CRM and CX Blogs by Members
Find insights on SAP customer relationship management and customer experience products in blog posts from community members. Post your own perspective today!
Showing results for 
Search instead for 
Did you mean: 
Here I would like to discuss a scenario (Flow through) of Merchandise Distribution which i implemented in SAP S/4 HANA system for a Retailer. Merchandise Distribution is in itself a very big topic and can easily take books to cover it.

Broadly Merchandise distribution can support the Pull and Push distribution of merchandise and as processes its supports:

  1. Flow Through – Goods from vendors are routed through a Warehouse (Distribution Center) to stores or customers with repackaging done in Warehouse (Distribution Center).

  2. Cross Dock – Goods from vendors are routed through a Warehouse (Distribution Center) to stores or customers without any repackaging.

  3. Put away – Goods are received and then stored in a Put away storage location for future orders.

Refer to SAP Documentation on Merchandise Distribution for more extensive information.

For the project I worked on the Flow Though Push process so will concentrate on it.

This process is based on the Allocation table-based flow though distribution.  As can be seen in the diagram below:

  • Allocation tables are created for the entering and confirming the store(s) requirements and delivery dates of a material and identifying the DC for the stores. Here it also carries the Vendor which will deliver to the DC.

  • Based on this confirmed Allocation table, Purchase orders to vendors and Stock transfer orders for Store deliveries are created.

  • Later based on the Goods receipts for the vendor Purchase orders, distribution of the received quantities to the corresponding stock transfer orders in the DC shipping units can be done automatically. This distribution can also lead to automatic outbound delivery creation.

There are various possibilities in each leg of Merchandise distribution flow which can be configured or enhanced easily, namely.

  • Distribution of received quantity: It’s possible to configure if the distribution can be done manually or automatic. Also, how distribution to STOs will happen in case received quantities are different than the PO quantity. Tolerances can be used to control distribution.

  • Outbound Delivery generation: Its also possible to completely automatic or manual intervention for Outbound delivery generation or via the batch jobs.

All the required configurations for the Merchandise distribution is in Menu path

IMG -> Logistics-General -> Merchandise Distribution

Let’s now go though the step by step required customizations:

  • Site Profiles for Merchandise Distribution – Here the possible supported processing methods (Cross Dock, flow through) in a DC are defined. This Profile is then assigned to DC site master.

Here a new site profile Z03 is created. Copying 001(Defaults) Profile

Following configurations are made in next screen, selected here FT and CD processes.As the setup I made is for Allocation Push, select the Push process, and Go to Details.

Now this is critical configuration step and need to spend sometime here.

Adjustment Point: This setup controls when and how the Distribution of received quantities happens.

I selected “2 Goods receipt, checking size of variance” as the requirement was the distribution to happen automatically on Goods receipt in DC but if its within the Purchase tolerance.

Point of FT Delivery Generation:  Now as the Distribution is done; this step controls When              and how Outbound Delivery is to be created.I selected “1 Goods Receipt” as the requirement was the delivery can be created once Goods receipt against PO is done.

Rest options were taken over as default.

  • Distribution Profile of Article in DC – This configuration deals with distribution related settings for articles. The Distribution profile is then assigned at Article/DC level (MARC).

Here the distribution Profile for Article is now assigned the methods for processing a                            Distribution of received goods for a specific flow.

For Flow through, I maintained Proc. Method as Flow through and Distribution method as Recipient-driven distribution. Adjustment Profile (see next config) as Z03. Percentage variance for adjustment as 15 %.


  • Adjustment Profiles per processing method: As the name suggests, this setting is used to  define the logic for distribution of received quantities to STOs. This setting is mainly used to define cases of under and over receipts in DC.

The logic for distribution is very flexible according to various business needs and can be ABAP coded or SAP standard function modules like W_FRM_DISTR_PROPORTIONAL or W_FRM_DISTR_PROP_CD etc from function group WRF4 can be used.

According to the customer requirement, I took help of ABAP colleagues to have the distribution logic coded in the FM mentioned.

Here its also possible to customize the logic to distribute any remainder of distribution made by the FM mentioned above.

Now these were the required customizations, I also did some master data updates to fulfill the process

  • Distribution Profile in Site master

Assignment of Configured Distribution Profile to the DC for which specific settings are to be activated

Tcode -WB02 

  • Distribution Profile in Article master: Assignment of Configured Distribution Profile to the Article /DC for which specific settings are to be activated

Tcode -MM42 


Other Things to Consider:

  • Tcode WF30 can be used for the monitor Purchase orders and stock orders for Merchandise Distribution and also can be used for manual adjust.

  • Tcode WF50 can be used to manually distribute (adjust) the Purchase order received which were not automatically distributed because the receipts were outside tolerances.

  • Table FRET stores relation between Purchase order and corresponding STOs and also stores status of the distribution and OBD creation in terms of quantities.

  • Report WF61 can be scheduled to create OBDs when automatic creation during Goods receipt is not configured.

  • OBDs should not be created using VL10B for this process (see SAP note 2665851).

  • SAP note 3124206 can be implemented to solve a minor issue in Tcode WF30.

I would conclude by mentioning that Retail Merchandise distribution process supports for smooth distribution of goods to stores through the Distribution centers in the most optimal way suited for an organization.

Thanks for reading, Did you find this blog informative ? or would you like to share your experiences with Merchandise Distribution, Share you thoughts and feedback in comment box  🙂

You can find answers to various questions on Retail execution in

Image Credits :SAP SE.