Text determination in SD

Text determination is a basic but often essential function of document processing.  Using text determination, text lines can be copied from one document to another such as from a customer master to a sales order. Once the organizational structure is in place, additional configuration related to texts and output may be completed in order to help manage sales transactions with customers and within a company, and to generate output for sales and sales support activities.  The usage of text is optional.

Texts: Texts are descriptions of additional information to help clarify data within SAP R/3.  Any relevant information can be freely defined, stored and maintained as the text both in the Customer Master record and in Sales & Distribution Documents. Texts are categorized by the Text Type. The text can be defined at the following levels:

           

·         Customer

o    Central Texts: defined at the Customer level

o    Contact Person: defined at the Customer level

o    Sales & Distribution: defined at the Customer/Sales Area level

·         Material

o    Info record: defined at the customer/material level

o    Pricing conditions

o    Agreements

o    Conditions

·         Document

o    Sales Document :defined at both the Header and Item level

o    Delivery :defined at both the Header and Item level

o    Billing :defined at both the Header and Item level

o    Shipment: defined at the Header level

o    Contact/Sales Activity :defined at the Header level

When creating a Sales Order, the text in the Sales Order refers to the Material, Customer or referenced Sales Order.  The referred text can be manually changed.

Define Output Configuration (V/44)

Output: Output control which is dependent on various criteria allows output to be processed and sent subject to certain conditions and restrictions.

For Output Control following needs to be defined:

·         Rules of output determination

·         Print parameters

·         When the sending of output is to be initiated

In the SAP R/3, outputs such as Order Confirmations, Delivery Notes, or Sales Invoices are controlled by the Customer Master, the Output Condition Record, and the Print Parameter.

When creating output, valid Output Condition Records are found utilizing the Output Determination Procedure. This procedure uses the Condition Technique like text determination and pricing. Output determination in sales and distribution allows user to control proposal using assignments and groupings in such a way that the system selects the output allowed in each sales transaction and carries out output processing according to predefined criteria. Output control occurs at the header and item levels.

In the SAP System there are two possible ways of controlling output determination for each output:

·         proposal of output from the customer master record

·         proposal of output using the condition technique

SAP recommends the output proposal using the condition technique. This is because it is much more flexible than taking the proposal via the customer master. For example, the condition technique makes it possible to determine the most suitable output from several different types of output.

In this step, define the print parameters are defined for sales, shipping, billing, transportation and sales activity output, for example. This is dependent on a predefined key. In the standard version of the SAP R/3 system, print parameters can, for example, be dependent on:

·         sales organization

·         sales organization/ distribution channel / division

·         sales office

·         shipping point

For example, it is possible to print out picking lists on a printer which is assigned to a particular shipping point, and sales order confirmations on another printer which is assigned to a particular sales office.

Define Output Layout (V/46)

In forms , definition of the layout of output documents is done. It is also defined which texts and data appear at which position of the output document. Forms are pre defined and allocated to the outputs which have been defined beforehand.  Forms define the text format and page layout of documents, which can be formatted (in accordance with the definitions) for display on the screen or for output to a printer.

Furthermore, user can allocate form texts (e.g. for address or letterhead) which appear in the output documents according to certain criteria (for example, sales organization or sales office).

Variant Pricing

What is variant Pricing 

Pricing configurable materials is a unique process because all items that make up the superior material must be taken into account. SAP uses a method called variant pricing to derive a final price for a configurable material. This method utilizes variant configuration and condition records to arrive at a price for the material. The objective of this activity is to explain how SAP locates the appropriate condition records to calculate a price for each variant configuration

Steps needs to perform 

Create condition records for material variants:

Variant pricing requires the creation of condition records to calculate discounts, taxes, or surcharges for the variant material. A variant material is one that possesses a number of different configurations. A car, for example, could be a variant material because one configuration may include a different type of tires than another. Two different configurations of the same car, therefore, one with wide tires and another with narrow tires, are variants of the superior material. Condition records are created to account for each variant of the header material. Using a condition record, for example, a discount would be calculated for a particular variant. This discount is then added to the header material. All possible configurations of the superior material, therefore, are covered either by creating one condition record which includes separate discounts, surcharges, or taxes for each variant or by creating a unique condition record for each variant. 

The following are two types of condition records specifically created for variant pricing:

· VA00: Discounts and surcharges applied to the item are based on the quantity ordered.

· VA01: Discounts and surcharges based on a percentage.

Create dependencies for each variant:

For the appropriate condition records to be located for each variant, object dependencies must be created. Dependencies are created so the correct condition record is applied to its corresponding variant. The use of a particular condition record, therefore, is dependent upon the variant configuration selected. For the header material car, for example, a dependency would tell the system to use condition record "XXXX" if the variant is a red, two-door, with a V6 engine. Condition record "XXXX" specifies a discount, surcharge, or tax which is then added to this variant of the header material car. The dependency says that choosing this particular condition record is dependent upon finding the values red, two-door, and V6 engine 

for the header material car. Pricing, in this case, is dependent upon choosing these three values.

Pricing may also be independent of certain selected values. After the three values, red, two-door, and V6 engine are chosen a price is applied to the material car. Price is therefore, independent of the other values selected. Anti-lock brakes and bucket seats may be selected and have no effect on the price of the car.

Calculate a price for the variant material:

Once the correct condition record is selected for the variant, a discount, surcharge, or tax is added to the price of the material. For the red, two-door car with a V6 engine, for example, a discount condition record is selected. This record dictates that for this variant, a 10% discount is applied to the regular price of the car. At this point, 10% is deducted from the total price of the car and the final price is calculated. 

SD Outline Agreements

Purpose of outline agreement 

Agreements play an important role in nearly all business processes. Customers and vendors agree on the goods to be provided under certain conditions and within a specific time frame. Agreements streamline business processes for both partners in

Usages

Agreements aim at streamlining business processes of both customer and vendor. Agreements can be effectively used to improve the efficiency in the following business areas.

• Reduce costs
• Increase quality
• Increase speed of delivery

Main Challenges would be

• How to meet specific pricing requirements in an agreements 
• How to incorporate various date relevant requirements (start date, end date, billing date etc..)
• How confirm delivery date with assured quantities 
• How to deal with returns in agreements 
• How to ensure the data transfer between transactions

Outline agreements are legal documents which represent an arrangement between a supplier
and a customer for the purchase of goods 

Types of Outline Agreements
- Scheduling Agreements

- Contracts

Scheduling Agreement

A scheduling agreement is an outline agreement between Company and Customer that is valid for a certain period of time. Scheduling agreements contain specific delivery dates in addition to target quantity and price information 

Since a scheduling agreement contains delivery dates and quantities, a delivery note is created directly from the agreement. Scheduling agreements are fulfilled by creating deliveries on the due date for the schedule lines. You must create your own schedule lines by entering the delivery dates requested by the customer. (via Schedule lines) 

In the scheduling agreement, the other functions can be carried out as in the order.

You must create your own schedule lines by entering the delivery dates requested by the customer. To create delivery dates for an item, select the item and go to “Item>Schedule lines. If the system cannot confirm the quantity specified on a given date, a second schedule line with the confirmed quantity and date will be automatically created. 

A new type of scheduling agreement, called a delivery order has been developed for component suppliers. It represents a pick-up sheet, which functions much like a JIT delivery schedule, except that the pickup sheet is not renewed. The customer transmits material release data informing the component supplier of needed materials and the date the forwarding agent will pick them up

Scheduling agreements are very much useful in industries where materials are produced in accordance with expected demand. 

Example: 

Suppose in automobile industry a car manufacturer produces 1200 cars in a year. 

He on an average produces 100 per month. 

Suppose he requires radial tires from XXXX company, he need not place an order for the entirequantity he requires over an year.Instead the company enters into an scheduling agreement with XXXX company which ensures timely supply according to the need of production run.

Contracts

A contract is an agreement stating that your customer will order a certain quantity of product from you within a given time frame. A Contract is an outline agreement between Company and

Customer that is valid for a certain period of time and contains an overall target quantity or value that a customer agrees to buy at a specific price over a certain period of time; however, it does not contain specific delivery dates (no schedule lines or delivery information.)

Contracts are 4 types. 

• Quantity contracts 
• Value contracts 
• Master contracts 
• Service contracts

Quantity contracts 

Quantity contracts are agreements between the customer and company to order specific quantities of a product within a set time frame. The customer does not provide any information about delivery dates, only the start and end date of the contract. Quantity contracts are usually agreed to at discounts from totals if priced individually. 

A quantity contract is fulfilled when the customer places orders against it in the contract period. These orders are known as release orders or ‘call-offs’. However, they are standard orders that automatically reference the customer’s quantity contract and reduce the remaining amount of product to be ordered under the contract. 

If a customer can give delivery dates for the product, then it is preferable to use a scheduling agreement, instead of a quantity contract.

     

Releasing The Quantity Contract

• Release orders are created referencing the Quantity contract. 
• Release orders created update the quantity contract.Since the contract does not contain any schedule lines or delivery information, a customer must fulfill the contract by placing a purchasing order against quantity contract.If you try to change a contract after the release order creation, the system warns you that subsequent documents exist.

Value Contracts

A value contract is a value based outline agreement with a customer in which it is agreed that a certain value of products will be purchased over a period of time.

Value contracts contain: 

a)Validity period
b)The agreed upon total value
c)Rules controlling the who can release against the contract through partner authorizations
d)Restrictions regarding what materials can be ordered against the contract

Value Contract Types

There are Two types of value contracts:

1.Standard value contract: It is used in majority of instances. It is based on total value of an assortment of materials for a particular Customer. We use document type WK1 for these type of contracts. 

2. Material Related Value Contract: it is based on a single material (usually configurable material). We use document type WK2 for these type of contracts.

Assortment Module

•An Assortment Module is a order entry tool that displays a list of materials and services that can be released from a value contract. It has a validity date and a restriction that only the materials and services that belong in the same sales organization and distribution channel for which your release order is being made will be displayed.

•While creating an Assortment module we have to provide the materials and their respective validity dates.

Releasing The Value Contracts

•Release orders are created referencing the value contract. 

•The system checks the released materials against the rules of the value contract as well as whether the release is within the validity period of the value contract. 

•The value of the released material is checked against the remaining open value of the contract. It is possible to define whether a value contract quantity can be exceeded or not. 

•Value contracts can be billed directly or billed per release order. 

•When billing documents are billed directly, a billing plan can be used.

Service Contracts

•A service contract is an agreement that contains the conditions for offering a certain service to the customer. You can manage rental and maintenance contracts in the standard version of the SAP R/3 System. A service contract contains validity dates, cancellation conditions, price agreements, and information on possible follow-up actions. 

• Element of the service contract in which you define the services or products you are providing the customer with under the terms of the service contract

• Service contract describes which services are to be performed, for which objects, and under which conditions. 
• Service contract consists of a header and one or more items. The header and each item can contain the following data: 

•Pricing conditions
•Contract data
•Text
•Status
•Partner data

Release orders are created referencing the service contract. 

The system checks the released materials against the rules of the service contract as well as whether the release is within the validity period of the service contract.

Contract Data in Sales Document

The contract start and end dates can be entered manually or determined automatically. The system can propose these dates upon document creation according to a date determination rule which can be proposed for the contract type. 

Sales document types are used to control whether or not additional contract data is allowed. Contract data can be maintained at header and item levels. Contract data at header level is valid for all items as long as different data is not entered at item level. 

In addition to the contract start and end dates, contract data includes the Installation Date, the Contract Signed Date, and the Dismantling Date. These dates are manually maintained in a contract and can be used to determine the contract start and end dates.

Contract Cancellation

For canceling a contract we use the document type ’CQ’

The following information is required while canceling contracts 

• Reason why the contract is cancelled. 
• When will be the cancellation effective. 

Once the contract is cancelled we cannot create release Orders with respect to contracts. We cannot cancel a contract after its validity is over