Complete Sales Order / Delivery flow in SAP

Let’s study a simple Sales Order flow in SAP.
Let’s assume 2 entities: Intel and Samsung.

Samsung: The inventory department realizes they are running low on certain electronic components. They send the request to the purchasing department that they require certain items. The Purchasing department will create a purchase request (PR: Tcode: ME51N ) .

This PR may be then subjected to RFQ (Request for Quotation Tcode: ME41) and vendor selection.  Basically they will decide from which company we need to buy the items from. They may select the Vendor (Seller) on basis of price, credit limit, reliability etc. etc. In some cases the seller has to send a quotation (Tcode: VA11 (Inquiry), VA21(Quotation) from Seller’s SAP system) having the price information so that Samsung can compare among all sellers.

Let’s assume from all these selection process, Intel wins the contract. Now a Purchase Order (PO) will be created by Samsung having information about the items, quantity required. It may also have the expected delivery date.

In Intel’s SAP system, a Sales Order (Tcode: VA01) is created against this Purchase Order. Each company follows its own Sales flow. Some may require credit release, finance approval etc.  A check is done whether all the items requested are available.  In certain cases, Intel has to manufacture the items freshly or get it from other locations if certain items are not available. This is commonly known as Internal Flow which can result in the creation of IPR (Internal PR), IPO (Internal PO), ISO (Internal SO) etc.,.

Once all the items are ready to be dispatched from the Intel’s warehouse/plant, an Outbound Delivery is created from Intel with reference to SO (Tcode: VL01N).

To deliver any goods, one needs to pick the goods (Picking), pack the goods (Packing) etc., these are different stages in the delivery.  Once these stages are over, we will do a PGI (Post Goods Issue). Post Goods issue is done when physically the goods are moved from warehouse or plant after Delivery is fully picked.

The next step is to ship the items to Samsung.  Intel creates an outbound shipment (Tcode: VT01N) with respect to the outbound delivery. The shipment will have tracking information of the truck or means by which the goods are transported to Samsung. Shipment has different stages also like loading the items to truck, the transit time, shipment start etc.

Once the outbound shipment from Intel is completed, Samsung will receive the goods. Samsung will create an Inbound delivery (Tcode: VL31N) from the original PO it created. The goods will be unloaded and inspected for quality norms and if everything is okay, a PGR (Post Goods Receipt) is done which indicates Samsung can pay the money to Intel.
The billing (Tcode: VF01) will be completed by both parties once Samsung transfers the money to Intel.  With this the deal gets closed.   

Hope this example clears up the simple SO flow.