You do not need to set up divisions if you do not use them to structure your enterprise. However, you need to set up one dummy division for technical reasons (a dummy division 00, containing all your products and assortments).
Reasons for defining more than one division
- Product-oriented sales reporting, such as sales or profit margins
- Stock reporting, such as quantities, volumes, or values
If you structure your Sales Information System (SIS) by item division, you should take this structure into account during Customizing.
- You may choose to update standard information structures for each header division
- You also need to update each item division if you have:
- Changed the rules on updating
- Created your own information structures
If you use more than one division, you can use a reference division to reduce the amount of master data maintenance (for customer master data and conditions).
Structure-forming and product (or item) divisions
You can distinguish between the two main types of division by how they are used:
- Divisions that you use to structure your external sales organization are structure-forming (or header divisions). These externally-oriented sales areas are formed to control sales processing.
- Divisions that you only create to group materials or for reporting purposes are not structure-forming. These include product or item divisions.
Header and item divisions
The divisions can occur at two different levels in each sales document.
- Entered in the document header (è header division)
- Derived from the material master of the material entered in the line item (è item division)
The header division and item division may not be identical. You carry out Customizing activities for each order type.
This allows you to minimize redundancy in your sales structure (for example, by defining or lifting restrictions for subscription rights).
The way you intend to use the customer order is an indication of whether or not you need more than one header division:
- Is it possible to order all the product mixes in one customer order?
- Are there restrictions? For example, can certain customer groups prevented from including certain product combinations on one customer order?
Unless there is a need to separate different types of sales processing, one header division is often enough.
There is no need to set up separate header divisions for:
- Different conditions
- Different management or staff structures within Sales and Distribution
- Reporting requirements
(since you can often use different concepts, for example product hierarchies, for grouping purposes)
If you want to separate different types of sales processing, define your own header divisions:
- Create externally-oriented sales areas
- Use the header division as a representative division
- Use the item division to provide additional structures for reporting purposes (Sales Information System, or Profitability Analysis (CO-PA))