BUSINESS BLUEPRINT

SAP R/3 ENTERPRISE IMPLEMENTATION

SALES & DISTRIBUTION

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CONTENTS

1 Executive Summary

1.1 Background

1.2 Enterprise Resource Planning (ERP) Objectives

1.3 Overview of Blueprint Phase

2 SD Module Introduction

3 SD Business Process Scope

3.1 Business Overview

3.1.2 Organizational Functions & Customer Segments
3.2 Business Processes
3.2.1 Pre Sales Handling
3.2.2 Sales Order Management
3.2.3 Delivery Processing
3.2.4 Billing
3.2.5 Customer Outline Agreement
3.2.6 Returns processing
3.2.7 Sales Accounting.
3.2.8 Sales Analysis

4 SD Integration with Other modules

4.1 MM - Materials Management

4.2 FI - Financials
4.3 PP - Production Planning

5 Organisation Elements in Sales and Distribution

5.1 Sales Organization

5.2 Distribution Channel
5.3 Division
5.4 Sales Area
5.5 Sales office
5.6 Sales group
5.7 Plant

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5.8 Storage Location
5.9 Shipping point
5.10 Overall Sales and Distribution Organization Structure

6 Master Data in Sales and Distribution

6.1 Customer Master

6.2 Material Master
6.3 Pricing Conditions

7 Business Process Mapping in SAP R/3

7.1 Presale Handling

7.2 Sample Sales
7.3 Rebate Agreements
7.4 Sales Returns
7.5 Invoicing
7.6 Credit and Debit Memo

8 Reporting

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 1 EXECUTIVE SUMMARY

1.1 BACKGROUND
MATRIX INDIA LTD. is in to the business of RIM manufacturering and softdrink production. Incorporated in2000.
The MIL product profile covers –
 RIM
 SOFT DRINKS

The production capacities at PUNE Plant are –

 RIMS per Day

The production capacities at NAGPUR Plant are –

 CRATES per Day
.
After successful commissioning of this project, MIL will further consolidate its position as market leader in RIM manufacturer
and SOFT DRINKS manufacturer. MIL has decided to implement an integrated ERP solution and have selected SAP R/3. MIL
is implementing SAP R/3 Enterprise 6.0; Net Business Solution (I) Ltd. is the Implementation Partner for R/3
implementation.uistribution
Version 2.0
The R/3 Modules, which are being implemented, are
FI/CO Financial Accounting and Controlling
SD Sales and Distribution
PP Production Planning
MM Materials Management

1.2 ENTERPRISE RESOURCE PLANNING (ERP)

OBJECTIVES
Objectives for the implementation project are:
 Attain benefits in the shortest possible time. The "Go-Live" target date is 31/03/2008.
 Avoid any unnecessary complexity that adds to costs, complicates support, or threatens to
delay the project.
 Empower MIL’s team to be self-supporting

To meet those project objectives and MIL as business partners agree the following principles:
 Implement R/3 standard business processes
 Implement R/3 as an interactive on-line system
 Adhere to business basic's and use SAP as a model for best business practices
 Empower the project team to make decisions rapidly

1.3 OVERVIEW OF BLUEPRINT PHASE

This document summarizes the findings of the NBS consulting team, which conducted requirement analysis of MIL for the SAP
R/3 system. The information was gathered through interviews conducted at the MIL’s both plant with the managers, key users

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and personnel from Information Systems, as well as through reviews of business processes, business procedures, documentation
and relevant reports using Q & A DB from Value SAP tool. The immediate purpose of the analysis is to prepare to move
forward rapidly with the implementation of MIL’s R/3 system. At the conclusion of the blueprint, the NBS consultants will
determine the SAP functionality required to run the MIL business. The Blueprint and its associated appendices present a
summarized perspective of all functional business processes that will be implemented.
As such, the Blueprint document will serve - from this point forward the dual role of both official project scope as well as
system acceptance criteria.

The body of this document describes the organizational structure and R/3 functional process flows to be implemented at MIL.
Generally, requirements that can be met using standard R/3 functionality through routine configuration tasks are not explicitly
documented.

However, certain key requirements are identified and summarized to highlight their importance to MIL and to document the
approach proposed to meet the requirement. One section of the report summarizes identified gaps. The project team should
discuss this list with agreement on
the approach going forward. Acceptable approaches may require:
 Additional programming or technical effort
 Recognition and acceptance of procedural changes ("Workarounds") using standard R/3
Additional resource commitment
 Simply the recognition and acceptance of a limitation.

The Blueprint reiterates the R/3 organizational structures that have been identified and will serve as the basis for the initial
configuration activities. The NBS team believes that R/3 can accurately model MIL’s organizational requirements. No
significant configuration choices have been identified that will prevent the future implementation of additional capabilities
within the R/3 environment. The information gathered and documented in the Blueprint is sufficient for the team to go forward
into the Realization phase. However, it is critical that both the NBS and SIPL team agree on the scope of the project as
presented in this document. Acceptance - by both teams - is required to move the project into the next phase. Business Blue Print
for BALCO
Sales and Distribution
2 SD MODULE INTRODUCTIONS
The Sales and Distribution module in SAP contains all of the software functionality included in managing pre-sales activities,
receiving & managing sales orders, delivering products to customers and billing customers for products sold. A major focus for
MIL’s implementation will be to successfully match MIL’s business requirements with the Sales and Distribution in SAP R/3.

3 SD BUSINESS PROCESS SCOPE

3.1 BUSINESS OVERVIEW
3.1.1 ORGANISATIONAL FUNCTIONS
Sales Organizations in Pune & Nagpur of MIL ,is responsible for the sales and marketing of finished goods. It is also
responsible for sales planning, order execution along with Logistics and Co-ordination with Branch and Central Accounting
Department, which processes accounts receivables and sales accounting functions of invoicing, taxation, documentary
payments and credit/debit notes etc.
MIL has a sales network of 2 Sales offices in Maharashtra State for customer management in their respective regions.

3.1.2 CUSTOMER SEGMENTS

Customer segement of MIL’s “RIM” products are a) Automotive Industries of two wheelers b) Co.Authorised whosellers and
dealers of auto spare parts through whom the company reaches out to the smaller customers,
Customer segment of MIL’s “SOFT DRINK” products are wholeseller, Dealer and Retailer.
The dealer and distribution network contribute almost 100% company’s sales volume . Business Blue Print for BALCO

3.2 BUSINESS PROCESSES

This section provides an overview of NBS understands of the various Order Fulfillment and Customer management processes
followed at MIL.These have been arrived at after interviews with key business users, business process workshops with actual
users, study of existing information systems in marketing and will form the basis of configuring the final system.

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 SALES PROCESS FLOW

INQUIRY

BRANCH ACCOUNTING
QUOTATION DEPT.

SALES ORDER

LOGISTICS DEPT.(PLANT)

CENTRAL ACCOUNTING
DEPT.(PLANT)
DILIEVERY AND DISPATCH

BILLING

INVOICING AND PAYMENT

3.2.1 PRE SALES HANDLING

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Inquiries and Quotations processing in case of government, new customers or existing customers who request new products
where these sales document are relevant.

3.2.2 SALES ORDER MANAGEMENT

IN MIL ,this covers the process of Order Entry for goods produced in different production environments (Made-to-Stock) with
the standard functions such as the following
 Pricing defined for various customer/material, material pricing groups conditions.
 Availability check using ATP (Available to Promise) logic using specific checking rules
 Transfer of requirements to materials planning (MRP)
 Shipping point determination
 Checking Credit limits under various scenarios

3.2.3 DELIVERY PROCESSING

In MIL, this covers the functions of warehousing at Pune & Nagpur and for dispatch of goods involving
 Creation and processing of Outbound Deliveries
 Picking
 Processing Goods Issue
and Distribution
3.2.4 BILLING
The covers the functions of:
 Creation of Invoices based on deliveries
 Issue credit and debit memos
 Transfer billing data to Financial Accounting (FI)

3.2.6 RETURNS PROCESSING

Customer Returns processing(consignment) includes returns processing which includes creation of returns order, returns
delivery, goods receipt in the plant and relevant excise effects. It also includes credit and debit memo requests that are created
with reference to returns orders or otherwise for B
ALCO
3.2.7 SALES ACCOUNTING
This covers the functions of
 Advance payments in the form of various financial instruments like LC, BG, and cheque, DD or PO.
 Customer Payments and Reversals
 Billing document creation
 Credit control, in case of customers with clean credit especially government and group
Companies.
 Debit and Credit note generation for disbursement of quantity or discounts, adjustments, etc.

 Creation, monitoring and settling of rebate agreement s for quantity discounts (QD) entered with custemers.

3.2.8 SALES ANALYSIS

These involve various forms of work lists for daily processing for sales, delivery and billing processing. Standard reports that
are used for example for monitoring of dispatches to customers, stocks at various locations, status and tracking of orders,
recording and management of financial instruments etc. and analysis using Information Systems.3 Business Blue Print for
BALCO

4 SD INTEGRATION WITH OTHER MODULES

Master and transaction data in Sales and Distribution are closely integrated with other modules within Logistics,Finance and
Production Planning. The integration touch points of the Sales and Distribution with various modules are detailed below.

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4.1 MM - MATERIALS MANAGEMENT
 Assignment of organizational elements like sales organization,distribution channel to plants. These allow customers to
be serviced from desired plants through the distribution channel.
 Definition of Material Types and Material Master records for finished and miscellaneous products belonging to various
divisions
 Stock Transport Order Processing for transfer of goods between and plants.
 Inventory management part of MM is completely integrated in the entire logistics system. For example, on entering a
sales order, a dynamic availability check can be initiated of stocks in hand.
 When the delivery is created; the quantity to be delivered is marked as "Scheduled for delivery". It is deducted from
the total stock with PGI.
 It is also possible to create sales order stocks, in case of Made-To-order production where the stock is produced against
a specific sales order.

4.2 FI - FINANCIALS
 Creating linkages between Sales organizations
 Customer payment process &Billing and posting the data to accounting
 Settlement of rebate agreements
 Credit ManagementDebit/Credit note creation for returns processing and Country Version India (CIN) comes
with functions for calculating, posting, and remitting excise duty:
 The system determines the excise and other taxes on your sales.
 You can create outgoing excise invoices, customized to your own requirements, and make the
Appropriate accounting postings
 All goods movements are recorded in the appropriate excise registers, including register --------
 You can remit the excise duty using the delivered functions.

4.3 PP - PRODUCTION PLANNING

The production -planning module serves as an important link between sales and production. This allows the customer
requirements to be translated into production planning parameters. In Demand management, the planning of requirement
quantities and requirement dates for finished products and important assemblies are required for planning and producing or
procuring a finished product.The requirements are determined from customer requirements, which are represented by sales
orders. The result of demand management is the demand program.
The characteristics and values are used for planning for components (incase of multi level BOM) and choosing routings to
produce the material in the shop floor.
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Version 2.0
5 ORGANISATION ELEMENTS IN SALES AND DISTRIBUTION
The first steps in the implementation of the R/3 System involve mapping the enterprise structure of onto the
organizational units of R/3. This structure mapping must ensure that
 All business processes can run smoothly, using resources as efficiently as possible.
 The requirements for internal and external reporting are met

5.1 SALES ORGANIZATION

The sales organization represents the selling unit in the legal sense. It is responsible for selling products or services for the
organization.
Company Code will have a Sales organizations responsible for all sales activities for finished
goods and miscellaneous products. These Sales Organizations are located in

5.2 DISTRIBUTION CHANNEL

The distribution channel determines how materials or services are distributed to customers.
Sales Organizations ’ will have single distribution channel respectively.

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Distribution Channel Code
Distribution Channel Code

5.3 DIVISION
Division represents the products and services sold by the organization and grouped together for the purposes of responsibility
and analysis. Each sales Organization is with single division resp.
Division:
Division:

Division Code
Division Code
Distribution
5.4 SALES AREA
Sales area is defined as a combination of sales organization/distribution channel/division for which all transactions are entered
in SAP.
SALES AREA 1
-

-
Distribu
Organiz

Divisio
Central
Sales

ation

tors

n SALES AREA 2
-

-
Distribu

-
Organiz

Divisio
Central
Sales

ation

tors

5.5 SALES OFFICE

This unit is responsible for sales in a particular geographical area.Commercial and central marketing offices will be defined as
Sales Office.
. There are two Sales Offices
Sales Office Code
Sales Office
Sales Office
These sales offices will be assigned to valid sales areas.

5.6 SALES GROUP

Group of sales person who are responsible for sales in the particular sales office.

sales groups
Sales Group Cod
Sales Group Cod

5.7 PLANT
Under company code , will be identified as plants. Material valuation will be at plant level. These will
be assigned to company code The following plants will define under company code

Plant

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Plant
Plant

5.8 STORAGE LOCATION

Storage location in SAP allows differentiation between various stocks of materials in a plant. These storage locations can also
correspond to physical storage points within SAPL.
The storage locations representing sales activities in SAPL are identified as below:

PUNE PLANT (RIM)

STORAGE LOC. RAW (RS) Finished (FC)

NAGPUR PLANT( SOFT DRINK)

STORAGE LOC. RAW (RS) Finished (FS)

5.9 SHIPPING POINT

This unit processes and manages outbound deliveries for a plant

5.10. ORGANISATION STRUCTURE

The overall organization structure can be summarized in the figure below. The various organizational elements are described
with the code to be used in configuration alongside.

(CLIENT NAME)

(COMPANY CODE)

(SALES ORGANIZATION)
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 (DISTRIBUTION CHANNEL)

(DIVISION)

6 MASTER DATA IN SALES AND DISTRIBUTION

Purpose
In sales and distribution, products or services are sold or sent to business partners. Data about the products or services,the
business partners is the basis for sales processing. In addition to sales and distribution, other departments of the company such
as accounting or materials management access the master data.The material master data is stored in a specific structure in order
to allow access from these different views.
The processing of business transactions in sales and distribution is based on the master data. In the SAP R/3 System, business
transactions are stored in the form of documents which are structured according to certain criteria so that all information in the
document is stored in a systematic way. Master data is maintained for customer, pricing and finished goods.

6.1 CUSTOMER MASTER

Customers are business partners whom the organization does sales related transactions.It is advisable to maintain data centrally
in order to avoid duplicates and exercise effective control over master records. Business related information on customer master
is stored in the following structure :
General Data: Defined at the client level and independent of any financial or sales functions. It includes company name,
address, telephone number, region, unloading point etc.
Company code Data: Data relevant to one company code and includes account management data and insurance data. The
customer can also be extended to other company codes.
Sales and Distribution Data: This data is defined for a specific sales area, It includes shipping terms, pricing data, shipping
conditions, delivery priority and partner functions relevant for shipping and billing.
Following kind of customers are required to be defined for SAPL depending on the different master data that is required for
processing them
Customers for finished goods

Customer Account Groups

Customer records are created for specific account groups. These groups control:
Required fields for entering master data, valid partner functions
Number Range assignment, internal or external for master records
One time customer

6.2 MATERIAL MASTER

Purpose
Different company areas and SAP modules access the material master records, which therefore must meet a wide variety of
requirements. During sales processing, the system repeatedly accesses the material master records. The material master record
is accessed, for example, in the inquiry, in the quotation and in the sales order,for shipping and billing.
Material master records form the basic source of data for sales processing. The information relevant to general data, sales, plant,
planning and storage related is maintained through views in the material master.
The sales and distribution data for a material is managed at the organizational levels client, plant, sales organization and
distribution channel. Therefore, the plant, the sales organization and the distribution channel have to be entered..
For sales and distribution, general data and sales and distribution data in the material master record are relevant. ALCO

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General Data
General data in a material master record is identical for every sales organization, plant and storage location. General data
contains, the material number,the material description, and units of measure, value, weight, volume and divisions.
Sales and Distribution Data
Sales and distribution data in a material master record is defined for a specific sales organization and distribution channel. The
delivering plant, the assignment to the sales group, grouping terms for price agreements and sales texts.
Sales and distribution data is divided into data that depends on the sales organization and data that depends on the plant:
 Sales organization/distribution channel data
This data includes the delivering plant, the sales unit, the min order quantity and min delivery quantity
 Plant data, this data applies to a plant and all its storage locations. Examples of plant data are MRP data, such as the
safety stock quantity, the reorder level, or the shipping processing time.

Mapping to R/3
For , material type used will be finished products ‘FERT’ for manufactured goods. External number
assignment will be used to create master records for all products.
Master records for finished goods will be maintained by Sales Organisation and cover general data, sales views and plant view.
Sales views will be created for Sales organization distribution channels of Sales through Distributors for all finished
products. Relevant material division will be entered for individual material master records and relevant manufacturing plant as
delivering plant in Sales/General Plant view. All presently relevant views can be extended to the related organizational elements
and the same can continue on a need basis.

6.3 PRICING CONDITIONS

Purpose Business Blue Print for BALCO
The term pricing is used broadly to describe the calculation of prices ( for ext.customers,vendors) and costs (for int purposes,
such as cost accounting). Conditions represent a set of circumstances that apply when a price is calculated.The variable
factors here - the customer, the product, the order quantity, and the date - determine the final price the customer gets. The
information about each of these factors can be stored in the form of condition records
The standard R/3 System includes predefined elements for routine pricing activities. For example, the standard system includes
condition types for basic pricing elements, such as material prices, customer and material discounts. During pricing, the system
calculates amounts based on a combination of automatic procedures and manually entered data. The system automatically
transfers pricing data – e.g. information about prices, surcharges, and discounts - from the condition records into documents.
Depending on the pricing policies, one can change prices manually during sales order processing.

Mapping to R/3
Pricing data will be maintained using condition records. These will be administered centrally and controlled by Central Sales
Organisation.
The following indicative price components would be setup using condition technique
 Condition records for base price of ( )
 Various trade discounts and rebate (QD) discounts and discounts based on customer groups like authorized dealer
discount.

7 BUSINESS PROCESS MAPPING IN SAP R/3

7.1 PRESALES HANDLING

Requirements and Expectations
 nquiries and Quotations in are processed for new customers or existing customers who are buying new
product lines. These may also be used in the case of negotiations and sending samples to customers.The documents are
exchanged over fax or email with customer. This forms the basis of any sales transactions that might occur as a
consequence of these activities.The capture of enquiries and quotations in the system ensures that the entire sales cycle
is recorded.
 Capture customer data, goods and quantity required payment terms and pricing structure.
 Evaluation of presales processing with reports and analysis.
General Description

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Customer Inquiries
Inquiries represent a customer’s request to a company that they provide a quotation or sales information without obligation
which is responsible for further processing.
Quotations
A quotation presents the customer with a legally binding offer for delivering a product or providing a service within certain
fixed conditions,within a specified time period
Features
Sales queries let you enter and store all the important, sales-related information you use during sales order processing. Queries
that are not complex can be entered quickly in the initial entry screen. The query can be entered from scratch or can be copied,
when the customer wants a firm quote, you can copy a previously entered inquiry directly into a quotation. The inquiries and
quotations entered in the system can be displayed and evaluated in a list.You can maintain a validity date in sales queries by
which time the query should have been answered. Business Blue Print for BALCO
The various steps in pre sales handling are described the table below:
Process Steps Description Perfomed by
1. Creation of Inquiry /Quotation
Each inquiry will have a valid start and end date. Enter sold-to party; in case customer record does not exist, create master
record for the same. Goods and quantity requested by customer will be recorded. Any specific information regarding payment
mode, taxes, material specifications, special conditions or sales requirements will be recorded in the form of texts.
2. Business Data pricing and taxes will be defaulted from the condition records and certain conditions related to discounts can
be changed manually within certain limits. Payment terms will be selected.
3. Save
Inquiry/Quotation is saved and an internal generated number will be assigned to it.
4. Subsequent Document processing
All further sales transactions like quotations, order, delivery etc can be referenced with the inquiry. This enables tracking of the
entire end-to-end sales cycle. Quotations and sales order can be created with reference to the inquiry. The inquiry will remain
open till the entire quantity has been referenced. Any balance quantity, which is not converted to order, can be Assigned a
reason for rejection and inquiry/quotation will be closed.
Special Configuration Requirement
Special document types will be created for inquiries and quotations with internal numbering.
Description of Improvement
 Complete visibility to entire sales cycle from presales to order execution.
 Ability to create sales order with reference to inquiry or quotation, which allows tracking of customer requirement and
duplication of effort in creation of sales order. The quantity referenced can be treated as complete on creation of the
order for the first time.

7.2 CUSTOMER CONTRACTS

Requirements and Expectations
 Facility to maintain contracts (MOU’s) with various customers in SAP. MOU’s are entered into in case of tender cases
and with large customers. These MOU’s are valid for a specific time period and applicable to certain products or group
of products with special pricing and payment terms. Authorized partners who can receive goods are also defined as
part of the contract.
 Control Release orders from contracts to authorized partners with relevant material, pricing/discounts and specific
quantities.
 Pricing and payment terms are customer and contract specific, with defined price variation clauses (PVC). Price
variation clause is of three types: 1) Firm price, rarely used 2) Price ruling at the time of dispatch, most common 3)
Price pegged to competition/benchmark product in a specified ratio.
General Description
Customer contracts are outline customer agreements that display when sales materials or services are sold within a certain time
period.
Quantity Contracts
A quantity contract is an agreement that your customer will order a certain quantity of a product from you during a specified
period. The contract contains basic quantity and price information, but does not specify delivery dates or quantities.
Creating Quantity Contracts
Enter the following data while creating a contract
-- Customer number of the sold-to party in the Sold-to party field.

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– Customer purchase order number for this document.
– Validity period in the Valid from and Valid to fields
– Material numbers
– Target quantities for the materials
The target quantity is the projected total quantity for the material in the contract.
Contract Release Orders
The contract does not contain any schedule lines with delivery dates; the released goods are issued using an order.
While creating a release order, the system checks whether:
 The released materials conform to the rules of the value contract.
 The release order is within the contract’s validity period.
 The released value (in the value contract) or the released quantity (in the quantity contract) exceeds the remaining
open value or the remaining open quantities in the contract. Authorized partners will be checked at the time of release
orders based on partner functions or customer hierarchy defined in the master records.
MIL will be using quantity contracts for materials. The overall processing based on sales order is akin to the regular transaction
processing.
Process Steps Description Performed by
1. Creation of Contracts
Quantity Contracts will be created for tender cases and agreements, which specify expected sales volume by customer over a
certain period. Products as part of contract are entered with their target quantity, which has been agreed with the customer. The
pricing/discounts,
Taxes will be specific to the contract. This will be entered manually directly or will be changed from the condition records
defaulting from the pricing procedure. Payment terms, generally customer specific, are entered in the contract.
2. Release Orders based on customer requests, release orders are created with reference to the contract, which specify the goods
and quantity requested. These are checked for the validity period and if released quantity exceeds the remaining open quantity.
Authorized partners for release orders are displayed based on the Assigned partner functions and checked in the partner
determination Procedure. Only authorized partners can be entered as partner Function.
3. Completing Contracts At the end of validity period or otherwise, if the contract is to be declared complete, items can be
assigned rejection reasons and the system will set the status of the contract to complete Zones. The overall processing of release
orders is similar to the described in section 7.3.1 / 7.3.2.
Special Organization Consideration
 Separate rebate agreement for quantity discounts to be maintained for contracts.
 Incase of benchmark price variation clause, base price will be entered manually.
Special Configuration Requirement
Creation of special condition type to handle Price variation clause in pegged/benchmark cases.

Description of Improvement
End-to-End visibility to contract processing from the time of contract creation to execution, completion and
settlement of rebate agreements.
Monitoring promised quantity and flexibility to define exception handling in case quantity is exceeded.
Setting up of Authorized partners to release ensure automatic control over customers eligible to receive contract
items.
Flexibility in pricing structure in terms of setting up special prices and Price variation clauses.
R/3 Business Blue Print for BALCO

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PROSECC MAPPING IN SAP R/3
General Description
The sales order is a contractual agreement between a sales organization and a sold-to party about delivering
products or providing a service for defined prices, quantities and times. In the sales order, functions such as pricing
and printouts are available. The system checks whether the material is available for the requested delivery date and
if necessary, transfers the requirements to materials planning. Shipping deadlines and shipping points are
determined in delivery scheduling.
Shipping plays an important role in the Logistics chain and is a subsequent activity of the Sales component. Some
of the indicative functions supported by the shipping component are listed below:
Deadline monitoring for reference documents due for shipment
Creating and processing outbound deliveries
Monitoring material availability and processing outstanding orders
Processing goods issue
Controlling using overviews of deliveries currently in process, activities that are still to be carried out and possible
bottlenecks.R/3 Business Blue Print for BALCO

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Billing represents the final processing stage in Sales and information is available from the same at all stages of
processing. The following functions are carried out by the billing function
Creation of invoices, issuing debit and credit Memos.
Issue rebates
Transfer of billing data to Accounting (FI)
Comprehensive pricing function and cancellation of billing transactions
The following process flow describes the steps in the sales order processing for finished goods sales (primary and
standard secondary) products at the zonal offices.

Process Steps Description Performed by

1. Creation of Sales Order
Order is entered for sales Area ZCSO from Mechanical division and relevant sales office logging the order.
Business Data Enter Sold-To party and Ship -To party (consignee) for the order, PO
Number and date at the header level.
2. Pricing and Tax
Structure Price conditions from master records will be determined for Base price
Trade Discount
Minimum Quantity Discount
Destination Discount
Cash Discount (incase of payments received in advance for this order)
Freight Charges
NSR for the order will be computed based on the above Payment terms will be selected manually based on the
order terms agreed with the customer. Incase of special orders, conditions for pricing structure will be entered
manually.
3. Availability checks Customer requirements will consume planned independent requirements in Demand
management. These will be finally reduced at the time of good issue in delivery.
4. Incompleteness Check
Incompleteness procedure will check for mandatory data like payment terms, financial instrument number assigned
to the order. Incase mandatory data is missing; system will generate a warning
but allow the sales order to be saved.

5. Save Sales Order Sales order is saved with an internally generated number.
6. Delivery Creation Delivery with reference to order or automatically executing the Delivery due list is created.
System will create deliveries for every shipping point based on confirmed scheduled lines. Incase of orders blocked
for delivery the same have to release by Central Accounting Dept., for the purposes of delivery creation. Text will
capture Transporter, vehicle number, Lorry receipt number, Road Permit number, Cancellation ion remarks and FA
Remarks.
7. Delivery Processing Save Delivery
Batch number from the available batches in the warehouse will be entered in the delivery based on actual items
picked against the order. Picked quantity will be copied to delivery quantity. The status of the various steps involving
picking, goods issue can be seen from the ‘Status Overview’ tab. Incase order is being dispatched against LC, the
financial document entered in the order will default in the delivery and system will check LC value is enough to
guarantee the delivery quantity. If this check fails, delivery will be blocked and Goods Issue cannot be posted.
On saving the delivery an internally generated number will be assigned to same.
11. Post Goods Issue (PGI)
After completion of loading & weighment at Weigh Bridge, Goods issue will be posted whereby stock will be issued
from inventory and Logistics. Blue Print for BALCO
delivery will be due for billing. This will also update the status of all relevant documents. Financial Transaction
posted will reduce inventory and increase the cost of finished goods sold account.
Goods issue can be reversed incase of data entry errors, wrong loading of material, provided goods are still within
the premises. This will update status of all documents and delivery can be re-processed. Packing list will be
generated containing the packing slip number of the items to be
dispatched.
12. Billing Following billing document types will be used in SIPL Credit Note, Debit Note Commercial Invoice Billing
due list will generate billing documents and post the following entries to accounting immediately.
Customer Account Dr
Sales Cr
Sales Tax Cr
Billing document will have internally generated number and will be Immediately posted to accounting.
Special Configuration Requirement

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Item division will be enabled for sales order document.
Invoice will be split based on payment terms and Division.
Description of Improvement
Flexible and master driven Pricing structure for prices, surcharge/discounts and taxes (ST and ED) reduces
errors and ensures better control.
Stock availability against ATP (Available-To-Promise) can be monitored and realistic delivery dates obtained
without significant manual intervention.
Transfer of individual requirements to production planning for MRP run.
Basic mechanism for Sales Tax Form Tracking expected to reduce the burden of manual
control.aDistributionersion 2.0

7.4.1 SAMPLE SALES

Requirements and Expectations
Samples are provided to regions for trade shows, exhibits or customer visits or directly to customers for marketing reasons. An
approval is sought to remove the material as sample from the competent authorities. The material is removed under an excise
invoice from the plant with regular pricing, discounts, excise duty and taxes.
Process Mapping
 End Customer / Region will defined as a customer; with separate document type with internal numbering which will
follow the same procedure for sales order processing described earlier will be applicable.
 No financial instrument will be involved and delivery processed by Logistics in a similar manner as described earlier.
 The billing document will generate an excise invoice. Different GL accounts will be derived by automatic account
determination to post revenue and COGS for sample sales.

7.6 REBATE AGREEMENTS

Requirements and Expectations
MIL has rebate agreements called Quantity Discounts (QD) customer / product or division wise for monthly, quarterly and
annual time periods. Rebates are different from other discounts in that they are based on the sales volume
generated by the customer within a specified period and are paid retrospectively. The rebate details are defined
in a rebate agreement
 A settlement run create s the required credit memo request automatically.
These can be either partial or complete settlement.
 Monitor status of rebate agreements and the quantity to be completed. Ability to setup retroactive rebate agreements.
 When the rebate -relevant billing documents are processed, accruals can be determined and posted
automatically.
 Facility to giving concession whenever the quantity is short of the approved target quantity.

General Description
A rebate is a price reduction which is granted to a customer in the form of a credit memo depending on the sales of a period.
The basis for a rebate can be defined in various ways (for example, customer, customer/material pricing group). You can define
a rebate on the basis of an agreement, the so-called rebate agreement, with your customer
A rebate agreement usually consists of a number of individual agreements in the form of condition records. A rebate
agreement number uniquely identifies a rebate agreement and the condition records it contains. You may have to create
rebates that do not depend on a material, but instead, for example, on:
 a customer
 a customer hierarchy
 a group of materials
You will then need to refer to a material for settlement. The system uses this material when you pay out the rebate.
Rebate Agreements Processing
Rebates in MIL will be value based created for customer/division or customer hierarchy/ division and determined by graduated
interval scales based on individual condition records.
Agreements will be valid for relevant time periods (monthly, quarterly, yearly) and appropriate accrual rate will be defined for
the same. These can be renewed on expiry.
Process Steps Description Performed by
1. Creation of Rebate Agreement

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2. Partial Settlement
3. Credit memo
4. Final settlement.
Special Configuration Requirement
 Creation of specific rebate agreements types with new condition types for graduated interval scales
Description of Improvement
 Automation of the current manual process, leading to significant reduction in rebate settlement and eliminating errors
with manual intervention
 Visibility to sales function and customers on the nature and derivation of the rebates disbursed.
 Overview to SAG of rebates disbursed to customers against various agreements and materials sold.

7.7 SALES RETURNS

Requirements and Expectations
Sales returns are processed in case of any quality complaints or defects in material supplied by MIL Returns are not a common
practice in MIL. Material return from customer is accepted only after investigation and only in genuine cases. In most cases, the
customer is issued a credit memo for the requisite amount.
. . The following are a list of requirements with reference to material returns from customer
 Facility to create credit memos with reference to invoices.
 Facility to create returns order and process delivery for goods receipt
 Provision to manage the excise related effects as a result of returns
General Description
Enter a return in the system if the customer returns damaged goods, or goods that had been delivered for sale on approval.
The return causes the system to:
 Register the receipt of goods using a returns delivery, and post the goods to stock (for example, blocked stock).
 Create a credit memo, once you have checked the goods and approved the complaint.
Creation of return based on a complaint:
 Posts the goods to production area for checking
 And then, implement one of the following activities:
 Approve the returns and create a credit memo
 Approve the returns, and implement a free of charge subsequent delivery based on the return.
Returns are handled through a separate document type similar to sales document, which can be created with reference to
invoice or sales order. The following figure shows the various means of creating a returns document.3 lue Print for BALCO
Process Steps Description Performed by
1. Creation of returns
Returns order is created with separate document type. created with reference to billing document against which sale was made.

2. Delivery Processing Returns Delivery is created with reference to the returns order
3. Billing document Billing document will be created with reference to the delivery and excise invoice generated. MODVAT
credit will have to be reversed based on the amount in the customer invoice.
4. Credit Memo request Based on the decision to refund the value of goods to customer,
Credit memo request will be created with reference to sales order document Special Configuration Requirement
Storage location for receipt of returns.
Description of Improvement
Traceability in the system for the entire sales cycle from sale to returns handling with the relevant effects considered for taxes.
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Page 61 of 77
7.9.1 INVOICING
Requirements and Expectations
All invoicing activities are carried out by Sales Office at for finished goods.

7.9.5 CREDIT AND DEBIT MEMO

Requirements and Expectations
SAG processes credit and debit memos for the below mentioned reasons at regular intervals:
 Monthly Quantity Discounts (Monthly / Quarterly / Annual)
 Additional Quantity Discounts
 MOU Discounts (Monthly / Quarterly/Annual)
 Sales Returns

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  Credit Note Cancellation
General Description
A credit memo request is a sales document used typically in returns processing to request credit for a
customer. A debit memo request is a sales document used in returns processing to request debit for a
customer.
Debit and credit memos will be created in the SD module wherever the material is involved in the
transaction and created with reference to order or invoice.
Sr. Process Steps Description Performed by R/3 Business Blue Print for BALCO
No.1. Creation of credit/Debit memo request
Separate document type for credit and debit memo requests with number range will be created for each of
these transactions.
1. Credit memo request can be created with reference to order in case of sales returns. Pricing will be
entered manually. Texts in terms of comments relevant for the transaction can be entered..
2. Credit /Debit Memo
Credit /Debit Memo is created with reference to the credit / Debit memo request. The billing block is to be
removed before processing the credit /Debit memo. This is a billing document, which can be created in the
background or online. Incase of sales returns for example, the accounting document will contain the
following entries in case of credit memos.
Customer A/C Cr Sales Returns Dr ,Separate G/L Accounts will be maintained for different categories of
discounts.

Description of Improvement
* Material related credit and debit memo’s created with reference to the sales documents, which
allows visibility to the order management cycle and reduced time to process quantity discounts
processed regularly.
* Facility to review credit memo request and approve/reject line items by concerned authorities allowing
control over the processing of notes. Pag

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 8 REPORTING

1 Party wise stock summary (secondary) Std Sap Report

2 Party wise item wise detail stock (secondary) Std Sap Report.
3 Party wise – product wise dispatch in a particular period Std Sap Report
4 Date wise party code wise dispatch Std Sap Report
5. Daily Invoice details Std Sap Report
6. Age wise stock report Std Sap Report
7. Report on CRP standard product sale and order Std Sap Report
8. Age analysis of pending order- product wise and party wise Std Sap Report
9. Report on Dispatch request Total- pending Std Sap Report
10. Report on truck under transit in case of Go-down dispatch Std Sap Report
11.Reports on Sale return Std Sap Report
12 Reports on sales performance company wise Std Sap Report
Logistics and Miscellaneous Remarks
1. Order balance Std Sap Report
2. Customer wise product wise lifting Std Sap Report
3. Party Wise Lifting - % STD Sap Report
4. Auction Detail Report STD Sap Report
5. Auction – Party wise report Std Sap Report

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