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  • SAP is the world's largest inter-enterprise software company and the world's third-largest independent software provider overall. We have a rich history of innovation and growth that has made us a true industry leader. SAP Americas 12 Million Users. 100,600 Installations. 1,500 Partners. SAP Americas is a subsidiary of SAP AG, the world's largest inter-enterprise software company and the third-largest software supplier overall. SAP Americas's corporate headquarters is located in Newtown Square, PA, a suburb of Philadelphia. Our officers and executives lead a team of professionals dedicated to delivering high-level customer support and services. Founded in 1972 as S ystems A pplications and P roducts in Data Processing, SAP has a rich history of innovation and growth that has made us the recognized leader in providing collaborative business solutions for all types of industries -- in every major market. The company, headquartered in Walldorf, Germany, employs more than 37,700 people in more than 50 countries, and serves more than 34,600 customers worldwide. Experience, Knowledge, and Technology for Maximizing Business SAP has leveraged our extensive experience to deliver mySAP Business Suite, the definitive family of business solutions for today's economy. These solutions are open and flexible, supporting databases, applications, operating systems, and hardware from almost every major vendor. What's more, mySAP Business Suite allows employees, customers, and business partners to work together successfully -- anywhere, anytime. By deploying the best technology, services, and development resources, SAP has delivered a business platform that unlocks valuable information resources, improves supply chain efficiencies, and builds strong customer relationships. And through the Global Solution Center, SAP Americas identifies customer needs and develops solutions to meet these needs. SAP is listed on several exchanges, including the Frankfurt Stock Exchange and the New York Stock Exchange, under the symbol "SAP."
  • 3-tier client server system Web server Internet transaction server Brings it to a single database across the world. What is Client-server Computing? The short answer: Client/server is a computational architecture that involves client processes requesting service from server processes. The long answer: Client/server computing is the logical extension of modular programming. Modular programming has as its fundamental assumption that separation of a large piece of software into its constituent parts ("modules") creates the possibility for easier development and better maintainability. Client/server computing takes this a step farther by recognizing that those modules need not all be executed within the same memory space. With this architecture, the calling module becomes the "client" (that which requests a service), and the called module becomes the "server" (that which provides the service). The logical extension of this is to have clients and servers running on the appropriate hardware and software platforms for their functions. For example, database management system servers running on platforms specially designed and configured to perform queries, or file servers running on platforms with special elements for managing files. It is this latter perspective that has created the widely-believed myth that client/server has something to do with PCs or Unix machines. What is a Client process? The client is a process (program) that sends a message to a server process (program), requesting that the server perform a task (service). Client programs usually manage the user-interface portion of the application, validate data entered by the user, dispatch requests to server programs, and sometimes execute business logic. The client-based process is the front- end of the application that the user sees and interacts with. The client process contains solution-specific logic and provides the interface between the user and the rest of the application system. The client process also manages the local resources that the user interacts with such as the monitor, keyboard, workstation CPU and peripherals. One of the key elements of a client workstation is the graphical user interface (GUI). Normally a part of operating system i.e. the window manager detects user actions, manages the windows on the display and displays the data in the windows. What is a Server process? A server process (program) fulfills the client request by performing the task requested. Server programs generally receive requests from client programs, execute database retrieval and updates, manage data integrity and dispatch responses to client requests. Sometimes server programs execute common or complex business logic. The server-based process "may" run on another machine on the network. This server could be the host operating system or network file server; the server is then provided both file system services and application services. Or in some cases, another desktop machine provides the application services. The server process acts as a software engine that manages shared resources such as databases, printers, communication links, or high powered-processors. The server process performs the back-end tasks that are common to similar applications.
  • We will setup and execute the 3 major processes an organization We created a pen because it was very easy to setup and understand. The IDES has a motorcycle, but that is more complex than we need to teach the system.
  • ERP - Enterprise Resource Planning - breaks down the traditional barrier that exist within a corporation.  For anyone to benefit from ERP, everyone has to contribute, this is the key to ERP survival. There has to be a common agenda throughout the business.  To get the commitment from everyone, everyone has to believe their needs and objectives are addressed by the plan, learning the tools and techniques to accomplish this is then relatively easy.
  • All of this together makes up the Master Record for a Material.
  • The system carries out the following activities when an outbound delivery is created: Checks the order and materials to make sure the outbound delivery is possible (for example, it checks for delivery blocks or incompleteness) Determines the delivery quantity of an item and checks the availability of the material Calculates the weight and volume of the delivery Calculates work expenditure Packs the outbound delivery according to the reference order Checks the delivery situation of the order and any partial delivery agreements Redetermines the route Adds information relevant for export Checks delivery scheduling and changes deadlines (if necessary) Assigns a picking location Carries out batch determination (if material is to be handled in batches) Creates an inspection lot if the material must pass a quality check Updates sales order data and changes order status
  • Changes in delivery will update the sales order.
  • In the system standard settings, it is a prerequisite for goods issue to be posted before the item relevant for picking can be picked completely. Therefore, delivery quantity and picking quantity (picked quantity) in the outbound delivery must be equal. Considering the picking lead time the picking date will be assigned based upon material availability The picking process involves taking goods from a storage location and staging the right quantity in a picking area where the goods will be prepared for shipping. Depending on the picking procedure being used, you can either determine delivery-relevant data before picking or wait until after picking is completed to record it. Delivery-relevant data may be made up of the following: Which batches a material is picked from Which serial numbers are picked Which valuation types the stock is taken from The use of the WM transfer order as a picking order offers you the following advantages: Determining of target data for transfer orders Splitting transfer orders according to target data Printing transfer orders or transmitting them in IDoc format Determining actual data for picking with option of executing incentive wage calculations using the Human Resources (HR) module Confirming transfer orders
  • The Packing component and related packing information enables you to: Update the stock situation of packing materials Monitor returnable packaging stocks at the customer's or forwarding agent's place of business Help you find you what was in a particular container (for example, if a customer maintains that they have received an incomplete delivery) Make sure that the weight and volume limits have been adhered to Ensure that products have been packed correctly UCC-128: Universal Container Code – Uniform packing code
  • As soon as the goods leave the company, the shipping business activity is finished. The outbound delivery forms the basis of goods issue posting. The data required for goods issue posting is copied from the outbound delivery into the goods issue document, which cannot be changed manually. Any changes must be made in the outbound delivery itself. In this way, you can be sure that the goods issue document is an accurate reflection of the outbound delivery. When you post goods issue for an outbound delivery, the following functions are carried out on the basis of the goods issue document: Warehouse stock of the material is reduced by the delivery quantity Value changes are posted to the balance sheet account in inventory accounting Requirements are reduced by the delivery quantity The serial number status is updated Goods issue posting is automatically recorded in the document flow Stock determination is executed for the vendor's consignment stock A worklist for the proof of delivery is generated A worklist for the proof of delivery is generated After goods issue is posted for an outbound delivery, the scope for changing the delivery document becomes very limited. This prevents there being any discrepancies between the goods issue document and the outbound delivery.
  • Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing. This component includes the following functions: Creation of: Invoices based on deliveries or services Issue credit and debit memos Pro forma invoices Cancel billing transactions Comprehensive pricing functions Issue rebates Transfer billing data to Financial Accounting (FI)
  • Creating Billing Documents Explicitly  Purpose If you only have to bill specific orders or deliveries, you can carry out manual billing explicitly. When processing the billing due list, you do not need to enter the individual documents to be invoiced. The system lists the documents to be invoiced on the basis of the selection criteria you enter. It can also combine several deliveries in one invoice. Process Flow You select the function for creating a billing due list. You enter the selection criteria for the billing documents to be created. For example, enter billing type F2 , if you only want to create invoices with this billing type. You then display the billing due list. The system uses the selection criteria to create the billing due list (a list of sales documents to be billed). You can now process this list, e.g. select some or all of the sales documents to be billed. You select the function for billing. The system creates the corresponding billing documents for the selected documents. Automatic Posting to Finance (next slide)
  • You can set the system to create one billing document for each sales document, e.g. one invoice per delivery. As long as certain data agrees, you can also combine different documents (orders and/or deliveries) fully or partially in a common billing document: If you want to guarantee that invoices are created separately according to certain criteria, you can do this by defining certain split criteria.
  • A purchasing organization is an organizational unit within logistics subdividing an enterprise according to the requirements of Purchasing. It procures materials and services, negotiates conditions of purchase with vendors, and bears responsibility for such transactions. A purchasing group is a group of buyers who are responsible for certain purchasing activities. The purchasing group is: - Internally responsible for procuring a material or a class of materials - Usually the principal channel for a company's dealings with its vendors
  • All of this together makes up the Master Record for a Material.
  • This is a standard view of the procure to pay process and the most common. It may vary significantly based upon the company procedures, the products/services purchases and other factors. SAP allow businesses to tailor it to their needs. Starts with a requisition or need that needs to be filled. This can come from Planning (MRP), manually or other The purchase order is the document to fill the need: usually includes the vendor, cost/price, quantity, terms and other pertinent information. [ part one of the 3-way match] Notifying the vendor The goods are shipped and brought to the organization The goods are received (typically at the dock) and then put away [ part two of the three way match] An invoice is received from the vendor [third part of the 3-way match] After the tolerances/verification of the 3-way match are met a payment is made according to the terms agreed to on the purchase order.
  • Requisitions can be created indirectly in the following ways: Via materials planning and control The component Consumption-Based Planning suggests materials that need to be ordered on the basis of past consumption or usage figures and existing stock levels. The order quantity and the delivery date are determined automatically. Via networks (from the component PS Project System ) Requisitions are generated automatically from networks if: A material component with non-stock material or an external service component has been assigned to an operation and the indicator allowing automatic generation of requisitions immediately the network is saved has been set in the network. Via maintenance orders Requisitions are generated automatically from maintenance orders if: A material component with non-stock material has been assigned to an operation, or An operation with the control key for external services has been created. For further information, refer to the section Planning of an Order in the PM Maintenance Orders documentation. Via production orders (from the component PP Production Planning and Control ). Requisitions are generated automatically from production orders if: They contain an external processing operation (e.g. subcontracting work). A precondition is that the control key for the operation allows or prescribes external processing. They contain non-stock components.
  • An outline purchase agreement is a longer-term agreement between a purchasing organization and a vendor regarding the supply of materials or the performance of services within a certain period according to predefined terms and conditions. Agreements are subdivided into: - Contracts - Centrally agreed contracts ; Distributed contracts quantity, or value You can also set up corporate buying contracts with your vendors. These are valid for all plants and company codes within a client (see Centrally Agreed Contract). Over the contract validity period, certain quantities of the materials or services covered are released (called off) against the contract as and when required through the issue of purchase orders referencing the latter. Such purchase orders are thus termed "contract release orders" or simply "release orders". (Outside SAP, particularly in the UK; they may also be referred to as "call-off orders".) - Scheduling agreements - Scheduling agreement referencing a centrally agreed contract outline purchase agreement under which materials are procured on predetermined dates within a certain time period. Delivery of the total quantity of material specified in a scheduling agreement item is spread over a certain period in a delivery schedule, consisting of lines indicating the individual quantities with their corresponding planned delivery dates.
  • A quotation is legally binding on the vendor for a certain period. A quotation consists of items in which the total quantity and delivery date of an offered material or service are specified Determining which vendors to send RFQs to is the first step in the bidding process. The system can help you to choose which vendors are to receive an RFQ if some or all of the information set out below is available: - Info records - Source list
  • Price Level This subcriterion compares relationship of a vendor's price to the market price. If the vendor's price is lower than the market price, he/she receives a good score; if it is higher than the market price he/she is assigned a poor score. On the basis of the subcriterion Price Level you can compare a vendor's price to the current market price at a certain point in time. Price History This subcriterion compares the development of the vendor's price with the market price. On the basis of the subcriterion Price History, you can determine whether the vendor's price has increased or decreased over a certain period in comparison with changes in the market price over the same period. Goods Receipt This subcriterion is used to evaluate the quality of the material that the vendor delivers. Quality inspection takes place at the time of goods receipt. Quality Audit This subcriterion is used to evaluate the quality assurance system used by a company in manufacturing products. Complaints/Rejection Level This subcriterion is used to evaluate whether the materials delivered by the vendor are regularly found to be faulty subsequent to incoming inspection (for example, on the shop-floor) leading to additional expense and loss of time (due to loss of production, reworking etc.). The score (QM key quality figure) is calculated in QM Quality Management and the data passed on to MM Vendor Evaluation. This key quality figure is converted for use in the Vendor Evaluation scoring system. On-Time Delivery Performance This subcriterion is used to determine how precisely a vendor has adhered to the specified delivery dates. Quantity Reliability This subcriterion is used to determine whether a vendor has delivered the quantity specified in the purchase order. “ On-time delivery performance” and “Quantity reliability” always have to be seen in conjunction. You can specify for each material (in the material master record) or for all materials (in the system settings) the minimum quantity of the ordered materials that must be delivered in order for a goods receipt to be included in the evaluation. This enables you to avoid a situation in which a punctual goods receipt involving only a small quantity of ordered materials is included in the evaluation with a good score for “on-time delivery performance”. If this minimum quantity is not delivered, the vendor is not awarded a score. However, in this case the vendor receives a bad score for quantity reliability. Compliance With Shipping Instructions This subcriterion is used to determine how precisely a vendor complies with your instructions for the shipping or packing of a material. Confirmation Date This subcriterion is used to determine whether a vendor adheres to a previously confirmed delivery date (that is, whether the goods are actually received on the date previously confirmed by the vendor).
  • The purchase order can be used for a variety of procurement purposes. You can procure materials for direct consumption or for stock. You can also procure services. Furthermore, the special procurement types "subcontracting", "third-party" (involving triangular business deals and direct-to-customer shipments) and "consignment" are possible. You can use purchase orders to cover your requirements using external sources (i.e. a vendor supplies a material or performs a service). You can also use a purchase order to procure a material that is needed in one of your plants from an internal source, i.e. from another plant.
  • If a material is delivered for a purchase order, it is important for all of the departments involved that the goods receipt entry in the system references this purchase order, for the following reasons: - Goods receiving can check whether the delivery actually corresponds to the order. - The system can propose data from the purchase order during entry of the goods receipt (for example, the material ordered, its quantity, and so on). This simplifies both data entry and checking (overdeliveries and underdeliveries). - The delivery is marked in the purchase order history. This allows the Purchasing department to monitor the purchase order history and initiate reminder procedures in the event of a late delivery. - The vendor invoice is checked against the ordered quantity and the delivered quantity. - The goods receipt is valuated on the basis of the purchase order price or the invoice price.
  • When you enter a goods movement in the system, you must enter a movement type to differentiate between the various goods movements. A movement type is a three-digit identification key for a goods movement. The movement type plays an important role in - updating of quantity fields - updating of stock and consumption accounts - determining which fields are displayed during entry of a document in the system
  • When you enter a goods movement, you start the following chain of events in the system: A material document is generated, which is used as proof of the movement and as a source of information for any other applications involved. If the movement is relevant for Financial Accounting, one or more accounting documents are generated. The stock quantities of the material are updated. The stock values in the material master record are updated, as are the stock and consumption accounts. Depending on the movement type, additional updates are carried out in participating applications. All updates are based on the information contained in the material document and the financial accounting document. For example, in the case of a goods issue for a cost center, the consumption values of the items are also updated.
  • It is in Logistics Invoice Verification that incoming invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting. An invoice can be processed in Logistics Invoice Verification in various ways: Invoice Verification Online Invoice Verification Online Invoice Verification in the Background Automatic Settlements Invoices Received via EDI Activate display of the MM and FI document numbers using the user parameter IVFIDISPLAY, by entering the value X for the user. In the standard system, only the document number from Materials Management is displayed.
  • Requisition – Nothing really happens unless we get the goods or pay for them The system does the transactions for you using the automatic account assignment When we receive these, it can match the receipt against the PO Debit Inventory (we now have additional inventory value) Credit GR/IR (we are going to owe/pay for that additional inventory)
  • Once we get the receipt – Debit GR/IR – now a wash Vendor AP Credit – we owe Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods Unique to SAP
  • Once we get the receipt – Debit GR/IR – now a wash Vendor AP Credit – we owe (it is debited: now a wash) Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods Unique to SAP Credit bank account (paid, now we have less cash)
  • Goods Receipt Debit Inventory Credit GR/IR Invoice Receipt Debit GR/IR Credit AP Payment Program (A/P) Debit: AP Credit Bank
  • Forecasting should be done primarily for end-item demand. In manufacturing situations, this means there is no real need for forecasting component parts which make up the final item. When production quantities for the end item have been determined, component demand can be computed based on the production plan of the end item and knowledge of the bill of materials (BOM).
  • Similar products: small variations e.g. bike with a different color If you are producing several similar products that have a lot of common parts, you can describe these products using a variant BOM. This is the case, for example, if you replace one material component with another to make a different product. Variants can also differ by containing different quantities of a component. You create the new BOM as a variant of an existing BOM.
  • Item Categories Stock Item – place a reservation and removed from stock when needed Non-Stock Item – Purchase Requisition will need to be created for the item Document Item – CAD drawing, Engineering Documents, etc
  • Routings enable you to plan the production of materials (products). Therefore, routings are used as a template for production orders and run schedules as well as a basis for product costing. A routing is a description of which operations (process steps) have to be carried out and in which order to produce a material (product). As well as information about the operations and the order in which they are carried out, a routing also contains details about the work centers at which they are carried out as well as about the required production resources and tools (includes jigs and fixtures). Standard values for the execution of individual operations are also saved in routings. In a routing you plan - The operations (work steps) to be carried out during production - The activities to be performed in the operations as a basis for determining dates, capacity requirements, and costs - The use of materials during production - The use of work centers - The quality checks to be carried out during production
  • Operations are carried out at a work center. In the SAP system work centers are business objects that can represent the following real work centers, for example: - Machines, machine groups - Production lines - Assembly work centers - Employees, groups of employees Use Together with bills of material and routings, work centers belong to the most important master data in the production planning and control system. Work centers are used in task list operations and work orders. Task lists are for example routings, maintenance task lists, inspection plans and standard networks. Work orders are created for production, quality assurance, plant maintenance and for the Project System as networks.
  • Data in work centers is used for - Scheduling - Operating times and formulas are entered in the work center, so that the duration of an operation can be calculated. - Costing - Formulas are entered in the work center, so that the costs of an operation can be calculated. A work center is also assigned to a cost center. - Capacity planning - The available capacity and formulas for calculating capacity requirements are entered in the work center. - Simplifying operation maintenance - Various default values for operations can be entered in the work center
  • Aggregate forecasts of a group of similar products are generally more accurate than individual forecasts of the individual products that make up the group.
  • Reyovac Batteries Constant Production building up On-hand inventory 90% of battery sales are in Nov and Dec for christmas
  • Supply chain planning, to a large degree, starts with forecasting. Matching supply and demand is an important goal for most firms and is at the heart of operational planning. It is also of significant importance as the overly optimistic Cisco found in 2001 when it took a $2.2 Billion inventory write-down because of their ability to “forecast demand with near-scientific precision” 1. Since most production systems can’t respond to consumer demand instantaneously, some estimate, or forecast, of future demand is required so that the efficient and effective operational plans can be made. Forecasts are always wrong, but some are “more wrong” than others. Forecasting the demand for innovative products, fashion goods, and the like is generally more difficult than forecasting demand for more “commodity-like” products that are sold on a daily basis. Aggregate forecasts of a group of similar products are generally more accurate than individual forecasts of the individual products that make up the group. Finally, the longer the forecast into the future, the less reliable the forecast will be.
  • A more recent proposal to fix forecast errors is to use collaboration . The idea is that if different parts of the supply chain collaborate on a common forecast and everyone plans based on that single forecast; then there is little need for one part of the chain to hedge based on the uncertainty of what is done in other parts of the chain. Intra-firm collaboration, you would think, would be common place – seems that a little common sense would dictate that everyone in a firm come together with a common set of forecast figures. But this is rarely the case. Marketing has a set of forecasts, so too does operations. Sales has their forecast and it’s possible that for budgeting purposes Finance uses still another. The advancement of enterprise resource planning (ERP) systems is helping ensure that there is only one forecast, based upon the principles of a single data repository used by all areas of the enterprise. Forecasts affect most functional areas of the firm and are the starting point for resource allocation decisions. For example, manufacturing must plan production on a day to day basis to meet customer orders, while purchasing needs to know how to align supplier deliveries with the production schedules. Finance needs to understand the forecasts so that the proper levels of investment can be made in plant, equipment, and inventory and so that budgets can be constructed to better manage the business. The marketing function needs to know how to allocate resources for various product groups and marketing campaigns. Forecasts also determine the labor requirements required by the firm so that the human resources function can make proper hiring and training decisions when demand is expected to grow.
  • Aggregating forecasts across multiple items reduces forecasting errors. A clothing store, for instance, might be able to estimate within a pretty narrow range what the demand will be for men’s dress shirts. But when that store tries to estimate the demand for individual styles, colors, and sizes of shirts, the accuracy of their forecasts will be considerably worse. Firms handle this kind of forecasting problem usually in one of three ways; they either forecast from the bottom up, from the top down, or they start in the middle and work both up and down. The “top down” forecast essentially estimates total sales demand and then divides those sales dollars level by level until the stock keeping unit (SKU) is reached. The “bottom up” method, as one might expect, starts with forecasts at the SKU level and then aggregates those demand estimates level by level to reach a company–level forecast. Another method, one might call the “in-between” method, starts forecasts at the category level (like men’s dress shirts), and then works up to determine store sales and works down to divide up the forecast into styles, colors and SKUs.
  • Planning strategies represent the business procedures for the planning of production quantities and dates. A wide range of production planning strategies are available in the SAP R/3 System, offering a large number of different options ranging from pure make-to-order production to make-to-stock production . Depending on the strategy you choose, you can: Use sales orders and/or sales forecast values to create the demand program Move the stocking level down to the assembly level so that final assembly is triggered by the incoming sales order Carry out Demand Management specifically for the assembly Strategies for Make-to-Stock Production  Purpose The planning strategies explained in this section are designed for planning procurement (production or purchasing) of components by planning the final products. If you can plan at component level more easily. Prerequisites Choose a make-to-stock strategy, if: The materials are not segregated. In other words, they are not assigned to specific sales orders. Costs need to be tracked at material level, and not at sales order level. Strategies for Planning Components  Purpose The planning strategies explained in this section are designed for planning the procurement (production or purchasing) of components by planning the components themselves. This is particularly useful in the following cases: There is a variety of finished products (possibly with an irregular demand pattern where planning is not possible). The finished products are consumption-based. The overall purpose of planning at component level is to procure components to stock (without sales orders) in order to react to customer demand as quickly as possible. Prerequisites Choose a strategy for planning components, if: The components are not segregated; that is, they are not uniquely linked at specific orders. Costs should be tracked at component (material) level and not at order level.
  • Strategies for Make-to-Order (MTO) Production  Purpose The planning strategies explained in this section are designed for the production of a material for a specific individual sales order. In other words, you do not want to produce finished products until you receive a sales order. This means that make-to-order strategies always support a very close customer-vendor relationship, because your sales orders are closely linked to production. The same relationship exists between the sales order and production that exists in a make-to-order environment. Make-to-order is also used in the following environments. Production using variant configuration Assemble-to-order Prerequisites Choose a make-to-order strategy, if: The materials are segregated. In other words, they are uniquely assigned to specific sales orders. Costs must be tracked at sales order level and not on material level. Strategies for Configurable Materials  Definition A configurable material is a material for which different variants are possible. The strategies for configurable materials allow you to plan products with an almost unlimited number of possible combinations of characteristics and combination value keys. Use these strategies if you want to plan a product that uses a feasible combination of characteristic values and that does not include final assembly. Typical examples of such products are cars, elevators, forklifts, trucks, buses. Assemble-to-order  An assemble-to-order environment is one in which the product or service is assembled on receipt of the sales order. Key components are planned or stocked in anticipation of the sales order. Receipt of the order initiates assembly of the customized product. Assemble-to-order is useful where a large number of finished products can be assembled from common components.
  • Using MPS you can carefully plan important parts or bottleneck parts in a separate planning run at the highest BOM level before the planning results have an effect on all of the production levels.
  • The central role of MRP is to monitor stocks and in particular, to automatically create procurement proposals for purchasing and production (planned orders, purchase requisitions or delivery schedules). This target is achieved by using various materials planning methods which each cover different procedures. Consumption-based planning is based on past consumption values and uses the forecast or other statistical procedures to determine future requirements. The procedures in consumption-based planning do not refer to the master production schedule. That is, the net requirements calculation is not triggered either by planned independent requirements or dependent requirement. Instead, it is triggered when stock levels fall below a predefined reorder point or by forecast requirements calculated using past consumption values.
  • The lot-size calculation is carried out in MRP. In the net requirements calculation, the system determines material shortages for each requirement date. These shortage quantities must be covered by receipt elements. The system then calculates the quantities required for the receipts in the planning run in the procurement quantity calculation. In static lot-sizing procedures, the procurement quantity is calculated exclusively by means of the quantity specifications entered in the material master. Features The following static lot-sizing procedures are available: Lot-for-lot order quantity Fixed lot size Fixed lot size with splitting and overlapping Replenishment up to maximum stock level In period lot-sizing procedures, the system groups several requirements within a time interval together to form a lot. Features You can define the following periods: days weeks months periods of flexible length equal to posting periods freely definable periods according to a planning calendar The system can interpret the period start of the planning calendar as the availability date or as the delivery date. In static and period lot-sizing procedures, the costs resulting from stock keeping, from the setup procedures or from purchasing are not taken into consideration. The aim of optimum lot-sizing procedures, on the other hand, is to group shortages together in such a way that costs are minimized. These costs include lot size independent costs (setup or order costs) and storage costs.
  • A request or instruction from a purchasing organization to a vendor (external supplier) or a plant to deliver a quantity of material or to perform services at a certain point in time.
  • List Types The SAP system differentiates between the following types of lists: Operation-based lists, for example, time tickets, confirmation slips Component-based lists, for example Pull List, material withdrawal slips PRT lists, for example, PRT overview Multi-purpose lists, for example, object overview, operation control ticket This type of list can contain information about operations or production resources and tools, for example. The lists that the system generates and prints refer to all operations, suboperations, components, and production tool and resources contained in a production order.
  • You can withdraw materials for an order that are not listed as components in the order. These "unplanned withdrawals" cause the actual costs of the production order to be updated.
  • Since production costs were higher than planned, the additional expenditure negatively affects the operating profit. This means that the profit decreases by the amount by which the actual costs charged to the production order exceed the standard price. The actual costs charged to the production order affect net income just as the posting of the inventory change at the time of the goods receipt. Since the actual expense was 20 higher than expected, the operating profit is 200 lower than it would have been if production had been at standard cost.
  • Calculate and analyze planned costs, target costs, and actual costs of production orders and process orders Calculate or update the work-in-process inventory and the finished goods inventory Calculate and analyze variances Transfer data to Financial Accounting (FI) Transfer data to Profitability Analysis (CO-PA) Transfer data to Profit Center Accounting (EC-PCA) Transfer data to Actual Costing / Material Ledger (CO-PC-ACT)
  • 2070.00 – 1987.00 = 83.00 83.00 is the difference between what it cost to make the product and what we value it at in the Material Master. Accounting 1 Screen Material Master 460 EPENS @ 4.50 = 2070.00 So we make it cheaper then we value the product.
  • This diagram shows the integration between finance and controlling: The expense accounts are managed in both the P&L expense account and the primary cost element in controlling.
  • This diagram show a purchase order. In this case the cost of the purchase order is assigned to Cost Center C0001.
  • Transactions can have an effect on both FI and CO. The transaction will create a debit and a credit for FI (FI transaction) If CO is turned on a cost center or cost element bucket will be updated. (CO transactions)
  • This diagram show a purchase order. In this case the cost of the purchase order is assigned to Cost Center C0001.
  • This figure shows an example of statistical key figures. A project cost center has 12 hours worth the activity. The statistical key figure is hours and is split at: 30% to the Work Center 50% to maintenance 20% to IS All costs for the labor will be allocated in this fashion
  • In Distribution and Assessment, you further allocate costs (or quantities for Indirect Activity Allocations) collected on a cost center during the accounting period to receivers, according to user-defined keys. These are therefore indirect allocation methods, because the exchange of activity is not the basis for allocating costs/quantities. Instead, user-defined keys such as percentage rates, amounts, statistical key figures, or posted amounts provide the cost/quantity assignment basis. The advantage of these methods is that they are easy to use. You usually define the keys and the sender/receiver relationships only once. Distribution and assessment are used primarily for cost centers. This is because direct cost allocation is not possible here due to the variety of transactions, the lack of clearly defined individual activity types and the fact that the entry of the activity is too time-consuming. For example, the costs of the company cafeteria may be assigned based on the number of employees in each cost center. Telephone costs are seldom allocated directly to the individual cost centers, but are collected on a clearing cost center for each period. They are then reposted or distributed at the end of the period according to the number of telephone units or telephone installations in each cost center. Assessment is a method of allocating primary and secondary costs in Cost Center Accounting and Activity-Based Costing. The following information is passed on to the receivers: The original cost elements are assigned cumulatively, or in groups, to assessment (secondary) cost elements. The original cost elements are not recorded on the receivers. Sender and receiver information (sender cost center, receiver cost center, or business process) appears in the Controlling (CO) document.
  • In this example the distribution of the rent expense is by square footage occupied by each of the cost centers. By the pie chart we see that distribution and administration have the most square footage.
  • Distribution and administration having most of the square footage thus have the majority of the distribution costs.
  • In this example IT expenses are accumulated. Periodically, the costs are reallocated to the primary and secondary cost elements based upon the budgeting and expense policy of the company. Notice how Sales now has a much larger portion than the other departments.
  • The reallocation in Dollars
  • Understand sap

    1. 1. © 2008 SAP AGIntroduction to SAP ERPAbstractThis teaching material is intended to explain how the fundamentalbusiness processes interact with SAP ERP in the functional areasof Sales and Distribution, Materials Management, ProductionPlanning, Financial Accounting, Controlling, and Human CapitalManagement.SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationSD, MM, PP, FI, CO
    2. 2. SAP ERPSAP University AlliancesPage 1-2© 2008 SAP AGCourse Content Introduction to SAP Navigation Sales & Distribution Materials Management Production Planning Financial Accounting Controlling
    3. 3. SAP ERPSAP University AlliancesPage 1-3© 2008 SAP AGSAP“Systems, Applications, and Products in Data Processing” Name of the Company- SAP AG- SAP America- SAP UK Name of the Software- SAP R/2- SAP R/3- SAP ERP
    4. 4. SAP ERPSAP University AlliancesPage 1-4© 2008 SAP AGWho is SAP? SAP AG- Founded in Walldorf, Germany in 1972- World’s Largest Business Software Company- World’s Third-largest Independent Software Provider Company Statistics- Over 40,000 employees in more then 50 countries- 1500 Business Partners- 36,200 customers in more then 120 countries- 12 million users- 100,600 installationsSource: SAP AG website
    5. 5. SAP ERPSAP University AlliancesPage 1-5© 2008 SAP AGIntegrated Business Solution Vendors SAP (Systems, Applications, & Products in Data Processing)- SAP ERP, All-in-One, Business by Design, Business One Oracle Applications- Oracle, JD Edwards, PeopleSoft, Siebel, Retek Microsoft Business Solutions- Dynamics: Great Plains, Navision, Axapta, Soloman The Sage Group- Sage Software – Accpac ERP, PeachTree SSA Global Technologies- BAAN
    6. 6. SAP ERPSAP University AlliancesPage 1-6© 2008 SAP AGSAP Architecture World-wide usage Designed to satisfy the information needs for business sizes (smalllocal to large all international)- Multi-lingual- Multi-currency Designed to satisfy the information needs for all industries
    7. 7. SAP ERPSAP University AlliancesPage 1-7© 2008 SAP AGSAP ERP Enables a company to link it’s business processes Ties together disparate business functions (integrated businesssolution) Helps the organization run smoothly Real-time environment Scalable and flexible
    8. 8. SAP ERPSAP University AlliancesPage 1-8© 2008 SAP AGSAP Architecture Client/Server Environment- Client – hardware/software environment that can make a request forservices for a central repository of resources- Server – hardware/software combination that can provide services to agroup of clients in a controlled environment Three – Tier Structure- GUI• Graphical User Interface or Web Interface- Application Server• One or more, help distribute work load- Database Server• One single data repository
    9. 9. SAP ERPSAP University AlliancesPage 1-9© 2008 SAP AGSAP ArchitectureDatabaseApplicationPresentationBrowser ClientPCs, Laptops, etc.NetworkApplicationServersDatabaseInternetTransactionServerWeb Server
    10. 10. SAP ERPSAP University AlliancesPage 1-10© 2008 SAP AGSAP Business SuiteSAP NetWeaverSAP SCMSAP PLMSAPSRMSAPCRMSAPERP ECC 6.0
    12. 12. SAP ERPSAP University AlliancesPage 1-12© 2008 SAP AGSAP Software Applications Solutions- SAP ERP- SAP CRM- SAP PLM- SAP SCM- SAP SRM- SAP Analytics- SAP Manufacturing- SAP Service- SAP Mobile Solutions- SAP xApps Small & Medium Size Solutions- Business One- Business by Design- SAP All-in-One Platforms- Enterprise Services Architecture- SAP NetWeaver Platform
    13. 13. SAP ERPSAP University AlliancesPage 1-13© 2008 SAP AGSAP ERP Business Modules Collections of logically related transactions within identifiablebusiness functions- MM (“Buy”)- PP (“Make”)- SD (“Sell”)- FI and CO (“Track”)- HCM
    14. 14. SAP ERPSAP University AlliancesPage 1-14© 2008 SAP AGSAP ERP Core Applications Logistics- Sales & Distribution- Plant Maintenance- Materials Management- Production Planning- Quality Management Accounting- Financial Accounting- Controlling- Asset Management- Treasury Human Resources- Personnel Management- Benefits- Payroll
    15. 15. SAP ERPSAP University AlliancesPage 1-15© 2008 SAP AGSAP Industry Solutions Aerospace & Defense Automotive Banking Chemicals Consumer Products Defense & Security Engineering, Const. Healthcare High Tech Higher Education Industrial Machinery Insurance Life Sciences Logistics Service Prod. Media Mill Products Mining Oil & Gas Pharmaceuticals Postal Services Professional Services Public Sector Railways Retail Telecommunications Utilities Wholesale Distribution
    16. 16. © 2008 SAP AGNavigationAbstractThis material explains how to navigate in SAP systems. It is aimed atstudents at educational institutions, such as schools, universities ofcooperative education, universities of applied sciences, and otheruniversities, with no previous experience of SAP software. It can be usedin the classroom or for self-study.On completion of the course, students will be able to navigate through theuser interface to deal with business processes and case studies.SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductAllLevelBeginnerFocusSAP ERP
    17. 17. SAP ERPSAP University AlliancesPage 1-17© 2008 SAP AGContent User guidance User specific settings Navigation in SAP Easy Access Menu Help
    18. 18. SAP ERPSAP University AlliancesPage 1-18© 2008 SAP AGLearning TargetsAt the end of this chapter you can Name the window elements Navigate in an SAP system Apply personal system settings Effectively use Help
    19. 19. SAP ERPSAP University AlliancesPage 1-19© 2008 SAP AGLog on to an SAP system
    20. 20. SAP ERPSAP University AlliancesPage 1-20© 2008 SAP AGSAP Easy Access Menu
    21. 21. SAP ERPSAP University AlliancesPage 1-21© 2008 SAP AGSAP Easy Access Menu
    22. 22. SAP ERPSAP University AlliancesPage 1-22© 2008 SAP AGRole-based User Menu
    23. 23. SAP ERPSAP University AlliancesPage 1-23© 2008 SAP AGDYNPRO ElementsRadiobuttonAlternative 1 (nur eine Alternative möglich!)ODER Alternative 2oder .....oder .....oder .....Anzeigen ÄndernCheckboxAuswahl 1 (Mehrfachwahl möglich!)Auswahl 4Auswahl 2Auswahl 3ÜberblickCheck boxRadio buttonsPress buttonsInput fieldsTabsSystem function barApplication function barCommand field(transaction code)Status bar
    24. 24. SAP ERPSAP University AlliancesPage 1-24© 2008 SAP AGENJOY Initiative – Old DesignInitial screen Header dataPosition detailsPosition overview
    25. 25. SAP ERPSAP University AlliancesPage 1-25© 2008 SAP AGENJOY Initiative – New Designheader datapositionoverviewpositiondetails
    26. 26. SAP ERPSAP University AlliancesPage 1-26© 2008 SAP AGHelp FunctionsF1: Description of Input FieldsF4: value list
    27. 27. SAP ERPSAP University AlliancesPage 1-27© 2008 SAP AGSAP Help Portalhttp://help.sap.com
    28. 28. SAP ERPSAP University AlliancesPage 1-28© 2008 SAP AGFavorites
    29. 29. SAP ERPSAP University AlliancesPage 1-29© 2008 SAP AGTransaction Codes
    30. 30. SAP ERPSAP University AlliancesPage 1-30© 2008 SAP AGTransaction SEARCH_SAP_MENU
    31. 31. SAP ERPSAP University AlliancesPage 1-31© 2008 SAP AGTransaction ICON
    32. 32. SAP ERPSAP University AlliancesPage 1-32© 2008 SAP AGMultiple Selection
    33. 33. SAP ERPSAP University AlliancesPage 1-33© 2008 SAP AGUser Profile Settings (local)
    34. 34. SAP ERPSAP University AlliancesPage 1-34© 2008 SAP AGUser Profile Settings (SAP System)
    35. 35. SAP ERPSAP University AlliancesPage 1-35© 2008 SAP AGDesktop Shortcut
    36. 36. SAP ERPSAP University AlliancesPage 1-36© 2008 SAP AGSummaryYou are now able to:- Name the window elements- Navigate in an SAP system- Apply personal system settings- Effectively use help
    37. 37. © 2008 SAP AGGlobal Bike Inc.AbstractThis material explains the company on which the introductionmaterial is based on. It describes its enterprise structure in detail.SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERPLevelBeginnerFocusGlobal Bike Inc.Integration
    38. 38. SAP ERPSAP University AlliancesPage 1-38© 2008 SAP AGGlobal Bike Incorporated Company in the bicycle business Initially buys and re-sells different lines of bicycles Sells to both wholesale and Internet – procure and distribute Later acquires a production facility to manufacture its own product– produce and distribute
    39. 39. SAP ERPSAP University AlliancesPage 1-39© 2008 SAP AGCore Business ProcessesGlobal Bike Inc. Sell – Sales and Distribution (SD) Buy – Procurement (MM) Plan – Production Planning (PP) Make – Manufacturing Execution (PP) Track – Financial Accounting (FI) Track – Controlling (CO)
    40. 40. SAP ERPSAP University AlliancesPage 1-40© 2008 SAP AGTwo Approaches of Learning Standard Training- Level 1: Introductory- Level 2: Business processes- Level 3: Configuration Business Process Integration Approach- Cross functional- Understand business processes and their relationship to SAPsorganizational structure- Highlight integration/configuration
    41. 41. SAP ERPSAP University AlliancesPage 1-41© 2008 SAP AGCross-functional integrationSource Unknown
    42. 42. SAP ERPSAP University AlliancesPage 1-42© 2008 SAP AGProcess IntegrationSales OrderProcessSales OrderEntry CheckAvailabilityProcurementProcessPickMaterialsPurchaseRequisitionPurchaseOrderGoodsReceiptInvoiceReceiptPaymentto VendorPost GoodsIssueInvoiceCustomerReceipt ofPaymentRun MRP
    43. 43. SAP ERPSAP University AlliancesPage 1-43© 2008 SAP AGProcess IntegrationSales OrderProcessSales OrderEntryCheckAvailabilityProcurementProcessPickMaterialsPurchaseRequisitionPurchaseOrderGoodsReceiptInvoiceReceiptPaymentto VendorPost GoodsIssueInvoiceCustomerReceipt ofPaymentRun MRP
    44. 44. SAP ERPSAP University AlliancesPage 1-44© 2008 SAP AGProcess IntegrationGoodsIssueSales OrderProcessSales OrderEntryCheckAvailabilityProductionProcessRun MPSw/MRPConvert ProductionProposal Scheduleand ReleaseProcurementProcessPickMaterialsPurchaseRequisitionPurchaseOrderGoodsReceiptInvoiceReceiptPaymentto VendorCompletionConfirmationGoodsReceiptQualityInspectionOrderSettlementPost GoodsIssueInvoiceCustomerReceipt ofPayment
    45. 45. SAP ERPSAP University AlliancesPage 1-45© 2008 SAP AGProcess IntegrationGoodsIssueSales OrderProcessSales OrderEntryCheckAvailabilityProductionProcessRun MPSw/MRPConvert ProductionProposal Scheduleand ReleaseProcurementProcessPickMaterialsPurchaseRequisitionPurchaseOrderGoodsReceiptInvoiceReceiptPaymentto VendorCompletionConfirmationGoodsReceiptQualityInspectionOrderSettlementPost GoodsIssueInvoiceCustomerReceipt ofPayment
    46. 46. SAP ERPSAP University AlliancesPage 1-46© 2008 SAP AGEnterprise Structure (Global Bike Inc.)PlantClientChart ofAccountsCompanyCodeFiscal YearVariantCredit ControlAreaPurchasingOrganizationPurchasingGroupShippingPointSalesOrganizationDistributionChannelDivisionSales AreaControllingAreaSL10 SL20
    47. 47. SAP ERPSAP University AlliancesPage 1-47© 2008 SAP AG
    48. 48. SAP ERPSAP University AlliancesPage 1-48© 2008 SAP AG
    49. 49. © 2008 SAP AGSales and Distribution (SD)SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationSales and Distribution
    50. 50. SAP ERPSAP University AlliancesPage 1-50© 2008 SAP AGFunctionality Sales Support Sales Shipping and Transportation Billing Credit Management Foreign Trade
    51. 51. SAP ERPSAP University AlliancesPage 1-51© 2008 SAP AGChapter Overview Sales and Distribution Org. Levels Sales and Distribution Master Data Sales Order Process- Order-to-Cash
    52. 52. SAP ERPSAP University AlliancesPage 1-52© 2008 SAP AGOrganizational Structure S&D Structure Client Company Code Sales Area- Sales Organization- Distribution Channel- Division Plant Shipping Point Loading Point Internal Sales Structure Sales Offices Sales Groups Salesperson
    53. 53. SAP ERPSAP University AlliancesPage 1-53© 2008 SAP AGStructure for Sales Order ProcessingClient 410Company CodeC100Plant P100 Plant P101Sales AreaSales OrgS100DistributionChannel (RE)Division(01)
    54. 54. SAP ERPSAP University AlliancesPage 1-54© 2008 SAP AGInternal Sales StructureUS Sales OfficeS100Western SalesOfficeNorthwest SalesGroupSouthwest SalesGroupSalesperson 1Eastern SalesOfficeNorthwest SalesGroupSouthwest SalesGroupSalesperson 2Salesperson 3Salesperson 4Salesperson 5Salesperson 6 Salesperson 7Salesperson 8Salesperson 9
    55. 55. SAP ERPSAP University AlliancesPage 1-55© 2008 SAP AGStructure for DistributionClient 410Company CodeC100Plant P100 Plant P101Shipping PointExpress DockLoading PointLP01Shipping PointFreight DockShipping PointRail DockLoading PointLP02Loading PointLP03
    56. 56. SAP ERPSAP University AlliancesPage 1-56© 2008 SAP AGSD Master DataCustomer MasterMaterial MasterSales Condition
    57. 57. SAP ERPSAP University AlliancesPage 1-57© 2008 SAP AGCustomer Master Data Customer Master- Contains all of the informationnecessary for processing orders,deliveries, invoices and customerpayment- Every customer MUST have amaster record Created by Sales Area- Sales Organization- Distribution Channel- Division
    58. 58. SAP ERPSAP University AlliancesPage 1-58© 2008 SAP AGCustomer Master Data The customer master informationis divided into 3 areas:- General Data- Company Code Data- Sales Area Data
    59. 59. SAP ERPSAP University AlliancesPage 1-59© 2008 SAP AGCustomer MasterCompany Code 102Company Code 101Company Code 100Client 410Sales Org. 101Sales Org. 100General Information relevant for the entire organization:NameAddressCommunicationCompany Code specific information:Acc. MgmtPaymentBankSales Area specific information:Sales OfficeCurrency
    60. 60. SAP ERPSAP University AlliancesPage 1-60© 2008 SAP AGMaterial Master Data Material Master- Contains all the information acompany needs to manage abouta material- It is used by most componentswithin the SAP system• Sales and Distribution• Materials Management• Production• Plant Maintenance• Accounting/Controlling• Quality Management- Material master data is stored infunctional segments called Views
    61. 61. SAP ERPSAP University AlliancesPage 1-61© 2008 SAP AGMaterial Master ViewsMaterial MasterBasic DataSales DataControlling DataForecasting DataPurchasing DataMat. Plan. DataAccounting DataStorage DataQuality Data
    62. 62. SAP ERPSAP University AlliancesPage 1-62© 2008 SAP AGMaterial MasterSales Org 102Sales Org 101Sales Org 100Client 410Storage Location 20Storage Location 10General Information relevant for the entire organization:NameWeightU/MSales specific information: Delivery PlantLoading GrpStorage Location specific information:Stock Qty
    63. 63. SAP ERPSAP University AlliancesPage 1-63© 2008 SAP AGCustomer Material Information Record Data on a material defined for aspecific customer is stored in aCustomer material info record. Info Records contain:- Customer-specific materialnumber- Customer-specific materialdescription- Customer-specific data ondeliveries and delivery tolerances You can also maintain default textto appear on sales orders for thatcustomer
    64. 64. SAP ERPSAP University AlliancesPage 1-64© 2008 SAP AGCondition Master (Pricing) Condition master data includes:- Prices- Surcharges- Discounts- Freights- Taxes You can define the conditionmaster to be dependent onvarious data:- Material specific- Customer specific Conditions can be dependent onany document field
    65. 65. SAP ERPSAP University AlliancesPage 1-65© 2008 SAP AGOutput Output is information that is sentto the customer using variousmedia, such as:- E-mail- Mail- EDI- Fax- XML Output examples:- Quotation- Confirmation- Invoice
    66. 66. SAP ERPSAP University AlliancesPage 1-66© 2008 SAP AGSales Order ProcessSales OrderEntryPost GoodsIssueInvoiceCustomerPickMaterialsReceipt ofCustomer PaymentPackMaterialsCheckAvailabilityPre-salesActivities
    67. 67. SAP ERPSAP University AlliancesPage 1-67© 2008 SAP AGPre-Sales Activities (CRM Light) Sales Support is a component of SD that assists in the sales,distribution, and marketing of a companies products and servicesto its customers. It contains the following functionality:- Creating and tracking customer contacts and communications (salesactivity)• Phone call records• On-site meeting• Letters• Campaign communication- Implementing and tracking direct mailing, internet, and trade faircampaigns based on customer attributes Pre-sales documents need to be managed within the presalesactivities: Inquiries and Quotations. These documents help identifypossible sales related activity and determine sales probability.
    68. 68. SAP ERPSAP University AlliancesPage 1-68© 2008 SAP AGPre-Sales Activities (CRM Light) The ultimate goal of all pre-sales activities is to equip thesales technician with all theinformation necessary tonegotiate and complete thepotential sale. Information needed:- Past sales activity- Past communication- Contact information- General Company info- Credit limits and usage- Current backorders 360º view of your customer
    69. 69. SAP ERPSAP University AlliancesPage 1-69© 2008 SAP AGInquiry An inquiry is a customer’s request to a company for information orquotation in respect to their products or services without obligationto purchase.- How much will it cost- Material/Service availability- May contain specific quantities and dates The inquiry is maintained in the system and a quotation is createdto address questions for the potential customer.
    70. 70. SAP ERPSAP University AlliancesPage 1-70© 2008 SAP AGQuotation The quotation presents thecustomer with a legally bindingoffer to deliver specific productsor a selection of a certain amountof products in a specifiedtimeframe at a pre-defined price.QuotationDATE February 25, 2008123 Any Street Quotation # 20000001Battle Creek, MI 49015 Customer IDPhone (605) 555-1212 Fax (605) 555-1414Bill To: Quotation valid until: June 4, 2008Prepared by: S. Tracy1234 North MainKansas City, MO 64118(123) 555-1212Comments or special instructions:Quantity Description Unit Price AMOUNT10 185.00 1,850.00(5.00) (50.00)5 269.00 1,345.00- -5.00% (157.25)TOTAL 2,987.75$If you have any questions concerning this quotation, contact:Steve Tracy(605) 555-121212345@GBI.comKB-0013-00DiscountTB-0014-00DiscountTotal DiscountHeartland Bike CompanyGBITHANK YOU FOR YOUR BUSINESS!
    71. 71. SAP ERPSAP University AlliancesPage 1-71© 2008 SAP AGSales Order Sales order processing can originate from a variety of documentsand activities- Customer contacts us for order: phone, internet, email- Existing Contract- Quotations The electronic document that is created should contain thefollowing basic information:- Customer Information- Material/service and quantity- Pricing (conditions)- Specific delivery dates and quantities- Shipping information- Billing Information
    72. 72. SAP ERPSAP University AlliancesPage 1-72© 2008 SAP AGSales Order The sales document is made upof three primary areas:- Header• Data relevant for the entire salesorder: Ex: customer data, totalcost of the order- Line Item• Information about the specificproduct: Ex: material andquantity, cost of an individual line- Schedule Lines• Uniquely belongs to a Line Item,contains delivery quantities anddates for partial deliveries
    73. 73. SAP ERPSAP University AlliancesPage 1-73© 2008 SAP AGSales Order The sales order contains all of the information needed to processyour customers request, the following information is determined foreach sales order:- Delivering Schedule- Shipping point and route determination- Availability Check- Transfer of requirements to MRP- Pricing- Credit limit check
    74. 74. SAP ERPSAP University AlliancesPage 1-74© 2008 SAP AGDelivery Scheduling When an order is created the you must enter a requested deliverydate for the order or each line item. The system will then determine a delivery timeline, this will beused when determining our material availability, or ATP (Availabilityto Promise) date. The system will determine this date using forward and backwardscheduling rules you have defined.
    75. 75. SAP ERPSAP University AlliancesPage 1-75© 2008 SAP AGBackward SchedulingRequestedDelv. DateGoodsIssueLoadingMaterialAvailabilityOrderDateTransp.Sched.TransitTime(2 days)LoadingTime(1 day)Pick & PackTime(2 days)Transp.Sched.Time(1 day)2nd 3rd 4th 5th 6th1st
    76. 76. SAP ERPSAP University AlliancesPage 1-76© 2008 SAP AGForward SchedulingTransitTime(2 days)LoadingTime(1 day)Transp.Sched.Time(1 day)NewDelv.Date1st 3rd 4th 5th 6th2ndPick & PackTime (2 days)7thRequestedDelv.DateGoodsIssueLoadingMaterialAvailabilityOrderDateTransp.Sched.
    77. 77. SAP ERPSAP University AlliancesPage 1-77© 2008 SAP AGShipping & Route Determination During the creation of the sales order the system must determinethe shipping point from which the material will be shipped and theroute the material will take to get from your warehouse to yourcustomers location. A shipping point is determined for each line item within the order. The route determination will is used to define the transit time of thematerial that we used in scheduling.
    78. 78. SAP ERPSAP University AlliancesPage 1-78© 2008 SAP AGAvailability Check Availability Check- Determines the materialavailability date- Considers all inward and outwardinventory movements Proposes 3 methods of delivery- One-time delivery- Complete delivery- Delayed proposal Rules are created by YOU
    79. 79. SAP ERPSAP University AlliancesPage 1-79© 2008 SAP AGTransfer to Planning The order is transferred toMaterial Requirements Planningas an (CIR) CustomerIndependent Requirement. If adeficit is found the system willpropose a Purchase Req. orOrder to fulfill the shortage.
    80. 80. SAP ERPSAP University AlliancesPage 1-80© 2008 SAP AGPricing The system displays pricing information for all sales documents onthe pricing screens at both the header and the line item level.- Header pricing is valid for the whole order it is the cumulative of all lineitems within the order- Line item pricing is for each specific material. The system will automatically search for price, discounts,surcharges, calculate taxes and freight. You have the ability tomanually manipulate the pricing at both the header and line itemlevel within the sales order by entering a condition type andamount.- Taxes and freight can be set-up so we can’t manually enter
    81. 81. SAP ERPSAP University AlliancesPage 1-81© 2008 SAP AGCredit Check Allows your company to manage its credit exposure and risk foreach customer by specifying credit limits. During the sales order process the system will alert the sales repabout the customers credit situation that arises, if necessary thesystem can be configured to block orders and deliveries.
    82. 82. SAP ERPSAP University AlliancesPage 1-82© 2008 SAP AGShipping & Transportation The shipping process begins when you create the deliverydocument for the sales order. This document controls, supports,and monitors numerous sub-processes for shipping processing:- Picking- Packing- Post Goods Issue Integrated with the Material Management (MM) and Finance (FI)modules
    83. 83. SAP ERPSAP University AlliancesPage 1-83© 2008 SAP AGShippingOrderCombinationSales Order 1Sales Order 2Sales Order 3Delivery 8…12PartialDeliverySales Order 4Delivery 8…13Delivery 8…14Delivery 8…15CompleteDeliverySales Order 5Delivery 8…16
    84. 84. SAP ERPSAP University AlliancesPage 1-84© 2008 SAP AGDelivery Creation Checks order and materials to determine if a delivery is possible— delivery block (hold), completeness Confirms availability Confirms export/foreign trade requirements Determines total weight & volume
    85. 85. SAP ERPSAP University AlliancesPage 1-85© 2008 SAP AGDelivery Creation Generates packing proposal Calculates weight and volume Checks scheduling Considers partial deliveries Updates route assignment Assigns picking location Updates sales order Determines batches Quality check (if needed) Updates sales order
    86. 86. SAP ERPSAP University AlliancesPage 1-86© 2008 SAP AGDelivery Document The Delivery Document initiates the delivery process and is thecontrol mechanism for this process- Picking- Packing- Loading- Posting Goods Issue Changes to delivery are allowable - products, quantities
    87. 87. SAP ERPSAP University AlliancesPage 1-87© 2008 SAP AGPicking Quantities based on delivery note Assigned date when picking should begin Automated storage location assignment Supports serial number/lot number tracking and batchmanagement Integrated with Warehouse Management (WM)
    88. 88. SAP ERPSAP University AlliancesPage 1-88© 2008 SAP AGLoading and Packing Identifies which packaging is to be used for specified products(customer preference and UCC-128 considerations) Identifies and updates accounts associated with returnablepackaging Tracks the packed product by container Insures weight/volume restrictions are enforced All packed items are assigned to the required means oftransportation
    89. 89. SAP ERPSAP University AlliancesPage 1-89© 2008 SAP AGGoods issue Event that indicates the legal change in ownership of the products Reduces inventory and enters Cost of Goods Sold Automatically updates the General Ledger (G/L) accounts Ends the shipping process and updates the status of the shippingdocuments
    90. 90. SAP ERPSAP University AlliancesPage 1-90© 2008 SAP AGBilling The billing document is created by coping data from the salesorder and/or delivery document.- Order-based billing- Delivery-based billing The billing process is used to generate the customer invoice. It will update the customer’s credit status.
    91. 91. SAP ERPSAP University AlliancesPage 1-91© 2008 SAP AGBilling Documents The billing document willautomatically create a debitposting to your customer sub-ledger account and credityour revenue account. It is at this point that the salesprocess is passed over toFinancial Accounting to awaitpayment.
    92. 92. SAP ERPSAP University AlliancesPage 1-92© 2008 SAP AGBilling MethodsCollectiveInvoicingDelivery basedInvoicingDelivery 8…34Delivery 8…33Order 14Order 9Delivery 8…56Invoice 9…68Order 6Delivery 8…20Delivery 8…21Invoice 9…45Invoice 9…46SplitInvoicingOrder 32 Delivery 8…86Invoice 9…92Invoice 9…91
    93. 93. SAP ERPSAP University AlliancesPage 1-93© 2008 SAP AGPayment Payment is the final step in the sales order process, this step ismanaged by the Financial Accounting department. Final payment includes:- Posting payments against invoices.- Reconciling differences between payment and invoice. Payment will create a posting clearing the liability in the A/Raccount and increases your bank account.
    94. 94. SAP ERPSAP University AlliancesPage 1-94© 2008 SAP AGDocument Flow The document flow and orderstatus feature allows you to findthe status of an order at any pointin time. The SAP updates theorder status every time a changeis made to any document createdin the customer ordermanagement cycle(Order-to-Cash).
    95. 95. SAP ERPSAP University AlliancesPage 1-95© 2008 SAP AGSales Order Process Debugging “Never again did I learn so much insuch a short time, because twentyparticipants made mistakes for me!You cannot make so many mistakesall alone”SAP Co-founder Klaus Tschira, on his experiences teachingCOBOL to clients at IBM.
    96. 96. SAP ERPSAP University AlliancesPage 1-96© 2008 SAP AGSales Order Process Debugging Document Flow- Gives Order Process Status List of Sales Orders (VA05)- Tool to Find Order- Need student’s user id/data set number
    97. 97. SAP ERPSAP University AlliancesPage 1-97© 2008 SAP AGSales Order Process DebuggingSD1SD2SD3SD4SD5SD6
    98. 98. © 2008 SAP AGMaterials Management (MM)SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationMaterials Management
    99. 99. SAP ERPSAP University AlliancesPage 1-99© 2008 SAP AGFunctionality Inventory Management Purchasing MRP Physical Inventory Valuation Service Master Invoice Verification Product Catalogs
    100. 100. SAP ERPSAP University AlliancesPage 1-100© 2008 SAP AGChapter Overview Organization Structure Master Data Procurement Process- Procure-to-Pay Process
    101. 101. SAP ERPSAP University AlliancesPage 1-101© 2008 SAP AGOrganizational Structure for Procurement Client- An independent environment in the system Company Code- Smallest org unit for which you can maintain a legal set of books Plant- Operating area or branch within a company• i.e. manufacturing facility or distribution facility Purchasing Organization- The buying activity for a plant takes place at the purchasingorganization Purchasing Group- Key that represents the buyer or group of buyers
    102. 102. SAP ERPSAP University AlliancesPage 1-102© 2008 SAP AGPurchasing Specific Structure Purchasing Organization- Organization unit responsible for procuring services and materials- Negotiates conditions of the purchase with the vendors Purchasing Group- Buyer or group of buyers who are responsible for certain purchasingactivities- Channel of communication for vendors
    103. 103. SAP ERPSAP University AlliancesPage 1-103© 2008 SAP AGPurchasing Organization / GroupCentralized vs.DecentralizedPurchasingPurchasing Org100Company Code100Company Code101Plant 100Purchasing Org100Purchasing Org100Company Code100Plant 100 Plant 101
    104. 104. SAP ERPSAP University AlliancesPage 1-104© 2008 SAP AGStructure for ProcurementClient 410Company CodeC100Plant P100 Plant P101Purchasing OrgP100PurchasingGroup 100Purchasing OrgP101
    105. 105. SAP ERPSAP University AlliancesPage 1-105© 2008 SAP AGMM Master DataVendor Master DataMaterial Master DataPurchasing Info RecordOutput Master DataCondition Master Data
    106. 106. SAP ERPSAP University AlliancesPage 1-106© 2008 SAP AGVendor Master Data Vendor Master- Contains all the necessaryinformation needed to businesswith an external supplier- Used and maintained primarily bythe Purchasing and AccountingDepartments- Every vendor MUST have amaster record
    107. 107. SAP ERPSAP University AlliancesPage 1-107© 2008 SAP AGVendor Master Views Client Level- Address- Vendor Number- Preferred Communication Company Code Data- Reconciliation Account- Terms of Payment- Bank Account Purchase Org Data- Purchasing Currency- Salesman’s Name- Vendor PartnersGeneral DataCompany Code DataFinancial Accounting (FI)Purchasing DataMaterials Mgmt (MM)
    108. 108. SAP ERPSAP University AlliancesPage 1-108© 2008 SAP AGVendor MasterCompany Code 102Company Code 101Company Code 100Client 410Purchasing Org. 101Purchasing Org. 100General Information relevant for the entire organization:NameAddressCommunicationCompany Code specific information:Acc. MgmtPaymentBankPurchasing Org. specific information:IncotermsCurrency
    109. 109. SAP ERPSAP University AlliancesPage 1-109© 2008 SAP AGMaterial Master Data Material Master- Contains all the information acompany needs to manage abouta material- It is used by most componentswithin the SAP system• Sales and Distribution• Materials Management• Production• Plant Maintenance• Accounting/Controlling• Quality Management- Material master data is stored infunctional segments called Views
    110. 110. SAP ERPSAP University AlliancesPage 1-110© 2008 SAP AGMaterial Master ViewsMaterial MasterBasic DataSales DataControlling DataForecasting DataPurchasing DataMat. Plan. DataAccounting DataStorage DataQuality Data
    111. 111. SAP ERPSAP University AlliancesPage 1-111© 2008 SAP AGMaterial MasterPlant 102Plant 101Plant 100Client 410Storage Location 20Storage Location 10General Information relevant for the entire organization:NameWeightU/MPlant specific information: Purchasing DataWork Sch.MRPStorage Location specific information:Stock QtyPicking
    112. 112. SAP ERPSAP University AlliancesPage 1-112© 2008 SAP AGPurchasing Information Record Framework for PurchaseOrder- Contains the relationshipbetween a vendor and amaterial Can be created:- Manually- Automatically – Quotations- Automatically – Pur Orders Reporting- Vendor EvaluationMaterial Master Vendor MasterPurchasingInformation Record
    113. 113. SAP ERPSAP University AlliancesPage 1-113© 2008 SAP AGPurchasing Information Record Allows buyers to quicklydetermine:- Which vendors have offered orsupplied specific materials Info Records contain:- Data on pricing and conditions- Last purchase order- Tolerance limits for deliveries- Specific lead times- Availability periods- Vendor Evaluation data Serves as default information forPurchase Orders
    114. 114. SAP ERPSAP University AlliancesPage 1-114© 2008 SAP AGMaster Data in UsePurchaseOrder45......01Material Master Vendor MasterPurchasingInformation Record
    115. 115. SAP ERPSAP University AlliancesPage 1-115© 2008 SAP AGProcurement ProcessPurchaseRequisitionPaymentto VendorNotifyVendorVendorShipmentInvoiceReceiptGoodsReceiptPurchaseOrderVendorSelection
    116. 116. SAP ERPSAP University AlliancesPage 1-116© 2008 SAP AGPurchase Requisition Internal Document instructing the purchasing department torequest a specific good or service for a specified time Requisitions can be created two ways:- Directly - Manually• person creating determines: what, how much, and when- Indirectly - Automatically• MRP, Production Orders, Maintenance Orders, Sales Orders
    117. 117. SAP ERPSAP University AlliancesPage 1-117© 2008 SAP AGRequisition Sourcing Once the requisition has been assigned a source of supply it canbe released for processing There are a variety of ways that a purchasing department canprocess a requisition to determine the appropriate Source ofSupply:- Internal Sourcing Requirements- Source List- Outlined Agreement- RFQ
    118. 118. SAP ERPSAP University AlliancesPage 1-118© 2008 SAP AGInternal Sourcing The requisition for materials could be satisfied by sources withinour company.- It is possible that a plant within your firm could represent a potentialsource of supply for the material needed (centralized warehouse)- If an internal source is identified the requirement is covered by aninternal procurement transaction (stock transport order)
    119. 119. SAP ERPSAP University AlliancesPage 1-119© 2008 SAP AGSource List A source list is a record that specifies the allowed means forprocuring a material for a certain plant within a given time period.- If the list contains a sole source the system will assign the vendor tothe requisition.- If several options exist the system will display a list of vendors for youto choose from.- If no source has been established the system will revert to searchinformation records and outline agreements.
    120. 120. SAP ERPSAP University AlliancesPage 1-120© 2008 SAP AGOutline Agreement Requisitions can be satisfied through existing longer-termpurchasing agreement These agreements are subdivided into:- Contracts• Consists of items defining the individual materials, material groups, orservices with prices and in many cases quantities– Quantity– Value- Scheduling Agreements• Total quantity of material is spread over a certain period in a deliveryschedule, consisting of line items indicating quantities and their planneddelivery date
    121. 121. SAP ERPSAP University AlliancesPage 1-121© 2008 SAP AGRequest for Quotation If nothing exist in the system we may need to submit a request forquotation to our vendors. An RFQ is an invitation to a vendor by aPurchasing Organization to submit a bid for the supply of materialsor services- The accepted quotations will generate Purchasing Information Records- Perform Quotation Price Comparisons- Finally Select a QuotationPurReq.generateRFQVendor1Vendor2Vendor3QuoteQuoteQuoteP.O.45…12RejectLetterEval.
    122. 122. SAP ERPSAP University AlliancesPage 1-122© 2008 SAP AGQuotation from Vendor The quotation received by your company is a legally binding offer,should decide to do business with the vendor, containing price’sand conditions for the materials specified in the RFQ for apredefined period of time.- In SAP the RFQ and the Quotation will be become a single document,you will enter the vendor’s response in the RFQ you created.
    123. 123. SAP ERPSAP University AlliancesPage 1-123© 2008 SAP AGVendor Evaluation once Identified Vendor evaluation helps purchasing evaluate vendors for sourcing whilealso enabling the company to monitor vendor relationships throughperformance scores and criteria you put in place.- Supports a maximum of 99 main criteria and 20 subcriteria for each main:• Price– Price Level– Price History• Quality– Goods Receipt– Quality Audit– Complaints/Rejection level• Delivery– On-time delivery performance– Quantity reliability– Compliance with shipping instructions– Confirmation Date- You then must establish a scoring range (1 -100) and determine the weightfactors of scores for each.
    124. 124. SAP ERPSAP University AlliancesPage 1-124© 2008 SAP AGPurchase Order A purchase order is a formal request to a vendor for a specificmaterial or service under the stated conditions Purchase Orders can be created manually- Reference a Purchase Order- Reference a Purchase Requisition- Reference a RFQ/Quotation- Without Reference Purchase Orders can be create automatically
    125. 125. SAP ERPSAP University AlliancesPage 1-125© 2008 SAP AGPurchase Order A purchase order can be used fora variety of purposes, the itemcategory (procurement type)defined in the PO will dictate theuse of the order and the processthat the order will follow:- Standard• Stock or Consumption- Services- Subcontracting- Third-Party- Consignment
    126. 126. SAP ERPSAP University AlliancesPage 1-126© 2008 SAP AGPurchase Order StructureHeaderVendor DateDoc. Number CurrencyTerms of Payment PO PriceItem OverviewMaterials Price/UofMQuantitiesDelivery DateLine ItemPO History TolerancesLine PriceDelivery SchedulePurchaseOrder45......01
    127. 127. SAP ERPSAP University AlliancesPage 1-127© 2008 SAP AGPurchase Order Output Once a Purchase Order has been created the vendor needs to benotified- Printed- E-mail- EDI- Fax- XML There are a variety of forms that aid in the purchasing process andare generated from the Purchase Order- Purchase Order Output- Order Acknowledgement Forms- Reminders- Schedule Agreements
    128. 128. SAP ERPSAP University AlliancesPage 1-128© 2008 SAP AGGoods ReceiptPurchaseOrder45......01VendorNotify VendorShipmentGoodsReceipt
    129. 129. SAP ERPSAP University AlliancesPage 1-129© 2008 SAP AGGoods Receipt Goods movement in which we accept goods into our system If materials are delivered against a Purchase Order we willreference that Order- Determine if we got what we ordered- System can purpose data for us from the PO• Material, quantity- Purchase Order History is update with the receipt- Updates Physical Inventory- Updates Inventory G/L Account
    130. 130. SAP ERPSAP University AlliancesPage 1-130© 2008 SAP AGMaterial Movements When a goods movement takes place it is represented by aMovement Type- Movement types are three-digit keys used to represent a movement ofgoods• 101 – goods receipt into warehouse• 103 – goods receipt into GR blocked stock• 122 – return delivery to vendor• 231 – consumption for a sales order• 561 – initial entry of stock Destinations for Receipt of Goods- Warehouse – Unrestricted, Quality, Blocked- Quality- Goods Receipt Blocked Stock
    131. 131. SAP ERPSAP University AlliancesPage 1-131© 2008 SAP AGEffects of a Goods Receipt When a Goods Movement for the receipt of goods takes place aseries of events occur- Material Document is Created- Accounting Document is Created- Stock Quantities are Updated- Stock Values are Updated- Purchase Order is Updated- Output can be generated (GR slip / pallet label)
    132. 132. SAP ERPSAP University AlliancesPage 1-132© 2008 SAP AGInvoice Processing Incoming Invoices are reference against a Purchase Order to verifytheir content, prices, and arithmetic. If discrepancies arise between the purchase order or goods receiptand the invoice the system with generate a warning or an error- Depending on system configuration the difference could cause thesystem to Block the InvoicePurchase order- Target quantity -- Target price -Goods receipt- Actual quantity -Invoice receipt- Actual price -
    133. 133. SAP ERPSAP University AlliancesPage 1-133© 2008 SAP AGInvoice Processing When an invoice is saved it applies the liability from the GoodsReceipt of our Purchase Order to a Vendor Upon verification the:- Purchase Order is updated- Material Master is Updated (MAP)- Accounting Document is created Once the Invoice has been posted the verification process iscompleted and the payment process is initiated within FinancialAccounting
    134. 134. SAP ERPSAP University AlliancesPage 1-134© 2008 SAP AGPayment to Vendor Can be done automatically or manually- Post Outgoing Payment vs. Payment Program Elements of the Payment Transaction:- Payment Method- Bank from which they get paid- Items to be Paid- Calculate Payment Amount- Print Payment Medium Process will create a financial accounting document to record thetransaction
    135. 135. SAP ERPSAP University AlliancesPage 1-135© 2008 SAP AGGoods Receipt / Invoice ReceiptReconciliation AccountPurchase requisitionPurchase orderMaterials Management (MM)and Financial Accounting (FI)via automatic accountassignmentGoods receiptNo impact onFinancial Accounting (FI)Dr CrInventory$100Dr CrGR / IR$100
    136. 136. SAP ERPSAP University AlliancesPage 1-136© 2008 SAP AGGoods Receipt / Invoice ReceiptReconciliation AccountAmount owed isassigned and transferred tovendor account payableInvoice receiptDr CrVendor A/P$100Dr CrGR / IR$100
    137. 137. SAP ERPSAP University AlliancesPage 1-137© 2008 SAP AGVendor PaymentAmount owed is paid tovendor and account payableis reducedBankDr CrVendor A/P$100Dr CrBank$100
    138. 138. SAP ERPSAP University AlliancesPage 1-138© 2008 SAP AGFI – MM Integration PointInvoiceReceiptPaymentProgramGoodsReceiptAP(Vendor)Dr CrGR / IR$100BankDr CrInventory$100 $100 $100Dr CrDr Cr$100$100
    139. 139. SAP ERPSAP University AlliancesPage 1-139© 2008 SAP AG
    140. 140. © 2008 SAP AGProduction Planning & Execution(PP)SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationProduction PlanningProduction Execution
    141. 141. SAP ERPSAP University AlliancesPage 1-141© 2008 SAP AGProduction Planning SAP Divides Production into multiple processes- Production Planning- Manufacturing Execution• Discrete Manufacturing• Repetitive Manufacturing• KANBAN- Production – Process Industries• Integrated planning tool for batch-orientated process manufacturing• Design primarily for chemical, pharmaceutical, food and beverageindustries along with batch-oriented electronics
    142. 142. SAP ERPSAP University AlliancesPage 1-142© 2008 SAP AGStructure Client Company Code Plants Storage Locations Work Center Locations
    143. 143. SAP ERPSAP University AlliancesPage 1-143© 2008 SAP AGPP Master Data Materials Bill of Materials (BOM) Routings Work Centers Product Groups
    144. 144. SAP ERPSAP University AlliancesPage 1-144© 2008 SAP AGMaterial Master Record
    145. 145. SAP ERPSAP University AlliancesPage 1-145© 2008 SAP AGBill of Materials (BOM) List of components that make up a product or assembly Frame Pedal Break Kit Front Wheel- Front Rim- Front Tire- Front Tube Rear Wheel- Rear Rim- Rear Tire- Rear Tube- Gear Saddle- Post- Seat- Clip Handle Bar- Bell- Clasp- Handle
    146. 146. SAP ERPSAP University AlliancesPage 1-146© 2008 SAP AGBill of Materials (BOM) Single-LevelSingle-LevelFinished BikeFront WheelFrameRear WheelPedal KitSaddleBrake KitHandle Bars
    147. 147. SAP ERPSAP University AlliancesPage 1-147© 2008 SAP AGBill of Materials (BOM) Single-Level vs. Multi-LevelSingle-LevelFinished BikeFrontWheelRearWheelRearRimMulti-Level BOMFrame Pedal BrakeHandleBarsSaddleRearTireTubeGearFrontRimFrontTireTubeSingle-LevelBellClaspHandleBarBellClaspHandleBarSingle-LevelSingle-Level Single-Level
    148. 148. SAP ERPSAP University AlliancesPage 1-148© 2008 SAP AGBill of Materials (BOM) Variant Bill of Material (BOM)- Several products with a large proportion of identical parts.Single-LevelFinished BikeFront WheelGraphite FrameRear WheelPedal KitSaddleBrake KitHandle BarsSingle-LevelFinished BikeFront WheelTubular FrameRear WheelPedal KitSaddleBrake KitHandle Bars
    149. 149. SAP ERPSAP University AlliancesPage 1-149© 2008 SAP AGBOM – Item Categories Item Category- Stock Item- Non-stock Item- Variable Material – Sheet of steel- Intra Item – Phantom material – process industry- Class Item – place holder- Document Item- Text Item
    150. 150. SAP ERPSAP University AlliancesPage 1-150© 2008 SAP AGRoutings Routings enable you to plan the production of materials (products). Routings are used as a template for production orders and runschedules Routing are also used as a basis for product costing. Series of sequential steps (operations) that must be carried out toproduce a given product Routings contain:- What, Where, When, How
    151. 151. SAP ERPSAP University AlliancesPage 1-151© 2008 SAP AGRoutings Routing – Operation 10- Explains the steps involved in this operation BOM – Front Wheel, Rear Wheel and Frame- Outlines the components that will be consumed in the routing Work Center – 00WC1- Identifies were the operations will take place and identifies the businesstransaction to be carried
    152. 152. SAP ERPSAP University AlliancesPage 1-152© 2008 SAP AGRoutings Routing for Finished BikeOperationWork CenterPlantControl KeyDescriptionTime and Unit of MeasureActivity Type
    153. 153. SAP ERPSAP University AlliancesPage 1-153© 2008 SAP AGRouting and BOMRoutingMaterial Master – Finished BikeBOMOper. 10Oper. 20Oper. 30Front WheelRear WheelFrameSaddleHandle BarsPedalsComponent assignment in routingTimeOp.10Op.20Op.30FrontWheelRearWheelFrameHandleBarsSaddleProducts arrive at thebeginning of the operationto which they are assignedOper. 40Oper. 50Pedals
    154. 154. SAP ERPSAP University AlliancesPage 1-154© 2008 SAP AGWork Center A location within a plant where value-added work (operations or activities)are performed- Work Centers can represent• People or Groups of People– Johnny Storm, Day Shift 1• Machines or Groups of Machines– Ink Mixer, Ink Injection Machine• Assembly Lines– Pen Assembly Line 2 Work center used to define capacities- Labor- Machine- Output- Emissions Capacities used in- Capacity requirements planning (CRP) Detailed scheduling Costing
    155. 155. SAP ERPSAP University AlliancesPage 1-155© 2008 SAP AGWork Center Work centers capture and use the following Resource Related data- Basic Data• Person Responsible, Location of Work Center- Scheduling Information• Queues and Move Times (interoperation), Formula Keys- Costing Data• Cost Center, Activity Types- Personnel Data• People, Positions, Qualifications- Capacity Planning• Available Capacity, Formulas, Operating Time- Default Data• Control Key, Standard Text Key
    156. 156. SAP ERPSAP University AlliancesPage 1-156© 2008 SAP AGProduct Group Aggregate planning that group together materials or other productgroups (Product Families) Multi- or Single- Level Product Groups- The lowest level must always consist of materialsBikesTouringMountain24 Speed18 Speed 18 Speed 24 SpeedRed 24T Blue 24TRed 24M Blue 24M
    157. 157. SAP ERPSAP University AlliancesPage 1-157© 2008 SAP AGMaterial Planning SOP provides a method for Sales Planning, Production Planning,FeasibilitySales, Production, Inventory0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberUnitsSalesProductionInventory
    158. 158. SAP ERPSAP University AlliancesPage 1-158© 2008 SAP AGProduction Planning & ExecutionDemandManagementForecastingSales & OperationsPlanningSIS CO/PAMPSMRPManufacturingExecutionOrderSettlementProcurementProcessStrategic PlanningDetailed PlanningManufacturing Execution
    159. 159. SAP ERPSAP University AlliancesPage 1-159© 2008 SAP AGProduction Planning & Execution Players in the Game- Strategic Planning• CEO, COO, CIO,CFO, Controller,MarketingDirector- Detailed Planning• Line Managers,ProductionScheduler, MRPController,CapacityPlanners- Execution• Line Workers,Shop FloorSupervisorsDemandManagementForecastingSales & OperationsPlanningSIS CO/PAMPSMRPManufacturingExecutionOrderSettlementProcurementProcessStrategicPlanningDetailedPlanningManufacturingExecution
    160. 160. SAP ERPSAP University AlliancesPage 1-160© 2008 SAP AGForecasting Forecasting is the foundationof a reliable SOP Accurate forecasts areessential in the manufacturingsector Overstocked & understockedwarehouses result in the samething: a loss in profits. Forecasts are ALWAYSWRONG
    161. 161. SAP ERPSAP University AlliancesPage 1-161© 2008 SAP AGForecasting Forecasting Models- Trend- Seasonal- Trend and Seasonal- Constant Selecting a Model- Automatically- Manually
    162. 162. SAP ERPSAP University AlliancesPage 1-162© 2008 SAP AGPlanning LevelsBikes55%Touring45%Mountain70%24 Speed30%18 Speed40%18 Speed60%24 Speed50%Red 24T50%Blue 24T40%Red 24M60%Blue 24MPlanning atProductGroup LevelPlanning at Material Level
    163. 163. SAP ERPSAP University AlliancesPage 1-163© 2008 SAP AGSales and Operations Planning (SOP) Information Origination- Sales- Marketing- Manufacturing- Accounting- Human Resources- Purchasing Intra-firm Collaboration- Institutional CommonSense
    164. 164. SAP ERPSAP University AlliancesPage 1-164© 2008 SAP AGSales and Operations Planning (SOP) Flexible forecasting andplanning tool Usually consists of threesteps:- Sales Plan- Production Plan- Rough Cut Capacity Plan Planned at an aggregatelevel in time buckets
    165. 165. SAP ERPSAP University AlliancesPage 1-165© 2008 SAP AGDemand Management Link between Strategic Planning (SOP) & Detailed Planning(MPS/MRP) The results of Demand Mgmt is called the Demand Program, it isgenerated from our independent requirements - PIR and CIRBikes55%Touring45%Mountain70%24 Speed30%18 Speed40%18 Speed60%24 Speed50%Red 24T50%Blue 24T40%Red 24M60%Blue 24MDisaggregationProduct GroupsMaterial
    166. 166. SAP ERPSAP University AlliancesPage 1-166© 2008 SAP AGDemand ManagementPlannedIndependentRequirementsCustomerIndependentRequirementsSalesForecastDemandProgramMPS / MRP
    167. 167. SAP ERPSAP University AlliancesPage 1-167© 2008 SAP AGTransfer from High Level to Detailed PlanningBikes55%Touring45%Mountain70%24 Speed30%18 Speed40%18 Speed60%24 Speed50%Red 24T50%Blue 24T40%Red 24M60%Blue 24MDemandPlanningDataPlanning atMaterial LevelDisaggregationPlanned Independent RequirementsAt Material and Plant LevelTransferOperativePlanningDataPlanning atGroup Level
    168. 168. SAP ERPSAP University AlliancesPage 1-168© 2008 SAP AGPlanning Strategies Planning strategies represent the business procedures for- The planning of production quantities- Dates Wide range of strategies Multiple types of planning strategies based upon environment- Make-To-Stock (MTS)- Make-To-order (MTO)• Driven by sales orders- Configurable materials• Mass customization of one- Assembly orders
    169. 169. SAP ERPSAP University AlliancesPage 1-169© 2008 SAP AGPlanning Strategy for Make-to-Stock Planning takes place using Independent Requirements- Sales are covered by make-to-stock inventory Strategies- 10 – Net Requirements Planning- 11 – Gross Requirements Planning- 30 – Production by Lot Size- 40 – Planning with Final Assembly
    170. 170. SAP ERPSAP University AlliancesPage 1-170© 2008 SAP AGPlanning Strategy for Make-to-Order Planning takes place using Customer Orders- Sales are covered by make-to-order production Strategies- 20 – Make to Order Production- 50 – Planning without Final Assembly- 60 – Planning with Planning Material
    171. 171. SAP ERPSAP University AlliancesPage 1-171© 2008 SAP AGMaster Production Scheduling (MPS) MPS allows a company to distinguish planning methods betweenmaterials that have a strong influence on profit or use criticalresources and those that do notBike SetFG-0010-00 GlovesHelmetSaddleFrame Etc.Handle BarsMPS run MPS ItemsNon-MPS Items
    172. 172. SAP ERPSAP University AlliancesPage 1-172© 2008 SAP AGMaterial Requirement Planning (MRP) In MRP, the system calculates the net requirements whileconsidering available warehouse stock and scheduled receiptsfrom purchasing and production During MRP, all levels of the bill of material are planned The output of MRP is a detailed production and/or purchasing plan Detailed planning level- Primary Functions- Monitor inventory stocks- Determine material needs• Quantity• Timing- Generate purchase or production orders
    173. 173. SAP ERPSAP University AlliancesPage 1-173© 2008 SAP AGDemand-Independent vs. Dependent Independent Demand – Original source of the demand. Dependent Demand – Source of demand resides at another level.MPSBike SetPlanned OrderMPSFG-0010-00MRPHelmetPlanned Order Purchase OrderMRPBrake KitPurchase OrderDep DepDepIndepSingle-LevelMulti-Level
    174. 174. SAP ERPSAP University AlliancesPage 1-174© 2008 SAP AGMaterial Requirement Planning (MRP) MRP is used to ensure the availability of materials based on theneed generated by MPS or the Demand Program- 5 Logical Steps• Net Requirements Calculation• Lot Size Calculation• Procurement Type• Scheduling• BOM Explosion
    175. 175. SAP ERPSAP University AlliancesPage 1-175© 2008 SAP AGNet RequirementsProcurementProposalFirmed ReceiptsFirmed Ordersor PurchaseRequisitionsRequirements –Planned Ind. Req.,ReservationsSales Orders,Etc.StockSafety StockShortage
    176. 176. SAP ERPSAP University AlliancesPage 1-176© 2008 SAP AGLot sizing Static- Based on fixed values in the Material Master Periodic- Groups net requirements together from multiple periods Optimum- Calculates the optimum lot size for a several periods of netrequirements
    177. 177. SAP ERPSAP University AlliancesPage 1-177© 2008 SAP AGProcurement Type External Procurement- Purchase Requisition- Purchase Order- Schedule Line Internal Procurement- Planned Order- Production Order- Process Order
    178. 178. SAP ERPSAP University AlliancesPage 1-178© 2008 SAP AGMulti-Level SchedulingTimeFinished ProductAssembly 1Semi-Finished GoodRaw MaterialComponentRequirementsDatePlanned OrderPurchase Requisition
    179. 179. SAP ERPSAP University AlliancesPage 1-179© 2008 SAP AGMRP vs. Consumption-Based Whether or not a material is planned using MRP or ConsumptionBased is determined by the MRP Type on the MRP1 screen of theMaterial MasterMRPVB – Reorder-PointConsumption BasedVV – Forecast BasedRP – ReplenishmentPD – MRPVSD – Seasonal MRP
    180. 180. SAP ERPSAP University AlliancesPage 1-180© 2008 SAP AGConsumption-BasedLotSizeReplenishmentLead TimeSafety StockReorderPoint
    181. 181. SAP ERPSAP University AlliancesPage 1-181© 2008 SAP AGOutput of MRPMRPPlanned OrderConvert toIn-HouseProductionProductionOrdersProcessOrdersPurchaseRequisitionsPurchaseOrdersScheduleLinesExternalProcurement
    182. 182. SAP ERPSAP University AlliancesPage 1-182© 2008 SAP AGOrders, orders, orders Planned Order (planning)- A request created in the planning run for a material in the future(converts to either a production or purchase order) Production Order (execution)- A request or instruction internally to produce a specific product at aspecific time Purchase Order (execution)- A request or instruction to a vendor for a material or service at aspecific time
    183. 183. SAP ERPSAP University AlliancesPage 1-183© 2008 SAP AGManufacturing Execution ProcessScheduleand ReleaseShop FloorDocumentsGoodsReceiptOrderSettlementGoodsIssueProductionProposal(Planning/Other)CompletionConfirmationCapacityPlanning
    184. 184. SAP ERPSAP University AlliancesPage 1-184© 2008 SAP AGProduction Order Production orders are used to control production operations andassociated costs- Production Orders define the following• Material produced• Quantity• Location• Time line• Work involved• Resources used• How to costs are settled
    185. 185. SAP ERPSAP University AlliancesPage 1-185© 2008 SAP AGProduction OrderBOMHowWhatQuantityTime Line
    186. 186. SAP ERPSAP University AlliancesPage 1-186© 2008 SAP AGSchedule Calculates the production dates and capacity requirements for alloperations within an order- Determines a Routing• Operation specific time lines• Material Consumption Points- Material Master• Scheduling Margin Key (Floats)- Work Center• Formulas• Standard Inter-operation Times
    187. 187. SAP ERPSAP University AlliancesPage 1-187© 2008 SAP AGRelease Two release processes- Header Level• Entire order and all operations are released for processing, order is given aREL status- Operation Level• Individual operations within an order are released, not until the lastoperation is released does the order obtains a REL status until then it is in aPREL status Automatic vs. Manual
    188. 188. SAP ERPSAP University AlliancesPage 1-188© 2008 SAP AGAvailability Check Automatic check to determine whether the component, productionresource tools, or capacities in an order are available- Can be automatic or manually executed- Determines availability on the required date Generates an availability log- Displays results of the check- Missing parts list- Reservations that could not be verified
    189. 189. SAP ERPSAP University AlliancesPage 1-189© 2008 SAP AGSchedule & Release The time between scheduling and releasing an order is used forcompany checks and any preparation needed for the processing ofthe order Once an order has been released it is ready for execution, we canat this time- Print shop floor documents- Execute goods movements- Accept confirmations against the order
    190. 190. SAP ERPSAP University AlliancesPage 1-190© 2008 SAP AGShop Floor Documents Shop Floor Documents are printed upon release of the ProductionOrder, examples would be:- Operation-based Lists• Time Tickets, Confirmation Slips- Component-based Lists• Material Withdrawal Slips, Pull List (consumption list)- PRT Lists• Overview of PRT’s used and in which operations- Multi-Purpose Lists• Operation Control Ticket, Object Overview
    191. 191. SAP ERPSAP University AlliancesPage 1-191© 2008 SAP AGMaterial Withdrawal When a production order is created it references a BOM todetermine the necessary components to produce the material, itthen places a reservation on each of the components Upon release of the order (or operation) you can withdraw thereserved materials from inventory- Reservation is updated- Inventory is updated- Costs are assigned to the order as actual costs
    192. 192. SAP ERPSAP University AlliancesPage 1-192© 2008 SAP AGConfirmations Confirmations are used to monitor and track the progression of anorder through its production cycle- Confirmation can be done at the operation or order level Exact confirmation shortly after completion of an operation isessential for realistic production planning and control Data that needs confirmation include- Quantities – yield, scrap, rework- Activity data – setup time, machine time- Dates – setup, processing, teardown started or finished- Personnel data – employee who carried out the operation, number ofemployee involved in the operation- Work center- Goods movements – planned and unplanned- Variance reasons- PRT usage
    193. 193. SAP ERPSAP University AlliancesPage 1-193© 2008 SAP AGConfirmations
    194. 194. SAP ERPSAP University AlliancesPage 1-194© 2008 SAP AGGoods Receipt Acceptance of the confirmed quantity of output from the productionorder into stock- Effects of the Goods Receipt• Updates stock quantity• Updates stock value• Price stored for future valuation changes• Production order is updated- Three documents are created• Material document• Accounting document• Controlling document
    195. 195. SAP ERPSAP University AlliancesPage 1-195© 2008 SAP AGOrder Settlement Consists of settling the actual costs incurred in the order to one ormore receiver cost objects- Receivers could include: a material, a cost center, an internal order, asales order, a project, a network, a fixed asset Parameters for Order Settlement- Settlement Profile• Specifics the receivers, distributions rules and method- Settlement Structure• Determines how the debit cost elements are assigned to the settlementcost elements Settlement Rule- Automatically assigned on creation of order, the parameters are usedto define this rule• Has one or more distribution rules assigned to it• Distribution rules defines: cost receiver, settlement share, settlement type
    196. 196. SAP ERPSAP University AlliancesPage 1-196© 2008 SAP AGOrder Settlement Settling a Production Order to Stock- Debt posting is made to the Production Order with the value of thematerial- Difference between the debt posting and credit posting is posted to aprice difference accountMaterial Prod. Order Price Diff.100 2080**Material Price determine by the quantity produced times the Standard Price in the MaterialMaster.
    197. 197. SAP ERPSAP University AlliancesPage 1-197© 2008 SAP AGOrder Settlement Costs analyzed- Primary• Materials• External Processing- Secondary• Production, Material, and Administrative Overhead• Labor Cost Analysis Reporting- Calculate and analyze planned costs, target costs, and actual costs ofthe production order.- Calculate and analyze variances
    198. 198. SAP ERPSAP University AlliancesPage 1-198© 2008 SAP AGOrder Settlement
    199. 199. SAP ERPSAP University AlliancesPage 1-199© 2008 SAP AGOrder Status
    200. 200. © 2008 SAP AGFinancial Accounting (FI)SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationFinancial Accounting
    201. 201. SAP ERPSAP University AlliancesPage 1-201© 2008 SAP AGGoal of FI Financial accounting is designed to collect the transactional datathat provides a foundation for preparing the standard portfolio ofreports In general, these reports are primarily, but not exclusively, directedat external parties Standard reports include:- Balance Sheet- Income Statement- Statement of Cash Flows
    202. 202. SAP ERPSAP University AlliancesPage 1-202© 2008 SAP AGTarget Audience Internal- Executives- Senior Management- Administrative Staff- Employees External- Legal Authorities- Banks- Auditors- Shareholders- Insurance- Taxing Authorities- Media- Financial Analysts
    203. 203. SAP ERPSAP University AlliancesPage 1-203© 2008 SAP AGOrganizational Objects These represent the legal and/or organizational views of anenterprise They form a framework that supports the activities of a business inthe manner desired by management Permit the accurate and organized collection of businessinformation Support the development and presentation of relevant informationin order to enable and support business decisions Organizational Objects:- Company Code- Chart of Accounts
    204. 204. SAP ERPSAP University AlliancesPage 1-204© 2008 SAP AGCompany Code Represents an independent legal accounting unit Balanced set of books, as required by law, are prepared at thislevel A client may have more than one company code- United States- United Kingdom- South America- Canada- GermanyLiabilities &Owners EquityAssets
    205. 205. SAP ERPSAP University AlliancesPage 1-205© 2008 SAP AGChart of Accounts A classification scheme consisting of a group of general ledger(G/L) accounts. A chart of accounts provides a framework for the recording ofvalues to ensure an orderly rendering of accounting data. The G/L accounts it contains are used by one or more companycodes.
    206. 206. SAP ERPSAP University AlliancesPage 1-206© 2008 SAP AGGeneral Ledger (G/L) Accounts The unique combination of Company Code and Chart of Accountcreates a data storage area called a General Ledger The General Ledger contains a listing of the transactions effectingeach account in the Chart of Accounts and the respective accountbalance It is utilized in the preparation of financial accounting statements
    207. 207. SAP ERPSAP University AlliancesPage 1-207© 2008 SAP AGPosting a G/L Entry
    208. 208. SAP ERPSAP University AlliancesPage 1-208© 2008 SAP AGG/L Account SummaryAccount number 100100 Bank AccountCompany code 00A1Period Debit Credit DC bal. BalanceC/f bal. 750,000.00Period 1 5,250.00 3,540.00 1,710.00 751,710.00Period 2 25,000.00 15,000.00 10,000.00 761,710.00
    209. 209. SAP ERPSAP University AlliancesPage 1-209© 2008 SAP AGBalance Sheet Presentation of an organization’s Assets, Liabilities, and Equity ata point in time Assets: What the company owns Liabilities: What the company owes Equity: The difference between Assets and Liabilities Assets = Liabilities + Equity
    210. 210. SAP ERPSAP University AlliancesPage 1-210© 2008 SAP AGBalance Sheet – SampleAssetsCash 1,000Accounts Receivable 3,000Equipment 500Total Assets 4,500LiabilitiesAccounts Payable 750Taxes Payable 250Total Liabilities 1,250EquityCommon Stock 2,000Retained Earnings 250Total Equity 2,250Total Liabilitiesand Equity 4,500
    211. 211. SAP ERPSAP University AlliancesPage 1-211© 2008 SAP AGIncome Statement Presentation of an organization’s Revenues and Expenses for agiven period of time (e.g., monthly, quarterly, or yearly) Revenues, in a simple sense, are inflows of cash as a result ofselling activities or the disposal of company assets Expenses, in a simple sense, are outflows of cash or the creationof liabilities to support company operations Revenues - Expenses = Net Income
    212. 212. SAP ERPSAP University AlliancesPage 1-212© 2008 SAP AGIncome Statement – SampleRevenueSales 11,000Deductions 750Total Revenue 10,250Operating ExpensesCost of Goods Sold 4,500Operating Expenses 3,750Total Expenses 8,250Net Income Before Taxes 2,000Taxes 750Net Income 1,250
    213. 213. SAP ERPSAP University AlliancesPage 1-213© 2008 SAP AGStatement of Cash Flows Considers the associated changes, both inflows and outflows, that haveoccurred in cash – arguably the most important of all assets – over a givenperiod of time (e.g., monthly, quarterly, or annually)
    214. 214. SAP ERPSAP University AlliancesPage 1-214© 2008 SAP AGCustomer and Vendor Accounts Customer and Vendor account balances are maintained in FI through fullyintegrated accounts receivable and accounts payable sub-modules Financial postings for Customers and Vendors are made directly to theirrespective individual accounts and accompanied by a concurrent automaticposting to the General Ledger
    215. 215. SAP ERPSAP University AlliancesPage 1-215© 2008 SAP AGCustomer Accounts Accounts Receivable Sub-Module- Information with respect to Customers who purchase the enterprise’s goods andservices such as sales and payments made- Substantive and important integration between Sales and Distribution (SD) andFI- Billings in SD generate FI journal entries for sales activityAccounts Receivable(General Ledger)950300Customer 142150Customer 123400Customer 135100Customer 189
    216. 216. SAP ERPSAP University AlliancesPage 1-216© 2008 SAP AGVendor Accounts Accounts Payable Sub-Module- Information with respect to Vendors from whom the enterprise purchases goodsand services such as purchases and payments made- Substantive and important integration between Materials Management (MM)and FI- Purchase and goods receipt activities in MM generate FI journal entriesAccounts Payable(General Ledger)850250Vendor 100435200Vendor 100234100Vendor 100621300Vendor 100846
    217. 217. SAP ERPSAP University AlliancesPage 1-217© 2008 SAP AGAccountants and Audit Trails Audit trails allow an auditor to begin with an account balance on a financialstatement and trace through the accounting records to the transactionsthat support the account balance Audit trails enable an auditor to trace individual transactions to the effectedaccount balance(s) on a financial statement
    218. 218. SAP ERPSAP University AlliancesPage 1-218© 2008 SAP AGSAP Document Principle Each business transaction impacting FI writes data to the SAP databasecreating a uniquely numbered electronic document The document number can be used to recall the transaction at a later date It contains, for example, such critical and necessary information as:- Responsible person- Date and time of the transaction- Commercial content Once written to the SAP database, a financial document (one impacting thefinancial position of the company) can not be deleted from the database It can be changed to some degree The SAP document principle provides a solid and important framework fora strong internal control system – a requirement of law for companies thatoperate in the United States
    219. 219. SAP ERPSAP University AlliancesPage 1-219© 2008 SAP AGSAP Document PrinciplePeriod 1Doc. no. DT Doc.date Currency Amount1500000013 KZ 01/05/04 USD 1,800.00 -1500000014 KZ 01/06/04 USD 990.00 -100000012 SA 01/08/04 USD 750.00 -1400000342 DZ 01/14/04 USD 5,250.00 -
    220. 220. SAP ERPSAP University AlliancesPage 1-220© 2008 SAP AGSAP FI Module Fully integrated with other SAP modules including, but not limited to:- Sales and Distribution (SD)- Materials Management (MM)- Production Planning and Execution (PP)- Managerial Accounting (CO)
    221. 221. SAP ERPSAP University AlliancesPage 1-221© 2008 SAP AGSummary Purpose SAP FI Organizational Objects Financial Statements Customer/Vendor Accounts Audit Trails Document Principle Integration
    222. 222. SAP ERPSAP University AlliancesPage 1-222© 2008 SAP AG
    223. 223. SAP ERPSAP University AlliancesPage 1-223© 2008 SAP AG
    224. 224. © 2008 SAP AGControlling (CO)SAP University AlliancesVersion 1.0Authors Stephen TracyBret WagnerStefan WeidnerProductSAP ERP 6.0Global Bike Inc.LevelBeginnerFocusCross-functional integrationControlling
    225. 225. SAP ERPSAP University AlliancesPage 1-225© 2008 SAP AGGoal of CO Managerial accounting – termed controlling – is designed to collectthe transactional data that provides a foundation for preparinginternal reports that support decision-making within the enterprise These reports are exclusively for use within the enterprise andinclude:- Cost center performance- Profit center performance- Budgets analyses
    226. 226. SAP ERPSAP University AlliancesPage 1-226© 2008 SAP AGTarget Audience Executives Senior Management Department Managers Controllers Cost Accountants
    227. 227. SAP ERPSAP University AlliancesPage 1-227© 2008 SAP AGOrganizational Objects These represent the legal and/or organizational views of anenterprise They form a framework that supports the activities of a business inthe manner desired by management Permit the accurate and organized collection of businessinformation Support the development and presentation of relevant informationin order to enable and support business decisions Organizational Objects:- Company Code - Cost Center- Chart of Accounts - Internal Order- Controlling Area - Profit Center
    228. 228. SAP ERPSAP University AlliancesPage 1-228© 2008 SAP AGCompany Code Represents an independent legal accounting unit Balanced set of books, as required by law, are prepared at thislevel A client may have more than one company code- United States- United Kingdom- South America- Canada- GermanyLiabilities &Owners EquityAssets
    229. 229. SAP ERPSAP University AlliancesPage 1-229© 2008 SAP AGChart of Accounts & Controlling Area Chart of Accounts- A complete listing of the accounts that exist in the General Ledger fora company- Since a given enterprise (e.g., General Motors) can consist of severalseparate legal entities (e.g., Cadillac, Chevrolet), separate companycodes can be created for each entity while each uses the same chartof accounts so that consolidated statements can be prepared. Controlling Area- A self-contained, organizational element for which the management ofrevenues and expenses can be performed- A controlling area may include one or more company codes; therefore,an enterprise can perform management accounting analyses andreports across several companies- A way to identify and track where revenues and costs are incurred forevaluation purposes
    230. 230. SAP ERPSAP University AlliancesPage 1-230© 2008 SAP AGProfit Center & Cost Center Profit Center- Responsible for revenue generation and cost containment- Evaluated on profit or return on investment- Enterprises are commonly divided into profit centers based on• Region• Function• Product Cost Center- Responsible for cost containment, not responsible for revenuegeneration• One or more value-added activities are performed within each cost center• Unit that is distinguished, for example, by area of responsibility, location, ortype of activity• Copy center• Security department• Maintenance department
    231. 231. SAP ERPSAP University AlliancesPage 1-231© 2008 SAP AGInternal Order Temporary cost center responsible for cost containment, notresponsible for revenue generation It is used to plan, collect, and monitor the costs associated with adistinct short-term event, activity, or project- Company picnic- Trade show- Recruiting campaign
    232. 232. SAP ERPSAP University AlliancesPage 1-232© 2008 SAP AGRevenue Elements A one-to-one linkage (mapping) between General Ledger revenueaccounts and CO revenue elements is established to permit thetransfer of FI revenue information to CO Posting in FI that impact revenue accounts lead to an posting inCO to a revenue element In other words, revenue account = revenue element – just differentwords depending on whether FI object or CO object
    233. 233. SAP ERPSAP University AlliancesPage 1-233© 2008 SAP AGCost Elements A one-to-one linkage (mapping) between General Ledger expenseaccounts and CO cost elements is established to permit the transfer of FIexpense information to CO Postings in FI that impact cost accounts lead to an posting in CO to a costelement In other words, expense account = cost element – just different wordsdepending on whether FI object or CO object Primary Cost Element- Originate in the General Ledger within FI and are automatically transferred toCO when an FI transaction is recorded in the General Ledger Secondary Cost Element- Used exclusively in CO for allocations and settlements between and amongstcost centers
    234. 234. SAP ERPSAP University AlliancesPage 1-234© 2008 SAP AGPrimary and Secondary Cost ElementsFinancialAccounting(FI)General Ledger AccountsRevenueAccountsBalanceSheetIncomeStatementExpenseAccountsManagerialAccounting(CO)Aggregate Cost ElementsPrimary CostElementsSecondary CostElements
    235. 235. SAP ERPSAP University AlliancesPage 1-235© 2008 SAP AGPosting Primary Cost ElementPrimary CostElementDebit Credit1,500CostCenterADebit Credit1,500Supplies Expense CashFinancial Accounting (FI)Managerial Accounting (CO)
    236. 236. SAP ERPSAP University AlliancesPage 1-236© 2008 SAP AGPosting Primary Cost Element(FI) TransactionDocumentAmountG/L Account #Cost Center1900012432(CO) TransactionDocumentCost CenterCost Element200006571,5001,500CashDebit CreditSupplies ExpenseDebit CreditCost Center1,500Financial Accounting (FI)Managerial Accounting (CO)
    237. 237. SAP ERPSAP University AlliancesPage 1-237© 2008 SAP AGPosting Secondary Cost ElementSecondary CostElementDebit Credit1,500Debit Credit1,500Supplies Expense CashCC 2CC 3CostCenterAFinancial Accounting (FI)Managerial Accounting (CO)
    238. 238. SAP ERPSAP University AlliancesPage 1-238© 2008 SAP AGStatistical Key Figures Provide the foundation for accurate and effective cost allocationsbetween cost objects Utilized to support internal cost allocations involving allocations,assessments, and distributions Examples: number of employees, square footage, minutes ofcomputer usageCopyCenterActivity(20 Hours)10 Hours6 Hours4 HoursExecutive OfficesMaintenanceDepartmentInformation ServicesDepartment
    239. 239. SAP ERPSAP University AlliancesPage 1-239© 2008 SAP AGPosting Secondary Cost ElementDebit Credit1,500Rent ExpenseDebit Credit2,500Supplies ExpenseDebit Credit2,000Labor Expense1,5002,5002,0001,8003,0001,200Primary Cost ElementPrimary Cost ElementPrimary Cost ElementSec. Cost ElementSec. Cost ElementSec. Cost ElementCopyCenterExecutive OfficesInformation ServicesMaintenanceDepartment
    240. 240. SAP ERPSAP University AlliancesPage 1-240© 2008 SAP AGTypes of Allocation Distributions – primary cost elements Assessments – combination of primary and/or secondary cost elements Distribution- Method for periodically allocating primary cost elements- Primary cost elements maintain their identities in both the sending and receivingobjects- Sender and receiver cost centers are fully documented in a unique Controlling(CO) document Assessment- A method of allocating both primary and secondary cost elements- Primary and/or secondary cost elements are grouped together and transferredto receiver cost centers through use of a secondary cost element- Sender and receiver cost centers are fully documented in a unique Controlling(CO) document
    241. 241. SAP ERPSAP University AlliancesPage 1-241© 2008 SAP AGDistributionsA010 – 600sq ftA005 – 400sq ftD010 – 550sq ftD005 – 900sq ftS010 – 100sq ftS005 – 200sq ftA020 – 100sq ftA015 – 150sq ftSendingcost centerPrimary costelementmaintains itsidentityReceivingcost centersA010 – AdministrationRent Expense$1,500Distribution
    242. 242. SAP ERPSAP University AlliancesPage 1-242© 2008 SAP AGDistributionsA015$75A020$50S005 –$100S010 – $50A010 –$300D005 –$450D010 –$275A005 –$200A010 – AdministrationRent Expense$1,500DistributionSendingcost centerPrimary costelementmaintains itsidentityReceivingcost centers
    243. 243. SAP ERPSAP University AlliancesPage 1-243© 2008 SAP AGAssessmentsA020 – 0%A005 – 15%A010 – 5%A015 – 10%S005 – 30%S010 – 10%D005 – 20%D010 – 10%A020 – ITSoftware Expense$4,200A020 – ITSupplies Expense$500AssessmentSendingcost center Primary andsecondarycost elementsReceivingcost center
    244. 244. SAP ERPSAP University AlliancesPage 1-244© 2008 SAP AGAssessmentsS010 – $470D010 – $470A005 – $705A010 – $235A015 – $470A020 –$0S005 – $1,410D005 – $940A020 – ITSoftware Expense$4,200A020 – ITSupplies Expense$500Sendingcost centerPrimary andsecondarycost elementsReceivingcost centerAssessment
    245. 245. SAP ERPSAP University AlliancesPage 1-245© 2008 SAP AGSAP CO Module Fully integrated with other SAP modules including, but not limited to:- Financial Accounting (FI)- Materials Management (MM)- Sales and Distribution (SD)- Production Planning and Execution (PP)
    246. 246. SAP ERPSAP University AlliancesPage 1-246© 2008 SAP AGSummary Purpose SAP CO Organizational Objects Revenue Elements Cost Elements Statistical Key Figures Allocations Integration
    247. 247. SAP ERPSAP University AlliancesPage 1-247© 2008 SAP AGThe End