Section 5 of 10

Organizational Structure and Sales Area

Sales organisation, distribution channel and division, the sales area they combine into, and the shipping-side organisational units.

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SD has more organisational units than most modules, which makes it daunting at first. Knowing what each exists for makes the design intent visible.

Three dimensions

UnitRepresentsExample
Sales organisationThe unit responsible for selling, and legally accountableDomestic sales, export sales
Distribution channelThe route by which goods reach the customerDirect, dealer, e-commerce, wholesale
DivisionA broad product groupingIndustrial equipment, household goods, consumables

A sales organisation is assigned to exactly one company code, so choosing it determines whose books the revenue lands in.

The sales area

The combination of the three is a sales area, the central unit in SD; nearly every setting is held at this level.

The reason for combining three dimensions is that the same customer often needs different terms in different contexts.

What can differ per sales area
SettingWhy it might differ
PriceDealers buy below the direct price
Payment termsExport prepaid, domestic on month-end terms
Shipping conditionsE-commerce by parcel, wholesale by truck
Credit limitSeparate limits per channel

Shipping-side units

UnitRoleBelongs to
PlantA location that holds stockCompany code
Storage locationWhere stock sits within a plantPlant
Shipping pointWhere shipping work is performedPlant
Loading pointA loading bay within a shipping pointShipping point

The shipping point is the unit deliveries are created for. Separating parcel and truck shipping points within one plant separates the work. It is determined automatically from shipping conditions, loading group and plant.

Assignments between units

  • Sales organisation โ†’ company code (one to one; determines where revenue is booked)
  • Distribution channel โ†’ sales organisation (many to many)
  • Division โ†’ sales organisation (many to many)
  • Plant โ†’ sales organisation and distribution channel (what may be sold from where, through which route)
  • Shipping point โ†’ plant (many to many)

Sales districts and offices

Separately, there are units for managing the sales force: sales district for geographic analysis, and sales office and sales group for the field organisation. These are recorded on documents and used for reporting rather than affecting processing.

๐Ÿ“– Unfamiliar term? Look it up in the SAP glossary.

Check your understanding

Test what you just read.

Quiz 1

Which statement correctly describes a Sales Organization?

Quiz 2

The same plant can be assigned to multiple Sales Organizations.

Quiz 3

What is the main purpose of the Distribution Channel?

Quiz 4

Sales Office and Sales Group are mandatory organizational elements in SAP SD.

Quiz 5

What is the correct definition of a Sales Area?

Quiz 6

Arrange the SD organizational hierarchy from top to bottom.

Click items in the correct order