A distribution chain is a combination of sales organization and distribution channel.

The distribution chain is used to target a particular group of customers. It attaches a permanent ("static") description to its sites, which associates them with the distinctive form typical of that distribution chain. The distribution chain to site assignment is important for the Retail Information System.

This static assignment is made in site maintenance in the general organizational data for the site.

For every distribution chain, you must use an indicator to define whether it is to be used for supplying consumers (from stores) or for supplying stores (from distribution centers). This is necessary for the following reason:

Sales prices are generally defined for a distribution chain and not for individual sites or customers. So if the same distribution chain is used for supplying both stores and consumers, then a distribution center will charge the store the same price as the store charges the consumer, using the selling price defined at distribution chain level. The same applies for the determination of the units of measure to be used for each delivery. Such associations are not usually desirable and they can be easily avoided by using separate distribution chains to supply stores and consumers.

In Customizing you define the distribution chains for which a site can deliver merchandise. No site can deliver merchandise until it has been assigned to a distribution chain.

For each distribution chain (sales organization and distribution channel) there is a reference distribution channel for customer and article master data, and also for condition data and sales document types. The data used for each of these areas is that of the reference distribution channel rather than that of the original distribution channel.

You specify various data for the combination of distribution chain and article, including sales unit and delivering site.