What are the dis-advantages of having common Distribution channel

[Former Member]

Hi Experts,

What are the dis-advantages of having common distribution channel.

Presently we have different Distribution channels seperately for Direct sales, Third Party sale, Stock Transfer, Job work & scrap sales, etc.

Now, we need to extend Material for all Distribution channels.

Instead we thought of having common Distribution channel. But we would like to know the limitations and de-merits of this in follwoing areas,

1. Pricing procedure determination.

2. Condition record determination

3. LIS updation

4. Standard reports at summary & detail level

5. Account determination ( VKOA)

6. Also, any other areas which would get impacted.

Please advice me on this.

Regards,

Ramakrishnan.B

[Former Member · Accepted solution]

 But we would like to know the limitations and de-merits of this in follwoing areas,
> 
> 1. Pricing procedure determination.
> 2. Condition record determination
> 3. LIS updation
> 4. Standard reports at summary & detail level
> 5. Account determination ( VKOA)
> 6. Also, any other areas which would get impacted.

Hi,

As said, this activity is carried out basically to reduce the number of Master data records.

Does not have any negative impact on points 1, 2 , 3 ,4 and 5. But be careful not to combine Channels which are exclusive in terms of master data records, such as domestic sales and export sales since customers will differ for these channels.

Hope this helps.

Regards,

Sharan

[Former Member]

Hi Ram,

may below points ans your query

1. Pricing procedure determination - ex you want to sale Scrap and finished goods to the customer naturaly the price for both the materials are different and hence you have to define different pricing for both. even if you maintain different pricing for them again problem will come if the material is based on diamention. the same will affect the reporting as you will not be able to view the seperate report or analysis for scrap and finished goods.

2. Condition record determination - its necessary to define different condition types / condition records for different material so again it will be confusing and moreover it will affect the sales order when t is Export or domestic, it will affect if the different tax system for the different customer like CST or VAT rather its depend wether you are maintaining different customers as per the location.

3. Standard reports at summary & detail level - i think you will not be able to use standard report more you will have to create Z creation. just check. but i am sure the analysis will be the problem. where as if you maintain different channels it will be easy to track domestic sale, export sale, finished goods sale, scrap sale, customerwise analysis etc.

4. Account determination ( VKOA) - as you are aware that SD is related to MM and FI and every transaction hit the FI entry the maintainance and assignment of GL will also be problem. and it may affect while final audit.

note - even if you can take common distribution channel and can create different orders according to the material but question arrases is how will you define pricing procedure while creating customer master, even if you define the different pricing how will you segregate or study the sale of different material. altogether for better understanding and to have proper accountability i would suggest to go for different distribution channels.

reward points if it is helpfull for you.

Thanks & Regards

Ashwini

[former_member671529]

We are in our sixth year of our ERP implementation. We used common distribution channel for our material master, customer master and Customer Material Info Records.

These notes are from our config. documentation:

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Distribution channels 01 and 02 use channel 01 as a common channel for customers and materials only.

This configuration will allow simplified master data setup for the customer master and material master. Production and service sales will be distinguished for reporting purposes from the transaction history by the u201Cdistribution channelu201D that is selected on the order entry screen as determined by the ship-to address and knowledge of the customer by the plant order entry person.

Note: This common distribution channel configuration does not apply for pricing conditions.

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This approach has been very beneficial for us in terms of monimizing master data upkeep for material masters, customer masters and Customer Material Info Records. No disadvantages that I can think of.

Regards,

Jeff