SAP SD Enterprise Structure

Enterprise Structure
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Every organizations Sales is structured in a certain way. This structure needs to be represented in SAP based on pre-defined organizational elements and combine them in a pre-defined way. This method of representing all the different organizational elements of the company in a structured way is called Enterprise Structure. Organizational elements or Org Units for short are a system representation of an actual company organizational unit. For example, an org unit in real life could be a particular product division , or a Sales Office in Seattle, or a manufacturing plant in Boston or a warehouse in Alabama. The following picture shows how an enterprise structure is created in SAP. Instead of discussing the text book definitions of these organizational units, lets take a company in real life and discuss the same. However, please do note the cardinality. For example, a company can be linked to multiple company codes as shown in the beginning of the picture above. Lets take the example of General Electric Healthcare ( or GE Medicals ) and discuss the enterprise structure in detail. We have taken GE just as an example, and this enterprise structure in no way represents GEs internal structure. In fact, GE Healthcare does not even use SAP as its ERP. Before discussing the same, lets look at another pictorial representation of the same picture as above but with GEs org units.

Company GE Medicals is the name of the company. This company has presence across the world. And when GE Healthcare declares profits in the US, it is not just including the US company but the entire world. In SAP parlance, GE Medicals is a Company. Company Code GE Medicals in the US will be run through a legal entity. A company code is an entity that has to report its financials to the government on a timely basis. For example an Incorporated entity can be called a company code. In this case, GE Medicals in the US is being called as a legal entity. Sales Organization Since the company has presence across the US, there will be sales organizations across the united states responsible for selling goods. For example, the Western division is responsible for selling goods in the Western states. The same organization is also responsible for handling returns, credits, availability of materials etc. Distribution Channel Just as the name speaks, a distribution channel is the sales channel through which products are distributed. In this case, the medical equipment could be sold through the direct channel or through an agency. Each of them will be represented as a distribution channel. A more common example could be Retail or Wholesale. Division Division is purely related to the product/service we are selling. Its a grouping of our products. For example all different types of XRay machines would fall under the X-Ray division. Sales Office The western division of the company might be having multiple sales offices in california. For example there could be one in the bay area and another in Los Angeles

Sales Group Each sales office contains multiple sales groups who have a fixed set of responsibilities. It could be based on the products that they sell or the type of sales that they perform or the role they play in the actual sale. For example, a sales group could be responsible for selling consumables used in the X-Ray while the field-apps will be responsible for selling the software used in the machines. Plant A plant is where goods are manufactured. Sometimes, you might not even manufacture anything Just trade goods. Still you would need a plant. So a plant could be a physical or virtual place where goods are manufactured or stored at a high level. For example, there could be a plant in New Jersey. Storage Location Each plant could be associated with multiple storage locations A place where goods are stored before being sold. For example, the new jersey plant could have storage locations in Edison and Iselin. Warehouse A warehouse is an extension of the storage location. While a storage location represents a location where goods are stored, a warehouse goes much further and describes how the goods are sold, the topography of the storage, storage conditions etc. Goods can still be sold without using Warehouse Management, but a sales cannot happen without a storage location. Sales Office A combination of the sales organization, distribution channel and division is called the sales area. Sales Organization + Distribution Channel + Division = Sales Area

Configuration
The configuration for the enterprise structure is very simple. The Menu path is [ SPRO -> IMG -> Enterprise Structure ] Definition: The first step before doing the configuration is to assess the requirement as to how the company is organized and how best it can be represented in SAP. Each company is run in a different way. Since SAPs enterprise structure is rigid, you might have to try different things to fit their organizations model into SAPs org structure. After you have fully understood the organizational units in the company, start by defining those in SAP. The following picture shows the path of the enterprise structure definition in IMG. While the Company and company codes are defined by FICO consultants, the ones highlighted in red below are absolutely necessary for the functioning of the SAP Sales & Distribution Module.

In normal practice, organization units are normally copied from 0001 . While creating a new organizational unit is easy, there are many associated links in the background that are normally not easy to understand. So its always best to copy from 0001. Lets see an example of how to create a new sales organization. Click on Define, copy, delete, check Sales Organization under the Sales and Distribution section. Choose the option highlighted below. Enter the copy button and choose the From and To sales organizations.

Enter 0001 as the source and target for example is WEST. Thats it and you are done.

Organizational units can be defined in a similar way for the rest of them. Assignment : After defining the org elements, we have to assign them to each other to make a meaningful representation of the companys organizational units. The menu path is [ SPRO -> IMG -> Enterprise Structure -> Assignment ]. Lets set up a sales area by assigning a distribution channel and division to the sales organization, just as an example. Select Set up Sales Area. However, if you are trying to create a sales area with the combination of WEST sales organization that you just created along with a distribution channel of 01 and a division of 01, you will see an error as shown below. The reason being that when WEST sales organization was copied with reference to the sales organization 0001, the assignments were also copied. This is just one of the default assignment

there are many more. So to be on the safer side, its better to copy it and delete all the necessary assignments rather that start from scratch. Otherwise, this is how assignments are created. Assignments can be made similarly based on our first illustration to all other organizational units based on your requirements.

The exact configuration steps are below.

Definition
Plant Define the plant New Jersey or Arkansas. Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics General -> Define, Copy, Delete Check Plant ] Division Define A division say X-Ray or CT Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics General -> Define, Copy, Delete Check Division] Sales Organization Define the Sales Organization East, West or South West Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Sales & Distribution -> Define, Copy, Delete,Check Sales Organization] Distribution Channel Define the division say Agency or Direct Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics General -> Define, Copy, Delete Check Distribution Channel] Sales Office Define the Sales office , say Bay Area or Los Angeles Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Sales & Distribution -> Maintain Sales Office] Sales Group Define the division say Field Applications or Consumables Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics General -> Maintain Sales Group] Storage Location Define the Storage Location say Edison or Iselin Configuration = [ spro -> IMG -> Enteprise Structure -> Definition ->Materials Management -> Define Storage Location] Warehouse Define the warehouse Give it any name you like. Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics Execution-> Define, Copy, Delete Check Warehouse Number] Shipping Point Define the Shipping Point , say Door1 or Door 2

Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics Execution -> Define, Copy, Delete Check Shipping Point] Sales Group Define the division say Field Applications or Consumables Configuration = [ spro -> IMG -> Enteprise Structure -> Definition -> Logistics General -> Maintain Sales Group]

Assignment
Plant to Company Code Assign the Plant you have created to the company code 1000. Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Logistics General -> Assign Plant to Company Code ] Tip : When you assign the plant to company code ( Since copies were made off of 0001 ), the system will say that the assignment has already been made with 0001. This is because of the Copy effect. For example, we have created a new plant for New Jersey ( NEW6 ) , but by default it has already been assigned to 0001 company code.

Since a plant can only be assigned to 1 company code, you cannot assign the plant to a company code of your choice. In this case, delete this assignment and create another. When you delete an existing assignment, you get the following error message. You can choose YES

And then , as usual, create a new entry to assign the newly created plant to the company code of your choice. Sales Organization to Company Code Assign the Sales Organization to the company code 1000 Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Sales & Distribution -> Assign Sales Organization to Company code] Distribution Channel to Sales organization Assign the distribution channel you have created to the sales organization you have created in the definition step. Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Sales & Distribution -> Assign Distribution Channel to Sales Organization] Division to Sales Organization Assign the division that you have created to the sales organization . Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Sales & Distribution -> Assign Division to Sales Organization] Set up Sales Area Set up Sales area as the combination of Sales Organization, distribution channel and division Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Sales & Distribution -> Set up Sales Area] Sales Office to Sales Area Assign the Sales Office Created earlier in the definition step to the Sales Area you created in the previous step. Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment->Sales & Distribution -> Assign Sales Office to Sales Area]

Sales Group to Sales Office Assign the Sales Group to the Sales Office Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment->Sales & Distribution -> Assign Sales Group to the Sales Office] Sales Organization + Distribution Channel to Plant The Sales Organization and Distribution Channel needs to be assigned to Plant. Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Sales & Distribution-> Assign Sales Organization distribution Channel - Plant] Warehouse Number to Plant / Storage Location Assign the Warehouse Number you have created to the Plant and Storage Location combination Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Logistics Execution ->Assign Warehouse Number to Plant/Storage location] Shipping Point to Plant Assign the shipping Point to Plant Configuration = [ spro -> IMG -> Enteprise Structure -> Assignment-> Logistics General -> Assign Shipping Point to Plant]