SAP Retail Organizational Structure

SAP Retail Organizational Structure

Flexible organizational units make it possible to reproduce even the most complex corporate structures in the standard system. The large number of organizational units available in the system enables you to reflect the legal and organizational structure of your company in the system and represent it from different viewpoints.

The most important organizational units are listed below. Their meaning in SAPRetail is described briefly. Many organizational units are also data retention levels; this means that if there is more than one of a particular organizational unit, different data can be stored for each one.

Organizational Structure: Examples

The following figures are typical examples of how a retailing company is organized and how this organization can be mapped to SAP Retail.

Organizational Structure: Corporate Group

Definition

A corporate group is the affiliation of legally independent companies under the common management of a controlling company. It is the highest of all organizational units in the hierarchy, and corresponds to a retailing company with several subsidiaries (for example), which are defined from a Financial Accounting point of view as individual company codes .

Use

Data defined at corporate group level is valid for all purchasing and sales organizations.

Integration

On the logistics side, the corporate group divides into sites. A site is a store, a distribution center or a production location. In SAP Retail, the site is the organizational level at which merchandise replenishment is planned and stocks are managed. Sites can be grouped together using the Classification System.

Organizational Structure: Company Code

Definition

A company code is an independent accounting unit that represents an independent company in the legal sense. It is the central organizational element in Financial Accounting.

Use

In the retail sector, company codes can be used at distribution chain level or even at the level of individual stores. For this reason, goods movements (such as stock transfers) between different company codes are common in SAPRetail.

Integration

Various assignments between a company code and other organizational units are possible:

A purchasing organization can be assigned to a company code. In this case, the purchasing organization can only order for sites within this company code.

A valuation area is the organizational unit subject to inventory management on a value basis in the SAP system. In SAP Retail, the valuation area must always correspond to a site.

You assign a company code as an attribute to the valuation area that is already allocated to a site either in the site maintenance or in Customizing.

Each sales organization must be assigned to a company code in Customizing. This assignment forms the link between Sales and Distribution and Accounts Receivable Accounting.

Organizational Structure: Site

Definition

A site is a store, a distribution center or a production location. In SAP Retail, the site is the organizational level at which merchandise replenishment is planned and stocks are managed.

Integration

A store is assigned one purchasing organization and one sales area (sales organization, distribution channel and division) and thereby also a distribution chain, to which the store belongs and which is used primarily for intercompany billing purposes. The store must be authorized to receive goods from the sales area to which the supplying distribution center belongs. If it is to be possible for merchandise to be transferred from one store to another, then the recipient store must also be authorized to receive goods from the sales area to which the supplying store belongs.

Each distribution center is assigned a purchasing organization (and, if required, a sales area) for determining warehouse transfer prices and units of measure.

A distribution center can also be assigned to a site (normally to itself) and a distribution chain (for determining sales prices). These assignments enable merchandise in the distribution center to be valuated at retail prices. This sort of valuation is most common in the apparel industry.

Each site belongs to exactly one company code .

Organizational Structure: Site Group

Definition

A site group is a number of sites that have been grouped together using the Classification System.

Use

You can use the Classification System to group together sites that have similar characteristics or are located close to each other, for example. This simplifies data maintenance, and can also be of use for reporting purposes.

Integration

To create site groups, at least one class type has to be defined in the Classification System.

Application groups are defined in Customizing and are assigned the class type required for creating the relevant site groups. This class type uses the customer number of the site as the key. The application groups Allocation Table, Promotions, Season and Labeling are predefined to allow these applications to work with the intended site groups.

Site groups operate independently of company codes, distribution chains and other fixed organizational structures.

Organizational Structure: Vendor

Definition

Vendors are the organizational units that deliver merchandise to sites or customers (the latter is possible in wholesale, for example, if a third-party arrangement exists). These vendors are normally external suppliers.

Integration

Whether sites exist as vendors in the system depends on the site category: Stores are not defined as vendors but distribution centers usually are, because a DC has a vendor function from the point of view of stores.

If returns from a site to a vendor are to be processed with the aid of Sales and Distribution documents, the vendor must also be created as a customer in the system. This will apply if delivery documents are to be generated and billed in the system for returns from a distribution center to a vendor, for instance.

Organizational Structure: Purchasing Organization

Definition

The purchasing organization is an organizational unit which procures articles and negotiates general purchase price conditions with vendors . It is responsible for all purchasing transactions in the company.

Use

A purchasing transaction is processed completely by one single purchasing organization. Authorizations to maintain master data and process purchasing transactions are assigned per purchasing organization.

The purchasing organization is used in the following areas:

• When a stock transport order (order type UB) is created, all the sites (stores) ordering together must belong to the same company code. This company code must also be the one defined for the purchasing organization specified.

If no company code is assigned to the purchasing organization, SAP Retail uses the company code assigned to the ordering sites. Alternatively, you can enter a company code manually. The system checks whether the purchasing organization is allowed to order for the sites specified. The system does not use any data from the supplying site in the order, nor does it use any data from the combination of supplying site and receiving site (except to calculate the delivery costs).

When a stock transport order is created between two company codes, the purchasing organization cannot be assigned to any fixed company code if it is to order for the supplying site.

• In standard purchase orders (order type NB) the system also checks whether the ordering purchasing organization is assigned to the vendor. This is important for purchase price determination, for example.
• Similar checks take place for outline agreements (contracts, scheduling agreements).
• Because promotions and allocation tables can be used to generate purchase orders, purchasing organizations play a role in these areas, too. Promotions need purchasing organizations for supply source determination and price maintenance functions; they are used in allocation table functions for scheduling (determining the latest possible purchase order date), for example.
• In a request for quotation issued to the vendor , the purchasing organization invites a vendor assigned to it to submit a quotation.

Integration

Purchasing organizations are data retention levels for many types of master data.

One (and only one) company code can be assigned to a purchasing organization. A purchasing organization that has been assigned a company code can only buy for sites that belong to that company code. If the purchasing organization is to be responsible for sites that do not all belong to the same company code, no company code should be assigned to that purchasing organization. This is especially important to bear in mind if the ordering site and the supplying site for a warehouse order or return delivery are assigned the same purchasing organization but these sites belong to different company codes.

A site can be assigned to the purchasing organization that orders for it in site maintenance. This standard (default) purchasing organization for a site can be changed both in site maintenance and via Customizing. When the source of supply is determined for the purposes of a stock transfer or consignment, the default purchasing organization is used automatically. Further purchasing organizations can be assigned to the site in addition to the default. A site cannot order if it has not been assigned to a purchasing organization.

A sales organization can be assigned a purchasing organization for statistical purposes. If this assignment is made and the sales organization is then assigned to a site in site maintenance, the default purchasing organization for the site must be the one that has been assigned to the sales organization.

In Customizing it is possible to assign reference purchasing organizations to a purchasing organization. This allows the purchasing organization access to the conditions and contracts of these reference purchasing organizations. The purchasing organization can make use of up to two reference purchasing organizations when the sequence in which it accesses conditions is determined.

Vendors are assigned a purchasing organization in the purchasing-related data in the vendor master (purchasing organization vendor).This enables the purchasing organization to order from this vendor. A vendor can supply more than one purchasing organization. Purchasing organization-specific purchasing info records can only be created if corresponding table entries exist. The system also uses the purchasing organization for vendor analyses and for vendor evaluation.

In purchase price determination , a purchasing organization can be assigned a schema group. This, together with the schema group of the vendor, determines the calculation schema for Purchasing. A purchasing organization can also be assigned a market price schema, which allows the average market price of an article to be maintained (for the purposes of rating a vendor’s price history). In addition, it is possible to process in the system any delivery costs that may arise in connection with a stock transport order. The calculation schema for this is determined via the schema group for the purchasing organization, the purchasing document type and the supplying site.

Each buyer is assigned to a purchasing organization in his or her user master.

Organizational Structure: Purchasing Group

Definition

A purchasing group corresponds to a buyer or group of buyers who perform the following purchasing activities:

• Procuring certain articles or merchandise categories
• Acting as the contact for vendors

Use

Purchasing groups can function strategically, operationally, or both.

The main strategic function of a purchasing group in SAP Retail is to maintain its master data and control data. This includes defining outline agreements and volume rebate arrangements for Purchasing, for example.

The purchasing group is also responsible for the day-to-day planning of requirements and ordering of merchandise.This includes creating purchase orders, allocation tables and promotions. It can also send vendors requests for quotation or create purchase requisitions.

Integration

Purchasing groups are assigned to the purchasing areas. They are not data retention levels; they are used as a selection criterion, as a level at which analyses can take place in the Information System and at which authorizations can be stored.

In the individual purchasing operations you are mostly required to enter a purchasing group and a purchasing organization. It is not possible to define an explicit link in the system between these two organizational units.

Every stock planner is assigned to a purchasing group. You make the assignment in the user master.

Organizational Structure: Purchasing Area

Definition

A purchasing area is an organizational unit that is assigned to the purchasing organizations responsible for negotiations with vendors and the master data maintenance that results from them.

Use

Purchasing areas are only used in the Information System and in standard reporting. No data or authorizations are stored at purchasing area level.

Integration

A purchasing group can only be assigned to one purchasing area in a purchasing organization.

Organizational Structure: Stock Planner Group

Definition

A stock planner group is a stock planner or group of stock planners responsible for requirements planning.

Integration

A site is subdivided into stock planner groups. The assignment of a stock planner group to a site is dependent on the article involved.

If a stock planner in a stock planner group has ordering autonomy, then the purchasing group that has been assigned to the stock planner in the user master will automatically be copied to purchase orders.

Organizational Structure: Sales Organization

Definition

A sales organization is an organizational unit in Logistics that structures the company according to its sales requirements.

Use

Each sales organization represents a "selling unit" in the legal sense. Its responsibilities include product liability and any claims to recourse that customers may make. It is also responsible for the sale and distribution of merchandise and negotiates sales price conditions. Sales organizations can be used to reflect regional subdivisions of the market, for example by states. A sales transaction is always processed entirely within one sales organization.

Integration

Each sales organization is assigned one company code . This company code tracks the business transactions of the sales organization from a mainly financial accounting point of view.

Note

When a delivery is made for a sales order, a transfer posting from the company code of the sales organization processing the order to the company code of the supplying site is generated (if two different company codes are involved).

In SAP Retail, a sales organization can be assigned a purchasing organization . This allows you to create an artificial hierarchy like the one shown in the diagram, giving you access to useful statistical information. In some cases the two terms are identical.

Employees can be assigned to a sales organization.

If a sales organization is not allowed to use all types of sales and distribution documents, it is possible to assign it a reference sales organization so that only those sales and distribution document types found in the reference are allowed in the assigned sales organization.

Organizational Structure: Sales Group

Definition

Sales groups (for example, each with a sales manager) are subdivisions of a distribution chain.

Use

Sales groups can be used for reporting purposes.

Integration

A store, in its role as customer, can be assigned a sales group which is responsible for sales to this store.

You can also base sales groups in a store. These sales groups are then responsible for SD sales orders in that store.

You can assign employees to a sales group.

Organizational Structure: Sales Department

Definition

Sales departments are subdivisions of stores.

Use

Sales departments are used to group together merchandise categories in a store and determine procurement activities in the store.

Note

If an article in a store is also sold in departments other than the one assigned via the merchandise category, department-based sales statistics can only be generated accurately if the relevant department can be determined from the sales transaction (if, for example, the department is included in the information provided by the POS system). The same applies for layout-based statistics, such as sales area profitability, for example. This is not contained in the standard information structures.

Integration

Each department can be assigned a receiving point .

Organizational Structure: Distribution Channel

Definition

The distribution channel is the channel through which saleable materials or services reach the customer. Distribution channels include selling to consumers through various types of retail outlet or via mail order.

Use

Each distribution channel is assigned to a sales organization , and these two units together form a distribution chain. Multiple assignments are possible.

Integration

Data is not retained at distribution channel level. A distribution channel level is not a data retention level until it has been combined with a sales organization or (later) a division as well.

Organizational Structure: Distribution Chain

Definition

The purpose of a distribution chain is to structure sales within a retail company. A distribution chain is made up of a sales organization and a distribution channel .

Use

Many retail companies use a variety of different sales channels to sell to their customers. These include store-based retailing, wholesale and Internet selling. In the case of store-based retailing, stores can belong to different chains, which have a common look and feel, a common assortment and common goods presentation but which target different groups of customers. SAP Retail reflects these different sales channels by means of distribution chains.

In addition to the marketing aspect, distribution chains are used in conjunction with sales area data to control logistics processes.

Distribution chains are also important for sales pricing. It is not only possible to determine sales prices for an individual site or customer but also for an entire distribution chain.

Distribution chains also have an important role as structuring characteristics for reporting on sales.

Integration

There are three types of distribution chains in SAP Retail:

• Store distribution chains
• Distribution center distribution chains
• Wholesale distribution chains

You assign the distribution chain type in Customizing under Distribution chain control. Among other things, the distribution chain type controls different logistics processes. In sales price calculation, it controls whether the sales price includes taxes or not.

Customer relationships are important for controlling logistics processes. You maintain these according to sales area. A sales area is a combination of a sales organization , distribution channel and division . Unlike in industrial companies, there is generally no differentiation made in SAP Retail between product-related divisions, therefore the distribution chain is definitive for the customer relationship.

You determine which distribution chains each site is going to use to deliver its merchandise. For a store that sells to consumers, the only available option is generally a store distribution chain, which represents a suitable chain of stores. Sometimes, however, you may need to differentiate between anonymous consumers and your known major customers, to whom you offer special prices. In this case you can set up a major customers distribution chain for your major customers. For distribution centers you can set up different distribution center distribution chains to supply the stores in the different chains, which have different transfer prices. For stores that are supplied by a distribution center, you maintain customer relationships for these distribution chains.

The significance of the distribution chain for logistics and price determination is also manifest in integrated article maintenance. In the distribution chain-related sales view you maintain data that is relevant for delivery, for example, the sales unit. For price determination, you maintain the actual sales price and other condition parameters but you also need to enter certain control data, such as the price fixing flag or the competition characterization of the article.

If there are lots of distribution chains, you can set up reference distribution chains to reduce the amount of work needed to maintain customer and article master data and conditions. To do this, enter suitable reference distribution channels for a distribution chain in Customizing under Distribution chain control.

Organizational Structure: Division

Definition

A division is an organizational unit based on responsibility for sales or profits from saleable materials or services.

Use

Divisions have two main applications: They are organizational units for Sales and Distribution, and they are necessary for business area account assignment for logistics transactions in Financial Accounting. Divisions can be used to describe specific product groups and can form the basis for sales statistics, for example.

Divisions are not used for any functions developed specifically for SAP Retail. However, a single dummy division is provided where necessary.

Integration

Articles are assigned uniquely (client-wide) to one division.

Divisions are assigned to sales organizations .

For each combination of sales organization and division there is a reference division for customer and article master data, and also for condition data and sales document types. This allows the data in the reference division to be used in the original division too.

Organizational Structure: Sales Area

Definition

The sales area is the combination of a distribution chain (a sales organization and a distribution channel) and a division . Since divisions are not actively used in SAP Retail, however, sales areas are of little significance here and can largely be seen as synonymous with distribution chains.

Use

Just as the purchasing organization plays an important role in calculation schema determination in Purchasing, the sales area (together with the document schema and the customer schema) is used to determine the sales price calculation schema in Sales Pricing.

Integration

Each site is assigned one sales area, and therefore one distribution chain as well, permanently ("statically") in site maintenance. The sales organization does not necessarily have to belong to the same company code as the site.

If a site is to be supplied by other sources, you can define (in site maintenance) the sales areas, and therefore distribution chains, via which the site is allowed to procure merchandise.

The "static" sales area determines the sales prices and assortments of a site, and frequently the internal and external presentation, too.

Sales areas appear in all the main sales and distribution documents, including customer inquiries, customer quotations, sales orders, customer outline agreements, deliveries and billing documents.

Sales areas are used for updates in the Sales Information System.

Organizational Structure: Sales Office

Definition

A sales office is an organizational unit in sales and distribution which is responsible for sales within a specific geographical area.

Use

Sales offices are used in sales transactions in the Sales and Distribution component. They can be used for reporting purposes. Sales offices are optional.

Integration

A sales office can be assigned to one or more distribution chains .

A store, in its role as the customer of a sales area, can be assigned a sales office which is responsible for internal sales to this store.

Regional sales managers are common in the retail sector. They can be represented in the system by sales offices with the appropriate employees assigned. This regional sales manager is then responsible for supplying the stores assigned to him with merchandise.

You can also treat each store as a sales office. This enables you to obtain statistics on the sales volume and revenue that a store achieves through SD sales orders.

Employees can be assigned to a sales office.

Organizational Structure: Storage Location

Definition

A storage location is an organizational unit that allows you to differentiate between various types of stock in a site.

Use

Stocks of an article can be managed within a site in different storage locations to differentiate, for example, between the stock stored for returns, promotions and cross-docking. Storage locations are intended to represent warehouses or areas in a warehouse.

To reflect the complex warehouses that are typical in retailing, each storage location can be divided into warehouse numbers, storage types and storage bins using the Warehouse Management System. Storage locations are then used to represent areas in a warehouse. This differentiation between stocks is therefore of most relevance to distribution centers.

If stock is to be managed on an article basis, storage locations must be used.

Organizational Structure: Department, Receiving and Unloading Point

Definition

Departments are subdivisions of a ship-to party. These might be, for example, different departments in a store, doors in a distribution center, or areas in a site.

Departments are assigned to receiving points, which in turn are assigned to unloading points. One receiving point may have several departments assigned to it, but each department is assigned to only one receiving point. If you know a department, you can therefore also determine the receiving point and the unloading point.

Using departments and receiving points enables you to more precisely specify the final destination for a shipment or portions of a shipment, thus reducing the time it takes for the goods to become available for the rec ipient ’s use or sale.

Example

A pallet load of merchandise is delivered to door 1 at a department store (unloading point) . The shipment is divided up and delivered to one or more floors (internal receiving points). From there, the packages are delivered to one or more departments, such as Housewares, Consumer Electronics, Health & Beauty Aids, or Ladies’ Apparel.

Use

• Sales orders

The receiving point and department are located on the Business Data Detail Shipment screen, either at the header or item level. If the header contains this information, this becomes the default for all items, but you can override it for individual items if you wish. Items in a sales order may have different receiving points and/or departments.

• Picking lists and delivery notes

You can print the receiving point and department on picking lists and delivery notes. If this information was included in the sales order, then it will automatically be inserted in these other documents; otherwise, you can enter it manually. (However, picking lists and delivery notes are not split by receiving point or department.)

• Billing documents

You can specify that the department and receiving point are to be printed on billing documents. You can also specify that invoices are to be split by receiving point and department.

In Customizing for Sales ( Sales Order Processing  Maintain Promotion/Receiving Point Determination per Sales Document Type ) you can specify for each type of document whether or not automatic department and receiving point determination is to be possible.

Structure

The department and receiving points are fields in sales orders and delivery notes.

Integration

The system can automatically determine the appropriate department and receiving point for an article. For this to occur for internal sites (for example, stores or distribution centers), you have to assign merchandise categories in the site master record.

You then assign valid departments and receiving points to the site, and a department to each merchandise category. A merchandise category can only have one department.

When you enter an article on a sales order, for example, the system checks the merchandise category to which the article belongs, then checks the merchandise category information for that site or customer and locates the corresponding department and receiving point for the article.