Set Up Third-Party Orders Right the First Time for Trouble-Free Operation

  • by Vijay Garg, SAP Senior Functional Consultant
  • January 1, 2006
For third-party sales operations, it is important to set up master data and conduct continuous maintenance. Ignore these and face significant cost.
Key Concept
Third-party sales is a typical scenario in today’s competing global economies, where the “best of breed” products are manufactured for a given company by smaller niche manufacturers or associated business partners. The end customer is not necessarily aware of these business affiliations, as the shipping is under the original seller’s documentation. Customer invoices are generated by the original sales partner as well. This model is used increasingly in the process and manufacturing industries, consumer packaged goods (CPG), high-tech, and others.
In third-party sales processes, a customer receives materials from a reputed sales partner for which the materials are sourced from another manufacturer. Third-party orders are an important part of these processes.

Although the third-party sales process is relatively simple, it uses links to other SAP modules, such as Sales & Distribution, Procurement, Logistic Invoice Verification, and Customer Invoicing. A lack of understanding of these links on the part of execution personnel can disrupt a smoothly running system, creating inefficiencies and destroying customer satisfaction. I’ll show you how to automate the processes smoothly and how to configure third-party orders and set up master data to ensure trouble-free operations. If you are new to the third-party sales concept, see the sidebar, "Basic Guide to Third-Party Sales."

Vijay Garg

Vijay Garg, PMP, has more than 14 years of SAP project management and implementation experience with Fortune 500 companies in the high-tech, chemicals, CPG, and engineering industries using various SAP Business Suite applications as well as SAP APO. Prior to working in SAP, he had vast experience in the engineering industry, including software development and applications.

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