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SAP R/3 implementation

At Indian Rayon

Sales & Distribution Module

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Contents

• Organization Structure• Master Data• Process Scenarios• Outputs• Critical Reports• Change Management Points• Gaps

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Organization Structure

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Organization Structure - Caustic

Domestic Export

Chemical

Caustic

South North

Sales Area

RayonChemical

(The combination of Sales Organization, Distribution Channel & division is called Sales Area)

Sales Offices are assigned to theSales Area

West 1 West 2 East

Sales Office

Sales Group

Karnatak

T.N

A.P

Kerala

Sales Organization

Distribution Channel

Division

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Organization Structure Description

Sales Org Chemical

Distribution Channel Domestic, Export

Division Caustic, Rayon Chemical

Organization Structure - Caustic

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Sales Office

North South East West 2 West 1

Sales Group

Delhi Karnataka W.B Maharashtra Baroda

Punjab A.P Jarkhand M.P Surat

Rajasthan Kerala Assam Goa Vapi

Haryana T.N Bihar Gujarath Kutch

U.P Saurashtra

Uttaranchal Ahmedabad

Himachal Pradesh

J & K

Organization Structure - Caustic

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Master Data

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Master Data

Different Masters to be maintained for Sales Processing are:

Customer Master

Material Master

Pricing Master

Credit Master

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Every customer master is managed under an account group. Account group has control functions during master record maintenance which include:

Customer number range and type of assignment (either internal or external). Alphanumeric numbers are also allowed for externally assigned numbers.

Field selection Mandatory or Optional fields We can use an indicator to specify that the customer

master records of an account group are one-time accounts (collective accounts for miscellaneous customers).

Master Data - Customer Master

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Customer Master Data

Account Groups:

The following set of account groups will be created for Caustic Business Units.

• Dealer

• Export Customer

• Direct, Institution, captive, government etc.

• One-time customer

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The different pricing conditions are –

Prices: NOS NOM Delivered Price Basic Price

Discounts: Cash Discount Credit Note Discount Quantity Discount Rate Difference Bulk Discount Distance Discount Commission

Master Data – Pricing Master

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• The pricing can be automatic or manual• Lower limit and upper limit can be predefined for a

particular pricing condition. (Ex: NOM, NOS etc)• The Pricing can be statistical value. This will be used for

reporting.• Taxes are calculated based on the predefined rules.

Pricing

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Master Data - Credit Master

The Credit Master is maintained for the credit control area. The credit master is maintained for the payer in SAP.

The credit master will have – Credit limit of the Customer / Dealer Risk category Credit exposure etc.

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Process Scenario

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The different sales processes are:

Standard Sales -- Sales to direct, dealer, ancillary, Captive Sale, institution etc

Export Sales Deemed ExportFOC SalesThird Party SaleReturnable Packaging

Process Scenarios – Caustic

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Process Scenarios – Standard Sales Process

Inquiry

Quotation

Sales Order

Delivery

Credit LimitExceeded

Invoice

Blocked forDelivery

YesNo

Quotation is created with Or withoutreference to Inquiry

Sales Order is created with Or withoutreference to Quotation or Contract

Contract

Credit Limit is Checked at the salesorder level.

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The Process covers sales to –

Direct DealerCaptive InstitutionAncillaryGroup SalesScrap etc

Process Scenarios – Standard Sales Process

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Inquiry

ConsignmentFill-up

Pro-formaInvoice

Quotation

Delivery

ConsignmentIssue

Delivery

Invoice

ConsignmentPick-up

ConsignmentReturn

Goods movement from Factory to Port

The ownership of the goods remain with IRIL

Credit LimitExceeded

Blocked forDelivery

YesNo

The ownership of the goods are transferred tocustomer after PGI

Return fromPort

Return fromCustomer

Pro-forma Invoice is created with Or withoutreference to Quotation

Goods movement from Port to Customer (BOL date)

Quotation is created with Or without reference toInvoice

Process Scenarios – Export Sales Process

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The process is given below:

• Create an ARE-3 and when it is ready post it. Print the ARE-3 and enclose a copy with the delivery.

• The shipping department sends the goods to the customer, together with the excise invoice and the ARE-3.

• When the customer receives the goods, he checks whether the excise invoice and the ARE-3 match the goods.

• If customer finds that there are fewer goods than stated on the ARE-3, he enters the shortfall in the ARE-3.

Process Scenarios – Deemed Export

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• Customer then fills out Part 2 of the ARE-3 (Certificate of Warehousing by the Consignee) and sends it back to the IRIL.

• ARE-3 is updated in the R/3 System.

• Customer fills out the various certification dates in the ARE-3 (for example, the date when the ARE-3 arrived back at your company).

• If there is a shortfall in the quantity of goods, then shortfall is entered. Since the whereabouts of the missing goods cannot be accounted for, they no longer qualify for exemption from basic excise duty.

• The excise duty has to be paid on the shortfall, plus interest, backdated to the date when you removed the goods from your premises. The concerned authority specifies which excise registers to pay the excise duty from

Process Scenarios – Deemed Export

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Process Scenarios – FOC Sales Process

The process is same as standard sales procedure. The difference is:

The pricing structure.

On basic price 100% discount is given.

No credit control

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Process Scenarios – Third Party Sales

Sales Order

Invoice

PurchaseRequisition

P.O withVendor

Vendor Invoice

Inquiry

Quotation

Quantity according to vendorinvoice

Purchase requisition is generated forthe order quantity

Purchase order with the vendor

Vendor sends the Invoice to IRIL

IRIL sends the Invoice tocustomer

Contract

Sale order is created based on thecustomer P.O

Vendor supplies the goods directly tocustomer

Goods Reciept

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Used in case of Chlorine and Hydrogen gas where the product is supplied in cylinders.

Returnable packaging consists of materials that are stored at the customer location but which remain the property of IRIL viz., cylinders. The customer is only required to pay IRIL for the returnable packaging if he does not return the cylinders.

Stocks of returnable packaging must be –

Managed separately from the rest of company’s stock so that the exact stock stored at the customer location is

available. Managed separately for each customer.

Process Scenarios – Returnable Packaging

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There are three main transactions for processing Returnable Packaging.

Creating Returnable Packaging Shipments

Creating Returnable Packaging Pick-Up

Creating Returnable Packaging Issue

Process Scenarios – Returnable Packaging

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Transportation

Shipment Document:

The Shipment Document is created once the transportation planning is finalized for the deliveries. Shipment Document can be used to:

Combine deliveriesSpecify different shipment stages – For example: Veraval

to Mumbai port & Mumbai Port to Destination. So this has 2 stages in the transportation process.

Shipment routeTransporter detailsMonitoring of different activities viz., Planning, Check-in,

Loading, shipment start

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Shipment Cost Document:

Shipment cost document is created w.r.t shipment document. This will help in calculating the freight and transferring the cost to FI.

Open Purchase order for the transporter can be created so that the service entry sheet will be created against this P.O. The service entry sheet is created automatically in the background as soon as the costs are transferred to FI.

Pricing can be done based on Service Provider (transporter)Departure & destination point etc.

Transportation

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Pricing (Freight Calculation)Pricing Procedure for freight calculationThe pricing can be done automatically if the prices are

maintained in advance or the prices can be entered manually at the time of shipment cost document creation.

Invoice Verification:Once the service entry sheet (Against P.O) is created the

Invoice verification and settlement can be carried out. In case of any loss of goods or damage of goods the

debit note will be raised on the transporter.

Transportation

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Outputs

The different outputs are:

• Delivery Note • Filling Memo• Invoice/Excise Invoice• Freight Debit Note• Road Permit Form No 45K• ARE document• Packing List • Specification Sheet• Credit Note

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Change Management

Existing In SAP

Indenting/Monthly Projection Contract

Sauda Sales Order

Sauda Sale Note Order Filling Memo Invoice

Contract S.O DO Inv Excise Invoice

No Automatic Credit control Automatic Credit Control

No Transportation tracking and Cost settlement in the system. No documentation in the system

Transportation tracking and Cost settlement. Shipment doc, Shipment Cost doc, and transporter Invoice verification has to be done.

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Gaps

Debit Note will not be created automatically. The ship-to-party (Consignee) can not be changed in the

delivery document once it is created.The net weight calculation in case of liquid products Once the excise invoice is posted to accounts, it will not be

possible to cancel the invoice and create new invoice with the same number.

Release strategy for pricing condition in sale order.Release strategy for credit release based on credit value.Allocation of toners to customer.Cash discount based on quantity rather than %.

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Gaps

The following points were identified during the to-be presentation:Allocation of toners to customer.Cash discount based on quantity rather than %.