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Why is Division and combination of sales organization and distribution channel assigned to plant?

Apr 22, 2017 at 01:24 AM

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Hi All,

No question is small and no question is silly. Apologies the question I am asking has been answered in the past. I googled for the answer and also have been SAP help but did not get proper answer. So it would be great if you can answer me.

Why is the Division and combination of sales organization and distribution channel assigned to plant as part of configuration?

Regards,

Srini.

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I should have self reviewed the question before posting it. Apologies for the typo.

"Apologies the question I am asking has been answered in the past. I googled for the answer and also have been SAP help but did not get proper answer." should read as "Apologies if the question I am asking has been answered in the past. I googled for the answer and also have been through SAP help but did not get proper answer."

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1 Answer

Veselina Peykova
Apr 22, 2017 at 08:40 AM
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I would not classify the question as silly :)

The reason for this assignment stems from the business logic. As you already know, you can have several sales organizations within a single company (which means different rules and logic for pricing). Let's assume I have a company Acme Inc, which operates in Switzerland and Austria, where we have different rules for pricing. Each of these has domestic sales (distribution channel 01) and inter-company sales (distribution channel 02). I also have plants AU01, AU02, CH01 and CH02. The business analyzed how profitable is each type of sales and decided that it is better for certain customers in CH to deliver directly from AU01 (the customer still orders from the Swiss operation and expects a Swiss invoice with their pricing agreements). For the end customer this is a domestic sale, so we need CH00/01/AU01. Plant AU02 is not supposed to be used for domestic sales in Switzerland - it is too far from the border and, as it is mainly a production facility, they do not perform mixed pallet picking (let's say, Austrians have 3 cross-docking locations AU03-AU05, where they reload the pallets from the bulk trucks to smaller bay trucks, prepare mixed pallets and deliver to local customers). As it turned out, that producing and importing a range of products in AU02 is cheaper than in CH02, the company performs transfers between AU02 and CH02, from where the products are shipped to other distribution centers after re-palletizing, which are intended only for domestic sales (CH03-CH06).

If there was no assignment between sales organization, distribution channel and plant, you would not be able to fine-tune the process in a way, that would be easy to use by the business.

As for the division: the situation is similar - you can have different kinds of products (e.g. alcoholic vs. non-alcoholic beverages in the same plants), and you need different rules for these. For example, some locations could have a license to store or sell alcoholic beverages, but not all of them.

If you have the opportunity to communicate with business people in your organization, I am sure, that they can provide a lot more examples and explain to you in their own words why this assignment is so important.

A small tip: for minor typing errors, instead of rewriting your question in a comment, you can use the edit function:

The advantage is, that the text is easy-to see, while the comments are collapsed by default and most people fail to notice them.


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