Category: SAP

Preface – This post is part of the SAP SD series.

Introduction

In this section, we’re going to see how to create an inquiry in the system.

Steps to create an Inquiry:

• Go to transaction code VA11.
• Give Inquiry Type and Organization Data details
• Give Header details
• Give Item details
• Save

Go to transaction VA11.

This is the transaction code to create an inquiry. You can just hit, enter or click on this green checkmark.

 

 

If you don’t like to remember these funky codes, they can still do logistics, sales and distribution, sales, inquiry and create.

 

 

So you can do this transaction, either way, use the transaction Code VA11 or you go to logistics, sales and distribution sales inquiry, then create.

So you can use VA11 or use the menu path.

Give Inquiry Type and Organization Data details

Go inside by either double-clicking it, or typing in VA11 and hitting enter, you’ll be taken to the screen. This is the first screen.

When you create an inquiry, what do you have here? You have two main pieces of data.

 

• Inquiry type, and when you go create a quotation, it’s going to say a quotation type. I don’t want to fully get into the concept of actually creating an inquiry type or configuring an inquiry type yet. But for now, I just want to understand that there are two pieces to start with.
  If you want to give me an example, you go to a subway and order some sandwiches, you’re going to start with some basic choices, like is it going to be a six-inches or a foot long? Right. You’re going to make some basic choices and then further move up from there.
  So similarly, this is the first choice that you’ve got to make. What is the inquiry type that you’re going to create? There can be multiple inquiries, inquiries for a certain group of products from another group of products.
  For example, a company like HP could be doing one inquiry type for all parts, any spare parts, another inquiry type for, say, capital goods? Another inquiry type for, say, routers. Because they might represent different lines of businesses and each inquiry is different for them, so they might want to do a different inquiry for each of them.
• Similarly, there is something called ORG Data. This is more or less the areas or the geographical areas in which they are to business. That’s a very gross misrepresentation. But for now, just think of our data as your different geographies.
  Like, again, if you take the HP example, the ORG data for sales happening in the US is going to be US organization distribution channel, let’s say retail and division park sales. And if they are creating an inquiry into Singapore, it’s going to be sales of Singapore. It could be retail or wholesale distribution channel and say capital goods division. Now, I’m just taking too many examples here, but don’t worry, we’re going to talk about all these things in much greater detail at a later point.

 

I just want to give you an idea of what’s an inquiry type and what’s your data and more importantly, why you’re seeing them here, because this is going to set the precedent for what you’re going to enter going forward.

Let me give you one simple example. You don’t want to choose the ORG data for the US. And when you go inside this enter customer from the Singapore or Japanese region. Right. It’s just wrong.

So you’re making a choice here and you’ll stick to those choices going forward as you enter customer data and material data.

 

All right, so that’s a goal here, click on this dropdown and select an as your inquiry. As I said, you can create your own inquiry types, but we’re not there yet. For now, we’ll select a standard inquiry type provided by SAP and click OK, and over here, select your sales or distribution channel and division.

 

Now, what are these Sales Organization 1000 represents the German sales org, Distribution Channel 10 represents the retail distribution channel and 00 represents a cross-division. But why is 1000 representing Germany? We will come to that when we come to enterprise structure. But until then, just select this level of details and hit enter.

Enter Header data.

 

You need to fill in some data and the rest of the details are automatically be picked up by SAP based on the data that’s already available.

For example, you want to pick a customer, right? In this case, Wal-Mart is our customer. We might not have created Wal-Mart yet in the system because we don’t know how to create a customer yet, but let’s just pick some customers for now.

Say 1000, that’s a customer.

 

Now, again, why one thousand? I just picked up a number because I know it exists. If you don’t know a number, you can click on the button beside the Sold-To-Party field and it’ll pop up a search box where they can do a variety of searches by postal code by city.

 

Let’s see if there’s anything like Wal-Mart. So I do a start which is a wild character and then to Wal-Mart and then star. So anything that has Wal-Mart in its name will be displayed.

 

So this is where you do your search and you select what kind of customer you want and so on.

 

So now coming back to our step. We have entered our customer and now hit the green button. It’s giving me another pop up now.

 

It says this customer has multiple ship to parties.

 

That means there are many ship to address that the customer could potentially ask us to ship. Which one do you want to select? You can either select the default one, which has a checkmark in there, or you can select the other one.

Now you can just let it remain and click OK.

 

Right, in this case, it has already pulled up the customer name, customer address and other details for the customer corresponding to the number 1000. So, what’s the name of the customer? It’s Becker Berlin and he stays at Calvin Strasse, some address and then Berlin. That’s the address.

 

 

Enter Line item data.

So here you will enter the line item details like desktops, laptops etc. Now, in this case, we don’t have desktops or laptops yet in the system. I know some materials, so I’m going to enter them here.

 

I entered material, quantity and hit enter. It will populate the material details with a description. You can enter more line items.

 

Now, we will enter the PO number and hit enter. As soon as you hit enter the system validates things. If there is an error, for example, say if you enter some wrong data, raw material, some random number that doesn’t exist. The system is going to look at the database behind the scenes and say, hey, this material is not defined.

 

So now just click on the save button and look at the left bottom corner here, inquiry 10000006 have been saved.

 

This is called an inquiry number.

And this is the number that we were referring to in our picture as inquiry number 10000006.

Now this is what we’re going to give to Wal-Mart and say, you know what, this is the inquiry that we have created from SAP. Thank you very much for your inquiry.

So this is how we create an Inquiry and an inquiry number is generated.

Preface – This post is part of the SAP SD series.

Introduction

After the sales have happened and after the logistics processes, which is physically delivering the goods, have happened and the truck has left the warehouse, you can start to invoice the customer.

If you take a case of Amazon, you go select the product, you pay and then get the order number. This is typically the case with any B2C physical deliverables. You can take Wal-Mart retail sales. Anybody walks into Wal-Mart, buys a product, you give the product, the sales clerk scans it, generates a bill, you pay, you walk out.

Now, this is B2B we are talking about, the sale between Wal-Mart and HP. Wal-Mart sends an order. HP takes the order, delivers the order, and then after the delivery, it bills Walmart. In the meanwhile, the delivery would have happened or it might be in between.

That’s a difference in how billing happens between B2B and B2C scenarios.

 

What is invoice or billing?

 

Billing is as simple as how Walmart generates a bill for you. There are these products that you have asked for, some desktops, some laptops, what not quantities. However much has been delivered, we’re going to bill them. Let’s say we have only delivered 95 laptops and 15 desktops. So we are going to bill for 95 laptops and 15 desktops. And what do you do after billing, you generate a bill or an invoice which says customer Wal-Mart these are our products, these are the prices which will include taxes, freight discounts, etc. Then finally sent a copy to Wal-Mart saying, this is what we have delivered and this is what you need to pay us.

 

So billing is an itemized selection of what has been shipped based on the customer’s order and how much the customer needs to pay. This is where the dollar value comes in.

 

Now, in the next article, we’re going to create an invoice or billing for the delivery that we have just PGI.

Preface – This post is part of the SAP SD series.

Introduction

We have learnt that pre-sales, sales and anything after sales is logistics. So logistics is where depending on the availability of goods you create the delivery.

Delivery has three pieces to it or there are three sections to delivery.

• Picking
• Packing
• PGI

The first one is picking, the second is packing (this is optional), sometimes you do pack, sometimes you don’t need to do it for some materials. But picking is typically a process that’s followed for all physical deliverables, meaning physical goods, all tangible goods. And the last step is PGI, which is posting the issue of goods or post goods issue. The corresponding accounts are updated and the inventory is updated. This is the delivery.

 

What is picking?

Depending on what the customer needs, these products will be brought to a place called a staging area, where you can do all the packing and the processing. So you get all these goods in the staging area and the next step is to get these goods ready for packing.

 

What is packing?

Packing is just pulling those desktops, laptops, whatever the products are, into the proper packaging format requested by the customer, weighing them on your FedEx machine or EPS machine and keeping the box ready for the truck to come in. This is packing.

After packing, when the truck comes in, the packed goods are loaded and the truck leaves. This is called picking.

 

What is a post goods issue (PGI)?

The goods that you have picked, packed and loaded are really no longer yours. They need to be accounted for in your inventory. All the details will be accounted for in your inventory.

Meaning what is your inventory, in our case its desktop, what’s the total as of before the packing sets,  quantities, let’s say 2000. Now as part of this delivery, 500 has been reduced. So now it’s 1500. So, this process of reducing the inventory and making sure that the accounts are up to date is called the post goods issue.

 

So, these are the three main steps that happen in the delivery.

In the next article, we are going to actually create a delivery for the order that we have created previously and do the picking. And we’re not going to do the packing yet and we are just going to do the PGI and technically close that delivery.

Preface – This post is part of the SAP SD series.

Introduction

We have finished our pre-sales documents, inquiry, quotations and then Wal-Mart has placed an order, this is a sales document. So now we need to deliver the physical goods. This part is called logistics and this behaves differently than an order.

 

What is the delivery?

Most of the things in the delivery, again, are copied down from an order because we are trying to deliver the goods corresponding to the order that the customer has given us.

Example

In this case, the customer said he needs a desktop, quantity 100 and then there could be more line items. And each line item over here will have what is called a confirmed date.

When creating the order, SAP has already done the availability check. An availability check confirms that these goods will be available or can be confirmed by this date, say, 14th of March or whatever. When you try to create this delivery, you should create it for that date, because if you try to create it before the system knows that the goods are not going to be it will not allow you to create a delivery. So make sure that the date you are trying to create the delivery, is the date the goods are confirmed. That’s called the delivery date.

Once you get that, then you can create a delivery. Only the items that have that are to be delivered in the designed timeframe will be going to be delivered. Whenever the goods are available you can create a delivery document and all the goods that are confirmed by that date, the date when you’re creating the delivery will flow down from the order into the delivery.

 

Pieces of Delivery

Delivery essentially comprises three pieces.

• Picking
• Packing
• PGI or post goods.

There are other areas as well, but these are the main three key pieces or three key subprocesses in our delivery.

We will understand picking, packing and PGI in our next article.

Preface – This post is part of the SAP SD series.

Introduction

In the previous articles, we have learnt about an inquiry with an example. So we have Wal-Mart as our customer. We have a company, say, HP. Wal-Mart has inquired for some goods and an inquiry has been created in the system and sent out to Wal-Mart. Wal-Mart liked the inquiry and requested a formal call. This is a quote or an RFQ. A quotation was created in the system with reference to the inquiry.

Up until this point, things are casual, meaning the customer is not promising to buy. The customer is just fooling around. Basically, it’s like you want to buy a car. You go to one dealer, another dealer, you go to five different dealers. You might just inquire for how long you want or you might get quotations from one, two, three, four different car sales guys or dealers. And you ultimately will end up buying from one. Typically, the quote that you like, you just confirm the quote and that’s when you go in and place an order for the car. But up until that point, it’s just called pre-sales term, because up until this point, there’s no sale.

But after this, if the customer chooses to buy, then the customer will place what is called a purchase order.

Steps to sales:

• Inquiry
• Quotation
• Purchase order

 

So from this point on, it becomes a sale. It’s almost exactly similar in terms of the data that it contains between an inquiry and a quotation. The customer does not change, nor does the quantities or the products that are desktops, laptops. So you can as well create it with reference and copy all the products and customers over to your subsequent document. In this case, the document is a sales order. And save it and generate a number for you, say 13409, and that is what you’re going to send as a purchase order, confirmation to the customer, Wal-Mart.

Sales Order

A sales order is a document generated in the system by the seller containing all the details related to the products or services requested by the customer. The details include prices, quantities, terms and conditions and much more information.

Purchase order

A purchase order is a fancy word for an order number generator in the system that confirms to the buyer that they have received the order. It is a document that a customer sends to the supplier that includes details like quantities, prices.

It’s just like if you place an order at Amazon, you’ll get order confirmation. So here are the products you brought to get to know the prices, the total taxes and of course, you get additional details like when it’s going to ship by, and on what carrier, what tracking number and other information. That’s your purchase order number.

Difference between purchase order and sales order

When the customer is buying things, he’s actually purchasing things. Wal-Mart, the customer, calls it a purchase order. HP, on the other hand, is selling things. So it’s called the sales order, but both are the same in this case.

And another point, just like the way quotation number and an inquiry number is generated, a purchase number is generated and sent to the customer, and that is called an order confirmation or a purchase order confirmation or sometimes it’s called sales order confirmation.

 

 

Preface – This post is part of the SAP SD series.

Introduction

Now that we have talked about the inquiry in the previous section, let’s start with the next step. We will continue with the example of Wal-Mart. Wal-Mart makes a decision that they like the inquiry, meaning that they like the prices or the product delivery date that HP has proposed. Or they don’t like it. If they like it, they like to continue their discussion further with HP in terms of how they would like to proceed further. The next step to an inquiry from a customer perspective needs to ask for a formal quote.

 

What is a quote?

The quotation process is going to look something like this: Wal-Mart is going to call or get in touch with HP and say, all right, with respect to our inquiry number 110120, we would like to continue further and want to ask you for a formal quote.

 

A quote is very similar to an inquiry. But almost has the same set of details. From HP’s perspective, the quote is almost similar. So, we have the customer, Wal-Mart, and of course products, Desktop, laptop and the quantities, prices. That’s a quote.

So why are they doing it again? If everything is similar between a quote and an inquiry, what’s the point in trying to do it again?  There are a couple of differences between the two.

 

Inquiry and quotation

An inquiry is very informal. Meaning, you go shopping at home for cars, you would go visit ten different dealerships. You’re not really sure which car you want. Maybe through the course of doing all these inquiries with different vendors, you find out that you might need a particular model of a car, say a Honda CRV. Now, you start to focus more on getting quotes from Honda CRV from different dealers that you’ve visited.

 

Difference between Inquiry and Quotation

The difference is, an inquiry is more informal. So HP does not need to stick to its stores or prizes, or variables. An inquiry has been made, we promised $500 per piece here, and if Walmart comes back 10 days from now and says I need the product, HP is not legally bound to deliver them at that price. But, a quotation on the other hand is more formal, which means the terms and conditions including prices, quantities, and deliverables need to be adhered to. Legally means, it’s more or less a formal legal quote, whereas inquiry is more informal, no terms, no promises.

 

The clear difference is inquiry is more informal. So, it doesn’t have a set of days with which it’s valid. It’s informal anyway.

The quotation, on the other hand, has a set of days within which it’s valid.

Example of Inquiry and Quotation

We can take an example, let’s continue the same car search.

We’re searching for cars and you found a car, you’d like to get a quote on it. Let’s say the dealer has quoted $25,000. It’s not going to be valid forever, right? It’s going to be valid for, say, two weeks or a week at most. So this set of dates within which that quotation is valid is called validity dates. All quotations typically have a validity date. So the from date, and the to date is called the validity dates.

 

You can grab some more differences between the inquiry and the quotation.