What is SAP SD and Organizational structure in SAP SD




The Sales and Distribution functionality in SAP ERP, with the help of integration with other functionalities such as Materials Management and Logistics Execution, covers the entire order-to-cash process of your company. This is also one of the oldest applications, which was part of the SAP R/2 version.

SD has evolved to be a very robust and flexible functionality of the core SAP ERP solution that today is very well complemented by the SAP Business Suite packages such as SAP Customer Relationship Management (SAP CRM) covering the front end of business activities and customer interaction, and by SAP Supply Chain Management (SAP SCM) covering the distribution and delivery end.

Organizational Structure in Sales and Distribution

The SAP system allows complex multitudes of business units to be defined and to represent the functional and legal structure of your company. As described in previous sections, every business activity in the SAP system is transparent and may be recorded by multiple functionalities or components that use different enterprise structures supporting them in an integrated fashion. SD is integrated as well and joined with Financial Accounting, Materials Management, and Logistics Execution components such as Shipping & Transportation.

Sales Organization

The sales organization has an enterprise structure in logistics that’s defined for allocating goods and services. This structure can reflect the business appearance of your sales organization and copy regional structure or international layout. The SAP system needs at least one sales organization to be defined for the SAP SD module functionality to work. A sales organization has to be allocated to the company code for accounting to be integrated.

Bear in mind that more than one sales organization can be allocated to an individual company code. All activities within this structure are reported at the sales organization level as a summation level. The sales organization has its own address, currency, and calendar that can be different and unique to each sales organization you’ve defined.

Distribution Channel

The distribution channel identifies a unique way for your customers to obtain goods and services from your company, such as wholesale, retail, Internet sales, and so on. Through design, to use the SD functions, you need at least one distribution channel. A distribution channel doesn’t have calendars, addresses, or currencies to maintain. They’re defined in the origin object: the sales organization. Every distribution channel can span across one, some, or all of your sales organizations. You can also assign one or more plants to a combination of the sales organization and distribution channel, but you need at least one for SD to function. After you define the distribution channel, you’ll be able to do the following:

Define materials and services master data.

Create and maintain your customer master data.Allow for complex pricing strategies.Define determination of sales document types.Use the channel in sales statistics.


This SAP enterprise structure is usually based on a wide group of products or services. Just like a distribution channel, a single division can be assigned to multiple sales organizations, and you need exactly one division for SD to function. Your material and customer master data has members that are particular to the division, hence allowing you to maintain business activity restricted to a narrow group of goods and services.

Source: https://sap-online-training.wixsite.com/overview-of-sap-sd

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