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MINI_PROJECT_ON_SAP_FORMATTED.docx
1. 1
MINI PROJECT ON SAP
PREPARED BY: RAJATH K.R
REGISTRATION NO: 14P35H0415
ADDRESS: NO 196, MAIN ROAD, J.C NAGAR,
BENGALURU 560006
CONTACT NO: 9035210310
EMAIL : RAJATHKR007@GMAIL.COM
NAME OF THE INSTITUTE: GEMS B SCHOOL
ROYAL COTTAGE, BANGALORE PALACE,
VASANTNAGAR
BENGALURU- 560052
YEAR OF SUBMISSION : 2016
2. 2
PREFACE
This project contains a detailed study on SAP and its components. SAP deals with
three major components namely Technical, Techno-functional and Functional.
Technical has three modules. Techno-functional has one module and Functional has
64 modules in it. All of these are explained in detail with different names.
This project also deals with the areas of application of SAP. The company SAP AG’s
various functions, history and location of SAP Labs are briefly explained. This
project also deals with what is SAP ABAP and what are its areas of application. It
also deals with SAP supply chain management used around the world.
3. 3
ACKNOWLEDGEMENTS
I would like to extend my gratitude and sincere thanks to Late H H Srikantadatta
Narasimharaja Wodeyar, Founder of GEMS BSchool, Bangalore.
I would like to express my whole hearted gratitude and sincere thanks to Dr M I M
Nehruzii, Dean, GEMS B School, Bangalore for his motivation and support to
prepare this project.
I would like to thanks all Lecturers who have guided me in preparing this project.
My special thanks to SAP Community network, Google and Wikipedia.
RAJATH K R
4. 4
CONTENTS
.
1. INTRODUCTION
2. HISTORY
A. FORMATION
B. ENTERPRISE RESOURSE PLANNING
C. CORPORATE RESTRUCTURING
D. ACQUISITIONS
E. BUSINESS AND MARKETS
3. ENTERPRISE SERVICE ORIENTED ARCHITECTURE
A. ENTERPRISE SOA
B. E-SOA AUTHENTICATION
C. PRODUCTS
D. PARTNERSHIPS
E. SAP PARTNER EDGE
F. COMMUNITIES
4. ORGANIZATION
A. SAP LAB LOCATIONS
B. USER GROUPS
C. CONFERANCES
D. COMPETITVE LANDSCAPE
E. SAP ENDORSED BUSINESS SOLUTIONS
F. OVERVIEW
G. DEVELOPMENT
H. IMPLEMENTATION
I. DEPLOYMENTATION AND MAINTAINANNCE COSTS
J. SAP BASIS
5. ERP ADVANTAGES AND DISADVANTAGES
6. INTRODUCTION TO ABAP
A. ABAP RUNTIME ENVIRONMENT
B. SAP SYSYTEMS AND LANDSCAPES
5. 5
7. TRANSACTIONS
8. TYPES OF ABAP
9. ABAP WORKBENCH
10. ABAP CODING DICTIONARY
11. ABAP SYNTAX
A. “HELLO WORLD”
B. CHAINED STATEMENTS
C. COMMENTS
12. DATA TYPE AND VARIABLES
13. ABAP OBJECTS
14. ABAP STATEMENTS
A. DECLARATIVE SATAEMENTS
B. MODULARIZATION STATEMENTS
C. CONRTOL STATEMENTS
D. CALL STATEMENTS
E. OPERATIONAL STATEMENTS
F. FORMATTING STATEMENTS
15. INTERNAL TABLES IN SAP
16. LIST OF SAP PRODUCTS
A. BUSINESS SOLUTIONS
B. INDUSTRY SOLUTIONS
C. SOLUTIONS FOR SMALL AND MIDSIZE ENTERPRISES
17. PLATFORMS AND FRAMEWORK
A. LEGACY PLATFORMS
B. OTHERS
18. SAP BUSINESS BY DESIGN
A. SOFTWARE AS SERVICE
B. SOLUTION OVERVIEW
6. 6
C. KEY CHRACTERISTICS
D. HISTORY
E. SAP CLOUD ADVANTAGES
19. SAP BUSINESS SUITE
A. ERP
a. HISTORY
i. ORIGIN OF SAP
ii. EXPANSION
iii. CHARACTERISTICS
iv. FUNCTIONAL AREAS
v. COMPONENETS
vi. BEST PRACTISES
vii. CONNECTIVITY TO PLANT FLOOR
FORMATION
b. IMPLEMENTATION
i. PROCESS PREPARATION
ii. CONFIGURATION
iii. TWO TIER ERP
iv. CUSTOMISATION
v. EXTENSIONS
vi. DATA MIGRATION
c. COMPARISION TO SPECIAL PURPOSE APPLICATIONS
i. ADVANTAGES
ii. BENEFITS
iii. DISADVANTAGES
d. SUPPLY CHAIN MANAGEMENT
I. ORIGIN OF THE TERM AND DEFINITIONS
II. FUNCTIONS
III. IMPORTANCE
IV. HISTORICAL DEVELOPMENTS
a) CREATION ERA
b) INTEGRATION ERA
c) GLOBALIZATION ERA
7. 7
d) SPECIALOZATION PHASE 1
e) SPECIALIZATION PHASE 2
f) SCM 2.0
g) BUSINESS PROCESS INTEGRAION
h) THEORIES
i) SUPPLY CHAIN TRENDS
j) TAX EFIICIENT SUPPLY CHAIN
MANAGEMENT
k) SUSTAINABILITY AND SOCIAL
RESPONSIBILTY IN SUPPLY
CHAINS
e. Components
I. MANAGEMENTS COMPONENTS
II. REVERSE SUPPLY CHAIN
f. GLOBAL APPLICATIONS
g. CERTIFICATION
h. SUPPLY CHAIN MAMNAGEMENT COLLEGE LEVEL
EDUCATION
8. 8
INTRODUCTION
SAP SE (/ɛseɪˈpi/) (Systemanalyse und Programmentwicklung; Systems,
Applications & Products in Data Processing) is a
German multinational software corporation that makes enterprise software to manage
business operations and customer relations. SAP is headquartered
in Walldorf, Baden-Württemberg, Germany, with regional offices in 130 countries.
The company has over 293,500 customers in 190 countries.
The company is a component of the Euro Stoxx 50 stock market index.
HISTORY
Formation
When Xerox aimed to exit the computer industry in 1975, they asked IBM to
migrate their business systems to IBM technology. As part of IBM's compensation
for the migration, IBM was given the rights to the Scientific Data Systems
(SDS)/SAPE software, reportedly for a contract credit of $80,000.
Five IBM engineers from the AI department (Dietmar Hopp, Klaus Tschira, Hans-
Werner Hector, Hasso Plattner, and Claus Wellenreuther, all from Mannheim,
Baden-Württemberg) were working in an enterprise-wide system based on this
software, only to be told that it would be no longer necessary. Rather than abandon
the project, they decided to leave IBM Tech and start another company. In June
1970, they founded Systemanalyse und Programmentwicklung ("System Analysis
and Program Development") company, as a private partnership under the German
Civil Code.
9. 9
Their first client was the German branch of Imperial Chemical
Industries in Östringen, where they developed mainframe programs for payroll and
accounting. Instead of storing the data on punch cards mechanically, as IBM did,
they stored it locally. Therefore, they called their software a real-time system, since
there was no need to process the punch cards overnight (for this reason their flagship
product carried an R in its name until the late 1990s). This first version was also a
stand alone software that could be offered to other interested parties.
Enterprise resource planning
In 1973, the first commercial product was launched. It was called SAP R/98 and
offered a common system for multiple tasks. This permitted the use of a centralized
data storage, improving the maintenance of data. From a technical point of view,
therefore, a database was necessary. In 1976, SAP GmbH was founded, and moved
its headquarters the following year to Walldorf, Germany. Three years later, in 1979,
SAP launched SAP R/2, expanding the capabilities of the system to other areas, such
as material management and production planning. In 1981, SAP brought a re-
designed product to market. However, SAP R/2 did not improve until the period
between 1985 and 1990. SAP released the new SAP R/3 in 1992. SAP developed and
released several versions of R/3 through 1995.
By the mid-1990s, SAP followed the trend from mainframe computing
to client/server architectures. The development of SAP’s internet strategy with
mySAP.com redesigned the concept of business processes (integration via Internet).
SAP was awarded Industry Week's Best Managed Companies in 1999.
Corporate restructuring
In August 1988, SAP GmbH became SAP AG, and public trading started on 4
November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges.
10. 10
In 1995, SAP was included in the German stock index DAX and, on 22 September
2003, SAP was included in the Dow Jones STOXX 50.
The company's official name became SAP AG (a public limited company) after the
2005 annual general meeting. In 2014, SAP changed from an AG to a European
Company (Societas Europaea or SE).
Acquisitions
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
59
Concur
Technologies
Sept 2014
Travel and
Expense
Management
USA $8.3b
58 See Why May 2014
Behavioral
target
marketing
USA $1.1b
57 Fieldglass Mar 2014
Contingent
labor and
services
USA
56 KXEN Oct 2013
Predictive
analytics
France
55 hybris May 2013
E-Commerce
Solutions
Switzerla
nd
11. 11
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
54 Camilion March 2013
Insurance
solutions
Canada
53 Smart Ops Feb 2013
Inventory
optimization
USA
52 Ticket-Web Feb 2013
CRM for
sports and
entertainmen
t promoters
USA
51 Ariba Oct 2012
Supplier
network
USA $4.3b
50 Syclo Jun 2012
Mobile asset
management
USA
49 datango Jan 2012
Electronic
performance
support
technologies
Germany
48
Success
Factors
Dec 2011
Talent
Management
USA $3.4b
13. 13
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
41 SAF Sep 2009
Inventory
Management
Switzerla
nd
$91m
40 High deal May 2009
High-volume
billing
France
39 Visiprise Jul 2008
Manufacturi
ng Execution
USA
38 Saicon INC Oct 2014
US
Recruitment
India
37
Business
Objects
Oct 2007
Business
Intelligence
France $6.78b
36
Yasu
Technologies
Pvt. Ltd.
Oct 2007
Business
Rules
Management
Software
India
35
Wincom
Communica
tions
May 2007
Internet
Communica
tion software
USA
14. 14
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
34 MaXware May 2007
Identity
software
Norway
33 Outlook soft May 2007
Planning &
consolidation
USA
32 Pilot Software Feb 2007
Strategy
Management
software
USA ~$200m
31 Factory Logic Dec 2006
Lean
scheduling
and supply
synchronizati
on
USA
30
Praxis
Software
Solutions
Jul 2006
Web-based
CRM and
eCommerce
USA
29
Frictionless
Commerce
May 2006
SRM
software
USA
28 Virsa Systems Apr 2006
Compliance
USA
17. 17
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
15 IMHC May 2001
Integrated
managed
health care
from IDS
USA
14 Expression May 2002
real-time file
sharing
?
13 Topmanage Feb 2002
SAP
BusinessOne
Suite
Israel
12
Paynet
International
AG
Dec 2001
Invoice
Processing
Germany
11 COPA GmbH Nov 2001
Beverage
industry
consulting
Germany
10
Infinite Data
Structures
May 2001
Trade
Management
/ CRM
USA
18. 18
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
9 Toptier Mar 2001
Enterprise
Information
Portal and
Integration
Infrastructur
e
USA ~$400m
8
Prescient
Consulting
Feb 2001
Consulting
services
USA
7
In-Q-My
Technologies
GmbH
2000 J2EE Server Bulgaria
6
Campbell
Software
1999
Workforce
Management
USA
5
AMC
Development
1998
Call Center
telephony
integration
software
USA
4 OFEK-Tech 1998
Warehousing
and
distribution
Israel
19. 19
Acquisi
tion
number
Acquired
company
Acquisition
date
Specialty
Country
of origin
Acquis
ition
costs
center
software
3
Kiefer &
Veittinger
1997
Sales force
Applications
Germany
2 Dacos 1996
Retail
solution
Germany
1 Steeb 1991
Consulting
services
Germany
Business and Markets
As of 2007, SAP is the world's largest business software company and the third-
biggest independent software provider by revenue. The corporation operates in four
geographic regions: EMEA (Europe, Middle East, Africa), NA (United States and
Canada), LAC (Latin America and Caribbean), and APJ (Asia Pacific and Japan SAP
focuses upon 25 industries and six industry sectors: process industries, discrete
industries, consumer industries, service industries, financial services and public
services. It offers integrated product sets for large enterprises,[30]
mid-sized
companies and small businesses
Enterprise Service-Oriented Architecture
Enterprise SOA
20. 20
SAP Enterprise Service Oriented Architecture (or Enterprise SOA) is SAP
SE's service-oriented architecture implementation. Enterprise SOA is enabled by the
SAP NetWeaver platform, and builds on the benefits of Web services. SAP has
positioned Enterprise SOA to deliver the benefits offered by service-oriented
architecture, including enabling both flexibility and business efficiency. SAP
markets Enterprise SOA as a cost-effective way of adding new applications to
existing infrastructure. SAP Solutions that currently use Enterprise SOA are mySAP
CRM, mySAP ERP and mySAP SRM.
E SOA AUTHENTICATTION
ESOA (former ESA - Enterprise Service Architecture) is SAP's own version of SOA
(more specialized version of SOA). SAP calls the services developed over the
Business Process Platform and Enterprise Services. The enterprise services are
different that web services in the sense that there will only one generic service
(registered at UDDI) for one application. Enterprise Services are web services with
business value and are reusable parts of business processes. Enterprise Services
Repository - part of SAP NetWeaver is central point of ESOA and starting point for
creating applications.
Partnerships
SAP partners include Global Services Partners with cross-industry multinational
consulting capabilities Global Software Partners providing integrated products that
complement SAP Business Suite solutions and Global Technology Partners
providing user companies with a wide range of products to support SAP technology,
including vendors of hardware, database, storage systems, networks, and mobile
computing technology
Extensions partners: this is a small number of companies which provide functionality
that complements SAP product capabilities. Their products are certified, sold, and
supported by SAP. These partner companies include Adobe, CA Technologies, GK
Software Hewlett-Packard, IDS Scheer, OpenText, Redwood Software,Vistex
Inc., Insync Techfin Solution Ltd, Meridian Global Services, Knoa Software, Nakisa
Inc, ICON-SCM, BackOffice Associates, Prometheus Group and SmartOps.
SAP PartnerEdge
21. 21
SAP products for small businesses and midsize companies are delivered through its
global partner network. In 2008, SAP signed SAP Global Service partnership
with HCL Technologies, a $6 billion technology service provider, headquartered in
IndiaSAP PartnerEdge signed with ENFOS, Inc., a software as a service company, to
develop their EcoHub Partner Sustainability Solution platform. The SAP
PartnerEdge program, SAP's partner program, offers a set of business enablement
resources and program benefits to help partners including value added resellers
(VARs) and independent software vendors (ISVs) be profitable and successful in
implementing, selling, marketing, developing and delivering SAP products to a
broad range of customers
Communities
SAP Community Network (SCN) is a community of SAP customers, partners,
employees, and influencers – typically in roles such as: developers, consultants,
integrators, and business analysts – who gain and share knowledge about ABAP,
Java, .NET, SOA, and other technologies, plus analytics and dashboards, business
process best practices, cloud, mobile, big data, and a range of other topics via blogs,
discussion forums, downloads and code samples, training materials, and a technical
library
Organization
SAP uses a two-tier structure of boards, with an executive board and a supervisory
board. As of 2015, members of the executive board were Bill McDermott (CEOand
Chairman, joined in 2008), Robert Enslin (2014) Bernd Leukert (2014), Luka Mucic
(CFO and COO, 2014), and Gerhard Oswald (1996).
Functional units of SAP are split across different organizational units for R&D
needs, field activities and customer support. SAP Labs are mainly responsible for
product development whereas the field organizations spread across each country are
responsible for field activities such Sales, Marketing, Consulting etc. Head office
located in SAP SE is responsible for overall management as well as core Engineering
activities related to Product Development. SAP customer support, also called Active
Global Support (AGS) is a global organization to provide support to SAP customers
worldwide.
22. 22
SAP Labs Locations
SAP Labs are R&D locations that develop and improve SAP core products. SAP
Labs are strategically located in high-tech clusters around the globe.
SAP Labs are located in Germany (main locations: Walldorf/Rot, Markdorf, Berlin),
United States (main location: Silicon Valley), India (main location: Bangalore),
China (main location: Shanghai), Brazil (main location: Sao Leopoldo), Bulgaria
(main location: Sofia), Canada (main locations: Vancouver,Montreal), Vietnam
(main location: Ho Chi Ming City), Israel (main location: Ra’anana), CIS (main
location: Moscow), France (main location: Paris, Sophia Antipolis), Ireland (main
location: Dublin), Hungary (main location: Budapest).
SAP’s main 4 Labs’ locations are Germany, India, China and the US. Labs Walldorf
was founded in 1972 and became SAP’s first location. At the beginning, the focus of
SAP expansion was entering highly developed IT markets: in 1993 Palo Alto
becomes a part of SAP Labs‘ locations. Aiming to acquire talented employees, in
1998, SAP opens its Labs in Bangalore, in 2003 – in China.
Among the latest SAP Labs‘ locations are Labs Vietnam and Labs Berlin. Labs
Vietnam was established in 2015, Labs Berlin – in 2016.
Based on SAP HANA in-memory platform, SAP Labs develop innovative products
for 98 of the 100 most-valuable global brands using cutting-edge methodologies and
technologies.
In order to manage SAP Labs, SAP Labs Network (SLN) was created. SLN is a
global unit that manages regional Labs and shares best business practices. It
coordinated and distributes development projects among individual SAP Labs
locations, accelerates product delivery, gives SAP full access to talent, and drives
SAP corporate strategy regarding innovation and business growth.
User Groups
SAP User Groups are independent, non-profit organizations of SAP customers and
SAP partners. They serve as communications channel for their members towards
SAP and for SAP towards the markets. The Americas' SAP Users’ Group (ASUG) is
the company’s largest user group, with 100,000 individuals at 3,800 companies.
ASUG members are professionals who work in more than 17 industries. Many are
23. 23
technical and business process experts in the SAP ecosystem; they have varied levels
of experience, and come from small businesses to global corporations, as well as
universities. In 2007, the SAP User Group Executive Network (SUGEN) was
established.
SAP provoked controversy and frustration among its users in 2008 by raising the
cost of its maintenance contracts. The issue was the subject of intense discussion
among user groups.[47]
Conferences
SAP has two annual conferences: SAPPHIRE and SAP TechEd. SAPPHIRE is
SAP's customer-facing event. It is generally where SAP announces major product
changes and strategic direction. It is typically held in the spring in North America.
SAP TechEd is the more technical conference, aimed at SAP's ecosystem of
consultants and software development partners. SAP TechEd has been held since
1995, usually in four locations in the fall. In 2014-15, SAP TechEd was held in three
locations, between fall and early spring.
Competitive landscape
SAP competitors are primarily in the enterprise resource planning software industry.
In this field, Oracle Corporation is SAP's major competitor. SAP also competes in
the customer relationship management, marketing & sales software, manufacturing,
warehousing & industrial software, and supply chain management & logistics
software sectors.
Oracle Corporation filed a lawsuit against SAP for malpractice and unfair
competition in the California courts in 2007. SAP lost the case in 2010 and was
ordered to pay a sum of US $1.3 billion, which was cited as the largest copyright
infringement judgment in history.
The verdict was overturned in 2011 and the lawsuit was finally settled in 2014 for
$356.7 million.
The resulting pressure saw SAP and SUGEN (SAP User Group Executive Network)
agree to a major benchmarking exercise to prove the value of the new support pricing
policy to customers. In December 2009, SAP delayed its Enterprise Support price
24. 24
rises until agreement had been reached on the benchmarks and KPIs (Key
Performance Indicators).
In January 2010, SAP reversed its direction on Enterprise Support and reintroduced
its standard support package for customers. The move to reinstate standard support –
at 18 percent of annual license fees, "will enable all customers to choose the option
that best meets their requirements", the company said.
In August 2013, SAP acquired Hybris publicly for eCommerce capabilities after
failing in a bid for Neolane. The rationale for the acquisition of Hybris was really for
product catalog and product information management.
SAP ENDORSED BUSINESS SOLUTIONS
SAP continues to support our customers’ business and build its eco-system around
SAP Accounting and Financial Close solutions by endorsing the BlackLine
Financial Close Suite of our partner BlackLine Systems. The partner software
provides solutions.
Account Reconciliation, Task Management, Variance Analysis, Journal Entries,
Transaction Matching and Consolidation Integrity Manager
The use of these solutions will enable customers to reduce risk and achieve
compliance in their account reconciliation and financial close processes, gain
efficiencies and increase employee productivity, thus freeing-up resources for value-
adding activities and supporting the business. It complements the innovations SAP is
delivering via SAP Business Suite powered by SAP HANA, SAP enterprise
performance management solutions, and SAP governance, compliance and risk
management solutions.
BlackLine Systems was the first to develop and offer a commercially
available Account Reconciliation solution and is considered a market leader by
analysts. The software is leveraged by more than 700 companies from the Fortune
100 to beyond the Fortune 1000, with more than 75,000 users in over 100 countries.
Examples of reference customers are insurance giant Zurich, e-commerce leader
25. 25
eBay, Mondelez International (formerly Kraft Foods), defense industry giant
Northrop Grumman, and global aluminum manufacturer Novelis, The solution is
provided as SaaS (Software-as-a-Service) with data centers in the U.S. and Europe.
BlackLine has been a successful SAP software solution and technology partner in the
SAP Partner Edge® program for more than three years.
As an Endorsed Business Solution (EBS), the solution is integrated to SAP solutions
(currently SAP ERP) and has been tested by SAP. The solution continues to be sold
by BlackLine Systems. The solution is a key part of the Accounting and Financial
Close solutions offered by SAP.
OVERVIEW
SAP ERP is part of the applications in the SAP Business Suite.
Development
SAP ERP was built based on the former SAP R/3 software. SAP R/3 through version
4.6c consisted of various applications on top of SAP Basis, SAP's set of
middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all
applications were built on top of the SAP Web Application Server. Extension sets
were used to deliver new features and keep the core as stable as possible. The Web
Application Server contained all the capabilities of SAP Basis.
As a result of marketing changes and changes in the industry, new versions of SAP
have been released. The first edition of mySAP ERP was launched in 2003 and
bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic
Enterprise Management (SEM) and extension sets. The SAP Web Application Server
was wrapped into NetWeaver, which was also introduced in 2003.
A complete architecture change took place with the introduction of mySAP ERP
edition in 2004. R/3 Enterprise was replaced with the introduction of ERP Central
Component (SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise
Management and Internet Transaction Server were also merged into SAP ECC,
allowing users to run them under one instance. Architectural changes were also made
to support an enterprise service architecture to transition customers to a services-
oriented architecture.
26. 26
Implementation
SAP ERP consists of several modules, including utilities for marketing and sales,
field service, product design and development, production and inventory control,
human resources, finance and accounting. SAP ERP collects and combines data from
the separate modules to provide the company or organization with enterprise
resource planning.
An article in the IEEE Transaction on Engineering Management journal reports an
industrial case in which senior management successfully dealt with a troubled SAP
R/3 implementation in an international fast-moving consumer goods (FMCG)
company during 2001 and 2002.
Deployment and maintenance costs
Effectively implemented SAP ERP systems can have cost benefits .Integration is the
key in this process. "Generally, a company's level of data integration is highest when
the company uses one vendor to supply all of its modules." An out-of-box software
package has some level of integration but it depends on the expertise of the company
to install the system and how the package allows the users to integrate the different
modules.
It is estimated that "for a Fortune 500 company, software, hardware, and consulting
costs can easily exceed $100 million (around $50 million to $500 million). Large
companies can also spend $50 million to $100 million on upgrades. Full
implementation of all modules can take years," which also adds to the end price.
Midsized companies (fewer than 1,000 employees) are more likely to spend around
$10 million to $20 million at most, and small companies are not likely to have the
need for a fully integrated SAP ERP system unless they have the likelihood of
becoming midsized and then the same data applies as would a midsized
company.[5]
Independent studies have shown that deployment and maintenance costs
of a SAP solution can greatly vary depending on the organization. For example,
some point out that because of the rigid model imposed by SAP tools, a lot of
customization code to adapt to the business process may have to be developed and
27. 27
maintained. Some others pointed out that a return on investment could only be
obtained when there was both a sufficient number of users and sufficient frequency
of use. Deploying SAP itself can also involve a lot of time and resources.
SAP BASIS
Basis, as evidenced by its name, is a foundational part of SAP systems. However, it's
difficult to answer the question of what exactly SAP Basis is because of its many
different components. Let's start at the beginning. This definition of SAP Basis lays
out the basics. Basis consists of the following components:
Client/server architecture and configuration: This is the technical foundation of
both SAP and Basis.
A relational database management system (RDBMS): Basis overlaps with many
aspects of traditional database administration.
A graphical user interface (GUI): The GUI is the interface through which the
Basis administrator interacts with SAP systems.
A development environment: This is where Basis development takes place.
A data dictionary: Data dictionaries are an indispensable part of the development
process.
User and system administration and monitoring tools: These allow the Basis
administrator to maintain the integrity and performance of SAP systems and
address user concerns along the way.
ERP advantages and disadvantages
Advantages
Allows easier global integration (barriers of currency exchange rates, language,
and culture can be bridged automatically)
Updates only need to be done once to be implemented company-wide
Provides real-time information, reducing the possibility of redundancy errors
28. 28
May create a more efficient work environment for employees[5]
Vendors have past knowledge and expertise on how to best build and implement
a system
User interface is completely customizable allowing end users to dictate the
operational structure of the product
Disadvantages
Locked into relationship by contract and manageability with vendor - a contract
can hold a company to the vendor until it expires and it can be unprofitable to
switch vendors if switching costs are too high
Inflexibility - vendor packages may not fit a company's business model well and
customization can be expensive
Return on Investment may take too long to be profitable
Implementations have a risk of project failure
INTRODUCTION TO ABAP
ABAP is one of the many application-specific fourth-generation languages (4GLs)
first developed in the 1980s. It was originally the report language for SAP R/2, a
platform that enabled large corporations to build mainframe business applications for
materials management and financial and management accounting.
ABAP used to be an abbreviation of Allgemeiner BerichtsAufbereitungsProzessor,
German for "generic report preparation processor", but was later renamed to the
English Advanced Business Application Programming. ABAP was one of the first
languages to include the concept of Logical Databases (LDBs), which provides a
high level of abstraction from the basic database level(s).
The ABAP language was originally used by developers to develop the SAP
R/3 platform. It was also intended to be used by SAP customers to enhance SAP
applications – customers can develop custom reports and interfaces with ABAP
programming. The language was geared towards more technical customers with
programming experience.
ABAP remains as the language for creating programs for the client-
server R/3 system, which SAP first released in 1992. As computer hardware evolved
29. 29
through the 1990s, more and more of SAP's applications and systems were written in
ABAP. By 2001, all but the most basic functions were written in ABAP. In 1999,
SAP released an object-oriented extension to ABAP called ABAP Objects, along
with R/3 release 4.6.
SAP's current development platform NetWeaver supports both ABAP and Java.
ABAP has an abstraction between the business applications, the operating system
and database. This ensures that applications do not depend directly upon a specific
server or database platform and can easily be ported from one platform to another.
SAP Netweaver currently runs on UNIX (AIX, HP-UX, Solaris, Linux), Microsoft
Windows, i5/OS on IBM System i (formerly iSeries, AS/400), and z/OS on
IBM System z (formerly zSeries, S/390). Supported databases are IBM
DB2, Informix, MaxDB, Oracle, and Microsoft SQL Server (support for Informix
was discontinued in SAP Basis release 7.00).
ABAP runtime environment
All ABAP programs reside inside the SAP database. They are not stored in separate
external files like Java or C++ programs. In the database all ABAP code exists in two
forms: source code, which can be viewed and edited with the ABAP Workbench
tools; and generated code, a binary representation somewhat comparable
with Java bytecode. ABAP programs execute under the control of the runtime
system, which is part of the SAP kernel. The runtime system is responsible for
processing ABAP statements, controlling the flow logic of screens and responding to
events (such as a user clicking on a screen button); in this respect it can be seen as
a Virtual Machine comparable with the Java VM. A key component of the ABAP
runtime system is the Database Interface, which turns database-independent ABAP
statements ("Open SQL") into statements understood by the underlying DBMS
("Native SQL"). The database interface handles all the communication with the
relational database on behalf of ABAP programs; It also contains extra features such
as buffering of tables and frequently accessed data in the local memory of the
application server.
SAP systems and landscapes
30. 30
All SAP data exists and all SAP software runs in the context of a SAP system. A
system consists of a central relational database and one or more application
("instances") accessing the data and programs in this database. An SAP system
contains at least one instance but may contain more, mostly for reasons of sizing and
performance. In a system with multiple instances, load balancing mechanisms ensure
that the load is spread evenly over the available application servers.
Installations of the Web Application Server (landscapes) typically consist of three
systems: one for development; one for testing and quality assurance; and one for
production. The landscape may contain more systems (e.g., separate systems for unit
testing and pre-production testing) or it may contain fewer (e.g., only development
and production, without separate QA); nevertheless three is the most common
configuration. ABAP programs are created and undergo first testing in the
development system. Afterwards they are distributed to the other systems in the
landscape. These actions take place under control of the Change and Transport
System (CTS), which is responsible for concurrency control (e.g., preventing two
developers from changing the same code at the same time), version management, and
deployment of programs on the QA and production systems.
The Web Application Server consists of three layers: the database layer; the
application layer; and the presentation layer. These layers may run on the same or on
different physical machines. The database layer contains the relational database and
the database software. The application layer knowledge contains the instance or
instances of the system. All application processes, including the business transactions
and the ABAP development, run on the application layer. The presentation
layer handles the interaction with users of the system. Online access to ABAP
application servers can go via a proprietary graphical interface, which is called "SAP
GUI", or via a Web browser.
Transactions
A transaction in SAP terminology is the execution of a program. The normal way of
executing ABAP code in the SAP system is by entering a transaction code (for
instance, VA01 is the transaction code for "Create Sales Order"). Transactions can be
called via system-defined or user-specific, role-based menus. They can also be
started by entering the transaction code directly into a command field, which is
31. 31
present in every SAP screen. Transactions can also be invoked programmatically by
means of the ABAP statements CALL TRANSACTION and LEAVE TO
TRANSACTION.
The general notion of a transaction is called a Logical Unit of Work (LUW) in SAP
terminology.
Types of ABAP programs
As in other programming languages, an ABAP program is either an executable unit
or a library, which provides reusable code to other programs and is not independently
executable.
ABAP distinguishes two types of executable programs:
Reports
Module pools
Reports follow a relatively simple programming model whereby a user optionally
enters a set of parameters (e.g., a selection over a subSET of data) and the program
then uses the input parameters to produce a report in the form of an interactive list.
The term "report" can be somewhat misleading in that reports can also be designed
to modify data; the reason why these programs are called reports is the "list-oriented"
nature of the output they produce.
Module pools define more complex patterns of user interaction using a collection of
screens. The term “screen” refers to the actual, physical image that the user sees.
Each screen also has a "flow logic", which refers to the ABAP code implicitly
invoked by the screens, which is divided into a "PBO" (Process Before Output) and
"PAI" (Process After Input) section. In SAP documentation the term “dynpro”
(dynamic program) refers to the combination of the screen and its flow logic.
The non-executable program types are:
INCLUDE modules
Subroutine pools
Function groups
32. 32
Object classes
Interfaces
Type pools
An INCLUDE module gets included at generation time into the calling unit; it is
often used to subdivide large programs.
Subroutine pools contain ABAP subroutines (blocks of code enclosed by
FORM/ENDFORM statements and invoked with PERFORM).
Function groups are libraries of self-contained function modules (enclosed by
FUNCTION/ ENDFUNCTION and invoked with CALL FUNCTION).
Object classes and interfaces are similar to Java classes and interfaces; the first
define a set of methods and attributes, the second contain "empty" method
definitions, for which any class implementing the interface must provide explicit
code.
Type pools define collections of data types and constants.
ABAP programs are composed of individual sentences (statements). The first word
in a statement is called an ABAP keyword. Each statement ends with a period.
Words must always be separated by at least one space. Statements can be indented as
you wish. With keywords, additions and operands, the ABAP runtime system does
not differentiate between upper and lowercase.
Statements can extend beyond one line. You can have several statements in a single
line (though this is not recommended). Lines that begin with asterisk * in the first
column are recognized as comment lines by the ABAP runtime system and are
ignored. Double quotations marks (") indicate that the remainder of a line is a
comment.
ABAP Workbench
The ABAP Workbench is part of the ABAP system and is accessed via SAPgui. It
contains different tools for editing programs. The most important of these are
(transaction codes are shown in parentheses):
ABAP Editor for writing and editing reports, module pools, includes and
subroutine pools (SE38)
33. 33
ABAP Dictionary for processing database table definitions and retrieving global
types (SE11)
Menu Painter for designing the user interface (menu bar, standard toolbar,
application toolbar, function key assignment) (SE41)
Screen Painter for designing screens and flow logic (SE51)
Function Builder for function modules (SE37)
Class Builder for ABAP Objects classes and interfaces (SE24)
The Object Navigator (transaction SE80) provides a single integrated interface into
these various tools
ABAP Coding Dictionary
The ABAP Dictionary contains all metadata about the data in the SAP system. It is
closely linked with the ABAP Workbench in that any reference to data (e.g., a table,
a view, or a data type) will be obtained from the dictionary. Developers use the
ABAP Dictionary transactions (directly or through the SE80 Object Navigator inside
the ABAP Workbench) to display and maintain this metadata.
When a dictionary object is changed, a program that references the changed object
will automatically reference the new version the next time the program runs. Because
ABAP is interpreted, it is not necessary to recompile programs that reference
changed dictionary objects.
A brief description of the most important types of dictionary objects follows:
Tables are data containers that exist in the underlying relational database. In the
majority of cases there is a 1-to-1 relationship between the definition of a table in
the ABAP Dictionary and the definition of that same table in the database (same
name, same columns). These tables are known as "transparent". There are two
types of non-transparent tables: "pooled" tables exist as independent entities in
the ABAP Dictionary but they are grouped together in large physical tables
("pools") at the database level. Pooled tables are often small tables holding for
example configuration data. "Clustered" tables are physically grouped in
"clusters" based on their primary keys; for instance, assume that a clustered
table H contains "header" data about sales invoices, whereas another clustered
table D holds the invoice line items. Each row of H would then be physically
34. 34
grouped with the related rows from D inside a "cluster table" in the database.
This type of clustering, which is designed to improve performance, also exists as
native functionality in some, though not all, relational database systems.
Indexes provide accelerated access to table data for often used selection
conditions. Every SAP table has a "primary index", which is created implicitly
along with the table and is used to enforce primary key uniqueness. Additional
indexes (unique or non-unique) may be defined; these are called "secondary
indexes".
Views have the same purpose as in the underlying database: they define subsets
of columns (and/or rows) from one or - using a join condition - several tables.
Since views are virtual tables (they refer to data in other tables) they do not take
a substantial amount of space.
Structures are complex data types consisting of multiple fields (comparable
to struct in C/C++).
Data elements provide the semantic content for a table or structure field. For
example, dozens of tables and structures might contain a field giving the price
(of a finished product, raw material, resource, ...). All these fields could have the
same data element "PRICE".
Domains define the structural characteristics of a data element. For example, the
data element PRICE could have an assigned domain that defines the price as a
numeric field with two decimals. Domains can also carry semantic content in
providing a list of possible values. For example, a domain "BOOLEAN" could
define a field of type "character" with length 1 and case-insensitive, but would
also restrict the possible values to "T" (true) or "F" (false).
Search helps (successors to the now obsolete "matchcodes") provide advanced
search strategies when a user wants to see the possible values for a data field.
The ABAP runtime provides implicit assistance (by listing all values for the
field, e.g. all existing customer numbers) but search helps can be used to refine
this functionality, e.g. by providing customer searches by geographical location,
credit rating, etc.
Lock objects implement application-level locking when changing data.
35. 35
ABAP syntax
This brief description of the ABAP syntax begins inevitably with the ubiquitous
"Hello world" program.
"Hello World”
REPORT TEST.
WRITE 'Hello World'.
This example contains two statements: REPORT and WRITE. The program
displays a list on the screen. In this case, the list consists of the single line "Hello
World". The REPORT statement indicates that this program is a report. This
program could be a module pool after replacing the REPORT statement
with PROGRAM.
Chained statements
Consecutive statements with an identical first (leftmost) part can be combined into a
"chained" statement using the chain operator :. The common part of the statements
is written to the left of the colon, the differing parts are written to the right of the
colon and separated by commas. The colon operator is attached directly to the
preceding token, without a space (the same applies to the commas in the token list
on, as can be seen in the examples below).
Chaining is often used in WRITE statements. WRITE accepts just one argument, so
if for instance you wanted to display three fields from a structure called
FLIGHTINFO, you would have to code:
WRITE FLIGHTINFO-CITYFROM.
WRITE FLIGHTINFO-CITYTO.
WRITE FLIGHTINFO-AIRPTO.
Chaining the statements results in a more readable and more intuitive form:
36. 36
WRITE: FLIGHTINFO-CITYFROM, FLIGHTINFO-CITYTO, FLIGHTINFO-
AIRPTO.
In a chain statement, the first part (before the colon) is not limited to the statement
name alone. The entire common part of the consecutive statements can be placed
before the colon. Example:
REPLACE 'A' WITH 'B' INTO LASTNAME.
REPLACE 'A' WITH 'B' INTO FIRSTNAME.
REPLACE 'A' WITH 'B' INTO CITYNAME.
could be rewritten in chained form as:
REPLACE 'A' WITH 'B' INTO: LASTNAME, FIRSTNAME, CITYNAME.
Comments
ABAP has 2 ways of defining text as a comment:
An asterisk (*) in the leftmost column of a line makes the entire line a comment
A double quotation mark (") anywhere on a line makes the rest of that line a
comment
Example:
***************************************
** Program: BOOKINGS **
** Author: Joe Byte, 07-Jul-2007 **
***************************************
REPORT BOOKINGS.
* Read flight bookings from the database
SELECT * FROM FLIGHTINFO
WHERE CLASS = 'Y' "Y = economy
37. 37
OR CLASS = 'C'. "C = business
(...)
Spaces
Code in ABAP is whitespace-sensitive.
x = a+b(c).
assigns to variable x the substring of the variable a, starting from b with the length
defined by the variable c.
x = a + b( c ).
assigns to variable x the sum of the variable a and the result of the call to method b
with the parameter c.
ABAP statements
In contrast with languages like C/C++ or Java, which define a limited set of
language-specific statements and provide most functionality via libraries, ABAP
contains an extensive amount of built-in statements. These statements traditionally
used sentence-like structures and avoided symbols, making ABAP programs
relatively verbose. However, in more recent versions of the ABAP language, a terser
style is possible.
An example of statement based syntax (whose syntax originates in COBOL) versus
expression-based syntax (as in C/Java):
ADD TAX TO PRICE.
* is equivalent to
PRICE = PRICE + TAX.
38. 38
Data types and variables
ABAP provides a set of built-in data types. In addition, every structure, table, view
or data element defined in the ABAP Dictionary can be used to type a variable. Also,
object classes and interfaces can be used as types.
The built-in data types are:
Type Description
I Integer
P Packed decimal
F Floating point
N Character numeric
C Character
D Date
T Time
X Hexadecimal (raw byte)
STRING Variable-length string
XSTRING Variable-length raw byte array
39. 39
Date variables or constants (type D) contain the number of days since January 1, 1
AD. Time variables or constants (type T) contain the number of seconds since
midnight. A special characteristic of both types is that they can be accessed both as
integers and as character strings (with internal format "YYYYMMDD" for dates and
"hhmmss" for times), which can be used for date and time handling. For example, the
code snippet below calculates the last day of the previous month (note: SY-DATUM
is a system-defined variable containing the current date):
DATA LAST_EOM TYPE D. "last end-of-month date
* Start from today's date
LAST_EOM = SY-DATUM.
* Set characters 6 and 7 (0-relative) of the YYYYMMDD string to "01",
* giving the first day of the current month
LAST_EOM+6(2) = '01'.
* Subtract one day
LAST_EOM = LAST_EOM - 1.
WRITE: 'Last day of previous month was', LAST_EOM.
All ABAP variables must be explicitly declared in order to be used. Normally all
declarations are placed at the top of the code module (program, subroutine, function)
before the first executable statement; this placement is a convention and not an
enforced syntax rule. The declaration consists of the name, type, length (where
applicable), additional modifiers (e.g. the number of implied decimals for a packed
decimal field) and optionally an initial value:
* Primitive types:
DATA: COUNTER TYPE I,
VALIDITY TYPE I VALUE 60,
TAXRATE(3) TYPE P DECIMALS 1,
LASTNAME(20) TYPE C,
DESCRIPTION TYPE STRING.
40. 40
* Dictionary types:
DATA: ORIGIN TYPE COUNTRY.
* Internal table:
DATA: T_FLIGHTS TYPE TABLE OF FLIGHTINFO,
T_LOOKUP TYPE HASHED TABLE OF FLT_LOOKUP.
* Objects:
DATA: BOOKING TYPE REF TO CL_FLT_BOOKING.
Notice the use of the colon to chain together consecutive DATA statements.
ABAP Objects
The ABAP language supports object-oriented programming, through a feature
known as "ABAP Objects". This helps to simplify applications and make them more
controllable.
ABAP Objects is fully compatible with the existing language, so one can use existing
statements and modularization units in programs that use ABAP Objects, and can
also use ABAP Objects in existing ABAP programs. Syntax checking is stronger in
ABAP Objects programs, and some syntactical forms (usually older ones) of certain
statements are not permitted.
Objects form a capsule which combines the character to the respective behavior.
Objects should enable programmers to map a real problem and its proposed software
solution on a one-to-one basis. Typical objects in a business environment are, for
example, ‘Customer’, ‘Order’, or ‘Invoice’. From Release 3.1 onwards, the Business
Object Repository (BOR) of SAP Web Application Server ABAP has contained
examples of such objects. The BOR object model will be integrated into ABAP
Objects in the next Release by migrating the BOR object types to the ABAP class
library. A comprehensive introduction to object orientation as a whole would go far
beyond the limits of this introduction to ABAP Objects. This documentation
introduces a selection of terms that are used universally in object orientation and also
occur in ABAP Objects. In subsequent sections, it goes on to discuss in more detail
41. 41
how these terms are used in ABAP Objects. The end of this section contains a list of
further reading, with a selection of titles about object orientation.
Objects are instances of classes. They contain data and provides services. The
data forms the attributes of the object. The services are known as methods (also
known as operations or functions). Typically, methods operate on private data
(the attributes, or state of the object), which is only visible to the methods of the
object. Thus the attributes of an object cannot be changed directly by the user,
but only by the methods of the object. This guarantees the internal consistency of
the object.
Classes describe objects. From a technical point of view, objects are runtime
instances of a class. In theory, any number of objects based on a single class may
be created. Each instance (object) of a class has a unique identity and its own set
of values for its attributes.
Object References are unique addresses that may be used to identify and point to
objects in a program. Object references allow access to the attributes and
methods of an object.
In object-oriented programming, objects usually have the following properties:
Encapsulation - Objects restrict the visibility of their resources (attributes and
methods) to other users. Every object has an interface, which determines how
other objects can interact with it. The implementation of the object is
encapsulated, that is, invisible outside the object itself.
Inheritance - An existing class may be used to derive a new class. Derived
classes inherit the data and methods of the superclass. However, they can
overwrite existing methods, and also add new ones.
Polymorphism - Identical (identically-named) methods behave differently in
different classes. In ABAP Objects, polymorphism is implemented by redefining
methods during inheritance and by using constructs called interfaces.
ABAP Statements – an Overview
The first element of an ABAP statement is the ABAP keyword. This determines the
category of the statement. The different statement categories are as follows:
42. 42
Declarative Statements
These statements define data types or declare data objects which are used by the
other statements in a program or routine. The collected declarative statements in a
program or routine make up its declaration part.
Examples of declarative keywords:
TYPES, DATA, TABLES
Modularization Statements
These statements define the processing blocks in an ABAP program.
The modularization keywords can be further divided into:
Defining keywords
You use statements containing these keywords to define subroutines, function
modules, dialog modules and methods. You conclude these processing blocks using
the END statements.
Examples of definitive keywords:
METHOD ... ENDMETHOD, FUNCTION ... ENDFUNCTION,
MODULE ... ENDMODULE.
Event keywords
You use statements containing these keywords to define event blocks. There are no
special statements to conclude processing blocks - they end when the next processing
block is introduced.
Examples of event key words:
AT SELECTION SCREEN, START-OF-SELECTION, AT USER-COMMAND
Control Statements
You use these statements to control the flow of an ABAP program within a
processing block according to certain conditions.
Examples of control keywords:
IF, WHILE, CASE
43. 43
Call Statements
You use these statements to call processing blocks that you have already defined
using modularization statements. The blocks you call can either be in the same
ABAP program or in a different program.
Examples of call keywords:
CALL METHOD, CALL TRANSACTION, SUBMIT, LEAVE TO
Operational Statements
These keywords process the data that you have defined using declarative statements.
Examples of operational keywords:
MOVE, ADD
Formatting statements
You can use various formatting options with the WRITE statement.
Syntax
WRITE .... f option.
Formatting options for all data types
Option Function
LEFT-JUSTIFIED Output is left-justified.
CENTERED Output is centered.
RIGHT-
JUSTIFIED
Output is right-justified.
UNDER g Output starts directly under field g.
NO-GAP The blank after field f is omitted.
USING EDIT
MASK m
Specifies format template m.
USING NO EDIT
MASK
Deactivates a format template specified in the ABAP Dictionary.
44. 44
NO-ZERO If a field contains only zeros, these are replaced by blanks. For
type c and n fields, leading zeros are replaced automatically.
Formatting options for numeric fields
Option Function
NO-SIGN The leading sign is not displayed on the screen.
DECIMALS d d defines the number of digits after the decimal point.
EXPONENT e In type f fields, the exponent is set to e .
ROUND r Type p fields are multiplied by 10**(-r) and then rounded.
CURRENCY c Format according to currency c in table TCURX.
UNIT u The number of decimal places is fixed according to unit uspecified in table
T006 for type p fields.
Formatting options for date fields
Option Function
DD/MM/YY Separators as defined in user’s master record.
MM/DD/YY Separators as defined in user’s master record.
DD/MM/YYYY Separators as defined in user’s master record.
MM/DD/YYYY Separators as defined in user’s master record.
DDMMYY No separators.
MMDDYY No separators.
YYMMDD No separators.
For more information on formatting options and the exclusion principles for some of
these options, see the keyword documentation of the WRITE statement.
45. 45
Below are some examples of formatting options. For more examples, see Creating
Complex Lists. The decimal character and thousands separators (period or comma)
of numeric fields are defined in the user’s master record
ABAP-Coding Screen Output
DATA: g(5) TYPE c VALUE 'Hello',
f(5) TYPE c VALUE 'Dolly'.
WRITE: g, f.
WRITE: /10 g,
/ f UNDER g.
WRITE: / g NO-GAP, f.
Hello Dolly
Hello
Dolly
HelloDolly
DATA time TYPE t VALUE '154633'.
WRITE: time,
/(8) time USING EDIT MASK '__:__:__'.
154633
15:46:33
WRITE: '000123',
/ '000123' NO-ZERO.
000123
123
DATA float TYPE f VALUE '123456789.0'.
WRITE float EXPONENT 3.
123456,789E+03
DATA pack TYPE p VALUE '123.456'
DECIMALS 3.
WRITE pack DECIMALS 2.
WRITE: / pack ROUND -2,
/ pack ROUND -1,
/ pack ROUND 1,
/ pack ROUND 2.
123,46
12.345,600
1.234,560
12,346
1,235
WRITE: sy-datum,
/ sy-datum yymmdd.
27.06.1995
950627
46. 46
Apart from the formatting options shown in the above tables, you can also use the
formatting options of the FORMAT statement. These options allow you to specify
the intensity and color of your output. For more information, see The FORMAT
Statement.
Internal tables in ABAP
Internal tables are an important feature of the ABAP language. An internal table is
defined similarly to a vector of structs in C++ or a vector of objects in Java. The
main difference with these languages is that ABAP provides a collection of
statements to easily access and manipulate the contents of internal tables. Note that
ABAP does not support arrays; the only way to define a multi-element data object is
to use an internal table.
Internal tables are a way to store variable data sets of a fixed structure in the working
memory of ABAP, and provides the functionality of dynamic arrays. The data is
stored on a row-by-row basis, where each row has the same structure.
Internal tables are preferably used to store and format the content of database tables
from within a program. Furthermore, internal tables in connection with structures are
an important means of defining complex data structures in an ABAP program.
The following example defines an internal table with two fields with the format of
database table VBRK.
* First define structured type
TYPES: BEGIN OF t_vbrk,
VBELN TYPE VBRK-VBELN,
ZUONR TYPE VBRK-ZUONR,
END OF t_vbrk.
* Now define internal table of our defined type t_vbrk
DATA : gt_vbrk TYPE STANDARD TABLE OF t_vbrk,
gt_vbrk_2 TYPE STANDARD TABLE OF t_vbrk. "easy to define more
tables
47. 47
* If needed, define structure (line of internal table)
* Definition with type or with reference to internal table:
DATA : gs_vbrk TYPE t_vbrk,
gs_vbrk2 LIKE LINE OF gt_vbrk2.
* You can also define table type if needed
TYPES tt_vbrk TYPE STANDARD TABLE OF t_vbrk.
LIST OF SAP PRODUCTS
Business Solutions
SAP Advanced Planner and Optimizer (APO)
SAP Analytics
SAP Advanced Business Application Programming (ABAP)
SAP Apparel and Footwear Solution (AFS)
SAP Business Information Warehouse (BW)
SAP Business Intelligence (BI)
SAP Catalog Content Management ()
SAP Convergent Charging (CC)
SAP PRD2(P2)
SAP Enterprise Buyer Professional (EBP)
SAP Enterprise Learning
SAP Portal (EP)
SAP Exchange Infrastructure (XI) (From release 7.0 onwards, SAP XI has been
renamed as SAP Process Integration (SAP PI))
SAP Extended Warehouse Management (EWM)
SAP GRC (Governance, Risk and Compliance)
SAP EHSM (Environment Health Safety Management)
Enteprise Central Component (ECC)
SAP HANA (formerly known as High-performance Analytics Appliance)
48. 48
SAP Human Resource Management Systems (HRMS)
SAP Success Factors
SAP Internet Transaction Server (ITS)
SAP Incentive and Commission Management (ICM)
SAP Knowledge Warehouse (KW)
SAP Manufacturing
SAP Master Data Management (MDM)
SAP Rapid Deployment Solutions (RDS)
SAP Service and Asset Management
SAP Solutions for mobile business
SAP Solution Composer
SAP Strategic Enterprise Management (SEM)
SAP Test Data Migration Server (TDMS)
SAP Training and Event Management (TEM)
SAP NetWeaver Application Server (Web AS)
SAP xApps
SAP Supply Chain Performance Management (SCPM)
SAP Supply Chain Management (SCM)
SAP Sustainability Performance Management (SUPM)
Industry Solutions
SAP for Retail
SAP for Utilities (ISU)
SAP for Public Sector (IS PSCD)
SAP for Oil & Gas (IS Oil & Gas)
SAP for Telecommunications (IST)
SAP for Healthcare (ISH)
SAP for Banking (SAP for banking)
SAP for Insurance (SAP for Insurance)
SAP Financial Services Network (FSN)
SAP Shipping Services Network (SSN)
49. 49
Engineering Construction & Operations (EC&O)
SAP IS Airlines & Defense
Solutions for Small and Midsize Enterprises
SAP Business One (6.2, 6.5, 2004, 2005, 2007, 8.8x, 9.0) (simple and powerful
Product)
SAP Business By Design
Platforms and frameworks
SAP Enterprise Services Architecture
SAP NetWeaver Platform
SAP NetWeaver Portal (formerly SAP Enterprise Portal)
SAP NetWeaver BI (formerly SAP NetWeaver BW- "BW" is still used to
describe the underlying data warehouse area and accelerator components)
SAP NetWeaver Visual Composer
SAP Auto-ID Infrastructure
SAP Composite Application Framework
SAP NetWeaver Development Infrastructure
SAP NetWeaver Identity Management
SAP NetWeaver Single Sign-On
SAP Business Connector (deprecated/removed from product range)
SAP HANA
Legacy Platforms
SAP R/2
SAP R/3
Others
OpenUI5
50. 50
SAP CCMS, monitoring program
SAPgui
eCATT
SAP Central Process Scheduling, process automation and job scheduler
SAP Fiori for mobile devices announced on May 2013
SAP Solution Manager
Sybase ASE
SAP BUSINESS BY DESIGN
SAP Business ByDesign is a fully integrated on-demand business management
solution designed for small or midsize businesses that that want the benefits of large-
scale business applications without the need for IT infrastructure. The software is
designed to track end-to-end business processes across the following scenarios
(referred to by SAP as "modules"): customer relationship management, financial
management, project management, supply chain management, supplier relationship
management, human resources management, executive management support and
compliance management.[4]
Designed for midsize companies or subsidiaries of larger
enterprises, it is delivered on-demand by SAP with a monthly subscription for a
minimum of 10 users.[5]
It has built-in business analytics, e-learning, and support.
SOFTWARE AS SERVICE
SAP Business ByDesign is a software as a service (SaaS) enterprise resource
planning (ERP) system. Acknowledging the increasing adoption of SaaS solutions,
especially in the middle market, SAP made the bold decision to develop an entirely
new code base to target the SaaS opportunity. With Business ByDesign now
generally available and in use by a wide range of customers, SAP is aggressively
expanding the product’s feature set.
Solution overview
SAP Business ByDesign is software as a service sold by SAP SE, a German
software company. It is an enterprise resource planning and business management
software product designed for small and medium sized enterprises. SAP announced
51. 51
SAP Business ByDesign on 19 September 2007 during an event in New York. It was
previously known under the code name "A1S".
KEY CHARACTERISTICS
Streamline end-to-end processes and maximize efficiency across your
organization
Gain timely business insights with integrated analytics and reporting powered by
SAP HANA
Manage your business from anywhere, at any time, with built-in mobile apps
Rely on highly secure data centers that are managed, monitored, and maintained
by SAP experts
HISTORY
SAP announced SAP Business ByDesign on 19 September 2007 during an event in
New York. It is available in Australia, Austria, Belgium, Canada, China, Denmark,
France, Germany, India, Italy, Japan, Mexico, the Netherlands, New Zealand, Spain,
South Africa, Switzerland, the United Kingdom and the United States.
Customers
and partners can produce (partially) localized country versions using the Localization
Toolkit provided by SAP. Therefore, as of December 2015, SAP Business ByDesign
has been implemented in 92 countries previously known under the code name "A1S".
SAP CLOUD ADVANTAGES
The most important reasons for customers to consider cloud-based computing:
Fast implementation time, providing quick access to functionality
Reduced IT efforts because both hardware and software operation and
maintenance are the provider’s responsibility
Flexibility due to subscription rather than licensing contracts and “pay-what-you-
use” concepts
Scalability to support changing business needs and supporting growth
SAP ERP
Integrated applications—that an organization can use to collect, store, manage and
interpret data from many business activities, including:
52. 52
product planning, purchase
manufacturing or service delivery
marketing and sales
inventory management
shipping and payment
ERP provides an integrated view of core business processes, often in real-time, using
common databases maintained by a database management system. ERP systems
track business resources—cash, raw materials, production capacity—and the status
of business commitments: orders, purchase orders, and payroll. The applications that
make up the system share data across various departments (manufacturing,
purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information
flow between all business functions, and manages connections to outside
stakeholders.
Enterprise system software is a multibillion-dollar industry that produces
components that support a variety of business functions. IT investments have become
the largest category of capital expenditure in United States-based businesses over the
past decade. Though early ERP systems focused on large enterprises, smaller
enterprises increasingly use ERP systems.
The ERP system is considered a vital organizational tool because it integrates varied
organizational systems and facilitates error-free transactions and production.
However, developing an ERP system differs from traditional system development.
ERP systems run on a variety of computer hardware and network configurations,
typically using a database as an information repository.
Origin
The Gartner Group first used the acronym ERP in the 1990s, where it was seen]
to
extend the capabilities of material requirements planning (MRP), and the
later manufacturing resource planning (MRP II), as well as computer-integrated
manufacturing. Without replacing these terms, ERP came to represent a larger whole
53. 53
that reflected the evolution of application integration beyond manufacturing. Not all
ERP packages developed from a manufacturing core; ERP vendors variously began
assembling their packages with accounting, maintenance, and human-resource
components. By the mid-1990s ERP systems addressed all core enterprise
functions. Governments and non–profit organizations also began to use ERP
systems.
Expansion
ERP systems experienced rapid growth in the 1990s. Because of the year 2000
problem and the introduction of the euro that disrupted legacy systems, many
companies took the opportunity to replace their old systems with ERP.[11]
ERP systems initially focused on automating back office functions that did not
directly affect customers and the public. Front office functions, such as customer
relationship management (CRM), dealt directly with customers, or e-
business systems such as e-commerce, e-government, e-telecom, and e-finance—
or supplier relationship management (SRM) became integrated later, when the
Internet simplified communicating with external parties.
"ERP II" was coined in 2000 in an article by Gartner Publications entitled ERP Is
Dead—Long Live ERP II. It describes web–based software that provides real–time
access to ERP systems to employees and partners (such as suppliers and customers).
The ERP II role expands traditional ERP resource optimization and transaction
processing. Rather than just manage buying, selling, etc.—ERP II leverages
information in the resources under its management to help the enterprise collaborate
with other enterprises. ERP II is more flexible than the first generation ERP. Rather
than confine ERP system capabilities within the organization, it goes beyond the
corporate walls to interact with other systems. Enterprise application suite is an
alternate name for such systems.
Developers now make more effort to integrate mobile devices with the ERP system.
ERP vendors are extending ERP to these devices, along with other business
applications. Technical stakes of modern ERP concern integration—hardware,
applications, networking, supply chains. ERP now covers more functions and roles—
including decision making, stakeholders’ relationships, standardization,
transparency, globalization, etc.,
54. 54
Characteristics
ERP (Enterprise Resource Planning) systems typically include the following
characteristics:
An integrated system that operates in (or near) real time without relying on
periodic updates
A common database that supports all applications
A consistent look and feel across modules
Installation of the system with elaborate application/data integration by the
Information Technology (IT) department, provided the implementation is not
done in small steps
Functional areas of ERP
An ERP system covers the following common functional areas. In many ERP
systems these are called and grouped together as ERP modules:
Financial accounting: General ledger, fixed asset, payables including vouchering,
matching and payment, receivables cash application and collections, cash
management, financial consolidation
Management accounting: Budgeting, costing, cost management, activity based
costing
Human resources : Recruiting, training, rostering, payroll, benefits,
401K,diversity management, retirement, separation
Manufacturing: Engineering, bill of materials, work orders, scheduling,
capacity, workflow management, quality control, manufacturing process,
manufacturing projects, manufacturing flow, product life cycle management
Order Processing: Order to cash, order entry, credit checking, pricing, available
to promise, inventory, shipping, sales analysis and reporting, sales
commissioning.
Supply chain management: Supply chain planning, supplier scheduling, product
configuration, order to cash, purchasing, inventory, claim processing,
warehousing (receiving, put away, picking and packing).
55. 55
Project management: Project planning, resource planning, project costing, work
breakdown structure, billing, time and expense, performance units, activity
management
Customer relationship management: Sales and marketing, commissions, service,
customer contact, call center support — CRM systems are not always considered
part of ERP systems but rather Business Support systems (BSS).
Data services : Various "self–service" interfaces for customers, suppliers and/or
employees
Components
Transactional database
Management portal/dashboard
Best practices
Most ERP systems incorporate best practices. This means the software reflects the
vendor's interpretation of the most effective way to perform each business process.
Systems vary in how conveniently the customer can modify these practices.
Companies that implemented industry best practices reduced time–consuming
project tasks such as configuration, documentation, testing, and training. In addition,
best practices reduced risk by 71% compared to other software implementations.
Use of best practices eases compliance with requirements such as IFRS, Sarbanes-
Oxley or Basel II. They can also help comply with de facto industry standards, such
as electronic funds transfer. This is because the procedure can be readily codified
within the ERP software, and replicated with confidence across multiple businesses
who share that business requirement.
Connectivity to plant floor information
ERP systems connect to real–time data and transaction data in a variety of ways.
These systems are typically configured by systems integrators, who bring unique
knowledge on process, equipment, and vendor solutions.
Direct integration—ERP systems have connectivity (communications to plant floor
equipment) as part of their product offering. This requires that the vendors offer
56. 56
specific support for the plant floor equipment their customers operate. ERP vendors
must be experts in their own products and connectivity to other vendor products,
including those of their competitors.
Database integration—ERP systems connect to plant floor data sources through
staging tables in a database. Plant floor systems deposit the necessary information
into the database. The ERP system reads the information in the table. The benefit of
staging is that ERP vendors do not need to master the complexities of equipment
integration. Connectivity becomes the responsibility of the systems integrator.
Enterprise appliance transaction modules (EATM)—These devices communicate
directly with plant floor equipment and with the ERP system via methods supported
by the ERP system. EATM can employ a staging table, web services, or system–
specific program interfaces (APIs). An EATM offers the benefit of being an off–the–
shelf solution.
Custom–integration solutions—Many system integrators offer custom solutions.
These systems tend to have the highest level of initial integration cost, and can have
a higher long term maintenance and reliability costs. Long term costs can be
minimized through careful system testing and thorough documentation. Custom–
integrated solutions typically run on workstation or server-class computers.
IMPLEMENTATION
ERP's scope usually implies significant changes to staff work processes and
practices. Generally, three types of services are available to help implement such
changes—consulting, customization, and support. Implementation time depends on
business size, number of modules, customization, the scope of process changes, and
the readiness of the customer to take ownership for the project. Modular ERP
systems can be implemented in stages. The typical project for a large enterprise
takes about 14 months and requires around 150 consultants.
Small projects can require months; multinational and other large implementations
can take years Customization can substantially increase implementation times.
Process preparation
57. 57
Implementing ERP typically requires changes in existing business processes. Poor
understanding of needed process changes prior to starting implementation is a main
reason for project failure. The difficulties could be related to the system, business
process, infrastructure, training, or lack of motivation.
It is therefore crucial that organizations thoroughly analyze business processes before
they implement ERP software. Analysis can identify opportunities for process
modernization. It also enables an assessment of the alignment of current processes
with those provided by the ERP system. Research indicates that risk of business
process mismatch is decreased by:
Linking current processes to the organization's strategy
Analyzing the effectiveness of each process
Understanding existing automated solutions
ERP implementation is considerably more difficult (and politically charged) in
decentralized organizations, because they often have different processes, business
rules, data semantics, authorization hierarchies, and decision centers. This may
require migrating some business units before others, delaying implementation to
work through the necessary changes for each unit, possibly reducing integration
(e.g., linking via Master data management) or customizing the system to meet
specific needs.
A potential disadvantage is that adopting "standard" processes can lead to a loss
of competitive advantage. While this has happened, losses in one area are often offset
by gains in other areas, increasing overall competitive advantage.
Configuration
Configuring an ERP system is largely a matter of balancing the way the organization
wants the system to work with the way it was designed to work. ERP systems
typically include many settings that modify system operations. For example, an
organization can select the type of inventory accounting—FIFO or LIFO—to use;
whether to recognize revenue by geographical unit, product line, or distribution
channel; and whether to pay for shipping costs on customer returns.
58. 58
Two tier enterprise resource planning
Two-tier ERP software and hardware lets companies run the equivalent of two ERP
systems at once: one at the corporate level and one at the division or subsidiary level.
For example, a manufacturing company uses an ERP system to manage across the
organization. This company uses independent global or regional distribution,
production or sales centers, and service providers to support the main company’s
customers. Each independent center or subsidiary may have its own business
models, workflows, and business processes.
Given the realities of globalization, enterprises continuously evaluate how to
optimize their regional, divisional, and product or manufacturing strategies to
support strategic goals and reduce time-to-market while increasing profitability and
delivering value. With two-tier ERP, the regional distribution, production, or sales
centers and service providers continue operating under their own business model—
separate from the main company, using their own ERP systems. Since these smaller
companies' processes and workflows are not tied to main company's processes and
workflows, they can respond to local business requirements in multiple locations.
Factors that affect enterprises' adoption of two-tier ERP systems include:
Manufacturing globalization, the economics of sourcing in emerging economies
Potential for quicker, less costly ERP implementations at subsidiaries, based on
selecting software more suited to smaller companies
Extra effort, (often involving the use of Enterprise application integration) is
required where data must pass between two ERP systems Two-tier ERP
strategies give enterprises agility in responding to market demands and in
aligning IT systems at a corporate level while inevitably resulting in more
systems as compared to one ERP system used throughout the organization.
Customization
ERP systems are theoretically based on industry best practices, and their makers
intend that organizations deploy them as is. ERP vendors do offer customers
59. 59
configuration options that let organizations incorporate their own business rules, but
often feature gaps remain even after configuration is complete.
ERP customers have several options to reconcile feature gaps, each with their own
pros/cons. Technical solutions include rewriting part of the delivered software,
writing a homegrown module to work within the ERP system, or interfacing to an
external system. These three options constitute varying degrees of system
customization—with the first being the most invasive and costly to maintain.
Alternatively, there are non-technical options such as changing business practices or
organizational policies to better match the delivered ERP feature set. Key differences
between customization and configuration include:
Customization is always optional, whereas the software must always be
configured before use (e.g., setting up cost/profit center structures, organizational
trees, purchase approval rules, etc.).
The software is designed to handle various configurations, and behaves
predictably in any allowed configuration.
The effect of configuration changes on system behavior and performance is
predictable and is the responsibility of the ERP vendor. The effect of
customization is less predictable. It is the customer's responsibility, and increases
testing activities.
Configuration changes survive upgrades to new software versions. Some
customizations (e.g., code that uses pre–defined "hooks" that are called
before/after displaying data screens) survive upgrades, though they require
retesting. Other customizations (e.g., those involving changes to fundamental
data structures) are overwritten during upgrades and must be re-implemented.
Customization advantages include that it:
Improves user acceptance
Offers the potential to obtain competitive advantage vis-à-vis companies using
only standard features
Customization disadvantages include that it:
60. 60
Increases time and resources required to implement and maintain
Inhibits seamless communication between suppliers and customers who use the
same ERP system uncustomized
Can create over reliance on customization, undermining the principles of ERP as
a standardizing software platform
Extensions
ERP systems can be extended with third–party software.[39]
ERP vendors typically
provide access to data and features through published interfaces. Extensions offer
features such as:
Reporting, and republishing
Capturing transactional data, e.g., using scanners, tills or RFID
Access to specialized data and capabilities, such as syndicated marketing data
and associated trend analytics
Advanced planning and scheduling (APS)
Managing facilities, and transmission in real-time
Data migration
Data migration is the process of moving, copying, and restructuring data from an
existing system to the ERP system. Migration is critical to implementation success
and requires significant planning. Unfortunately, since migration is one of the final
activities before the production phase, it often receives insufficient attention. The
following steps can structure migration planning:
Identify data to migrate
Determine migration timing
Generate data templates]
Freeze the toolset
Decide on migration-related setups
Define data archiving policies and procedures
Comparison to special–purpose application
61. 61
Advantages
The fundamental advantage of ERP is that integrated myriad business processes
saves time and expense. Management can make decisions faster and with fewer
errors. Data becomes visible across the organization. Tasks that benefit from this
integration include Sales forecasting, which allows inventory optimization.
Chronological history of every transaction through relevant data compilation in
every area of operation.
Order tracking, from acceptance through fulfillment
Revenue tracking, from invoice through cash receipt
Matching purchase orders (what was ordered), inventory receipts (what arrived),
and costing (what the vendor invoiced)
ERP systems centralize business data, which:
Eliminates the need to synchronize changes between multiple systems—
consolidation of finance, marketing, sales, human resource, and manufacturing
applications
Brings legitimacy and transparency to each bit of statistical data
Facilitates standard product naming/coding
Provides a comprehensive enterprise view (no "islands of information"), making
real–time information available to management anywhere, any time to make
proper decisions
Protects sensitive data by consolidating multiple security systems into a single
structure
Benefits
ERP can improve quality and efficiency of the business. By keeping a company's
internal business processes running smoothly, ERP can lead to better outputs that
may benefit the company, such as in customer service and manufacturing.
ERP supports upper level management by providing information for decision
making.
62. 62
ERP creates a more agile company that adapts better to change. It also makes a
company more flexible and less rigidly structured so organization components
operate more cohesively, enhancing the business—internally and externally.[42]
ERP can improve data security. A common control system, such as the kind
offered by ERP systems, allows organizations the ability to more easily ensure
key company data is not compromised
ERP provides increased opportunities for collaboration. Data takes many forms
in the modern enterprise. Documents, files, forms, audio and video, emails.
Often, each data medium has its own mechanism for allowing collaboration. ERP
provides a collaborative platform that lets employees spend more time
collaborating on content rather than mastering the learning curve of
communicating in various formats across distributed systems
Disadvantages
Customization can be problematic. Compared to the best-of-breed approach, ERP
can be seen as meeting an organization’s lowest common denominator needs, forcing
the organization to find workarounds to meet unique demands.
Re-engineering business processes to fit the ERP system may damage
competitiveness or divert focus from other critical activities.
ERP can cost more than less integrated or less comprehensive solutions.
High ERP switching costs can increase the ERP vendor's negotiating power,
which can increase support, maintenance, and upgrade expenses.
Overcoming resistance to sharing sensitive information between departments can
divert management attention.
Integration of truly independent businesses can create unnecessary dependencies.
Extensive training requirements take resources from daily operations.
Harmonization of ERP systems can be a mammoth task (especially for big
companies) and requires a lot of time, planning, and money.
Supply chain management
63. 63
Supply chain management (SCM) is the management of the flow of goods and
services. It includes the movement and storage of raw materials, work-in-
process inventory, and finished goods from point of origin to point of consumption.
Interconnected or interlinked networks, channels and node businesses are involved in
the provision of products and services required by end customers in a supply
chain.[3]
Supply chain management has been defined as the "design, planning,
execution, control, and monitoring of supply chain activities with the objective of
creating net value, building a competitive infrastructure, leveraging worldwide
logistics, synchronizing supply with demand and measuring performance globally
SCM draws heavily from the areas of industrial engineering, systems engineering,
operations management, logistics, procurement, and information technology, and
strives for an integrated approach.
Origin of the term and definitions
The term "supply chain management" entered the public domain when Keith Oliver,
a consultant at Booz Allen Hamilton (now Strategy&), used it in an interview for
the Financial Times in 1982. The term was slow to take hold. It gained currency in
the mid-1990s, when a flurry of articles and books came out on the subject. In the
late 1990s it rose to prominence as a management buzzword, and operations
managers began to use it in their titles with increasing regularity.
Commonly accepted definitions of supply chain management include:
The management of upstream and downstream value-added flows of materials,
final goods, and related information among suppliers, company, resellers, and
final consumers.
The systematic, strategic coordination of traditional business functions and
tactics across all business functions within a particular company and across
businesses within the supply chain, for the purposes of improving the long-term
performance of the individual companies and the supply chain as a whole
A customer-focused definition is given by Hines (2004:p76): "Supply chain
strategies require a total systems view of the links in the chain that work together
efficiently to create customer satisfaction at the end point of delivery to the
consumer. As a consequence, costs must be lowered throughout the chain by
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driving out unnecessary expenses, movements, and handling. The main focus is
turned to efficiency and added value, or the end-user's perception of value.
Efficiency must be increased, and bottlenecks removed. The measurement of
performance focuses on total system efficiency and the equitable monetary
reward distribution to those within the supply chain. The supply chain system
must be responsive to customer requirements."
The integration of key business processes across the supply chain for the purpose
of creating value for customers and stakeholders (Lambert, 2008)
According to the Council of Supply Chain Management Professionals (CSCMP),
supply chain management encompasses the planning and management of all
activities involved in sourcing, procurement, conversion, and logistics
management. It also includes coordination and collaboration with channel
partners, which may be suppliers, intermediaries, third-party service providers,
or customers. Supply chain management integrates supply and
demand management within and across companies. More recently, the loosely
coupled, self-organizing network of businesses that cooperate to provide product
and service offerings has been called the Extended Enterprise.
A supply chain, as opposed to supply chain management, is a set of organizations
directly linked by one or more upstream and downstream flows of products, services,
finances, or information from a source to a customer. Supply chain management is
the management of such a chain.
Supply chain management software includes tools or modules used to execute
supply chain transactions, manage supplier relationships, and control associated
business processes.
Supply chain event management (SCEM) considers all possible events and factors
that can disrupt a supply chain. With SCEM, possible scenarios can be created and
solutions devised.
In many cases the supply chain includes the collection of goods after consumer use
for recycling. Including third-party logistics or other gathering agencies as part of the
RM re-patriation process is a way of illustrating the new endgame strategy
Functions
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Supply chain management is a cross-functional approach that includes managing the
movement of raw materials into an organization, certain aspects of the internal
processing of materials into finished goods, and the movement of finished goods out
of the organization and toward the end consumer. As organizations strive to focus on
core competencies and become more flexible, they reduce their ownership of raw
materials sources and distribution channels. These functions are increasingly being
outsourced to other firms that can perform the activities better or more cost
effectively. The effect is to increase the number of organizations involved in
satisfying customer demand, while reducing managerial control of daily logistics
operations. Less control and more supply chain partners lead to the creation of the
concept of supply chain management. The purpose of supply chain management is to
improve trust and collaboration among supply chain partners, thus improving
inventory visibility and the velocity of inventory movement.
Importance
Organizations increasingly find that they must rely on effective supply chains, or
networks, to compete in the global market and networked economy. In Peter
Drucker's (1998) new management paradigms, this concept of business relationships
extends beyond traditional enterprise boundaries and seeks to organize entire
business processes throughout a value chain of multiple companies.
In recent decades, globalization, outsourcing, and information technology have
enabled many organizations, such as Dell and Hewlett Packard, to successfully
operate collaborative supply networks in which each specialized business partner
focuses on only a few key strategic activities (Scott, 1993). This inter-organisational
supply network can be acknowledged as a new form of organisation. However, with
the complicated interactions among the players, the network structure fits neither
"market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of
performance impacts different supply network structures could have on firms, and
little is known about the coordination conditions and trade-offs that may exist among
the players. From a systems perspective, a complex network structure can be
decomposed into individual component firms (Zhang and Dilts, 2004). Traditionally,
companies in a supply network concentrate on the inputs and outputs of the
processes, with little concern for the internal management working of other
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individual players. Therefore, the choice of an internal management control structure
is known to impact local firm performance (Mintzberg, 1979).
In the 21st century, changes in the business environment have contributed to the
development of supply chain networks. First, as an outcome of globalization and the
proliferation of multinational companies, joint ventures, strategic alliances, and
business partnerships, significant success factors were identified,
complementing the earlier "just-in-time", lean manufacturing, and agile
manufacturing practices.[12]
Second, technological changes, particularly the dramatic
fall in communication costs (a significant component of transaction costs), have led
to changes in coordination among the members of the supply chain network (Coase,
1998).
Many researchers have recognized supply network structures as a new organisational
form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation",
"Global Production Network", and "Next Generation Manufacturing System". In
general, such a structure can be defined as "a group of semi-independent
organisations, each with their capabilities, which collaborate in ever-changing
constellations to serve one or more markets in order to achieve some business goal
specific to that collaboration" (Akkermans, 2001).
The security management system for supply chains is described in ISO/IEC 28000
and ISO/IEC 28001 and related standards published jointly by the ISO and the IEC.
Supply Chain Management draws heavily from the areas of operations management,
logistics, procurement, and information technology, and strives for an integrated
approach.
Historical developments
Six major movements can be observed in the evolution of supply chain management
studies: creation, integration, and globalization (Movahedi et al., 2009),
specialization phases one and two, and SCM 2.0.
Creation era
The term "supply chain management" was first coined by Keith Oliver in 1982.
However, the concept of a supply chain in management was of great importance long
before, in the early 20th century, especially with the creation of the assembly line.
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The characteristics of this era of supply chain management include the need for
large-scale changes, re-engineering, downsizing driven by cost reduction programs,
and widespread attention to Japanese management practices. However, the term
became widely adopted after the publication of the seminal book Introduction to
Supply Chain Management in 1999 by Robert B. Handfield and Ernest L. Nichols,
Jr., published over 25,000 copies and was translated into Japanese, Korean,
Chinese, and Russian.
Integration era
This era of supply chain management studies was highlighted with the development
of electronic data interchange (EDI) systems in the 1960s, and developed through the
1990s by the introduction of enterprise resource planning (ERP) systems. This era
has continued to develop into the 21st century with the expansion of Internet-based
collaborative systems. This era of supply chain evolution is characterized by both
increasing value added and cost reductions through integration.
A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1–type
supply chain, systems such as production, storage, distribution, and material control
are not linked and are independent of each other. In a stage 2 supply chain, these are
integrated under one plan and is ERP enabled. A stage 3 supply chain is one that
achieves vertical integration with upstream suppliers and downstream customers. An
example of this kind of supply chain is Tesco.
Globalization era
The third movement of supply chain management development, the globalization
era, can be characterized by the attention given to global systems of supplier
relationships and the expansion of supply chains beyond national boundaries and into
other continents. Although the use of global sources in organisations' supply chains
can be traced back several decades (e.g., in the oil industry), it was not until the late
1980s that a considerable number of organizations started to integrate global sources
into their core business. This era is characterized by the globalization of supply chain
management in organizations with the goal of increasing their competitive
advantage, adding value, and reducing costs through global sourcing.
Specialization era (phase I): outsourced manufacturing and distribution
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In the 1990s, companies began to focus on "core competencies" and specialization.
They abandoned vertical integration, sold off non-core operations, and outsourced
those functions to other companies. This changed management requirements, by
extending the supply chain beyond the company walls and distributing management
across specialized supply chain partnerships.
This transition also refocused the fundamental perspectives of each organization.
Original equipment manufacturers (OEMs) became brand owners that required
visibility deep into their supply base. They had to control the entire supply chain
from above, instead of from within. Contract manufacturers had to manage bills of
material with different part-numbering schemes from multiple OEMs and support
customer requests for work-in-process visibility and vendor-managed inventory
(VMI).
The specialization model creates manufacturing and distribution networks composed
of several individual supply chains specific to producers, suppliers, and customers
that work together to design, manufacture, distribute, market, sell, and service a
product. This set of partners may change according to a given market, region, or
channel, resulting in a proliferation of trading partner environments, each with its
own unique characteristics and demands.
Specialization era (phase II): supply chain management as a service
Specialization within the supply chain began in the 1980s with the inception of
transportation brokerages, warehouse management (storage and inventory), and non-
asset-based carriers, and has matured beyond transportation and logistics into aspects
of supply planning, collaboration, execution, and performance management.
Market forces sometimes demand rapid changes from suppliers, logistics providers,
locations, or customers in their role as components of supply chain networks. This
variability has significant effects on supply chain infrastructure, from the foundation
layers of establishing and managing electronic communication between trading
partners, to more complex requirements such as the configuration of processes and
work flows that are essential to the management of the network itself.
Supply chain specialization enables companies to improve their overall competencies
in the same way that outsourced manufacturing and distribution has done; it allows
