Organizational Structure: Distribution Chain 
Organizational Structure: Distribution Chain
Definition
The purpose of a distribution chain is to structure sales within a retail company. A distribution chain is made up of a
sales organization and a distribution channel.Use
Many retail companies use a variety of different sales channels to sell to their customers. These include store-based retailing, wholesale and Internet selling. In the case of store-based retailing, stores can belong to different chains, which have a common look and feel, a common assortment and common goods presentation but which target different groups of customers. SAP Retail reflects these different sales channels by means of distribution chains.
In addition to the marketing aspect, distribution chains are used in conjunction with sales area data to control logistics processes.
Distribution chains are also important for sales pricing. It is not only possible to determine sales prices for an individual site or customer but also for an entire distribution chain.
Distribution chains also have an important role as structuring characteristics for reporting on sales.
Integration
There are three types of distribution chains in SAP Retail:
You assign the distribution chain type in Customizing under Distribution chain control. Among other things, the distribution chain type controls different logistics processes. In sales price calculation, it controls whether the sales price includes taxes or not.
Customer relationships are important for controlling logistics processes. You maintain these according to sales area. A sales area is a combination of a
sales organization, distribution channel and division. Unlike in industrial companies, there is generally no differentiation made in SAP Retail between product-related divisions, therefore the distribution chain is definitive for the customer relationship.You determine which distribution chains each site is going to use to deliver its merchandise. For a store that sells to consumers, the only available option is generally a store distribution chain, which represents a suitable chain of stores. Sometimes, however, you may need to differentiate between anonymous consumers and your known major customers, to whom you offer special prices. In this case you can set up a major customers distribution chain for your major customers. For distribution centers you can set up different distribution center distribution chains to supply the stores in the different chains, which have different transfer prices. For stores that are supplied by a distribution center, you maintain customer relationships for these distribution chains.
The significance of the distribution chain for logistics and price determination is also manifest in integrated article maintenance. In the distribution chain-related sales view you maintain data that is relevant for delivery, for example, the sales unit. For price determination, you maintain the actual sales price and other condition parameters but you also need to enter certain control data, such as the price fixing flag or the competition characterization of the article.
If there are lots of distribution chains, you can set up reference distribution chains to reduce the amount of work needed to maintain customer and article master data and conditions. To do this, enter suitable reference distribution channels for a distribution chain in Customizing under Distribution chain control.