SAP Logistics Execution (LE) Overview

The SAP Logistics Execution (LE) is used to map the logistical processes of a company. It covers the entire supply chain process - vendor, warehouse, production , distribution & customer. SAP Logistics Execution (LE)  comprise of:

1- Inbound process in which goods are collected from the vendor and placed in storage in a warehouse.

2- Outbound process in which the goods are removed from storage and delivered to the end customer.

3- Internal warehouse processes for example posting changes, stock transfers , WM inventory etc.

4- Transportation process which includes inbound and outbound shipments and the calculation , settlement of shipment costs. 

SAP Logistics Execution System (LES) is an integral part of the supply chain. SAP Logistics Execution System (LES)  can be integrated into an SAP R/3 System as well as with SAP APO, SAP BW etc.

The logistics process can be subdivided into the following main processes: Sales Order [SO]Processing for GI [goods issue] and Ordering (PO processing) for GR [goods receipt].

 

SAP Logistics Execution (LES) represents the link between the Sales and Purchase processes [SD and MM]. The link between the various components in the supply chain with the addition of LES is as follows:

Information about material requirements is passed on to MRP [Material Requirement Planning] component in MM from Sales orders. Then these requirements are passed on to internal or external procurement where these requirements are processed by Procurement or Production components in Production Planning [PP] . The Inventory Management component (IM) processes [GR] goods receipts, [GI] goods issues, reservations, posting changes, & stock transfers to make required stock available in the warehouse. 
 

The Warehouse Management system (WMS) processes the warehouse stock movements. From there the logistics movement is processed in the Shipping component. Finally the process is completed in the Billing component. The Billing component is integrated with internal Accounting [CO] and external accounting [FI]. In Invoice Verification, the "Value flow" is updated.

SAP Logistics Execution System (LES) consists of Delivery Processing, Warehouse Management, Transportation in the SAP modules.  The Warehouse Management (WM) system is integrated with Inventory Management[MM], Inventory samples [QM], Delivery processing [SD] and wages [HR].

Practical SD Learning Course

A lot of new graduates in Business Administration and IT are demanding what should they learn in SD ?  I keep replying them via mails as normally candidates learn a lot of things in SD but miss the bigger picture and then face problems while working with the system. In order to avoid repetition and save time here is an example of an SD learning course. Hope it gives a larger picture to all the interested candidates.

Course Name : Practical SD Learning Course

Course Code  :  SD-Sales-Cycle

Duration        :  4 Weeks

Salient Features 

Step by Step Instructional Notes to map the business process of a Test Oganization into the SAP system

Details of the Test Oganization

Mapping the Organisation Structure in SAP System

Configuring the Sales Part of the SAP System 

Developing  Master Data required for running the sales cycle

Running  the Sales Cycle

Troubleshooting the issues during sales cycle

Checking the Impact on MM and FI Modules

Checking the Reports to verify the results of sales cycle

SD Summary

Sales Order [VOV8]:

Doc type, No Range, Del type, Imm Delivery, Order/ Del rel Billing [F1/F2]

 Item Category [VOV7]:

Item Category Group, Doc Type, Usage, Higher-level Item Cat

Schd Line Cat. [VOV6]:

Item Category + MRP type

Sales Doc Types:

Standard Order, Cash Sales, Rush Order, Return Order, FOC Delivery

 Goods Issue:

COGS – Debited, Inventory – Credited 

Billing:

Customer – Debited, Revenue, Tax, Freight – Credited

Incoming Payment:

Bank – Debited, Customer – Credited

Availability Check: 

• Determines Material Availability date,

• Does delivery scheduling back from required delivery date?

• Run at the end of Replenishment lead time

Scope [Avail. Check] :

Current Stock, Inward Stock Movement, Outward Stock Movement

Inbound Process:

Purchase. Req – Pur.Order – Inb. Del – T.O – T.O Confirmation – G.R

Outbound Process:

Sales Order – Outbound Del – T.O – T.O Confirmation – G.I

 Free Goods

Master Data:

Condition Record [VBN1] – Sales Document

Free Conditions: 

Condition Type= NA00, Item Category Usage= FREE, Item Category = TANN

 Rebate Processing

Rebate:

Rebate Agreement – Sales Doc – Billing Document – Post Accrual

Rebate Agreement:

Settlement Run – Credit Memo Request – Remove Block –Credit Memo

Rebate Condition:

Condition Type: B002 [added to Pricing Proc in the Sales Document]

SAP SD Interview Tips for Credit Management

Credit Management:

Credit Control Area [CCA] can accommodate multiple Company Codes

 Static Credit Check:

Checks Open Order + Open Deliveries + Open Billing Documents

 Dynamic Credit Check:

Checks Credit Horizon [date]

All Credit Checks:

Static Check, Dynamic Check, Max Doc Value, Oldest Open Item

Interview Tips Cross Modular

VOFM:

Transaction to create and process Routines

Routines:

Routines are programs used for defining Copy requirements and Copy Controls

Batch Determination:

The following steps defines Batch determination process in SD

• Batch Determination Procedure

• Strategy types

• Access Sequence

• Condition Tables

• Assign Batch Determination Procedure

• Automatic Batch Determination for [Sales / Delivery] Item Categories

• Define Selection Rules

• Define Sort Rules

Flexible SOP:

It is used for Planning of Finished Goods

• Append MCVBRP to include required Characteristics and Key Figures

• Edit Field Catalogue to select Characteristics and Key Figures

• Create Info Structure [MC21]

• Update Info Structure [OMO1]

• Set Planning Parameters [MC7F]

• Create Planning Type [MC8A]

• Create Planning Hierarchy [MC59]

• Maintain Planning Hierarchy [MC61]

• Create SOP Plan [MC93]

 Condition Technique

Acct Detr Proc. [VKOA] :

Chart of Accts,Sales Org,Cust Acct Asgmnt grp, Mat A.A.G, AcctKey

Applications of Condition Technique:

• Pricing

• Account Determination

• Output Determination

• Batch Determination

• Text Determination

Picing

Pricing Elements:

1-Price, 2-Discount/Surcharge, 3-Freight and 4-Tax

Pricing Procedure:

It is used to determine valid condition record

Pric. Proc. Detr [OVKK] :

Sales Area , Sales Doc [ Doc Pic.Proc.], Sold-to [Cust Pric. Proc]

Header Conditions:

Header conditions are automatically distributed among Items.

• Header Conditions has to be marked as Group Condition in order to be distributed among Items

• Header conditions are distributed among Items on the basis of Value, Volume and Weight

• The basis of distribution of header condition among Items is set in Base Formula field in Pricing Procedure in the IMG

Pricing in Billing:

Pricing can be done again at billing level using following Pricing Types

A: Pricing Elements copied from Reference document and updated according to scales

B: Pricing is carried out again

C: Manual Pricing Elements are adopted & pricing is carried out again for remaining pricing elements

D: Pricing Elements are copied from Reference document

G: Pricing Elements are copied from Reference document and Tax re-determined

H: Pricing Elements are copied from Reference document and Freight re-determined

Condition Exclusion:

Condition exclusion can be used to determine the Best Price

• Condition exclusion is performed using Exclusion group

• Exclusion group is a combination of condition types

• During Pricing the conditions which give best price are selected from the exclusion group and the others are de-activated

• The cumulative value of a condition can be tracked and displayed in a condition record

Condition Supplements:

The condition types which are added to the condition record

Condition Types:

Following are important condition types.

• HM00 : Manual Header condition to enter Order value

• AMIW : Min Order Value, Statistical group condition whose value is distributed among items

• DIFF : Group Condition to calculate diff b/w the rounded value & Net order value.

• PN00 : Net Price for Item

• PMIN : Min price for the material

• PR02 : Prices with scales [scale type=D]

• KF00 : Freight Surcharge

• HD00 : Manual Freight Surcharge

Note: Rounding Unit is maintained in Table OO1R for each company code and currency

 Shipping

Shipment Processing:

It consists of the following

• GR for Inbound or GI for Outbound

• Create Shipment document

• Process Shipment document [Planning]

• Monitor Shipment document [Reporting]

Shipment document:

It contains the following info

• Inbound or Outbound deliveries

• Shipment types [Individual or Collective Shipment]

• Mode of Transport [Aero-plane, Ship, Truck]

• Service Agent [Vendor]

• Deadlines [Transportation Planning]

• Shipment Stages

• Shipment Output

• Partner

Delivery and Shipment:

The difference is as follows

• Delivery – Shipping Point – Plant

• Shipment – Transportation Planning Point – Company Code

 Transportation

Transportation Planning Point:

A Location or a group of people

Shipment Costing:

It consists of following

• Create Shipment Cost Document

• Calculate Shipment Cost

• Settle Shipment cost with Service Agents

• Bill Shipment Cost to Customer

Shipment Cost Deter Proc :

It consists of following

• Transportation Planning Point

• Shipping Type

• Service Agent/ Forwarding Agent

• Shipment Cost Item Category

Settlement of Shipment Cost:

It consists of following

• Shipment Cost is posted in FI as Accruals

• Shipments cost is assigned to a Cost Object

• Payable is posted in FI to cancel Accruals

Note: Shipment Cost is added to the material as Delivery Cost for Inbound Shipments

Payment to Service Agents:

It is made by

• Creating credit memos and sending them periodically

• Receiving Invoices from service agents and posting them as invoices in FI