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risk on wrong definition of sales organization, distribution channel and division

Hi,

our organization just started to implement SAP and SD module is one of the subject to complete.

We are in the defining phase of the above subject but I still can not understand the risk of being miss-defining the sales organization, distribution channel and division. Is it true will only impacting the pricing and reporting only? Are there going to be future impact on this?

Thank you before for your explanation.

Andy

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4 Answers

  • Best Answer
    Posted on May 16, 2014 at 01:51 PM

    Hi Andy,

    a rule of thumb when defining sales organization is that, unless customer master can't be share among different sales units, then always create only one sales org. this way you have minimum master data to maintain.

    I don't think there is good or bad in this decision, only good and better. I would suggest you making your decision based on customer master situation.

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    • the reason to keep enterprise structure easy and simple is mainly for the sake of maintaining master data. as we know in sd there is customer master, material master, condition master, output master, etc. among which customer master and material master probably counts most. let's say if you have the same customers and products for two segments, then defining two sales orgs means you will always have to create your master data twice, in both sales areas. Even if some customers are not inter-usable, you can always common distribution channel.

      If you already maintain different customers, then you might wanna look from the standpoint of material master. pricing strategy.

  • Posted on May 16, 2014 at 10:45 AM

    Hi

    If you create more levels than needed, maybe the client needs to create more segments for material (table MVKE) and for customers (table KNVV) than the client would need.

    In the other hand, if you create less levels (sales org, channel and so on) than client would need, maybe the client will find limits or troubles in the future for define with customizing tools new pricing procedures, access sequences for pricing, output types and so on (check in IMG the settings where these fields works) and it will be needed to do it with enhancements, userexits and so on.

    Look for in table DD03L for tables T* and field VKORG. See the tables and maybe you will be aware about the points where these fields work.

    I hope this helps you

    Regards

    Eduardo

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    • Hi,

      My former answer is not the unique reason for this customizing decisions. For instance, in a firm, you can find different sales managers or chairmans, so, a good idea is split this areas in sales organization, channels and so on, Why? Because you can separate them for reporting (SIS, COPA, BI, ...) or for authorizations (authorization not only works for transaction, it works also for organization levels) avoiding other teams could modify documents in other organization levels (or view them).

      Other criteria is achieve one customer could buy product in other organization levels, if the sales policy is it.

      Other criteria is the settings with other organization levels, for instance, with finance (FI company).

      I hope this helps you

      Regards

      Eduardo

  • author's profile photo Former Member
    Former Member
    Posted on May 17, 2014 at 02:59 AM

    Hi Andy,

    Good to see the suggestions!

    These are the rules I try to follow:

    • Do not over do it. Simple is better and facilitates change.
    • One sales organization for each company code unless significant differences exist between independent sales departments. Like one wants to use CRM and others won't. It's roughly equivalent to one by each top level sales director.
    • One distribution channel for each sales channel group that defines different prices or different shipping conditions for the same material. Like retail and wholesale have different pricing. Special rules can apply like mail delivery require different correspondence settings.
    • One division for each division of the company. If company has no clearly defined divisions (like Aeronautics and Footwear) there is no need (in sales) to split (it might in financials).

    Using sales office and sales group for reporting is a lot better than the top level structures because it's easy to change them in master data, unlike sales org or distribution channel. And when departments get reorganized the system effort is significantly reduced if no change occurs at those three top levels.

    So I normally use the sales office to the first or second level of reporting and sales group in some cases to represent individual sales persons or nothing at all in other cases.

    regards,

    Edgar

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  • Posted on May 16, 2014 at 09:02 AM

    plz confirm what do you mean by misdefining

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