Distribution Processing: Deliveries for Merchandise Distribution

Use
Deliveries for a distribution are basically the same as deliveries as used in Shipping, but have a different business background. y Actual deliveries Deliveries for a distribution are generated with reference to defined quantities, once a goods receipt has been posted. y Partial deliveries If the delivery can only contain a proportion of the quantity planned, a partial delivery is created. However, partial deliveries can also be created to support continuous merchandise flow (e.g. generation of a partial delivery for each handling unit cross-docked). Once a delivery has been created for a merchandise distribution, the delivery quantities are subtracted from the quantity fields for the individual processing methods.

Special Features of Deliveries for Cross-Docking

In Customizing, you can define whether deliveries for cross-docking should be marked as not relevant for picking. Since the goods are moved straight from the goods receipt to the goods issue zone, picking is usually not required. If you want to implement incentive wages for the associates in the cross-docking area, you can mark cross-docking deliveries as relevant for picking. This enables you to generate transfer orders for the goods to be moved from goods receipt to goods issue. The transfer orders are then used for entering actual data and calculating incentive wages.

Special Features of Deliveries for Merchandise-Driven Flow-Through

Deliveries are not used as the base document for merchandise-driven flow-through. The delivery documents are only generated after the merchandise has been physically split up. Deliveries for merchandise-driven flow-through are automatically marked as not relevant for picking, as the goods have been physically split when the delivery is created. As soon as a handling unit (such as a wire basket or pallet) is full and the distribution orders have been confirmed, you generate the delivery online. The physical flow of goods is therefore the same as that mapped to R/3.

Effects of the Processing Methods on How Deliveries are Generated

In Customizing, you can define when a delivery should be generated for merchandise distribution and which type of delivery should be generated. The following options are available: y y Automatic generation at goods receipt Automatic generation on adjusting the distribution

Generation online using separate transactions

For further information on generating a delivery online, see Generating Individual Deliveries for Merchandise Distribution: Procedure and Generating Deliveries for Merchandise Distribution Using Collective Processing: Procedure. Automatic generation at goods receipt Automatic generation on adjusting the distribution prior to goods receipt x x x Online (collective Online processing) (individually)

Putaway Cross-docking Recipient-driven flowthrough

x x x

x x x -

x x

Merchandise-driven flow- through

Generation of Deliveries Asynchronously (in the Background)

You can activate asynchronous processing in Customizing for automatic generation of deliveries during an adjustment and for manual generation of deliveries online using separate transactions. The standard system setting is synchronous delivery generation. When deliveries are generated at goods receipt, however, this is always done in the background, independently of the Customizing settings. The system updates an application log that records the messages that occur during generation. You can have the application log updated: y y only when errors occur always

You can analyze the application log using the Display application log transaction. If delivery generation in the background is terminated as a result of a technical problem (similar to a processing termination), no message is displayed on-screen for the user. No application log is generated either. In this case, you can examine the problem using the transaction for analyzing transactional RFCs (SM58).

Integration
The deliveries generated for Merchandise Distribution are the same as those generated in the Logistics Execution menu. As such, they can be processed exactly in the same way as in Picking and Transportation.

This is not, however, the case for deliveries for merchandise-driven flow-through and for cross-docking. In these cases, either it makes no sense to have picking or it is not required (see above). The function for generating deliveries (collective processing) in Merchandise Distribution is not the same as the function for collective processing of due documents (transaction VL10x) in Logistics Execution. The same applies for the function for generating individual deliveries in Merchandise Distribution and the function for creating outbound deliveries as single documents (transactions VL01N, VL01NO) in Logistics Execution.

Prerequisites
To use merchandise-driven flow-through, you must use Lean WM. Lean WM must be activated for the site/storage location/warehouse number and a special picking storage type entered for merchandisedriven flow-through.

1. Generating Individual Deliveries for Merchandise Distribution

Use
You can use this procedure to generate individual deliveries for cross-docking and merchandise-driven flow-through. In merchandise-driven flow-through, deliveries are only generated once the goods have been physically distributed to the recipients.

Procedure
1. On the Generate Deliveries for Merchandise Distribution screen, enter the required distribution center and customer number of the recipient (generally the ship-to party). 2. Choose Generate deliveries for CD or Generate deliveries for FT. In the case of merchandise-driven flow-through, you create a delivery for the handling unit just filled (the associated distribution order must have already been confirmed). As this handling unit is only destined for a single recipient, you must enter this recipient on the selection screen. In the case of cross-docking, you do not need to enter a recipient. 3. Choose Deliveries p Generate immediately or proceed as follows. 4. Choose Deliveries p Enter quantity. The Delivery data for Generating Deliveries screen appears.

In the case of deliveries for cross-docking, a line is displayed for each recipient, if you did not limit the selection to a single recipient on the first screen. 5. Choose Edit p Superimpose quantities, if you want to restrict the required articles further. 6. Choose Execute. The quantities of the articles requested are displayed. 7. Choose Deliveries p Generate. 8. You can choose Goto p Delivery log to display the deliveries that have been created for the issue documents. From here, you can display the relevant documents.

If errors occur during generation of deliveries, they are recorded in a log (Goto p Error log).

2. Generating Deliveries for Merchandise Distribution Using Collective Processing

Use
You can use this procedure to generate deliveries for distribution using collective processing. This is possible for all processing methods except merchandise-driven flow-through. In the case of merchandisedriven flow-through, deliveries are generated individually, as soon as a handling unit for a recipient is filled (see Generating Deliveries Individually for Merchandise Distribution).

Procedure
1. On the Merchandise Distribution: Monitor Screen enter your selection criteria. 2. Choose Program p Execute. 3. The system displays the distributions you selected. 4. Select the distributions for which you want to create deliveries. 5. Choose Edit p Deliveries p Generate deliveries to generate deliveries for all the selected distributions, regardless of processing method. However, if you only want to generate deliveries for a single processing method (cross-docking, recipient-driven flow-through, or putaway), select Generate CD, FT or putaway.

Merchandise Distribution: Customizing Settings

Use
If you want to use Merchandise Distribution, you need to make special Customizing settings. These are described in brief below.

Customizing Settings for Merchandise Distribution

You make these settings in the merchandise distribution section of Customizing for general logistics. y Site profile This profile controls the adjustment and subsequent processing for merchandise distribution for a single site. y Adjustment profile Here, you define for each processing method how distribution is to be adjusted in the case of an overdelivery or underdelivery. SAP Retail uses function modules for this and offers standard processes in function group WFR4. However, you can also include nonstandard processes by assigning a function module you have created. y Distribution profile in distribution center In this profile, you can enter default values for controlling merchandise distribution in a distribution center. You can assign the processing method and adjustment profile, for example. y WM movement type Here, you must enter the warehouse management movement type intended for merchandise-driven flow-through for each warehouse number. You must create a new movement type for merchandise-driven flow-through (see Customizing settings for Shipping). This movement type is then entered in the distribution order during distribution order generation.

Customizing Settings for Allocations

If you plan merchandise distribution using an allocation table, you are advised to use the settings for the item type of the allocation table, which you can make in the Allocation Table in Purchasing. y Article movement in the distribution center Here you configure the system so that the processing method is determined from the master data. This enables dynamic determination of the processing method. y Technical control of follow-on document generation If you specify that deliveries are to be created as allocation table follow-on documents, the following restrictions apply for merchandise distribution: o You cannot use merchandise-driven flow-through and the optimizing method

o o

You cannot define delivery phases for the allocation table follow-on documents. When you adjust distribution, the quantities in the deliveries are changed to coincide with the quantities actually delivered. As a result, you are not able to compare the actual quantities with the original planned quantities.

Sequence You should set the distribution data indicator so that distribution data is always generated.

3. Customizing Settings for Inventory Management

You make these settings in the Materials Management section under Inventory Management and Physical Inventory. You should set up goods receipts so that the "Delivery completed" indicator is set automatically at goods receipt. If the "Delivery completed" indicator is not set, an entry in the distribution data is not flagged as completed after subsequent processing.

Customizing Settings for Availability Checks

You make these settings in the Sales and Distribution section under Basic Functions. You cannot use the blocking concept "Article block at article/site level" for availability checks based on ATP logic during the generation of deliveries for a merchandise distribution. You have to use the blocking concept "Article block with quantity transfer" instead. The result in real terms is the same. You therefore make the following settings: y Define article block for other users Deactivate the block for the checking groups concerned and the calling program delivery. y Define checking group Activate the article block for the availability check with quantity transfer for the checking groups concerned.

Customizing Settings for Shipping

You make these settings in the Logistics Execution section under Shipping. y Lean WM If you want to distribute merchandise using merchandise-driven flow-through, you must manage the storage location used for this in Lean WM. For this, you must make all the basic settings for Lean WM in Customizing for Shipping (see IMG). The following settings are required for merchandise distribution: o Storage type A storage type must be maintained for merchandise distribution. You are advised to use a separate storage type for merchandise-driven flow-through.

Confirmation must be required for this storage type. You use this storage type as the planned picking storage type for the movement type and/or controls for assignment of site/storage location/warehouse number. o Movement type You must create a separate movement type for merchandise-driven flow-through. You must maintain the destination storage type for this movement type, but you must not enter a source storage type, a source storage bin or a destination storage bin. In addition, you must assign transfer type "Pick" and deselect the indicator that forbids manual inclusion of transfer orders. Immediate confirmation must not be possible. o Control for assigning site/storage location/warehouse number Here, you must set the level for warehouse management to 2 for each site and storage location and enter the storage type for merchandise distribution as the planned picking storage type (see also Merchandise Distribution: Using WM Functions). y Storage location determination The same storage location should be determined at goods receipt and goods issue. As a result, you are advised to have the same settings for picking location determination in Customizing for Shipping (Logistics Execution) and storage location determination for goods receipt. You must ensure that determination rule RETA is used for picking location determination. When goods are received for a site, you are advised to use a different storage location for each processing method. You can set storage location determination under Controls in site master Customizing. You can enter the default values for the storage locations here. y Condition for creating delivery due index To improve system performance, sales orders are no longer updated when a collective purchase order is created. Instead, the system checks in the following functions whether the sales order item concerned can be found in a merchandise distribution: o o Creating collective purchase orders (transaction WF10) Processing a delivery due list (transaction VL04 and VL10*) In this case, the item is no longer due for shipment and is no longer processed by the functions named. If there are no more items due for shipment after a collective purchase order has been created, then the sales order is deleted in its entirety from the delivery due list. You must ensure that when the system checks whether a delivery due index is to be created for a sales order, a FORM routine is run that checks whether the sales order items concerned are in a merchandise distribution. Proceed as follows:

o o

Choose transaction VOFM to maintain the conditions and formula. Choose Requirements p Subsequent Functions p Delivery Due Index and enter for the check whether a delivery due date is to be created. A FORM routine is also to be used that calls function module W_FRM_SO_DELIVERY_DUE_CHECK. In the standard SAP System, you use FORM routine 108 (Delivery Due Date). Only enter this FORM routine if you use the collective purchase order in conjunction with sales orders. This is because using the FORM routine would otherwise restrict system performance unnecessarily, especially when processing a delivery due list (VL04 and VL10*).

Customizing Settings for Consumption-Based Planning

In Customizing for Materials Management, you can define planning areas under consumption-based planning and master data. For merchandise distribution you are advised to define no more than one planning area per site.

Other Settings
If you use the availability check for transfer documents (sales orders or warehouse orders), you should take account of the replenishment lead time in the check.

4. Merchandise Distribution: Processing Methods

Use
The processing method determines how merchandise is to be treated in a distribution center immediately after goods receipt.

Cross docking method

Cross-docking is an efficient consumer response (ECR) concept used to improve logistics, in particular in the distribution center. The goods are taken from goods receipt to goods issue without being placed in storage in the meantime. You can use the cross docking method to increase inventory turn, move the goods through the distribution center more quickly and reduce the costs for processing and storage. You can also use the cross-docking method in SAP Retail even if you do not use a warehouse management system. Cross-docking includes the following processing methods: y Cross-docking The shipping units are not unpacked or repacked between goods receipt and goods issue. y Flow-through Once they have been received, the goods are transported to a repacking zone, where they are repacked. They are then taken to goods issue. The following types of flow-through exist: o Recipient-driven flow-through After goods receipt, the merchandise distribution data is evaluated and the relevant deliveries are created for the recipients. The articles for these deliveries are then picked. o Merchandise-driven flow-through The goods are picked in the distribution center using a distribution order. When a handling unit (e.g. a pallet) is full, a delivery is created containing the content of the handling unit. You can only use this method if you use Lean WM.

A pallet of boxes of red wine is delivered to goods receipt. A distribution order is created for the pallet when the goods receipt is posted, and is printed in the form of a distribution list. A member of the warehouse staff takes the pallet to the distribution zone, where there are a number of pallets, each assigned to a different store. Other articles have already been placed on these pallets for the stores. The warehouse staff use the information on the distribution list to put the boxes of red wine on the store pallets, e.g. 6 boxes on pallet 1 (Boston store), 4 boxes on pallet 2 (Cambridge store) etc. Once a store pallet is full, a delivery is created for it in the system. The goods on the pallets are then secured, and the pallets transported to goods issue.

Putaway
The goods are placed in a particular storage bin. At a later date, deliveries are generated, the merchandise is picked, and the goods issue is posted.

Optimizing methods
Often, some recipients receive large quantities, and therefore also large handling units (e.g. whole pallets), while the requirements of other recipients are smaller, and they therefore receive deliveries in a smaller unit (e.g. box). Despite these differences, you are able to procure all merchandise in large handling units by combining the distribution methods. y Cross-docking/flow-through All handling units that can be forwarded completely to a recipient are processed using crossdocking. If a recipient is to receive a quantity smaller than that contained in a handling unit, the merchandise is processed by flow-through and split into smaller quantities. y Cross-docking/putaway All handling units that can be forwarded completely to a recipient are processed using crossdocking. If a recipient is to receive a quantity smaller than that contained in a handling unit, the merchandise is split into smaller units. These smaller units are placed in stock, and removed from stock when they are to be delivered to the recipient. You can use this as an alternative to the cross-docking/flow-through method if you do not use flow-through in your distribution center.

How is the processing method determined?

The processing method is contained in the following data: y Article You can enter a distribution profile in the logistics data in the article master. This indicates the processing method to be used for a distribution center. You can assign a processing method to the distribution profile in Customizing for Merchandise Distribution.

Procurement document During merchandise distribution planning, you can have the system propose the processing method from the distribution profile, and change this if required. You can process this in the details screen for the distribution center in allocation tables. When you create a collective purchase order, you can maintain it in the worklist or individual processing. If you create a procurement document as a follow-on document for an allocation table or collective purchase order, the processing method is copied to the procurement document (indicator for relevance to allocation table in additional item data) and the merchandise distribution data.

Distribution data If you adjust merchandise distribution online, the system proposes a processing method. You are no longer able to change the indicator for the processing method. However, you are able to change the method indirectly by copying the full or partial merchandise quantity to the quantity fields for other processing methods. However, if you do this, you must remember that the merchandise quantity already exists as stock in the storage location of the original method. As a result, as with quantity changes, you must carry out a transfer posting for the stock in the storage location(s) of the other method. . At goods receipt, you posted 100 pieces, for which cross-docking was defined, to crossdocking storage location 0001. When you adjusted the distribution online, you reduced the cross-docking quantity to 60, and set the flow-through quantity to 40. You must therefore carry out a transfer posting for these 40 pieces from storage location 0001 to flow-through storage location 0002.

5. Distribution Processing: Distribution Orders

Use
You can distribute the goods-receipt quantity of the articles (that is, after the distribution has been adjusted) among the recipients using distribution orders. You can use the distribution order like distribution lists. As soon as a handling unit (such as a wire basket or pallet) is full and the distribution orders have been confirmed, you generate the delivery online. The physical flow of goods is therefore the same as that mapped to R/3. Merchandise-driven distribution is used in the fashion sector, for example.

Using Distribution Orders as Distribution Lists

You can use distribution orders as distribution lists to: y y determine target data for distribution orders split distribution orders by target data

y y y

print distribution order or transfer IDocs (for printed lists or PDC units, as required) enter actual data to enable you to implement incentive wages using Human Resources (HR) confirm distribution orders

When are Distribution Orders Generated?

In Customizing, you can define the point at which a distribution order should be generated. The following options are available: y y Automatic generation at goods receipt Online referencing an article For further information on generating distribution orders online, see Creating Distribution Orders

Example of the Use of Distribution Orders

There is merchandise in the picking storage type for merchandise-driven flow-through. The merchandise has to be distributed as follows among the wire baskets for stores R151, R152 and R153. 1 pallet of article 1: 5 pieces for store R151 and 10 pieces for store R152 1 crate of article 2: 15 pieces for store R151 and 5 pieces for store R153 As a distribution order relates to only one article, you create two distribution orders for this, containing the following items: First distribution order Article Quantity From storage type From storage bin To storage type To storage bin Store R151

Article 1

5 pieces

Picking storage type for merchandisedriven flow-through Picking storage type for merchandisedriven flow-through

Shipping zone

Article 1

10 pieces

Shipping zone

Store R152

Second distribution order Article Quantity From storage type From storage bin To storage type To storage bin Store R151

Article 2

15 pieces

Picking storage type for merchandise-

Shipping zone

driven flow-through Article 2 5 pieces Picking storage type for merchandisedriven flow-through Shipping zone Store R153

As soon as a handling unit (such as a wire basket or pallet) for a particular recipient is full and the distribution orders have been confirmed, you generate the delivery. The delivery is automatically marked as not relevant for picking.

Integration
Distribution orders are transfer orders that do not reference a preceding document. They are fully integrated in Lean WM functionality. You can also use the transfer order functions for distribution orders. The business background to them, however, is that they are used for the special case of merchandisedriven flow-through.

Prerequisites
To use distribution orders, you must use Lean WM. Lean WM must be activated for the site/storage location/warehouse number and a special picking storage type entered for merchandise-driven flowthrough. To ensure that merchandise is properly distributed, you are advised to make distribution orders subject to confirmation. 6.