign a sales group to one or more sales offices.

• You can assign people to a sales group.

• A sales group is responsible for all items in a sales document.

• The items in a delivery or a billing document can belong to different sales groups.

• The sales group is a selection criterion for lists of sales documents.

• For each sales group, you can determine the printer for output differently on the basis of the
sales documents.

A sales group is not:

• a selection criterion for lists of deliveries or billing documents

• a selection criterion for the delivery or billing due list

Actions

To define a sales group, enter a three-character alphanumeric key and a description.

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Result:

Manage Sales Orders

App ID: F1873

With the Manage Sales Orders app, you can search for sales orders according to your filter criteria and
display them in a list. From the list, you can execute different actions, for example, you can reject all
items of one or more sales orders. You can also navigate to related apps, for example, to display sales
order details, or you can display the process flow.

Key Features

▪ Search for sales orders using a free text search

▪ Search for sales orders by entering a value in one or more of the filter fields

▪ Create a variant for the current filter selection and save it for later reference

Note
SAP delivers a standard filter variant.

▪ Filter the displayed sales orders by using additional criteria

▪ Hide the filter bar

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▪ Sort sales orders

Note
SAP delivers a default sort order.

▪ Hide or show columns in the list

▪ Export the list of sales orders to a spreadsheet. The list is exported as displayed, that is, your
column settings and sorting are kept.

▪ Create a sales order with detailed information in the Create Sales Orders - VA01 app

▪ Create a sales order with basic information in the Manage Sales Orders - Version 2 app

▪ Create a sales order with reference to a sales contract or a sales quotation

▪ Reject all items for up to 25 selected sales orders simultaneously. You must enter a reason for
rejection

▪ Set or remove a delivery block for up to 25 selected sales orders on header level
simultaneously

▪ Set or remove a billing block for up to 25 selected sales orders on header level simultaneously

▪ Choose a row in the list to display or change sales order details

▪ Navigate to the Customer - 360° View app

▪ Navigate to the sales order object page

▪ Navigate to the customer object page

▪ Navigate to the process flow, which provides you with a graphical overview of the chain of
connected process steps and corresponding business documents (document flow). For
example, you can see the status of a sales order, whether it is relevant for shipping, and if an
invoice has been created.

Default User Values

If you have maintained default values for the sold-to party and ship-to party, these values are
automatically used for filtering.

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Supported Device Types

▪ Desktop

▪ Tablet

Feature Comparison Documentation

For a comparison of the features for managing sales orders offered by this app and the Manage Sales
Orders - Version 2 app, see Feature Comparison for Managing Sales Orders.

Related Information

Approve or Rework a Sales Document

SAP Note 2376618

Maintaining Your Default User Values

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