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BUSINESS PROCESS OVERVIEW
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  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC
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  • Version 1.0 The Rushmore Group, LLC 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."
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC Solutions mySAP Customer Relationship Management, mySAP ERP, mySAP Product Lifecycle Management, mySAP Supply Chain Management, mySAP Supplier Relationship Management, SAP Analytics, SAP Manufacturing, SAP Service and Asset Management, SAP solutions for mobile business, SAP xApps Small and Midsize mySAP All-in-One, SAP Business One Platforms Enterprise Services Architecture, SAP NetWeaver Platform
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  • Version 1.0 The Rushmore Group, LLC
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  • Version 1.0 The Rushmore Group, LLC For three decades, SAP has developed best business practices with our most successful partners and customers. We can share this experience with you. SAP Best Practices get you started with a fully documented and reusable prototype that you can turn into a productive solution quickly. So you can control costs, reduce risk, and immediately experience the benefits of mySAP Business Suite. SAP Best Practices empower your company with: A proven methodology that leverages a prototype approach to implementation Thoroughly documented scenarios -- from both a business and a technical perspective Proven preconfigurations of SAP solutions Benefits for companies of any size, for both new and existing customers -- so you can easily adapt techniques to meet your specific requirements or use them as a starting point for customized ASP or hosted solutions
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC Stands for Systems , applications and products in data processing SAP AG located in Germany SAP America is wholly owned sub of AG R/2 is the initial version R/3 newer
  • Version 1.0 The Rushmore Group, LLC The have a new product: SAP Business One: Small business First one is for retail So many large companies have small subsidiaries that are not big enough to run SAP R/3 Driven as a market decision to prevent erosion of market share. SAP has a complete set of industry solutions: Automotive Pharmaceuticals Hospital Manufacturing Chemical Government 20+ Minimal configuration: a lot of what we do in the class is already done.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC Draw picture of stool Seat – Transactions Supported by Leg 1 – Organizations data Leg 2 – Master data Vendor, customer, material Leg 3 – Rules Govern how a transaction is used in the system SAP is an erector set You can create anything you want with it, the problem is converting it to something else is not easy. You can’t readily dismantle it too easily. Did you define what you wanted it to do before you started. One is the biggest problem is people do not define what you want before they start.
  • Version 1.0 The Rushmore Group, LLC During this unit we will go through everything you need to know to navigate successfully throughout the SAP R/3 system. These systems are pervasive throughout R/3, so anywhere you are working it will be the same. Often called the UI (User Interface).
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  • Version 1.0 The Rushmore Group, LLC Client is a whole set of rules You may have many different clients within the SAP system with different functions. For instance, a production class may have a much different setup and execution than a service class next door.
  • Version 1.0 The Rushmore Group, LLC Users are client dependent. A user has to be setup individually per client with its own password.
  • Version 1.0 The Rushmore Group, LLC Having a password is important. Every movement or transaction within SAP is tracked via the audit trail. So, if someone steals your password they can do much damage to the system and it will be tracked back to your name.
  • Version 1.0 The Rushmore Group, LLC Currently support 26 languages including double-bit Kanji languages (oriental)
  • Version 1.0 The Rushmore Group, LLC The user/password has validity dates per client. For instance, if a temporary employee is doing some data entry work for a couple of weeks, the administrator can, not only limit the access, but limit the time the employee will have access, so they cannot access the system once they leave.
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  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC
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  • Version 1.0 The Rushmore Group, LLC White open area is command field – transaction codes Green check mark is enter (same function as enter on your key board) Disk – Save Back – one screen Yellow – One level Cancel – back up one screen at a time Binoculars – Expand and find Pages Asterisk – Create a new sessions Toggle between sessions Short cut – Desktop (can do it from menu) Question mark : Help
  • Version 1.0 The Rushmore Group, LLC Input Fields can be optional, required (check mark in the field), restricted: the field that is key is the field you are currently in
  • Version 1.0 The Rushmore Group, LLC Transaction dependant
  • Version 1.0 The Rushmore Group, LLC F1 = Description of the fields functionality F4 = Possible Entries
  • Version 1.0 The Rushmore Group, LLC Application help Specific to the application you are working on SAP Library (all) All the help with finds. Release notes (updates and upgrade information) There are many version and updates that are continually going out. This let’s you know what one you are working on.
  • Version 1.0 The Rushmore Group, LLC Different ways to set up Pop up: so it pops up in its own screen when you get the message On bottom menu Red Error:: Kiss of death – you cannot do anything Generally the cursor moves to where the infraction occurs Yellow – Warning: most of the time it will let you continue – Something is not quite perfect, but good enough to let the transaction occur. Green – All documents that you create will give you information messages.
  • Version 1.0 The Rushmore Group, LLC We will do nothing with the IMG side in this class.
  • Version 1.0 The Rushmore Group, LLC System log off Exit button Corner x-box Normal Windows close Time out options: If you are not active within x-period of time then the system will automatically log you out. All transactions are tracked via the audit trail. Any thing you do has your name written all over it. So, if you try to mess up the system we will know who did it. Remember, if you do not log out someone else can mess up the system and the blame will be place on you.
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  • Version 1.0 The Rushmore Group, LLC All of this together makes up the Master Record for a Material.
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  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC Changes in delivery will update the sales order
  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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)
  • Version 1.0 The Rushmore Group, LLC 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 slide0
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC
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  • Version 1.0 The Rushmore Group, LLC All of this together makes up the Master Record for a Material.
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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
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  • Version 1.0 The Rushmore Group, LLC 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).
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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)
  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC 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)
  • Version 1.0 The Rushmore Group, LLC Goods Receipt Debit Inventory Credit GR/IR Invoice Receipt Debit GR/IR Credit AP Payment Program (A/P) Debit: AP Credit Bank
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  • Version 1.0 The Rushmore Group, LLC 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).
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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
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  • Version 1.0 The Rushmore Group, LLC 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
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC Capacity Categories  Capacities in work centers are distinguished by capacity categories Capacity categories are for example: Machine capacity Personnel capacity Reserve capacity for rush orders Emissions Energy requirements Each capacity category can be used once in each work center. Together with bills of material and routings, work centers belong to the most important master data in the R/3 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. Work Center Capacity A work center capacity is created in the work center and is directly assigned to the work center. You can however maintain the capacity separately For detailed capacity planning you can assign individual capacities to each capacity category in a work center. You can determine available capacities for the individual capacities. Alternatively you can assign HR-objects (people, qualifications, requirements profiles and positions) to a capacity. You can thus determine which employee or qualification is needed in the capacity.
  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC Aggregate forecasts of a group of similar products are generally more accurate than individual forecasts of the individual products that make up the group.
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  • Version 1.0 The Rushmore Group, LLC Reyovac Batteries Constant Production building up On-hand inventory 90% of battery sales are in Nov and Dec for christmas
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC consist of settling the actual costs incurred in the order to one or more receiver cost objects
  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC 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)
  • Version 1.0 The Rushmore Group, LLC 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.
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  • Version 1.0 The Rushmore Group, LLC Cost – costs incurred for advertising Applications – how many applications did you receive from that advertisment Medium – Press, Radio, TV Recruitment Instrument – New York Time, Chicago Tribune, Argus Leader
  • Version 1.0 The Rushmore Group, LLC allows a company to coordinate and monitor all the steps involved in the applicant process solicited or unsolicited applicants
  • Version 1.0 The Rushmore Group, LLC Entry of applications in the system can be divided so that more than one person is responsible for it. EX. On receipt of the applications, one employee enters the mandatory data for all applicants. The applications are then distributed among the responsible administrators/personnel officers, who decide which applicants can be rejected immediately. They then enter additional data on applicants who are still of interest to the company. Status determines what information is needed: If the applicant is an external applicant, all the required data must be entered manually. When dealing with internal applicants, however, you can import data such as name and address simply by specifying the candidate's personnel number. You can overwrite this data, if necessary
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  • Version 1.0 The Rushmore Group, LLC Hiring with Recruitment – if you hire an applicant, you can transfer his or her data to the Personnel Administration component. The applicant's data is transferred directly from the applicant database to the employee database. You have the ability to enter the additional data, such as working time and salary details, later in Personnel Administration. Hiring independent of Recruitment – New employees can also be hired independently of the Recruitment component, by means of personnel action in Personnel Administration. In such cases, data relevant to the new employee is created. * if you know the right people no need for recruitment and applications (they make a job for you) * this is how we hired our employee
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  • Version 1.0 The Rushmore Group, LLC You use the Qualifications and Requirements component to define, structure, and manage your qualifications catalog. On the basis of this qualifications catalog, the organizational structure (and, if required, other information) you can create profiles. You can then use these profiles to manage, evaluate and compare object characteristics. The profiles can be used to show both the requirements of a position and the qualifications and career goals (preferences) of a person. You can also run profile match-ups to find out how suitable certain persons are for a certain position in your organization, for example. If any qualification deficits arise, you can plan further training measures
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  • Version 1.0 The Rushmore Group, LLC Career Planning – ensure employees feel good about themselves and the direction they are going within the company – done by aligning goals of the company and the employee Succession Planning – determining qualified successors for specific posts within the company ensuring our success (having internal replacements) and minimizing cost associated with finding retrain employees
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  • Version 1.0 The Rushmore Group, LLC Integration Points within HCM MM (requisitions for supplies – Markers, Paper, Manuals) (reservations – Rooms, Projectors) SD (tracking external attendees – contact information, etc) FI/CO (billing external attendees) (cross billing for internal attendees) HCM Personnel Administration – use of Employee data (attendees – instructors) Organizational Admin – approval procedures Personnel Development – qualifications check for entry to class – update skills upon completion Time Management – recording and checking of attendance to the class
  • Version 1.0 The Rushmore Group, LLC The Personnel Time Management component offers you support in performing all human resources processes involving the planning, recording, and valuation of internal and external employees’ work performed and absence times. It provides other SAP applications with planning data and delivers information to business processes such as: Determining personnel costs Creating invoices Confirmations Service entry of external employees
  • Version 1.0 The Rushmore Group, LLC You are not limited to one method of time recording when entering time and labor data. There are different methods of time recording depending on the technical prerequisites, the demands on the data being recorded, and the employee's tasks: Your employees post their working times at external time recording terminal (swipe, punch, piecework). Your employees use the Cross-Application Time Sheet (CATS) to record information on their working times. You can use the recorded data for further business processes in Human Resources, Logistics, and Controlling. Your employees use Web applications or mobile devices to record their working times and receive information about their planned and actual working times. These include applications for the Cross-Application Time Sheet, clock-in and clock-out postings, and for displaying time accounts and work schedules. Your time administrators, such as supervisors and secretaries, use the Time Manager's Workplace to correct and complete decentrally the time data of the employees assigned to them. Your time administrators in the Human Resources department use the Maintain Time Data transaction to check and complete employees’ time data centrally.
  • Version 1.0 The Rushmore Group, LLC Payroll Accounting – Remuneration, Incentive Wages Personnel Cost Analysis Internal Cost Allocation – assign labor costs to the correct cost objects Invoicing – Billing for work performed (consulting) Performance Analysis – absenteeism, tardiness, etc Capacity Availability – work schedule, can he/she be assigned to a task or Work Center Shift Planning – available hours, hours needed
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  • Version 1.0 The Rushmore Group, LLC Job Pricing generates salary structures based on internal and external information and provides reporting capabilities will perform the following functions generate and maintain salary structures define pay grades and levels external job evaluations systems and salary surveys evaluation and comparison of jobs and related jobs Budgeting used to allocated funds to organizational units within the organization can create several budgets roll-up feature bottom up – submit the budget top down – approve the budget The Compensation Administration component provides you with the necessary tools for strategic remuneration planning that reflects both your corporate culture and your salary policies. User-defined calculation rules and eligibility criteria mean that you can create compensation adjustments that meet your individual requirements and comply with your compensation policy.
  • Version 1.0 The Rushmore Group, LLC US Specific: FSA – Flexible Spending Accounts - enable employees to set aside pre-tax income to cover anticipated medical or dependent care expenses COBRA – Consolidated Omnibus Budget Reconciliation Act of 1985 – requires the vast majority of employers to offer continuation of coverage to covered employees and their dependents who, due to certain qualifying events, lose group health plan under the same terms and conditions as effective immediately prior to the event. HIPPA - Health Insurance Portability and Accountability Act - The HIPAA Certificate Report enables you to generate the "Certificate of Creditable Coverage" for employees and their dependents who are entitled to this document under the Health Insurance Portability and Accountability Act of 1996
  • Version 1.0 The Rushmore Group, LLC Many internal integration points Often integrates with an outside or 3 rd party system
  • Version 1.0 The Rushmore Group, LLC HOPE the +’s outweigh the –’s Generation of W2 – W4
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC This diagram show a purchase order. In this case the cost of the purchase order is assigned to Cost Center C0001.
  • Version 1.0 The Rushmore Group, LLC 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)
  • Version 1.0 The Rushmore Group, LLC This diagram show a purchase order. In this case the cost of the purchase order is assigned to Cost Center C0001.
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  • Version 1.0 The Rushmore Group, LLC 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
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  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC Distribution  Use Distribution is used to allocate the primary costs of a cost center. The following information is passed on to the receivers: The original cost element (that is, the primary cost element) is retained. Sender and receiver information (for example, the identities of the sender and receiver cost center/business process) is documented using line items in the CO document. You can use the information system to analyze the distribution results according to sender and receiver relationships.
  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC Distribution and administration having most of the square footage thus have the majority of the distribution costs.
  • Version 1.0 The Rushmore Group, LLC Assessments are to Secondary Costs Distributions are to Primary Costs Assessment  Use 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. Allocation through assessment is useful when the composition of the costs is unimportant for the receiver. For example, the assessment of cafeteria costs to a cost center need not be broken down further. You can use the information system to analyze the assessment results by assessment cost element according to sender and receiver relationships. A method of internal cost allocation by which you allocate the costs of a sender cost center to receiver CO objects (such as orders and other cost centers) using an assessment cost element. The system supports the following: Hierarchical method (where the user determines the assessment sequence) Iterative method (where the system determines the sequence of assessment using iteration). Example: The costs from the cafeteria cost center could be assessed based on the statistical key figure "employee", which was set up on the receiver cost center. Receiver cost center I has 10 employees, receiver cost center II has 90. The costs of the cafeteria cost center would be transferred (assessed) to receiver cost center I (10%) and receiver cost center II (90%). The credit on the cafeteria cost center and the debit of the two receiver cost centers are posted using an assessment cost element. Depending on the system setting, the total costs or some of the costs for the cafeteria cost center would be debited.
  • Version 1.0 The Rushmore Group, LLC 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.
  • Version 1.0 The Rushmore Group, LLC The reallocation in Dollars
  • Version 1.0 The Rushmore Group, LLC
  • Version 1.0 The Rushmore Group, LLC

BUSINESS PROCESS OVERVIEW BUSINESS PROCESS OVERVIEW Presentation Transcript

  • BPI-OverviewAn Introduction to SAP The Rushmore Group, LLC© SAP AG. All rights reserved. SAP University Alliance. The 1 Rushmore Group, LLC
  • Course Content• Introduction to SAP• Sales & Distribution• Materials Management• Production Planning• Human Capital Management• Financial Accounting• Controlling © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 2
  • Business Process Integration(Overview) The Rushmore Group, LLC© SAP AG. All rights reserved. SAP University Alliance. The 3 Rushmore Group, LLC View slide
  • Welcome• Instructor introductions• Student introductions• Classroom materials• Housekeeping issues – Times for class – Lunch – Breaks © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 4 View slide
  • Introductions• Your name…• Your background [briefly]…• Your SAP role/experience/courses attended…• Your objectives/expectations with respect to this course... © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 5
  • Course Outline• Day One • What is SAP • Sales & Distribution• Day Two • Materials Management• Day Three • Production Planning & Execution• Day Four • Human Capital Management• Day Five • Financial Accounting & Controlling © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 6
  • Business Process Integration(Overview) The Rushmore Group, LLC© SAP AG. All rights reserved. SAP University Alliance. The 7 Rushmore Group, LLC
  • SAP• Systems, Applications, and Products in Data Processing (SAP) – Name of the Company • SAP AG • SAP America • SAP UK – Name of the Software • SAP R/2 • SAP R/3 • SAP ECC 6.0 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 8
  • Who 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 – 38,400 employees in more than 50 countries • 1500 Business Partners – 36,200 customers in more than 120 countries • 12 million users • 100,600 installations Source: SAP AG website © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 9
  • Integrated Business Solution Vendors• SAP (Systems, Applications, & Products in Data Processing) • ECC 6.0, All-in-One, 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• Many Others © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 10
  • What is SAP ERP?• World-wide usage• Designed to satisfy the information needs for business sizes (small local to large all international) – Multi-lingual – Multi-currency• Designed to satisfy the information needs for all industries © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 11
  • SAP ERP• Enables a company to link it’s business processes• Ties together disparate business functions (integrated business solution)• Helps the organization run smoothly• Real-time environment• Scalable and flexible © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 12
  • SAP Architecture• Client/Server Environment – Client – hardware/software environment that can make a request for services for a central repository of resources – Server – hardware/software combination that can provide services to a group of clients in a controlled environment © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 13
  • SAP Architecture• 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 14
  • SAP ArchitecturePCs, Laptops, etc. Browser Client Network Web Server Internet Presentation Transaction Server Application Application Servers Database Database © SAP AG. All rights reserved. SAP University Alliance. The 15 Rushmore Group, LLC
  • Business Modules• Collections of logically related transactions within identifiable business functions – MM (“Buy”) – PP (“Make”) – SD (“Sell”) – FI and CO (“Track”) – HCM © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 16
  • SAP: Software Applications• Solutions • Small & Medium Size Solutions – mySAP CRM – mySAP Business One – mySAP ERP ECC – mySAP All-in-One – mySAP PLM – mySAP SCM • Platforms – mySAP SRM – Enterprise Services Architecture – SAP Analytics – SAP NetWeaver Platform – SAP Manufacturing – SAP Service – SAP Mobile Solutions – SAP xApps © SAP AG. All rights reserved. SAP University Alliance. The 17 Rushmore Group, LLC
  • mySAP Business Suite mySAP PLM mySAP mySAP mySAP SRM ERP ECC 6.0 CRM mySAP SCM SAP NetWeaver© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 18
  • mySAP Business Suite SD FI MM mySAP PLM COPP AM SAP R/3 mySAP mySAP mySAP Client/Server SRM ERP CRMQM ABAP PS PM Basis WF mySAP SCM HR IS SAP NetWeaver © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 19
  • SAP R/3: 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 20
  • Use What Works• Industry Solutions• Best Business Practices © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 21
  • SAP: Industry Solutions• Aerospace & Defense • Media• Automotive • Mill Products• Banking • Mining• Chemicals • Oil & Gas• Consumer Products • Pharmaceuticals• Defense & Security • Postal Services• Engineering, Const. • Professional Services• Healthcare • Public Sector• High Tech • Railways• Higher Education • Retail• Industrial Machinery • Telecommunications• Insurance • Utilities• Life Sciences • Wholesale Distribution• Logistics Service Prod. © SAP AG. All rights reserved. SAP University Alliance. The 22 Rushmore Group, LLC
  • SAP: Best Business Practices• SAP Best Practices cover well-proven business scenarios that help to exploit the potentials of mySAP ERP. It is a flexible building block technology that enables you to implement and adapt your solution quickly using fully documented and reusable prototypes. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 23
  • How to be Successful SIT AND PLAY© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 24
  • Pen IncIntroduction to Your Company © SAP AG. All rights reserved. SAP University Alliance. The 25 Rushmore Group, LLC
  • Pen Incorporated• Start-up company in the promotional pen business• Initially buys and re-sells different lines of promotion pens• Sells to both wholesale and retail – procure and distribute• Later acquires a production facility to manufacture its own product – produce and distribute © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 26
  • BPI – Core Business Processes• Pen Inc. – Stage 1 (A Trading Goods Company)  Buy – Procurement (MM)  Sell – Sales and Distribution (SD)  Track – Financial Accounting (FI)• Pen Inc. – Stage 2 (Buys a Production Facility)  Buy – Procurement (MM)  Sell – Sales and Distribution (SD)  Make – Production (PP)  Track – Financial Accounting (FI)  Track – Controlling (CO)  Track – Human Capital Management (HCM)  Track – Quality Management (QM) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 27
  • BPI - Concepts• Concepts can be:  Easy  Business Processes for a Lemonade Stand  Intermediate  Business Processes for Pen Inc  Implement Case Study  Expert  Business Processes for GM or GM © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 28
  • Two Approaches to Learning• Standard Training  Level 1: Introductory  Level 2: Business processes  Level 3: Configuration• BPI Approach  Cross functional  Understand business processes and their relationship to SAPs organizational structure  Highlight integration/configuration© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 29
  • Cross-Functional © SAP AG. All rights reserved. SAP University Alliance. The 30 Rushmore Group, LLC
  • Process Integration Purchase Requisition Purchase Order Run MRP Goods Sales Order Procurement Check Receipt Entry Process Availability Sales Order Invoice Pick Receipt Process MaterialsReceipt of PaymentPayment to Vendor Post Goods Invoice Issue Customer © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 31
  • Process Integration Purchase Requisition Purchase Order Run MRP Goods Sales Order Procurement Check Receipt Entry Process Availability Sales Order Invoice Process Receipt PickReceipt of Materials PaymentPayment to Vendor Post Goods Invoice Issue Customer © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 32
  • Process Integration Purchase Order Purchase Requisition Convert Production Goods Proposal Schedule Receipt Procurement and Release Process Run MPS w/MRP Invoice Goods Receipt Production Issue Check Process Availability Sales Order Payment Completion Entry to Vendor Quality Confirmation Sales Order Inspection Pick Goods Process Materials Receipt OrderReceipt of SettlementPayment Post Goods Issue InvoiceAG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC © SAP 33 Customer
  • Process Integration Purchase Order Purchase Requisition Convert Production Goods Proposal Receipt Schedule Procurement and Release Process Run MPS w/MRP Invoice Goods Receipt Production Check Issue Availability Process Sales Order Payment Completion Entry to Vendor Quality Confirmation Sales Order Inspection Goods Pick Process Receipt Materials OrderReceipt of SettlementPayment Post Goods Issue Invoice All rights reserved. SAP University Alliance. The Rushmore Group, LLC © SAP AG. 34 Customer
  • Pen Inc Organizational StructureCredit Control Client Fiscal Year Area Variant Chart of Company Controlling Accounts Code AreaPurchasingOrganization Plant SalesPurchasing Organization SL10 SL20 Group Distribution Division Shipping Channel Point Sales Area © SAP AG. All rights reserved. SAP University Alliance. The 35 Rushmore Group, LLC
  • The Basics of SAP - Navigation -© SAP AG. All rights reserved. SAP University Alliance. The 36 Rushmore Group, LLC
  • Overview• Logging on• SAP R/3 screens• Basics of data entry• Working with multiple sessions• Reporting• On-line help and system messages• Setting user defaults• Logging off © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 37
  • Navigation© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 38
  • SAP: Logging-On © SAP AG. All rights reserved. SAP University Alliance. The 39 Rushmore Group, LLC
  • SAP: Logging-On• Information needed: – Client • Complete set of tables – User Name • Unique User ID – Password • 3 to 8 characters • Letters or numbers – Language • EN = English • DE = German • ES = Spanish © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 40
  • Logging On - The Client• This is a numeric field• Defines a whole business entity © SAP AG. All rights reserved. SAP University Alliance. The 41 Rushmore Group, LLC
  • Logging On - User• Enter the name of the SAP user• Users are Client-Specific – User identification on one client will only allow access to that client on that server• The user ID defines the rights the person logging on is assigned © SAP AG. All rights reserved. SAP University Alliance. The 42 Rushmore Group, LLC
  • Logging On - Password• Rules – Can contain Letters – Can contain Numbers – No 3 characters can be alike – Can not begin with ? or ! – Must be 3 - 8 characters – Can not use previous 5 passwords• Easy to remember © SAP AG. All rights reserved. SAP University Alliance. The 43 Rushmore Group, LLC
  • Logging On - Language• SAP supports multi- national character sets and languages on the same system.• Default languages are English and German; can load multiple others.• Current system: – EN = English – DE = German – ES = Spanish © SAP AG. All rights reserved. SAP University Alliance. The 44 Rushmore Group, LLC
  • Logging On - Data Record Table Valid ValidClient User Password From To 400 STEVE ******** 1/1/2000 12/21/2000 400 BOB ******** 1/1/2000 12/21/2000 400 GERRY ******** 1/1/2000 12/21/2000 421 STEVE ******** 1/1/2006 12/31/2008 421 BOB ******** 1/1/2006 12/31/2008 421 GERRY ******** 1/1/2006 12/31/2008 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 45
  • SAP: Easy Access Menu© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 46
  • SAP: Easy Access• SAP menus can be Role Based – determined by the User Group and Profile your User ID is a assigned Sales View Purchasing View © SAP AG. All rights reserved. SAP University Alliance. The 47 Rushmore Group, LLC
  • SAP: System Menus & Submenus © SAP AG. All rights reserved. SAP University Alliance. The 48 Rushmore Group, LLC
  • SAP: Menus FavoritesTransactions Folder and Sub-Folder © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 49
  • Enter Comm and F i eld Save Back Exit Canc el Print Find/E xpand ic ons Scrol li SAP – Standard Tool Bar cons Creat e Creata new se ead esktossion p sho rtcut© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC Help icon Optio ns50
  • SAP: Screen Elements Menu Bar Standard Tool Bar Title BarCommand Field Application Bar Search Tabs Input Fields Drop Down Status Bar © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 51
  • SAP: Application Bar• Screen or view dependant – (e.g. materials master will differ from sales order entry will differ from the main menu) © SAP AG. All rights reserved. SAP University Alliance. The 52 Rushmore Group, LLC
  • SAP: Help F4F1 Possible Entries © SAP AG. All rights reserved. SAP University Alliance. The 53 Rushmore Group, LLC
  • SAP: On-line Help © SAP AG. All rights reserved. SAP University Alliance. The 54 Rushmore Group, LLC
  • System Messages• E = Error – An invalid entry has been made – The cursor moves to the field where the error has occurred• W = Warning – A possible error has been made – The user can continue without changing• I = Information – Feedback from the system © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 55
  • SAP: IMG (Implementation Guide)© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 56
  • Logging Off• System > logoff• Exit button• Control box For security purposes it is important to log off SAP whenever you leave your PC. Your user name is linked with all transactions you perform providing an audit trail. © SAP AG. All rights reserved. SAP University Alliance. The 57 Rushmore Group, LLC
  • Sales & Distribution(SD) BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 58 Rushmore Group, LLC
  • SD: Functionality• Sales Support• Sales• Shipping and Transportation• Billing• Credit Management• Foreign Trade © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 59
  • SD: Chapter Overview• Sales and Distribution Org. Levels• Sales and Distribution Master Data• Sales Order Process – Order-to-Cash © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 60
  • Sales & Distribution Org Structure & Master Data© SAP AG. All rights reserved. SAP University Alliance. The 61 Rushmore Group, LLC
  • SD: Organizational StructuresS&D Structure Internal Sales Structure• Client • Sales Offices• Company Code • Sales Groups• Sales Area • Salesperson – Sales Organization – Distribution Channel – Division• Plant• Shipping Point• Loading Point © SAP AG. All rights reserved. SAP University Alliance. The 62 Rushmore Group, LLC
  • SD: Structure for Sales Order Processing Client 410 Sales Area Company Code Sales Org C100 S100 Distribution Division Channel (RE) (01)Plant P100 Plant P101 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 63
  • SD: Internal Sales Structure US Sales Office S100 Western Sales Eastern Sales Office OfficeNorthwest Sales Southwest Sales Northeast Sales Southeast Sales Group Group Group Group Salesperson 1 Salesperson 4 Salesperson 6 Salesperson 7 Salesperson 2 Salesperson 5 Salesperson 8 Salesperson 3 Salesperson 9 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 64
  • SD: Structure for Distribution Client 410 Company Code C100 Plant P100 Plant P101 Shipping Point Shipping Point Shipping Point Rail Dock Express Dock Freight DockLoading Point Loading Point Loading Point LP03 LP02 LP01 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 65
  • SD: Master DataCondition Master DataCustomer Master DataMaterial Master DataCust/Mat Info Record Output Master Data © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 66
  • SD: Customer Master Data • Customer Master – Contains all of the information necessary for processing orders, deliveries, invoices and customer payment – Every customer MUST have a master record • Customer Master Data is created by Sales Area – Sales Organization – Distribution Channel – Division © SAP AG. All rights reserved. SAP University Alliance. The 67 Rushmore Group, LLC
  • SD: Customer Master Data • The customer master information is divided into 3 areas: – General Data – Company Code Data – Sales Area Data© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 68
  • SD: Customer Master General Information relevant for the entire organization: Name Address Communication Client 410Company Code specific information: Sales Area specific information: Acc. Mgmt Sales Office Payment Currency Bank Company Code 102 Sales Org. 101 Company Code 101 Sales Org. 100 Company Code 100 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 69
  • SD: Master Data • Material Master – Contains all the information a company needs to manage about a material – It is used by most components within the SAP system • Sales and Distribution • Materials Management • Production • Plant Maintenance • Accounting/Controlling • Quality Management – Material master data is stored in functional segments called Views © SAP AG. All rights reserved. SAP University Alliance. The 70 Rushmore Group, LLC
  • SD: Material Master Views Sales Data Basic Data Purchasing Data Mat. Plan. Data Material Master Forecasting Data Storage DataControlling Data Quality Data Accounting Data© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 71
  • SD: Material Master General Information relevant for the entire organization: Name Weight U/M Client 410Sales specific information: Delivery Plant Storage Location specific information: Loading Grp Stock Qty Plant 102 Storage Location 20 Plant 101 Storage Location 10 Plant 100 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 72
  • SD: Customer-Material Information Record• Data on a material defined for a specific customer is stored in a Customer material info record.• Info Records contain: – customer-specific material number – customer-specific material description – customer-specific data on deliveries and delivery tolerances• You can also maintain default text to appear on sales orders for that customer © SAP AG. All rights reserved. SAP University Alliance. The 73 Rushmore Group, LLC
  • SD: Condition Master (Pricing) • Condition master data includes: – Prices – Surcharges – Discounts – Freights – Taxes • You can define the condition master to be dependent on various data: – Material specific – Customer specific • Conditions can be dependent on any document field © SAP AG. All rights reserved. SAP University Alliance. The 74 Rushmore Group, LLC
  • SD: Output• Output is information that is sent to the customer using various media, such as: – E-mail – Mail – EDI – Fax – XML• Output examples: – Quotation – Confirmation – Invoice © SAP AG. All rights reserved. SAP University Alliance. The 75 Rushmore Group, LLC
  • Sales & DistributionSales Sales Order Process© SAP AG. All rights reserved. SAP University Alliance. The 76 Rushmore Group, LLC
  • Sales: The Process Pre-sales Sales Order Activities Entry Check Availability Pick Materials Receipt ofCustomer Payment Pack Invoice Materials Customer Post Goods Issue © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 77
  • SD: Pre-Sales Activities (CRM Light)• Sales Support is a component of SD that assists in the sales, distribution, and marketing of a companies products and services to its customers. It contains the following functionality: – Creating and tracking customer contacts and communications (sales activity) • Phone call records • On-site meeting • Letters • Campaign communication – Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes• Pre-sales documents need to be managed within the presales activities: Inquiries and Quotations. These documents help identify possible sales related activity and determine sales probability. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 78
  • SD: Pre-Sales Activities (CRM Light)• The ultimate goal of all pre- sales activities is to equip the sales technician with all the information necessary to negotiate and complete the potential sale.• Information needed: – Past sales activity – Past communication – Contact information – General Company info – Credit limits and usage – Current backorders• 360º view of your customer © SAP AG. All rights reserved. SAP University Alliance. The 79 Rushmore Group, LLC
  • SD Process: Inquiry• An inquiry is a customer’s request to a company for information or quotation in respect to their products or services without obligation to 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 created to address questions for the potential customer. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 80
  • SD Process: Quotation• The quotation presents the customer with a legally binding offer to deliver specific products or a selection of a certain amount of products in a specified timeframe at a pre-defined price. © SAP AG. All rights reserved. SAP University Alliance. The 81 Rushmore Group, LLC
  • SD Process: Sales Order• Sales order processing can originate from a variety of documents and activities – Customer contacts us for order: phone, internet, email – Existing Contract – Quotations• The electronic document that is created should contain the following basic information: – Customer Information – Material/service and quantity – Pricing (conditions) – Specific delivery dates and quantities – Shipping information – Billing Information © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 82
  • SD Process: Sales Order• The sales document is made up of three primary areas: – Header • Data relevant for the entire sales order: Ex: customer data, total cost of the order – Line Item • Information about the specific product: Ex: material and quantity, cost of an individual line – Schedule Lines • Uniquely belongs to a Line Item, contains delivery quantities and dates for partial deliveries © SAP AG. All rights reserved. SAP University Alliance. The 83 Rushmore Group, LLC
  • SD Process: Sales Order• The sales order contains all of the information needed to process your customers request, the following information is determined for each sales order: – Delivering Schedule – Shipping point and route determination – Availability Check – Transfer of requirements to MRP – Pricing – Credit limit check © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 84
  • Sales Order: Delivery Scheduling• When an order is created the you must enter a requested delivery date for the order or each line item.• The system will then determine a delivery timeline, this will be used when determining our material availability, or ATP (Availablity to Promise) date.• The system will determine this date using forward and backward scheduling rules you have defined. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 85
  • Sales Order: Backward SchedulingOrder Material Transp. Goods RequestedDate Availability Sched. Loading Issue Delv. Date1st 2nd 3rd 4th 5th 6th Pick & Pack Transp. Loading Transit Sched. Time Time Time (2 days) (2 days) Time (1 day) (1 day) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 86
  • Sales Order: Forward Scheduling Requested NewOrder Material Transp. Goods Delv. Delv.Date Loading Issue Date Date Availability Sched. 1st 2nd 3rd 4th 5th 6th 7th Transp. Loading Transit Pick & Pack Sched. Time TimeTime (2 days) Time (1 day) (2 days) (1 day) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 87
  • Sales Order: Shipping & Route Determination• During the creation of the sales order the system must determine the shipping point from which the material will be shipped and the route the material will take to get from your warehouse to your customers 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 the material that we used in scheduling. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 88
  • Sales Order: Availability Check • Availability Check – Determines the material availability date – Considers all inward and outward inventory movements • Proposes 3 methods of delivery – One-time delivery – Complete delivery – Delayed proposal • Rules are created by YOU © SAP AG. All rights reserved. SAP University Alliance. The 89 Rushmore Group, LLC
  • Sales Order: Transfer to Planning• The order is transferred to Material Requirements Planning as an (CIR) Customer Independent Requirement. If a deficit is found the system will propose a Purchase Req. or Order to fulfill the shortage. © SAP AG. All rights reserved. SAP University Alliance. The 90 Rushmore Group, LLC
  • Sales Order: Pricing• The system displays pricing information for all sales documents on the pricing screens at both the header and the line item level. – Header pricing is valid for the whole order it is the cumulitive of all line items 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 to manually manipulate the pricing at both the header and line item level within the sales order by entering a condition type and amount. – Taxes and freight can be set-up so we can’t manually enter. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 91
  • Sales Order: Credit Check• Allows your company to manage its credit exposure and risk for each customer by specifying credit limits.• During the sales order process the system will alert the sales rep about the customers credit situation that arises, if necessary the system can be configured to block orders and deliveries. © SAP AG. All rights reserved. SAP University Alliance. The 92 Rushmore Group, LLC
  • SD Process: Shipping & Transportation• The shipping process begins when you create the delivery document 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 93
  • SD Process: Shipping Sales Order 1 Sales Order 4 Sales Order 5 Sales Order 2 Delivery 8…13 Delivery 8…16 Sales Order 3 Delivery 8…14 Delivery 8…12 Delivery 8…15 Order Partial CompleteCombination Delivery Delivery © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 94
  • SD Process: Delivery 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 95
  • SD Process: Delivery Creation• Generates packing proposal• Calculates weight and volume• Checks scheduling• Considers partial deliveries• Updates route assignment• Assigns picking location• Determines batches• Quality check (if needed)• Updates sales order © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 96
  • SD Process: Delivery Document• The Delivery Document initiates the delivery process and is the control mechinism for this process – Picking – Packing – Loading – Posting Goods Issue• Changes to delivery are allowable - products, quantities © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 97
  • Delivery: Picking• Quantities based on delivery note• Assigned date when picking should begin• Automated storage location assignment• Supports serial number/lot number tracking and batch management• Integrated with Warehouse Management (WM) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 98
  • Delivery: Loading and Packing• Identifies which packaging is to be used for specified products (customer preference and UCC- 128 considerations)• Identifies and updates accounts associated with returnable packaging• Tracks the packed product by container• Insures weight/volume restrictions are enforced• All packed items are assigned to the required means of transportation © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 99
  • Delivery: Goods 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 shipping documents © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 100
  • SD Process: Billing• The billing document is created by coping data from the sales order 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. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 101
  • SD Process: Billing Documents• The billing document will automatically create a debit posting to your customer sub-ledger account and credit your revenue account.• It is at this point that the sales process is passed over to Financial Accounting to await payment. © SAP AG. All rights reserved. SAP University Alliance. The 102 Rushmore Group, LLC
  • SD Process: Billing Methods Delivery 8…20 Invoice 9…45Delivery based Order 6 Invoicing Delivery 8…21 Invoice 9…46 Delivery 8…33 Collective Order 9 Delivery 8…34 Invoice 9…68 Invoicing Order 14 Delivery 8…56 Invoice 9…91 Split Order 32 Delivery 8…86 Invoicing Invoice 9…92 © SAP AG. All rights reserved. SAP University Alliance. The 103 Rushmore Group, LLC
  • SD Process: Payment• Payment is the final step in the sales order process, this step is managed 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/R account and decreasing your bank account. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 104
  • SD Process: Document Flow• The document flow and order status feature allows you to find the status of an order at any point in time. The SAP updates the order status every time a change is made to any document created in the customer order management cycle (Order-to-Cash). © SAP AG. All rights reserved. SAP University Alliance. The 105 Rushmore Group, LLC
  • Materials Management(MM) BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 106 Rushmore Group, LLC
  • MM: Functionality• Inventory Management• Purchasing• MRP• Physical Inventory• Valuation• Service Master• Invoice Verification• Product Catalogs © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 107
  • MM: Chapter Overview• Organization Structure• Master Data• Procurement Process – Procure-to-Pay Process © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 108
  • Materials ManagementMM Procurement© SAP AG. All rights reserved. SAP University Alliance. The 109 Rushmore Group, LLC
  • MM: Org. 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 purchasing organization• Purchasing Group – Key that represents the buyer or group of buyers © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 110
  • MM: Purchasing 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 purchasing activities – Channel of communication for vendors © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 111
  • MM: Purchasing Organization/Group Company Code Plant 100 Purchasing Org 100 100Purchasing Org Plant 100 Plant 101 100Centralized vs. Purchasing Org 100Decentralized Purchasing Company Code Company Code 100 101 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 112
  • MM: Structure for Procurement Client 410Purchasing Org Company Code Purchasing Org P100 C100 P101 Purchasing Plant P100 Group 100 Plant P101 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 113
  • MM: Master Data• Material Master – Contains all the information a company needs to manage about a material – It is used by most components within the SAP system • Sales and Distribution • Materials Management • Production • Plant Maintenance • Accounting/Controlling • Quality Management – Material master data is stored in functional segments called Views © SAP AG. All rights reserved. SAP University Alliance. The 114 Rushmore Group, LLC
  • MM: Material Master Views Sales Data Basic Data Purchasing Data Mat. Plan. Data Material Master Forecasting Data Storage DataControlling Data Quality Data Accounting Data© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 115
  • MM: Material Master General Information relevant for the entire organization: Name Weight U/M Client 410Plant specific information: Purchasing Data Storage Location specific information: Work Sch. Stock Qty MRP Picking Plant 102 Storage Location 20 Plant 101 Storage Location 10 Plant 100 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 116
  • MM: Master Data • Vendor Master – Contains all the necessary information needed to business with an external supplier – Used and maintained primarily by the Purchasing and Accounting Departments – Every vendor MUST have a master record © SAP AG. All rights reserved. SAP University Alliance. The 117 Rushmore Group, LLC
  • MM: Vendor Master Views • Client Level – Address General Data – Vendor Number – Preferred Communication • Company Code Data Company Code Data – Reconciliation AccountFinancial Accounting (FI) – Terms of Payment – Bank Account • Purchase Org Data Purchasing Data – Purchasing Currency Materials Mgmt (MM) – Salesman’s Name – Vendor Partners © SAP AG. All rights reserved. SAP University Alliance. The 118 Rushmore Group, LLC
  • MM: Vendor Master General Information relevant for the entire organization: Name Address Communication Client 410Company Code specific information: Purchasing Org. specific information: Acc. Mgmt Incoterms Payment Currency Bank Company Code 102 Purchasing Org. 101 Company Code 101 Purchasing Org. 100 Company Code 100 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 119
  • MM: Purchasing Information Record• Framework for Purchase Order – Contains the relationship between a vendor and a Purchasing material Information Record• Can be created: – Manually – Automatically – Quotations – Automatically – Pur Orders• Reporting – Vendor Evaluation Material Master Vendor Master © SAP AG. All rights reserved. SAP University Alliance. The 120 Rushmore Group, LLC
  • MM: Purchasing Information Record• Allows buyers to quickly determine: – Which vendors have offered or supplied 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 for Purchase Orders © SAP AG. All rights reserved. SAP University Alliance. The 121 Rushmore Group, LLC
  • MM: Master Data in Use Purchase Order 45......01 Material Master Vendor Master Purchasing Information Record © SAP AG. All rights reserved. SAP University Alliance. The 122 Rushmore Group, LLC
  • Materials ManagementProcurement The Purchasing Process© SAP AG. All rights reserved. SAP University Alliance. The 123 Rushmore Group, LLC
  • Procurement Process Purchase Vendor Requisition Selection Purchase Order Notify Payment Vendorto Vendor Invoice Vendor Receipt Shipment Goods Receipt © SAP AG. All rights reserved. SAP University Alliance. The 124 Rushmore Group, LLC
  • MM: Purchase Requisition• Internal Document instructing the purchasing department to request 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 125
  • MM: Requisition Sourcing• Once the requisition has been assigned a source of supply it can be released for processing• There are a variety of ways that a purchasing department can process a requisition to determine the appropriate Source of Supply: – Internal Sourcing Requirements – Source List – Outlined Agreement – RFQ © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 126
  • MM: Internal Sourcing• The requisition for materials could be satisfied by sources within our company. – It is possible that a plant within your firm could represent a potential source of supply for the material needed (centralized warehouse) – If an internal source is identified the requirement is covered by an internal procurement transaction (stock transport order) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 127
  • MM: Source List• A source list is a record that specifies the allowed means for procuring a material for a certain plant within a given time period. – If the list contains a sole source the system will assign the vendor to the requisition. – If several options exist the system will display a list of vendors for you to choose from. – If no source has been established the system will revert to search information records and outline agreements. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 128
  • MM: Outline Agreements• Requisitions can be satisfied through existing longer-term purchasing agreement• These agreements are subdivided into: – Contracts • consists of items defining the individual materials, material groups, or services with prices and in many cases quantities – Quantity – Value – Scheduling Agreements • Total quantity of material is spread over a certain period in a delivery schedule, consisting of line items indicating quantities and their planned delivery date © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 129
  • MM: Request for Quotation• If nothing exist in the system we may need to submit a request for quotation to our vendors. An RFQ is an invitation to a vendor by a Purchasing Organization to submit a bid for the supply of materials or services – The accepted quotations will generate Purchasing Information Records – Perform Quotation Price Comparisons – Finally Select a Quotation P.O. Quote 45…12 Vendor Pur generate 1 RFQ Quote Eval. Req. Vendor 2 Reject Quote Letter Vendor 3 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 130
  • MM: Quotation from Vendor• The quotation received by your company is a legally binding offer, should decide to do business with the vendor, containing price’s and conditions for the materials specified in the RFQ for a predefined 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. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 131
  • MM: Vendor Evaluation once Identified• Vendor evaluation helps purchasing evaluate vendors for sourcing while also enabling the company to monitor vendor relationships through performance 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 weight factors of scores for each. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 132
  • MM: Purchase Order• A purchase order is a formal request to a vendor for a specific material 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 133
  • MM: Purchase Order • A purchase order can be used for a variety of purposes, the item category (procurement type) defined in the PO will dictate the use of the order and the process that the order will follow: – Standard • Stock or Consumption – Services – Subcontracting – Third-Party – Consignment © SAP AG. All rights reserved. SAP University Alliance. The 134 Rushmore Group, LLC
  • MM: Purchase Order Structure Header Vendor Date Doc. Number Currency Terms of Payment PO Price Item OverviewPurchase Materials Price/UofM Order Quantities Delivery Date45......01 Line Item PO History Tolerances Line Price Delivery Schedule © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 135
  • MM: Purchase Order Output• Once a Purchase Order has been created the vendor needs to be notified – Printed – E-mail – EDI – Fax – XML• There are a variety of forms that aid in the purchasing process and are generated from the Purchase Order – Purchase Order Output – Order Acknowledgement Forms – Reminders – Schedule Agreements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 136
  • MM: Goods Receipt Notify Vendor Purchase Order 45......01 Vendor Receipt Shipment © SAP AG. All rights reserved. SAP University Alliance. The 137 Rushmore Group, LLC
  • MM: Goods Receipt• Goods movement in which we accept goods into our system• If materials are delivered against a Purchase Order we will reference 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 138
  • MM: Material Movements• When a goods movement takes place it is represented by a Movement Type – Movement types are three-digit keys used to represent a movement of goods • 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 139
  • MM: Effects of a Goods Receipt• When a Goods Movement for the receipt of goods takes place a series 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) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 140
  • MM: Invoice Processing• Incoming Invoices are reference against a Purchase Order to verify their content, prices, and arithmetic.• If discrepancies arise between the purchase order or goods receipt and the invoice the system with generate a warning or an error – Depending on system configuration the difference could cause the system to Block the Invoice Purchase order - Target quantity - - Target price - Invoice receipt Goods receipt - Actual price - - Actual quantity - © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 141
  • MM: Invoice Processing• When an invoice is saved it applies the liability from the Goods Receipt 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 is completed and the payment process is initiated within Financial Accounting © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 142
  • FI: Payment 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 the transaction © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 143
  • Goods Receipt / Invoice Receipt Reconciliation AccountPurchase requisition No impact on Financial Accounting (FI) Purchase order Materials Management (MM) and Financial Accounting (FI) Goods receipt via automatic account assignment Inventory GR / IR Dr Cr Dr Cr $100 $100 © SAP AG. All rights reserved. SAP University Alliance. The 144 Rushmore Group, LLC
  • Goods Receipt / Invoice Receipt Reconciliation Account Amount owed isInvoice receipt assigned and transferred to vendor account payable GR / IR Vendor A/P Dr Cr Dr Cr $100 $100 © SAP AG. All rights reserved. SAP University Alliance. The 145 Rushmore Group, LLC
  • Vendor Payment Amount owed is paid toBank vendor and account payable is reduced Bank Vendor A/P Dr Cr Dr Cr $100 $100 © SAP AG. All rights reserved. SAP University Alliance. The 146 Rushmore Group, LLC
  • (FI – MM) Integration Points Goods Invoice Payment Receipt Receipt Program APInventory GR / IR (Vendor) BankDr Cr Dr Cr Dr Cr Dr Cr$100 $100 $100 $100 $100 $100 © SAP AG. All rights reserved. SAP University Alliance. The 147 Rushmore Group, LLC
  • Production Planning & Execution(PP) BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 148 Rushmore Group, LLC
  • Production Planning• SAP Divides Production into multiple processes – Production • Discrete Manufacturing • Repetitive Manufacturing • KANBAN – Production – Process Industries • integrated planning tool for batch-orientated process manufacturing • design primarily for chemical, pharmaceutical, food and beverage industries along with batch-oriented electronics © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 149
  • Production Planning: Structure• Client• Company Code• Plants• Storage Locations• Work Center Locations © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 150
  • Production Planning: Master Data• Materials• Bill of Materials (BOM)• Routings• Work Centers• Product Groups © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 151
  • PP: Master Data - Material Master © SAP AG. All rights reserved. SAP University Alliance. The 152 Rushmore Group, LLC
  • PP: Master Data - BOM• list of components that make up a product or assembly BOM for Executive Pen Cap •Cap Band Crown •Crown •Clip •Band Clip •Barrel Band •Cartridge Cartridge (Inside) © SAP AG. All rights reserved. SAP University Alliance. The 153 Rushmore Group, LLC
  • Master Data – Bill of Material• Single-Level Single-Level Single-Level Executive Pen Executive Set Band Cap Gift Box Barrel Clip Stand Cartridge Crown Executive Pen © SAP AG. All rights reserved. SAP University Alliance. The 154 Rushmore Group, LLC
  • PP: Master Data - BOM• Single-Level vs. Multi-Level Single-Level Executive Set Single-Level Giftbox Stand Executive Pen Band Cap Multi-Level BOM Barrel Clip Cartridge Crown © SAP AG. All rights reserved. SAP University Alliance. The 155 Rushmore Group, LLC
  • Master Data – Bill of Material• Variant Bill of Material (BOM) – Several products with a large proportion of identical parts. Executive Pen Executive Pen Band Cap Band Cap Barrel Clip Barrel Clip Red Cartridge Crown Blue Cartridge Crown © SAP AG. All rights reserved. SAP University Alliance. The 156 Rushmore Group, LLC
  • BOM – 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 157
  • Routings• Routings enable you to plan the production of materials (products).• Routings are used as a template for production orders and run schedules• Routing are also used as a basis for product costing. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 158
  • PP: Master Data - Routings• series of sequential steps (operations) that must be carried out to produce a given product• routings contain – what – where – when – how © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 159
  • PP: Master Data - Routings• Routing – Operation 10 – explains the steps involved in this operation• BOM – Clip, Crown, Cap – outlines the components that will be consumed in the routing• Work Center – WC100 – identifies were the operations will take place and identifies the business transaction to be carried © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 160
  • Master Data – Routings • Routing for EPENOperation Plant Description Activity Type Work Center Control Key Time and Unit of Measure © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 161
  • MD: Routing & BOMMaterial Master - EPEN Routing BOM Products arrive at the beginning of the operation to which they are assignedOper. 10 Cap Op. 10 Op. 20 Op. 30 ClipOper. 20 Crown Cap Barrel Cap Barrel Clip Cart. Cartridge CrownOper. 30 Band TimeComponent assignment in routing © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 162
  • PP: Master Data - Work Centers• 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 163
  • Master Data – Work Center• Work center used to define capacities – Labor – Machine – Output – Emissions• Capacities used in – Capacity requirements planning (CRP)• Detailed scheduling• Costing © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 164
  • PP: Master Data - Work Centers• 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 165
  • PP: Master Data - Product Groups• Aggregate planning that group together materials or other product groups (Product Families)• Multi- or Single- Level Product Groups – the lowest level must always consist of materials Bikes Mountain Touring 18 Speed 24 Speed 18 Speed 24 Speed Red 24M Blue 24M Red 24T Blue 24T © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 166
  • Production Planning© SAP AG. All rights reserved. SAP University Alliance. The 167 Rushmore Group, LLC
  • PP: Material PlanningSOP provides a method for Sales Planning, ProductionPlanning, Feasibility Sales, Production, Inventory 4,000,000 3,500,000 3,000,000 Units 2,500,000 Sales 2,000,000 Production 1,500,000 Inventory 1,000,000 500,000 0 r De e r t ry er il ly y ch ne N o er y us be r ar Ma Ju Ap mb a mb b r Ju g tem nu ru Ma to Au ve b ce Oc Ja Fe p Se © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 168
  • Production Planning & Execution SIS Forecasting CO/PA Sales & Operations Planning Strategic Planning Demand Management Detailed Planning MPS MRP Manufacturing Procurement Execution Process Order Settlement Manufacturing Execution© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 169
  • PP: Production Planning & Execution• Players in the Game SIS Forecasting CO/PA – Strategic Planning • CEO, COO, CIO, CFO, Controller, SOP Strategic Marketing Director Planning Demand – Detailed Planning Management • Line Managers, Production Scheduler, MRP Controller, Detailed Capacity Planners MPS Planning – Execution MRP • Line Workers, Shop Floor Supervisors Manufacturing Procurement Execution Process Order Settlement Execution © SAP AG. All rights reserved. SAP University Alliance. The 170 Rushmore Group, LLC
  • PP: Forecasting• Forecasting is the foundation of a reliable SOP• Accurate forecasts are essential in the manufacturing sector – overstocked & understocked warehouses result in the same thing: a loss in profits.• Forecasts are ALWAYS WRONG © SAP AG. All rights reserved. SAP University Alliance. The 171 Rushmore Group, LLC
  • PP: Forecasting • Forecasting Models – Trend – Seasonal – Trend and Seasonal – Constant • Selecting a Model – Automatically – Manually © SAP AG. All rights reserved. SAP University Alliance. The 172 Rushmore Group, LLC
  • Planning Levels Bikes Planning at Product Group Level 45% 55% Mountain Touring 30% 70% 40% 60%18 Speed 24 Speed 18 Speed 24 Speed 40% 60% 50% 50% Red 24M Blue 24M Red 24T Blue 24T Planning at Material Level © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 173
  • PP: Sales and Operations Planning (SOP)• Information Origination – Sales – Marketing – Manufacturing – Accounting – Human Resources – Purchasing• Intra-firm Collaboration – Institutional Common Sense © SAP AG. All rights reserved. SAP University Alliance. The 174 Rushmore Group, LLC
  • PP: Sales and Operations Planning (SOP)• Flexible forecasting and planning tool• Usually consists of three steps: – Sales Plan – Production Plan – Rough Cut Capacity Plan• Planned at an aggregate level in time buckets © SAP AG. All rights reserved. SAP University Alliance. The 175 Rushmore Group, LLC
  • PP: Demand Management• Link between Strategic Planning (SOP) & Detailed Planning (MPS/MRP)• The results of Demand Mgmt is called the Demand Program, it is generated from our independent requirements - PIR and CIR Product Groups Bikes Disaggregation 45% 55% Mountain Touring 30% 70% 40% 60% 18 Speed 24 Speed 18 Speed 24 Speed 40% 60% 50% 50% Material Red 24M Blue 24M Red 24T Blue 24T © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 176
  • PP: Demand ManagementForecast Sales Planned Customer Independent Independent Requirements Requirements Demand Program MPS / MRP © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 177
  • PP: Transfer from High Level to Detailed Planning Planning at Bikes Demand Group Level Planning 45% 55% Data Disaggregation Mountain Touring 30% 70% 40% 60% 18 Speed 24 Speed 18 Speed 24 Speed 40% 60% 50% 50% Red 24M Blue 24M Red 24T Blue 24T Planning atMaterial Level Transfer Operative Planned Independent Requirements Planning Data At Material and Plant Level © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 178
  • PP: Planning Strategies• Planning strategies represent the business procedures for – The planning of production quantities – Dates• Wide range of strategies © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 179
  • PP: Planning 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 © SAP AG. All rights reserved. SAP University Alliance. The 180 Rushmore Group, LLC
  • PP: Planning 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 181
  • PP: Planning 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 182
  • PP: Master Production Scheduling• Planners use the independent requirements from the Sales and Operations plan to create the Master Production Plan• MPS creates planned order proposals for each master schedule item and generates the dependent requirements for the first-level components in each product’s bill of materials• Master planner review and update the suggested master production schedule before generating a detailed production schedule © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 183
  • PP: Master Production Schedule (MPS)• MPS allows a company to distinguish planning methods between materials that have a strong influence on profit or use critical resources and those that do not MPS Items MPS run ESET Non-MPS Items Giftbox EPEN Stand Crown Barrel Cartridge Cap © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 184
  • PP: Material Requirements Planning (MRP)• In MRP, the system calculates the net requirements while considering available warehouse stock and scheduled receipts from 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 185
  • PP: Material Requirements Planning (MRP)• Detailed planning level• Primary Functions – Monitor inventory stocks – Determine material needs • Quantity • Timing – Generate purchase or production orders © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 186
  • PP: Demand - Independent vs. DependentIndependent Demand – Original source of the demand.Dependent Demand – Source of demand resides at another level. Single-Level Indep MPS ESET Planned Order Multi-Level Dep Dep MPS MRP EPEN Giftbox Planned Order Purchase Order Dep MRP Cartridge Purchase Order © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 187
  • PP: Material Requirements Planning (MRP)• MRP is used to ensure the availability of materials based on the need generated by MPS or the Demand Program – 5 Logical Steps • Net Requirements Calculation • Lot Size Calculation • Procurement Type • Scheduling • BOM Explosion © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 188
  • MRP – Net Requirements Procurement Shortage ProposalFirmed Receipts Requirements – Planned Ind. Req., Reservations Firmed Orders Sales Orders, or Purchase Etc. Requisitions Stock Safety Stock© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 189
  • MRP – Lot 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 net requirements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 190
  • Procurement Type• External Procurement – Purchase Requisition – Purchase Order – Schedule Line• Internal Procurement – Planned Order • Production Order • Process Order © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 191
  • Multi-level Scheduling Requirements Planned Order Date Purchase Requisition Finished Product Assembly 1 Semi-Finished GoodRaw MaterialComponent Time© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 192
  • PP: MRP versus Consumption Based• Whether or not a material is planned using MRP or Consumption Based is determined by the MRP Type on the MRP1 screen of the Material Master MRP Consumption Based PD – MRP VB – Reorder-Point VSD – Seasonal MRP VV – Forecast Based RP – Replenishment © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 193
  • PP: Consumption Based Lot SizeReorder Point Safety Stock Replenishment Lead Time © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 194
  • PP: Output of MRP MRP In-House External Planned OrderProduction Procurement Convert toProduction Purchase Orders Requisitions Process Purchase Schedule Orders Orders Lines © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 195
  • PP: Orders, 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 a specific time• Purchase Order (execution) – a request or instruction to a vendor for a material or service at a specific time © SAP AG. All rights reserved. SAP University Alliance. The 196 Rushmore Group, LLC
  • Manufacturing Execution© SAP AG. All rights reserved. SAP University Alliance. The 197 Rushmore Group, LLC
  • PP: Execution Process (Make-to-Stock) Capacity Production Planning Schedule Proposal and Release(Planning/Other) Shop Floor Documents Order Settlement Goods Issue Goods Receipt Completion Confirmation © SAP AG. All rights reserved. SAP University Alliance. The 198 Rushmore Group, LLC
  • PP: Execution – Production Order• Production orders are used to control production operations and associated costs – Production Orders define the following • material produced • quantity • location • time line • work involved • resources used • how costs are settled © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 199
  • PP: Execution – Production Order HowWhat BOMQuantity Time Line © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 200
  • PP: Execution – Schedule• calculates the production dates and capacity requirements for all operations 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 201
  • PP: Execution – Release• Two release processes – Header Level • entire order and all operations are released for processing, order is given a REL status – Operation Level • individual operations within an order are released, not until the last operation is released does the order obtains a REL status until then it is in a PREL status• Automatic vs. Manual © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 202
  • PP: Execution – Availability Check• automatic check to determine whether the component, production resource 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 203
  • PP: Execution – Schedule & Release• the time between scheduling and releasing an order is used for company checks and any preparation needed for the processing of the order• once an order has been released it is ready for execution, we can at this time – print shop floor documents – execute goods movements – accept confirmations against the order © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 204
  • PP: Execution – Shop Floor Documents• Shop Floor Documents are printed upon release of the Production Order, examples would be: – Operation-based Lists • Time Tickets, Confirmation Slips – Component-based Lists • Material Withdrawl Slips, Pull List (consumption list) – PRT Lists • Overview of PRTs used and in which operations – Multi-Purpose Lists • Operation Control Ticket, Object Overview © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 205
  • PP: Execution – Material Withdrawal• when a production order is created it references a BOM to determine the necessary components to produce the material, it then places a reservation on each of the components• upon release of the order (or operation) you can withdraw the reserved materials from inventory – reservation is updated – inventory is updated – costs are assigned to the order as actual costs © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 206
  • PP: Execution – Confirmations• confirmations are used to monitor and track the progression of an order through its production cycle – confirmation can be done at the operation or order level• exact confirmation shortly after completion of an operation is essential for realistic production planning and control © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 207
  • PP: Execution – Confirmations• 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 of employee involved in the operation – work center – goods movements – planned and unplanned – variance reasons – PRT usage © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 208
  • PP: Execution – Confirmations© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 209
  • PP: Execution – Goods Receipt• acceptance of the confirmed quantity of output from the production order 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 210
  • PP: Execution – Order Settlement• consists of settling the actual costs incurred in the order to one or more receiver cost objects – receivers could include: a material, a cost center, an internal order, a sales order, a project, a network, a fixed asset © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 211
  • PP: Execution – Order Settlement• 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 settlement cost elements• Settlement Rule – automatically assigned on creation of order, the parameters are used to define this rule • has one or more distribution rules assigned to it • distribution rules defines: cost receiver, settlement share, settlement type © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 212
  • PP: Execution – Order Settlement• Settling a Production Order to Stock – debt posting is made to the Production Order with the value of the material – difference between the debt posting and credit posting is posted to a price difference account Material Prod. Order Price Diff. 80 100 20 **Material Price determine by the quantity produced times the Standard Price in the Material Master. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 213
  • PP: Execution – Order 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 of the production order. • Calculate and analyze variances © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 214
  • PP: Order Settlement© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 215
  • PP: Order Status © SAP AG. All rights reserved. SAP University Alliance. The 216 Rushmore Group, LLC
  • Human Capital Management(HCM) BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 217 Rushmore Group, LLC
  • Goal of HCM• Right People for Right Job at the Right Time• Functions – determining staffing needs – recruitment and training – time management – performance issues and performance monitoring – compensation and benefits – proper alignment of corporate and personnel goals © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 218
  • Shift in HCM• Effects of Globalization and Technology – Stereotype shift • Payroll • Personnel Department • Human Resources • Human Capital Management – shift from brute labor force to quality workers » get rid of the fishing nets and bring in the lines – transform employees into competitive resources © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 219
  • Modules within HCM• Personnel Management – HR Master Data, Personnel Administration, Info. Systems, Recruitment, Benefits & Salary Administration,• Organizational Management – Organizational Structure, Staffing Schedules, Job Descriptions, Planning Scenarios, Personnel Cost Planning• Payroll Accounting – Payroll Administration, Payroll Simulation• Time Management – Shift Planning, Work Schedules, Time Recording, Absence Determination• Personnel Development – Career/Succession Planning, Profile Match-ups, Training, TEMs © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 220
  • Integration of HCM• HCM with Production – Shift Planning (Capacity)• HCM with FI/CO – Payroll – Personnel Cost Planning• HCM with MM – TEMs (Training and Event Management)• HCM with SD – Salespeople - Commissions © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 221
  • Organizational Data• A hierarchy in which the organizational units in an enterprise are arranged according to task and functions• Are static data and are rarely changed• The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 222
  • Structure of HCM• Enterprise Structure• Personnel Structure• Organizational Structure © SAP AG. All rights reserved. SAP University Alliance. The 223 Rushmore Group, LLC
  • Organizational Structure for HCM• Enterprise Structure – This structure makes up the legal identity of the company – The Enterprise Structure is made up of the following elements: • Client • Company Code • Personnel Area • Personnel Subarea © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 224
  • Enterprise Structure• Client – technical structure feature• Company Code – highest level of the enterprise structure• Personnel Area – divides the company into sub-units (unique to a client) – locations or divisions• Personnel Subarea – subdivision of the personnel area (the grouping of the personnel area and subarea must be unique to a company code) – departments © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 225
  • Enterprise Structure: Pen Inc. Client Client 420Company Pen Inc 100 CodePersonnel P100 P101 Area Pen Inc. Central Office Pen Inc. MFG CenterPersonnel 0001 0002 0001 Subarea Administration Finance Manufacturing © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 226
  • Personnel Structure• This structure describes an employee’s position within the company in regards to work hours and compensation• The Personnel Structures is made up of the following elements – Employee Group – Employee Subgroup – Payroll Area © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 227
  • Personnel Structure: Elements• Employee Group – represents a division of the companies employees and establishes a relationship between the company and the employee – defines the extent which the employees capacity is available to for the company • Active Employee, Pensioner, Interns, External Employee © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 228
  • Personnel Structure: Elements• Employee Subgroup – refines the relationship between company and employee • Standard Salary, Executive Salary, Daily Wage, Hourly Wage, Etc. – control features for the personnel structure are defined at this level. • employee relationship with payroll • eligible work schedules, wage types, attendance policy, restrictions for collective agreement provision © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 229
  • Personnel Structure: Elements• Payroll Area – groups employees together that are paid the same (time) • Weekly, Bi-Weekly, Monthly – the payroll area is determined from a combination of the Employee Group and Employee Subgroup • number of employees in the payroll run • specific dates of the payroll run © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 230
  • Organizational Structure• This is an overview of your Company’s Organizational Plan (Org. Hierarchy) – Depicts the reporting structure and task distribution• The Organization Structure is made up of the following elements – Organizational Unit • represent functional units within an enterprise (ex. departments) – Position • spots that are occupied by individuals (Salesperson) – Job • classifications of functions within an enterprise – ex. Job: Officer, which is used for Positions: CEO, CFO, COO • job description for numerous positions – Person • the individual, he/she is assigned to a specific position © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 231
  • Organizational Structure: Pen IncOrganizational UnitsPositionPerson © SAP AG. All rights reserved. SAP University Alliance. The 232 Rushmore Group, LLC
  • HCM: Master Data• Master data is relatively fixed – Record that contains all the necessary information to conduct business transactions – Information within a master record can and will change, our hope is that it does not change frequently.• Before making the master data configurations, you must have completely defined the organizational structures © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 233
  • Employee Data• Information must be recorded and maintained effectively for every employee – Infotypes (Information Types) are units of information that aid in the entry of master data and group like information together• Status of the Employee will determine what information should be gathered – Active vs. Intern – Exempt vs. Non-exempt © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 234
  • Employee Data: Infotypes• Numerous infotypes will be created for each employee – Organizational Assignment must be the first infotype recorded © SAP AG. All rights reserved. SAP University Alliance. The 235 Rushmore Group, LLC
  • Employee Data: Infosubtypes• Certain data that is entered in an infotype can trigger the need for a infosubtype – ex. Family Member/Dependents • If you enter that you are married or have children it will generate the need for a spouse/child infosubtype to capture the information about the spouse or child(ren)• Subtypes also allow you to account for time constraints – Different addresses may be current at the same time • Permanent Residence • Temporary Residence • Home address © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 236
  • Employee Data: Personnel Actions• Personnel actions are a series of predefined infotypes that are grouped together to speed the data entry process – Hiring, Firing, Reassignment, Retiring – would all be examples of procedures that could be represented by a Personnel action• Personnel Actions enable users to enter information about an employee without having to access each individual infotype © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 237
  • Personnel File• Information maintained about an employee is stored in their Personnel File © SAP AG. All rights reserved. SAP University Alliance. The 238 Rushmore Group, LLC
  • HCM: Employee LifecycleBirth Death (Retire) Work Taxes © SAP AG. All rights reserved. SAP University Alliance. The 239 Rushmore Group, LLC
  • HCM: Process/Functions Hire Recruitment Employee Training and Development ESSCost Planning Employee Self-Service Reporting Manage Work Time (CATS) Payroll Administration Compensation & Benefits © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 240
  • Recruitment – Selection - Hiring Applicants AdvertisingVacancy Hire Select & Notify Profile Match © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 241
  • HCM Process: Recruitment• allows you to monitor and meet the personnel requirements within the company• determines vacancies within the company – maintained by Personnel or Line Managers – the system will generate a list of all positions that are marked vacant• once a vacancy has been identified advertising can be initiated © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 242
  • Recruitment: Advertising• Vacancies are published in advertisements – internal or external announcement of a position• The advertisements are recorded in the system enabling you to gather information about that advertisement – cost – applications – medium – recruitment instrument © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 243
  • Recruitment: Applicant Administration• allows a company to coordinate and monitor all the steps involved in the applicant process • Applicant Administration is a combination of – receiving applications – profile match – selection of applicants © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 244
  • Recruitment: Applicant Administration• Maintaining applications – Applicants are the central object of Recruitment • it is a person who expresses interest (through job application) in employment or position change within the company – All applicants must be maintained in the system • maintenance responsibility must be delegated (one or more people) • the status of the applicant will determine the information that is needed• Profile Matching – Compares skills of the applicant to the requirements of the position • can the applicant offer what the company needs – is there another vacant position that he/she would have a better match © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 245
  • Recruitment: Applicant Administration• Selection – Applicant Activities aid in Selection process • used to enter, log, and plan all the tasks for an applicant during the selection process – Activity Types: mail confirmation of receipt, mail invitation to interview, schedule appointment for interview, reject applicant, offer contract » depending on the activity and the system output can be generated automatically – Activity Status: planned, completed – Performance Date: when it was carried out – Person Responsible: person responsible for carrying it out – Upon completion of qualification review and interviews the position must be filled © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 246
  • HCM Process: Hiring• Master data (information) is obtained during the hiring process (employee data) • Personal Data, Payroll Data, Time Data, Etc.• Hiring can be integrated with Recruitment • information obtained about an applicant can be copied into his/her personnel record• Hiring can be done independently of Recruitment • through the Hiring personnel action (infotypes) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 247
  • HCM Process: Personnel Development• Personnel Development component is used to assess and create employee “value” that can be utilized by the company.• Purpose is to manage the work efforts and develop the work skills of employees within the company• A company’s Personnel Development needs are determined by comparing current or future work requirements with employees’ qualifications, preferences, and aspirations.• Personnel Development comprises of the following components : – Qualifications/Requirements – Appraisal Systems – Career and Succession Planning – Development Plans © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 248
  • HCM Process: Training & Development PersonnelDevelopment de ve lo p Career & Development Succession generate Plan Planning determine Appraisals based upon Qualifications/ creates Training Requirements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 249
  • HCM Process: Training & Development• Qualifications/Requirements – this component is used to define, structure, and manage your qualifications catalog • the catalog enables you to place requirements on positions and qualifications on employees (or applicants) within the company – perform profile match-ups (people and positions) – run reports to recognize qualification deficits and enact training measures © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 250
  • HCM Process: Training & Development• Appraisal Systems – used in • Personnel Administration – as an instrument to evaluate members of your organization in a planned, formalized and standardized manner • TEMs – training appraisals – attendance appraisals • Compensation Management – appraisal results can be used to influence remuneration © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 251
  • HCM Process: Training & Development• Career and Succession Planning – Career Planning • planning functionality that allows you to analyze an employees skills, preferences, dislikes, qualifications, potential and determine positions they should hold during their tenure at the company – Succession Planning • planning functionality that allows you plan for positions in the company that will need to be filled because of turnover (or new position) • enables a company to analyze employees and determine and prepare potential replacements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 252
  • HCM Process: Training & Development• Development Plans – a series of development measures and information on the sequence in which they should be passed through and time requirements to provide an individual with a specific qualification • Generic Plans – training program (all prospective sales reps must complete a course on Fundamental Selling Techniques) • Individual Plans – comprised of all the items that a person has completed, is currently involved in, or will be involved in the future – proposes needed course work (integration with TEMs) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 253
  • HCM Process: Training & Development• Training – enable new hires and current employees access to the necessary resources to build job skills needed for both current and future task assignments • this is figured through Qualifications/Requirements reports, development plans, career planning, etc – Encourage continually learning and professional development • SAP offers a powerful resource to assist in scheduling training - TEMs © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 254
  • HCM Process: Training & Development• Training and Event Management (TEMs) – Component that enables a company to manage, track, and plan various different business events – Helps determine demand for courses and schedule dates, manage the resources, attendees, and costs associates with the event © SAP AG. All rights reserved. SAP University Alliance. The 255 Rushmore Group, LLC
  • HCM Process: Training & Event Mgmt• TEMS Catalog Structure – Business Event Groups • Used to classify business event types – Business Event Types • Time independent description of a business event – Business Events • Actual time based event that is to take place © SAP AG. All rights reserved. SAP University Alliance. The 256 Rushmore Group, LLC
  • HCM Process: Training & Event Mgmt– Integration Points MM SD FI TEMS CO HCM Personnel TimeDevelopment Management Organizational Personnel Administration Administration © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 257
  • HCM Process: Time Management • supports planning, recording, and evaluation of internal employee time data • time data that would be gathered and evaluated – hours worked – leave – illness – overtime – substitutions – business trips • conference, training © SAP AG. All rights reserved. SAP University Alliance. The 258 Rushmore Group, LLC
  • HCM Process: Time Management• There are multiple methods for data collection: Time AdministratorsTime Manager’s Workplace Time Terminals Cross Applications Time Sheet Employee Self Service Mobile Technology © SAP AG. All rights reserved. SAP University Alliance. The 259 Rushmore Group, LLC
  • HCM Process: Time Management• Time collection will be used for: – payroll accounting – personnel cost analysis – internal cost allocations – invoicing – performance analysis – capacity availability – shift planning © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 260
  • HCM Process: Compensation & Benefits• Compensation is not the cut-and-dry subject it once was – Past – consisted of an employees base salary or, at most, a base salary and commission. – Today - looked at as compensation packages; including: • salaries, stock options • employee stock ownership plans • pay-for-performance plans • bonuses, profit sharing • commissions, non-cash rewards • variable pay, and much more. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 261
  • HCM Process: Compensation Management• The balancing of company interests to operate within the companys fiscal budget and fairly paying employees – key component of attracting, developing, retaining, and rewarding high quality staff through wages and salaries which are competitive in the labor markets• Compensation Management is comprised of the following components: – Job Pricing – Budgeting – Compensation Administration – Long-term Incentives © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 262
  • HCM Process: Benefits Administration• benefits today are offered as a part of an employees overall compensation package• this component allows a company great flexibility in creating and maintaining individual packages for your employees – Six international Plan Categories• Allows for detailed company reporting – Benefit Plan Participation – Health Plan Costs – Employee Demographics – Benefits Election Analysis• Country Specific Settings available – FSA, COBRA (US examples) • HIPPA Certificates © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 263
  • HCM Process: Payroll Administration• SAP contains an international payroll driver that is modified for each country• payroll is released for individual payroll areas – the run is for a specific group of employees and a specific period of time – upon release all affected personnel records are locked• will generate an payroll results, and earning statement, bank transfers and check payments © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 264
  • HCM Process: Payroll Administration• Payroll Process – determine Gross Amount • base pay and any other additional payment – overtime, sick pay, Christmas bonuses, special pay – determine Deductions (Net Amount) • processes garnishments, deductions, taxes, and benefits for employees – Federal/State Income Tax, Insurance (Health, Life), Loans – Integration with Financial Accounting & Controlling • G/L postings, payments processed, reports available © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 265
  • HCM Process: Cost Planning Reporting• used to analyze, monitor, plan a company’s personnel costs, wages, salaries, and employer contributions – cost plans are generated by developing and comparing multiple cost scenarios, these scenarios might be actual or projected © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 266
  • HCM Process: Employee Self-Service• Employee Self-Service (ESS) – empowers employees to create, display, and change their own personal information • streamlines and simplifies the HR data entry process – some of the capabilities include • SAP Office – appointment calendar, employee directory • Personal Information – address, bank information • Time Management – record working time, request leave • Business Trips – submit travel request, reserve flights, rooms, also expense reimbursement process • Training – register for training, display your bookings • Benefit Enrollment and Overview (Healthcare, Retirement, etc) • Display Leave and Earnings Statements • Qualification and Appraisal Review • W-2 W-4 printout © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 267
  • Financial AccountingFI BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 268 Rushmore Group, LLC
  • Financial Accounting (FI)• Financial accounting is designed to collect the transactional data that provides a foundation for preparing the standard portfolio of reports• In general, these reports are primarily, but not exclusively, directed at external parties• Standard reports include: – Balance Sheet – Income Statement – Statement of Cash Flows © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 269
  • Target Audience - Internal• Executives• Senior Management• Administrative Staff• Employees © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 270
  • Target Audience - External• Legal Authorities• Banks• Auditors• Shareholders• Insurance• Taxing Authorities• Media• Financial Analysts © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 271
  • SAP FI Organizational Objects• These represent the legal and/or organizational views of an enterprise• They form a framework that supports the activities of a business in the manner desired by management• Permit the accurate and organized collection of business information• Support the development and presentation of relevant information in order to enable and support business decisions © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 272
  • SAP FI Organizational Objects• Company Code• Chart of Accounts © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 273
  • Company Code• Represents an independent legal accounting unit• Balanced set of books, as required by law, are prepared at this level• A client may have more than one company code – United States – United Kingdom – South America Liabilities & Assets – Canada Owners Equity – Germany © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 274
  • Chart 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 of values to ensure an orderly rendering of accounting data.• The G/L accounts it contains are used by one or more company codes. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 275
  • General Ledger (G/L) Accounts• The unique combination of Company Code and Chart of Account creates a data storage area called a General Ledger• The General Ledger contains a listing of the transactions effecting each account in the Chart of Accounts and the respective account balance• It is utilized in the preparation of financial accounting statements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 276
  • Posting a G/L Entry © SAP AG. All rights reserved. SAP University Alliance. The 277 Rushmore Group, LLC
  • G/L Account Summary Account number 100999 Bank Account Company code C999Period Debit Credit DC bal. BalanceC/f bal. 750,000.00 Period 1 5,250.00 3,540.00 1,710.00 751,710.00 Period 2 25,000.00 15,000.00 10,000.00 761,710.00 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 278
  • Balance Sheet• Presentation of an organization’s Assets, Liabilities, and Equity at a point in time• Assets—What the company owns• Liabilities—What the company owes• Equity—The difference between Assets and Liabilities• Assets = Liabilities + Equity © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 279
  • Balance Sheet – SampleAssets Liabilities Cash 1,000 Accounts Payable 750 Accounts Receivable 3,000 Taxes Payable 250 Equipment 500 Total Liabilities 1,250Total Assets 4,500 Equity Common Stock 2,000 Retained Earnings 250 Total Equity 2,250 Total Liabilities and Equity 4,500 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 280
  • Income Statement• Presentation of an organization’s Revenues and Expenses for a given period of time (e.g., monthly, quarterly, or yearly)• Revenues, in a simple sense, are inflows of cash as a result of selling activities or the disposal of company assets• Expenses, in a simple sense, are outflows of cash or the creation of liabilities to support company operations• Revenues - Expenses = Net Income © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 281
  • Income Statement - SampleRevenue Sales 11,000 Deductions 750Total Revenue 10,250Operating Expenses Cost of Goods Sold 4,500 Operating Expenses 3,750Total Expenses 8,250Net Income Before Taxes 2,000Taxes 750Net Income 1,250 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 282
  • Statement of Cash Flows• Considers the associated changes, both inflows and outflows, that have occurred in cash – arguably the most important of all assets – over a given period of time (e.g., monthly, quarterly, or annually) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 283
  • Customer and Vendor Accounts• Customer and Vendor account balances are maintained in FI through fully integrated accounts receivable and accounts payable sub-modules• Financial postings for Customers and Vendors are made directly to their respective individual accounts and accompanied by a concurrent automatic posting to the General Ledger © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 284
  • Customer Accounts• Accounts Receivable Sub-Module – Information with respect to Customers who purchase the enterprise’s goods and services such as sales and payments made – Substantive and important integration between Sales and Distribution (SD) and FI – Billings in SD generate FI journal entries for sales activity © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 285
  • Customer AccountsCustomer 189 Customer 142 Accounts Receivable 100 300 (General Ledger) 950Customer 135 Customer 123 400 150 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 286
  • Vendor Accounts• Accounts Payable Sub-Module – Information with respect to Vendors from whom the enterprise purchases goods and 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 entries © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 287
  • Vendor AccountsVendor 100234 Vendor 100435 Accounts Payable 200 250 (General Ledger) 850Vendor 100621 Vendor 100846 100 300 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 288
  • Accountants and Audit Trails• Audit trails allow an auditor to begin with an account balance on a financial statement and trace through the accounting records to the transactions that support the account balance• Audit trails enable an auditor to trace individual transactions to the effected account balance(s) on a financial statement © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 289
  • SAP Document Principle• Each business transaction impacting FI writes data to the SAP database creating 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 290
  • SAP Document Principle• Once written to the SAP database, a financial document (one impacting the financial 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 for a strong internal control system – a requirement of law for companies that operate in the United States © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 291
  • SAP 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 292
  • SAP 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) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 293
  • SAP FI Module Review• Purpose• SAP FI Organizational Objects• Financial Statements• Customer/Vendor Accounts• Audit Trails• Document Principle• Integration © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 294
  • ControllingCO BPI - Overview© SAP AG. All rights reserved. SAP University Alliance. The 295 Rushmore Group, LLC
  • Controlling (CO)• Managerial accounting – termed controlling – is designed to collect the transactional data that provides a foundation for preparing internal reports that support decision-making within the enterprise• These reports are exclusively for use within the enterprise and include: – Cost center performance – Profit center performance – Budgets analyses © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 296
  • Target Audience• Executives• Senior Management• Department Managers• Controllers• Cost Accountants © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 297
  • SAP CO Organizational Objects• These represent the legal and/or organizational views of an enterprise• They form a framework that supports the activities of a business in the manner desired by management• Permit the accurate and organized collection of business information• Support the development and presentation of relevant information in order to enable and support business decisions © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 298
  • SAP CO Organizational Objects• Company Code• Chart of Accounts• Controlling Area• Cost Center• Internal Order• Profit Center © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 299
  • Company Code• Represents an independent legal accounting unit• Balanced set of books, as required by law, are prepared at this level• A client may have more than one company code – United States – United Kingdom – South America Liabilities & Assets Owners Equity – Canada – Germany © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 300
  • Chart of Accounts• A complete listing of the accounts that exist in the General Ledger for a company• Since a given enterprise (e.g., General Motors) can consist of several separate legal entities (e.g., Cadillac, Chevrolet), separate company codes can be created for each entity while each uses the same chart of accounts so that consolidated statements can be prepared. © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 301
  • Controlling Area• A self-contained, organizational element for which the management of revenues and expenses can be performed• A controlling area may include one or more company codes; therefore, an enterprise can perform management accounting analyses and reports across several companies• A way to identify and track where revenues and costs are incurred for evaluation purposes © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 302
  • 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 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 303
  • Cost Center• Responsible for cost containment, not responsible for revenue generation – One or more value-added activities are performed within each cost center• Unit that is distinguished, for example, by area of responsibility, location, or type of activity – Copy center – Security department – Maintenance department © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 304
  • Internal Order• Temporary cost center responsible for cost containment, not responsible for revenue generation• It is used to plan, collect, and monitor the costs associated with a distinct short-term event, activity, or project – Company picnic – Trade show – Recruiting campaign © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 305
  • Revenue Elements• A one-to-one linkage (mapping) between General Ledger revenue accounts and CO revenue elements is established to permit the transfer of FI revenue information to CO• Posting in FI that impact revenue accounts lead to an posting in CO to a revenue element• In other words, revenue account = revenue element – just different words depending on whether FI object or CO object © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 306
  • Cost Elements• A one-to-one linkage (mapping) between General Ledger expense accounts and CO cost elements is established to permit the transfer of FI expense information to CO• Postings in FI that impact cost accounts lead to an posting in CO to a cost element• In other words, expense account = cost element – just different words depending on whether FI object or CO object © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 307
  • Cost Elements• Primary Cost Element • Originate in the General Ledger within FI and are automatically transferred to CO when an FI transaction is recorded in the General Ledger• Secondary Cost Element • Used exclusively in CO for allocations and settlements between and amongst cost centers © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 308
  • Primary and Secondary Cost Elements Managerial Financial Accounting Accounting (CO) (FI) Aggregate Cost Elements General Ledger Accounts Income Balance Statement SheetSecondary Cost Primary Cost Expense Elements Elements Accounts Revenue Accounts © SAP AG. All rights reserved. SAP University Alliance. The 309 Rushmore Group, LLC
  • Posting Primary Cost Element Financial Accounting (FI) Supplies Expense Cash Debit Credit Debit Credit 1,500 1,500 Managerial Accounting (CO) Cost Primary Cost Center Element A © SAP AG. All rights reserved. SAP University Alliance. The 310 Rushmore Group, LLC
  • Posting Primary Cost Element Financial Accounting (FI)(FI) Transaction Document Supplies Expense Debit Credit Cash Debit Credit Amount G/L Account # 1,500 1,500 Cost Center 1900012432 Managerial Accounting (CO)(CO) Transaction Cost Center Document Cost Center 1,500 Cost Element 20000657 © SAP AG. All rights reserved. SAP University Alliance. The 311 Rushmore Group, LLC
  • Posting Secondary Cost Element Financial Accounting (FI) Supplies Expense Cash Debit Credit Debit Credit 1,500 1,500 Managerial Accounting (CO) Cost CC 2 Center Secondary Cost A CC 3 Element © SAP AG. All rights reserved. SAP University Alliance. The 312 Rushmore Group, LLC
  • Statistical Key Figures• Provide the foundation for accurate and effective cost allocations between cost objects• Utilized to support internal cost allocations involving allocations, assessments, and distributions• Examples: number of employees, square footage, minutes of computer usage © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 313
  • Statistical Key Figures 6 Hours Executive Offices Copy Maintenance Center 10 Hours Department Activity(20 Hours) Information Services 4 Hours Department© SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 314
  • Posting Secondary Cost Element Executive Rent Expense Offices Debit Credit 1,500 Copy nt 1,800 me Prim Center Ele a st ry C o st E . Co c le m en Se Maintenance tSupplies Expense 1,500 Department Debit Credit Sec. Cost Element 2,500 2,500 ost E lement 3,000 Primary C 2,000 Se Labor Expense ent c. C Information Elem os Debit Credit Co st tE lem Services ary Prim en t 2,000 1,200 © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 315
  • Types of Allocations• Distributions – primary cost elements• Assessments – combination of primary and/or secondary cost elements © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 316
  • Distributions• Method for periodically allocating primary cost elements• Primary cost elements maintain their identities in both the sending and receiving objects• Sender and receiver cost centers are fully documented in a unique Controlling (CO) document © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 317
  • Distributions Sending Receiving cost center cost centers Primary cost element maintains its A005 – 400 identity D010 – 550 sq ft sq ftA010 – Administration A010 – 600 Rent Expense Distribution sq ft $1,500 D005 – 900 sq ft A015 – 150 sq ft A020 – 100 sq ft S010 – 100 S005 – 200 sq ft sq ft © SAP AG. All rights reserved. SAP University Alliance. The 318 Rushmore Group, LLC
  • Distributions Receiving Sending cost centers cost center Primary cost element A005 – maintains its D010 – $200 identity $275A010 – Administration A010 – Rent Expense Distribution $300 $1,500 D005 – $450 A015 A020 $75 $50 S010 – $50 S005 – $100 © SAP AG. All rights reserved. SAP University Alliance. The 319 Rushmore Group, LLC
  • Assessments• A method of allocating both primary and secondary cost elements• Primary and/or secondary cost elements are grouped together and transferred to receiver cost centers through use of a secondary cost element• Sender and receiver cost centers are fully documented in a unique Controlling (CO) document © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 320
  • Assessments Receiving Sending cost center cost center Primary and D010 – 10% secondary A005 – 15% A020 – IT cost elements A010 – 5%Software Expense $4,200 D005 – 20% Assessment A015 – 10% A020 – ITSupplies Expense A020 – 0% S010 – 10% $500 S005 – 30% © SAP AG. All rights reserved. SAP University Alliance. The 321 Rushmore Group, LLC
  • Assessments Receiving Sending cost center cost center Primary and secondary A005 – $705 A020 – IT cost elements D010 – $470Software Expense $4,200 A010 – $235 D005 – $940 A020 – IT Assessment A015 – $470Supplies Expense A020 –$0 $500 S010 – $470 S005 – $1,410 © SAP AG. All rights reserved. SAP University Alliance. The 322 Rushmore Group, LLC
  • SAP 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) © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 323
  • SAP CO Module Review• Purpose• SAP CO Organizational Objects• Revenue Elements• Cost Elements• Statistical Key Figures• Allocations• Integration © SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC 324