montreal overview powerpoint june 2008

8/7/2019 Montreal Overview Powerpoint June 2008

http://slidepdf.com/reader/full/montreal-overview-powerpoint-june-2008 1/247

© 2008 SAP AG

Introduction to SAP ERP

Abstract

This teaching material is intended to explain how the fundamental

business processes interact with SAP ERP in the functional areas

of Sales and Distribution, Materials Management, Production

Planning, Financial Accounting, Controlling, and Human Capital

Management.

SAP University Alliances

Version 1.0

Authors Stephen TracyBret Wagner Stefan Weidner

ProductSAP ERP 6.0Global Bike Inc.

LevelBeginner

FocusCross-functional integrationSD, MM, PP, FI, CO



SAP ERP


Page 1-2© 2008 SAP AG

Course Content

Introduction to SAP Navigation

Sales & Distribution

Materials Management

Production Planning

Financial Accounting

Controlling



SAP ERP



SAP

“Systems, Applications, and Products in Data Processing” Name of the Company

- SAP AG

- SAP America

- SAP UK

Name of the Software- SAP R/2

- SAP R/3

- SAP ERP



SAP ERP



Who is SAP?

SAP AG- Founded in Walldorf, Germany in 1972

- World’s Largest Business Software Company

- World’s Third-largest Independent Software Provider

Company Statistics

- Over 40,000 employees in more then 50 countries- 1500 Business Partners

- 36,200 customers in more then 120 countries

- 12 million users

- 100,600 installationsSource: SAP AG website



SAP ERP



Integrated Business Solution Vendors

SAP (Systems, Applications, & Products in Data Processing)- SAP ERP, All-in-One, Business by Design, Business One

Oracle Applications- Oracle, JD Edwards, PeopleSoft, Siebel, Retek

Microsoft Business Solutions- Dynamics: Great Plains, Navision, Axapta, Soloman

The Sage Group- Sage Software – Accpac ERP, PeachTree

SSA Global Technologies- BAAN



SAP ERP



SAP Architecture

World-wide usage Designed to satisfy the information needs for business sizes (small

local to large all international)- Multi-lingual

- Multi-currency

Designed to satisfy the information needs for all industries



SAP ERP



SAP ERP

Enables a company to link it’s business processes Ties together disparate business functions (integrated business

solution)

Helps the organization run smoothly

Real-time environment Scalable and flexible



SAP ERP



SAP Architecture

Client/Server Environment- Client – hardware/software environment that can make a request for services for a central repository of resources

- Server – hardware/software combination that can provide services to agroup of clients in a controlled environment

Three – Tier Structure- GUI

• Graphical User Interface or Web Interface

- Application Server

• One or more, help distribute work load- Database Server

• One single data repository



SAP ERP



SAP Architecture

Database

Application

Presentation

Browser ClientPCs, Laptops, etc.

Network

Application

Servers

InternetTransaction

Server

Web Server



SAP ERP



SAP Business Suite

SAP NetWeaver

SAP SCM

SAP PLM

SAPSRM

SAPCRM

SAP

ERP ECC 6.0



SAP ERP



SAP Business Suite

SAP NetWeaver

SAP SCM

SAP PLM

SAPSRM

SAPCRM

SAP

ECC

SD

MM

PP

QM

PM

HR IS

WF

AM

CO

FI

PS

SAP R/3Client/Server

ABAPBasis



SAP ERP



SAP Software Applications

Solutions- SAP ERP

- SAP CRM

- SAP PLM

- SAP SCM

- SAP SRM- SAP Analytics

- SAP Manufacturing

- SAP Service

- SAP Mobile Solutions

- SAP xApps

Small & Medium Size Solutions- Business One

- Business by Design

- SAP All-in-One

Platforms- Enterprise Services Architecture

- SAP NetWeaver Platform



SAP ERP



SAP ERP Business Modules

Collections of logically related transactions within identifiablebusiness functions- MM (“Buy”)

- PP (“Make”)

- SD (“Sell”)

- FI and CO (“Track”)- HCM



SAP ERP



SAP ERP Core Applications

Logistics

- Sales & Distribution

- Plant Maintenance

- Materials Management

- Production Planning- Quality Management

Accounting- Financial Accounting

- Controlling

- Asset Management- Treasury

Human Resources- Personnel Management

- Benefits

- Payroll



SAP ERP



SAP Industry Solutions

Aerospace & Defense

Automotive

Banking

Chemicals

Consumer Products

Defense & Security

Engineering, Const.

Healthcare

High Tech

Higher Education

Industrial Machinery

Insurance

Life Sciences

Logistics Service Prod.

Media Mill Products

Mining

Oil & Gas

Pharmaceuticals

Postal Services Professional Services

Public Sector

Railways

Retail

Telecommunications Utilities

Wholesale Distribution



© 2008 SAP AG

Navigation

Abstract

This material explains how to navigate in SAP systems. It is aimed at

students at educational institutions, such as schools, universities of

cooperative education, universities of applied sciences, and other

universities, with no previous experience of SAP software. It can be used

in the classroom or for self-study.

On completion of the course, students will be able to navigate through the

user interface to deal with business processes and case studies.


Version 1.0


ProductAll

LevelBeginner

Focus

SAP ERP



SAP ERP



Content

User guidance

User specific settings

Navigation in SAP Easy Access Menu

Help



SAP ERP



Learning Targets

At the end of this chapter you can

Name the window elements

Navigate in an SAP system

Apply personal system settings

Effectively use Help



SAP ERP



Log on to an SAP system



SAP ERP



SAP Easy Access Menu



SAP ERP



Role-based User Menu



SAP ERP



DYNPRO Elements

Radiobutton

Alternative 1 (nur eine Alternative möglich!)

ODER Alternative 2

oder .....

oder .....

oder .....

Anzeigen Ändern

Checkbox

Auswahl 1 (Mehrfachwahl möglich!)

Auswahl 4

Auswahl 2

Auswahl 3

Überblick

Check box

Radio buttons

Press buttons

Input fields

Tabs

System function bar Application function bar

Command field

(transaction code)

Status bar



SAP ERP



ENJOY Initiative – New Design

header data

position overview

positiondetails



SAP ERP



Help Functions

F1: Description of Input Fields

F4: value list



SAP ERP



Favorites



SAP ERP



Transaction Codes



SAP ERP



Transaction SEARCH_SAP_MENU



SAP ERP



Transaction ICON



SAP ERP



User Profile Settings (local)



SAP ERP



User Profile Settings (SAP System)



SAP U i it Alli



SAP ERP



Summary

You are now able to:- Name the window elements

- Navigate in an SAP system

- Apply personal system settings

- Effectively use help



© 2008 SAP AG

Global Bike Inc.

Abstract

This material explains the company on which the introduction

material is based on. It describes its enterprise structure in detail.


Version 1.0


ProductSAP ERP

LevelBeginner

Focus

Global Bike Inc.Integration



SAP ERP



Two Approaches of Learning

Standard Training- Level 1: Introductory

- Level 2: Business processes

- Level 3: Configuration

Business Process Integration Approach- Cross functional

- Understand business processes and their relationship to SAP'sorganizational structure

- Highlight integration/configuration




SAP ERP



Cross-functional integration

Source Unknown




SAP ERP



Process Integration

Sales Order

Entry CheckAvailability

Procurement

Process

PickMaterials

PurchaseRequisition

PurchaseOrder

GoodsReceipt

InvoiceReceipt

Paymentto Vendor

Post GoodsIssueInvoice

Customer

Receipt of Payment

Run MRP




SAP ERP



Process Integration

Sales Order Entry CheckAvailability

Procurement

Process

Pick

Materials

PurchaseRequisition

PurchaseOrder

GoodsReceipt

InvoiceReceipt

Paymentto Vendor

Post GoodsIssueInvoice

Customer

Receipt of Payment

Run MRP




SAP ERP



Process Integration

GoodsIssue

Sales Order Entry

CheckAvailability

ProductionProcess

Run MPSw/MRP

Convert ProductionProposal Schedule

and ReleaseProcurement

Process

PickMaterials

PurchaseRequisition

PurchaseOrder

GoodsReceipt

InvoiceReceipt

Paymentto Vendor

CompletionConfirmation

GoodsReceipt

Quality

Inspection

Order Settlement

Post GoodsIssue

InvoiceCustomer

Receipt of Payment




SAP ERP



Process Integration

GoodsIssue

Sales Order Entry

CheckAvailability

ProductionProcess

Run MPSw/MRP

Convert ProductionProposal Schedule

and ReleaseProcurement

Process

PickMaterials

PurchaseRequisition

PurchaseOrder

GoodsReceipt

InvoiceReceipt

Paymentto Vendor


GoodsReceipt

Quality

Inspection

Order Settlement

Post GoodsIssue

InvoiceCustomer

Receipt of Payment




SAP ERP



Enterprise Structure (Global Bike Inc.)

Plant

Client

Chart of Accounts

CompanyCode

Fiscal Year Variant

Credit ControlArea

PurchasingOrganization

PurchasingGroup

ShippingPoint

SalesOrganization

DistributionChannel

Division

Sales Area

ControllingArea

SL10 SL20




SAP ERP

y





© 2008 SAP AG

Sales and Distribution (SD)


Version 1.0



LevelBeginner

FocusCross-functional integrationSales and Distribution



SAP ERP


Chapter Overview

Sales and Distribution Org. Levels

Sales and Distribution Master Data

Sales Order Process- Order-to-Cash




SAP ERP


Organizational Structure

S&D Structure

Client

Company Code

Sales Area

- Sales Organization- Distribution Channel

- Division

Plant

Shipping Point

Loading Point

Internal Sales Structure

Sales Offices

Sales Groups Salesperson




SAP ERP


Structure for Sales Order Processing

Client 410

Company CodeC100

Plant P100 Plant P101

Sales Area

Sales OrgS100

DistributionChannel (RE)

Division(01)




SAP ERP


Internal Sales Structure

US Sales OfficeS100

Western SalesOffice

Northwest SalesGroup

Southwest SalesGroup

Salesperson 1

Eastern SalesOffice

Northwest SalesGroup

Southwest SalesGroup

Salesperson 2

Salesperson 3

Salesperson 4

Salesperson 5

Salesperson 6 Salesperson 7

Salesperson 8

Salesperson 9




SAP ERP


Structure for Distribution

Client 410

Company CodeC100


Shipping PointExpress Dock

Loading PointLP01

Shipping PointFreight Dock

Shipping PointRail Dock

Loading PointLP02

Loading PointLP03



SAP ERP


Customer Master Data

Customer Master

- Contains all of the informationnecessary for processing orders,deliveries, invoices and customer payment

- Every customer MUST have amaster record

Created by Sales Area- Sales Organization

- Distribution Channel

- Division




SAP ERP


Customer Master Data

The customer master information

is divided into 3 areas:- General Data

- Company Code Data

- Sales Area Data




SAP ERP


Customer Master

Company Code 102Company Code 101

Company Code 100

Client 410

Sales Org. 101

Sales Org. 100

General Information relevant for the entire organization:NameAddressCommunication

Company Code specific information:Acc. Mgmt

PaymentBank

Sales Area specific information:Sales Office

Currency




SAP ERP


Material Master Data

Material Master

- Contains all the information acompany needs to manage abouta material

- It is used by most componentswithin the SAP system

• Sales and Distribution

• Materials Management• Production

• Plant Maintenance

• Accounting/Controlling

• Quality Management

- Material master data is stored in

functional segments called Views




SAP ERP


Material Master Views

Material Master

Basic Data

Sales Data

Controlling Data

Forecasting Data

Purchasing Data

Mat. Plan. Data

Accounting Data

Storage Data

Quality Data




SAP ERP


Material Master

Sales Org 102Sales Org 101

Sales Org 100

Client 410

Storage Location 20Storage Location 10

General Information relevant for the entire organization:NameWeightU/M

Sales specific information: Delivery PlantLoading Grp

Storage Location specific information:Stock Qty




SAP ERP


Customer Material Information Record

Data on a material defined for a

specific customer is stored in aCustomer material info record.

Info Records contain:- Customer-specific material

number - Customer-specific material

description- Customer-specific data on

deliveries and delivery tolerances

You can also maintain default textto appear on sales orders for thatcustomer




SAP ERP


Condition Master (Pricing)

Condition master data includes:

- Prices- Surcharges

- Discounts

- Freights

- Taxes

You can define the conditionmaster to be dependent onvarious data:

- Material specific

- Customer specific

Conditions can be dependent onany document field




SAP ERP


Output

Output is information that is sent

to the customer using variousmedia, such as:

- E-mail

- Mail

- EDI

- Fax

- XML

Output examples:- Quotation

- Confirmation

- Invoice



SAP ERP


Pre-Sales Activities (CRM Light)

Sales Support is a component of SD that assists in the sales,

distribution, and marketing of a companies products and servicesto its customers. It contains the following functionality:- Creating and tracking customer contacts and communications (sales

activity)• Phone call records

• On-site meeting• Letters

• Campaign communication

- Implementing and tracking direct mailing, internet, and trade fair campaigns based on customer attributes

Pre-sales documents need to be managed within the presalesactivities: Inquiries and Quotations. These documents help identifypossible sales related activity and determine sales probability.




SAP ERP


Pre-Sales Activities (CRM Light)

The ultimate goal of all pre-

sales activities is to equip thesales technician with all theinformation necessary tonegotiate and complete thepotential sale.

Information needed:- Past sales activity

- Past communication

- Contact information

- General Company info

- Credit limits and usage

- Current backorders

360º view of your customer




SAP ERP


Inquiry

An inquiry is a customer’s request to a company for information or

quotation in respect to their products or services without obligationto purchase.- How much will it cost

- Material/Service availability

- May contain specific quantities and dates

The inquiry is maintained in the system and a quotation is createdto address questions for the potential customer.




SAP ERP


Quotation

The quotation presents the

customer with a legally bindingoffer to deliver specific productsor a selection of a certain amountof products in a specifiedtimeframe at a pre-defined price.

Quotation

DATE February 25, 2008

123 Any Street Quotation # 20000001Battle Creek, MI 49015 Customer ID

Phone (605) 555-1212 Fax (605) 555-1414

Bill To: Quotation valid until: June 4, 2008Prepared by: S. Tracy

1234 North MainKansas City, MO 64118(123) 555-1212

Comments or special instructions:

Quantity Description Unit Price AMOUNT

10 185.00 1,850.00

(5.00) (50.00)

5 269.00 1,345.00

- -

5.00% (157.25)

TOTAL 2,987.75$

If you have any questions concerning this quotation, contact:Steve Tracy(605) [email protected]

KB-0013-00

Discount

TB-0014-00

Discount

Total Discount

Heartland Bike Company

GBI

THANK YOU FOR YOUR BUSINESS!




SAP ERP


Sales Order

Sales order processing can originate from a variety of documents

and activities- Customer contacts us for order: phone, internet, email

- Existing Contract

- Quotations

The electronic document that is created should contain thefollowing basic information:- Customer Information

- Material/service and quantity

- Pricing (conditions)- Specific delivery dates and quantities

- Shipping information

- Billing Information




SAP ERP


Sales Order

The sales document is made up

of three primary areas:- Header • Data relevant for the entire sales

order: Ex: customer data, totalcost of the order

- Line Item• Information about the specific

product: Ex: material andquantity, cost of an individual line

- Schedule Lines• Uniquely belongs to a Line Item,

contains delivery quantities anddates for partial deliveries




SAP ERP


Sales Order

The sales order contains all of the information needed to process

your customers request, the following information is determined for each sales order:- Delivering Schedule

- Shipping point and route determination

- Availability Check

- Transfer of requirements to MRP- Pricing

- Credit limit check




SAP ERP


Delivery Scheduling

When an order is created the you must enter a requested delivery

date for the order or each line item.

The system will then determine a delivery timeline, this will beused when determining our material availability, or ATP (Availability

to Promise) date.

The system will determine this date using forward and backwardscheduling rules you have defined.




SAP ERP


Backward Scheduling

RequestedDelv. Date

GoodsIssueLoading

MaterialAvailability

Order Date

Transp.Sched.

TransitTime

(2 days)

LoadingTime

(1 day)

Pick & PackTime

(2 days)

Transp.Sched.Time

(1 day)

2nd 3rd 4th 5th 6th1st




SAP ERP


Forward Scheduling

TransitTime

(2 days)

LoadingTime

(1 day)

Transp.Sched.Time

(1 day)

NewDelv.Date

1st 3rd 4th 5th 6th2nd

Pick & PackTime (2 days)

7th

RequestedDelv.Date

GoodsIssueLoading

MaterialAvailability

Order Date

Transp.Sched.




SAP ERP


Shipping & Route Determination

During the creation of the sales order the system must determine

the shipping point from which the material will be shipped and theroute the material will take to get from your warehouse to your customers location.

A shipping point is determined for each line item within the order.

The route determination will is used to define the transit time of thematerial that we used in scheduling.



SAP ERP


Transfer to Planning

The order is transferred to

Material Requirements Planningas an (CIR) Customer Independent Requirement. If adeficit is found the system willpropose a Purchase Req. or Order to fulfill the shortage.




SAP ERP


Pricing

The system displays pricing information for all sales documents on

the pricing screens at both the header and the line item level.- Header pricing is valid for the whole order it is the cumulative of all line

items within the order

- Line item pricing is for each specific material.

The system will automatically search for price, discounts,surcharges, calculate taxes and freight. You have the ability tomanually manipulate the pricing at both the header and line itemlevel within the sales order by entering a condition type andamount.

- Taxes and freight can be set-up so we can’t manually enter




SAP ERP


Credit Check

Allows your company to manage its credit exposure and risk for

each customer by specifying credit limits. During the sales order process the system will alert the sales rep

about the customers credit situation that arises, if necessary thesystem can be configured to block orders and deliveries.




SAP ERP


Shipping & Transportation

The shipping process begins when you create the delivery

document for the sales order. This document controls, supports,and monitors numerous sub-processes for shipping processing:- Picking

- Packing

- Post Goods Issue

Integrated with the Material Management (MM) and Finance (FI)modules




SAP ERP


Shipping

Order Combination

Sales Order 1

Sales Order 2

Sales Order 3

Delivery 8…12

PartialDelivery

Sales Order 4

Delivery 8…13

Delivery 8…14

Delivery 8…15

CompleteDelivery

Sales Order 5

Delivery 8…16




SAP ERP


Delivery Creation

Checks order and materials to determine if a delivery is possible

— delivery block (hold), completeness Confirms availability

Confirms export/foreign trade requirements

Determines total weight & volume

S


D li C ti



SAP ERP


Delivery Creation

Generates packing proposal

Calculates weight and volume

Checks scheduling

Considers partial deliveries

Updates route assignment Assigns picking location

Updates sales order

Determines batches

Quality check (if needed)

Updates sales order

SAP ERP


D li D t



SAP ERP


Delivery Document

The Delivery Document initiates the delivery process and is the

control mechanism for this process- Picking

- Packing

- Loading

- Posting Goods Issue

Changes to delivery are allowable - products, quantities

SAP ERP


Pi ki



SAP ERP


Picking

Quantities based on delivery note

Assigned date when picking should begin

Automated storage location assignment

Supports serial number/lot number tracking and batchmanagement

Integrated with Warehouse Management (WM)



SAP ERP


G d i



SAP ERP


Goods issue

Event that indicates the legal change in ownership of the products

Reduces inventory and enters Cost of Goods Sold

Automatically updates the General Ledger (G/L) accounts

Ends the shipping process and updates the status of the shippingdocuments

SAP ERP


Billing



SAP ERP


Billing

The billing document is created by coping data from the sales

order and/or delivery document.- Order-based billing

- Delivery-based billing

The billing process is used to generate the customer invoice.

It will update the customer’s credit status.

SAP ERP


Billing Documents



SAP ERP


Billing Documents

The billing document will

automatically create a debitposting to your customer sub-ledger account and credityour revenue account.

It is at this point that the sales

process is passed over toFinancial Accounting to awaitpayment.

SAP ERP


Billing Methods



SAP ERP


Billing Methods

CollectiveInvoicing

Delivery basedInvoicing

Delivery 8…34

Delivery 8…33

Order 14

Order 9

Delivery 8…56

Invoice 9…68

Order 6Delivery 8…20

Delivery 8…21

Invoice 9…45

Invoice 9…46

SplitInvoicing

Order 32 Delivery 8…86

Invoice 9…92

Invoice 9…91

SAP ERP


Payment



SAP ERP


Payment

Payment is the final step in the sales order process, this step is

managed by the Financial Accounting department. Final payment includes:

- Posting payments against invoices.

- Reconciling differences between payment and invoice.

Payment will create a posting clearing the liability in the A/Raccount and increases your bank account.

SAP ERP


Document Flow



SAP ERP


Document Flow

The document flow and order

status feature allows you to findthe status of an order at any pointin time. The SAP updates theorder status every time a changeis made to any document createdin the customer order

management cycle(Order-to-Cash).

SAP ERP


Sales Order Process Debugging



SAP ERP



“Never again did I learn so much insuch a short time, because twentyparticipants made mistakes for me!

You cannot make so many mistakesall alone”

SAP Co-founder Klaus Tschira, on his experiences teaching

COBOL to clients at IBM.

SAP ERP





SAP ERP



Document Flow

- Gives Order Process Status

List of Sales Orders (VA05)- Tool to Find Order

- Need student’s user id/data set number

SAP ERP





SAP ERP



SD1SD2SD3

SD4SD5

SD6



SAP ERP


Chapter Overview



SAP ERP

Page 1-100© 2008 SAP AG

Chapter Overview

Organization Structure

Master Data

Procurement Process- Procure-to-Pay Process

SAP ERP


Organizational Structure for Procurement



SAP ERP

Page 1-101© 2008 SAP AG

Organizational Structure for Procurement

Client

- An independent environment in the system

Company Code- Smallest org unit for which you can maintain a legal set of books

Plant

- Operating area or branch within a company• i.e. manufacturing facility or distribution facility

Purchasing Organization- The buying activity for a plant takes place at the purchasing

organization

Purchasing Group- Key that represents the buyer or group of buyers

SAP ERP


Purchasing Specific Structure



SAP ERP

Page 1-102© 2008 SAP AG

Purchasing Specific Structure

Purchasing Organization

- Organization unit responsible for procuring services and materials- Negotiates conditions of the purchase with the vendors

Purchasing Group- Buyer or group of buyers who are responsible for certain purchasing

activities

- Channel of communication for vendors



SAP ERP


Structure for Procurement



SAP ERP

Page 1-104© 2008 SAP AG

Structure for Procurement

Client 410

Company CodeC100


Purchasing OrgP100

Purchasing

Group 100

Purchasing OrgP101

SAP ERP


MM Master Data



SAP ERP

Page 1-105© 2008 SAP AG

MM Master Data

Vendor Master Data


Purchasing Info Record

Output Master Data

Condition Master Data

SAP ERP


Vendor Master Data



SAP ERP

Page 1-106© 2008 SAP AG

Vendor Master

- Contains all the necessaryinformation needed to businesswith an external supplier

- Used and maintained primarily bythe Purchasing and AccountingDepartments

- Every vendor MUST have amaster record

SAP ERP


Vendor Master Views



Page 1-107© 2008 SAP AG

Client Level

- Address- Vendor Number

- Preferred Communication

Company Code Data- Reconciliation Account

- Terms of Payment

- Bank Account

Purchase Org Data- Purchasing Currency

- Salesman’s Name- Vendor Partners

General Data

Company Code DataFinancial Accounting (FI)

Purchasing DataMaterials Mgmt (MM)

SAP ERP


Vendor Master



Page 1-108© 2008 SAP AG

Company Code 102Company Code 101

Company Code 100

Client 410

Purchasing Org. 101Purchasing Org. 100

General Information relevant for the entire organization:NameAddressCommunication

Company Code specific information:Acc. Mgmt

PaymentBank

Purchasing Org. specific information:Incoterms

Currency

SAP ERP





Page 1-109© 2008 SAP AG

Material Master

- Contains all the information acompany needs to manage abouta material

- It is used by most componentswithin the SAP system

• Sales and Distribution

• Materials Management

• Production

• Plant Maintenance

• Accounting/Controlling

• Quality Management

- Material master data is stored infunctional segments called Views

SAP ERP


Material Master Views



Page 1-110© 2008 SAP AG

Material Master

Basic Data

Sales Data

Controlling Data

Forecasting Data

Purchasing Data

Mat. Plan. Data

Accounting Data

Storage Data

Quality Data

SAP ERP


Material Master



Page 1-111© 2008 SAP AG

Plant 102Plant 101

Plant 100

Client 410

Storage Location 20Storage Location 10

General Information relevant for the entire organization:NameWeightU/M

Plant specific information: Purchasing DataWork Sch.

MRP

Storage Location specific information:Stock Qty

Picking

SAP ERP


Purchasing Information Record



Page 1-112© 2008 SAP AG

Framework for Purchase

Order - Contains the relationship

between a vendor and amaterial

Can be created:

- Manually- Automatically – Quotations

- Automatically – Pur Orders

Reporting

- Vendor EvaluationMaterial Master Vendor Master

Purchasing

Information Record

SAP ERP


Purchasing Information Record



Page 1-113© 2008 SAP AG

Allows buyers to quickly

determine:- Which vendors have offered or supplied specific materials

Info Records contain:- Data on pricing and conditions

- Last purchase order

- Tolerance limits for deliveries

- Specific lead times

- Availability periods

- Vendor Evaluation data

Serves as default information for Purchase Orders

SAP ERP


Master Data in Use



Page 1-114© 2008 SAP AG

Purchase

Order

45......01

Material Master Vendor Master

PurchasingInformation Record

SAP ERP


Procurement Process



Page 1-115© 2008 SAP AG

PurchaseRequisition

Paymentto Vendor

NotifyVendor

Vendor ShipmentInvoiceReceipt

GoodsReceipt

PurchaseOrder

Vendor

Selection

SAP ERP


Purchase Requisition



Page 1-116© 2008 SAP AG

Internal Document instructing the purchasing department to

request a specific good or service for a specified time Requisitions can be created two ways:

- Directly - Manually• person creating determines: what, how much, and when

- Indirectly - Automatically

• MRP, Production Orders, Maintenance Orders, Sales Orders

SAP ERP


Requisition Sourcing



Page 1-117© 2008 SAP AG

Once the requisition has been assigned a source of supply it can

be released for processing There are a variety of ways that a purchasing department can

process a requisition to determine the appropriate Source of Supply:- Internal Sourcing Requirements

- Source List- Outlined Agreement

- RFQ

SAP ERP


Internal Sourcing



Page 1-118© 2008 SAP AG

The requisition for materials could be satisfied by sources within

our company.- It is possible that a plant within your firm could represent a potential

source of supply for the material needed (centralized warehouse)

- If an internal source is identified the requirement is covered by aninternal procurement transaction (stock transport order)

SAP ERP


Source List



Page 1-119© 2008 SAP AG

A source list is a record that specifies the allowed means for

procuring a material for a certain plant within a given time period.- If the list contains a sole source the system will assign the vendor to

the requisition.

- If several options exist the system will display a list of vendors for youto choose from.

- If no source has been established the system will revert to searchinformation records and outline agreements.

SAP ERP


Outline Agreement



Page 1-120© 2008 SAP AG

Requisitions can be satisfied through existing longer-term

purchasing agreement These agreements are subdivided into:

- Contracts• Consists of items defining the individual materials, material groups, or

services with prices and in many cases quantities

– Quantity– Value

- Scheduling Agreements• Total quantity of material is spread over a certain period in a delivery

schedule, consisting of line items indicating quantities and their planneddelivery date

SAP ERP


Request for Quotation



Page 1-121© 2008 SAP AG

If nothing exist in the system we may need to submit a request for

quotation to our vendors. An RFQ is an invitation to a vendor by aPurchasing Organization to submit a bid for the supply of materialsor services- The accepted quotations will generate Purchasing Information Records

- Perform Quotation Price Comparisons

- Finally Select a Quotation

Pur Req. generate

RFQ Vendor 1

Vendor 2

Vendor 3

Quote

Quote

Quote

P.O.45…12

RejectLetter

Eval.

SAP ERP


Quotation from Vendor



Page 1-122© 2008 SAP AG

The quotation received by your company is a legally binding offer,

should decide to do business with the vendor, containing price’sand conditions for the materials specified in the RFQ for apredefined period of time.- In SAP the RFQ and the Quotation will be become a single document,

you will enter the vendor’s response in the RFQ you created.

SAP ERP


Vendor Evaluation once Identified



Page 1-123© 2008 SAP AG

Vendor evaluation helps purchasing evaluate vendors for sourcing while

also enabling the company to monitor vendor relationships throughperformance scores and criteria you put in place.- Supports a maximum of 99 main criteria and 20 subcriteria for each main:

• Price– Price Level

– Price History

• Quality– Goods Receipt– Quality Audit

– Complaints/Rejection level

• Delivery– On-time delivery performance

– Quantity reliability

– Compliance with shipping instructions

– Confirmation Date

- You then must establish a scoring range (1 -100) and determine the weightfactors of scores for each.

SAP ERP


Purchase Order



Page 1-124© 2008 SAP AG

A purchase order is a formal request to a vendor for a specific

material or service under the stated conditions Purchase Orders can be created manually

- Reference a Purchase Order

- Reference a Purchase Requisition

- Reference a RFQ/Quotation

- Without Reference

Purchase Orders can be create automatically

SAP ERP


Purchase Order



Page 1-125© 2008 SAP AG

A purchase order can be used for

a variety of purposes, the itemcategory (procurement type)defined in the PO will dictate theuse of the order and the processthat the order will follow:

- Standard

• Stock or Consumption- Services

- Subcontracting

- Third-Party

- Consignment

SAP ERP


Purchase Order Structure



Page 1-126© 2008 SAP AG

Header Vendor DateDoc. Number CurrencyTerms of Payment PO Price

Item Overview

Materials Price/UofMQuantitiesDelivery Date

Line Item

PO History TolerancesLine PriceDelivery Schedule

PurchaseOrder

45......01

SAP ERP


Purchase Order Output



Page 1-127© 2008 SAP AG

Once a Purchase Order has been created the vendor needs to be

notified- Printed

- E-mail

- EDI

- Fax

- XML There are a variety of forms that aid in the purchasing process and

are generated from the Purchase Order - Purchase Order Output

- Order Acknowledgement Forms

- Reminders

- Schedule Agreements

SAP ERP


Goods Receipt



Page 1-128© 2008 SAP AG

Purchase

Order 45......01

Vendor

Notify Vendor

ShipmentGoodsReceipt

SAP ERP


Goods Receipt



Page 1-129© 2008 SAP AG

Goods movement in which we accept goods into our system

If materials are delivered against a Purchase Order we willreference that Order - Determine if we got what we ordered

- System can purpose data for us from the PO• Material, quantity

- Purchase Order History is update with the receipt- Updates Physical Inventory

- Updates Inventory G/L Account

SAP ERP


Material Movements



Page 1-130© 2008 SAP AG

When a goods movement takes place it is represented by a

Movement Type- Movement types are three-digit keys used to represent a movement of goods

• 101 – goods receipt into warehouse

• 103 – goods receipt into GR blocked stock

• 122 – return delivery to vendor

• 231 – consumption for a sales order

• 561 – initial entry of stock

Destinations for Receipt of Goods

- Warehouse – Unrestricted, Quality, Blocked- Quality

- Goods Receipt Blocked Stock

SAP ERP


Effects of a Goods Receipt



Page 1-131© 2008 SAP AG

When a Goods Movement for the receipt of goods takes place a

series of events occur - Material Document is Created

- Accounting Document is Created

- Stock Quantities are Updated

- Stock Values are Updated

- Purchase Order is Updated- Output can be generated (GR slip / pallet label)

SAP ERP


Invoice Processing



Page 1-132© 2008 SAP AG

Incoming Invoices are reference against a Purchase Order to verify

their content, prices, and arithmetic. If discrepancies arise between the purchase order or goods receipt

and the invoice the system with generate a warning or an error - Depending on system configuration the difference could cause the

system to Block the Invoice

Purchase order - Target quantity -

- Target price -

Goods receipt- Actual quantity -

Invoice receipt- Actual price -



SAP ERP


Payment to Vendor



Page 1-134© 2008 SAP AG

Can be done automatically or manually

- Post Outgoing Payment vs. Payment Program

Elements of the Payment Transaction:- Payment Method

- Bank from which they get paid

- Items to be Paid

- Calculate Payment Amount

- Print Payment Medium

Process will create a financial accounting document to record thetransaction



SAP ERP


Vendor Payment



Page 1-137© 2008 SAP AG

Amount owed is paid tovendor and account payable

is reducedBank

Dr Cr

Vendor A/P

$100

Dr Cr

Bank

$100

SAP ERP


FI – MM Integration Point



Page 1-138© 2008 SAP AG

InvoiceReceipt

PaymentProgram

GoodsReceipt

AP

(Vendor)Dr Cr

GR / IR

$100

BankDr Cr

Inventory

$100 $100 $100

Dr Cr Dr Cr

$100 $100

SAP ERP




© 2008 SAP AG

Production Planning & Execution

(PP)


Version 1.0



LevelBeginner

Focus

Cross-functional integrationProduction PlanningProduction Execution

SAP ERP


Production Planning



Page 1-141© 2008 SAP AG

SAP Divides Production into multiple processes

- Production Planning

- Manufacturing Execution• Discrete Manufacturing

• Repetitive Manufacturing

• KANBAN

- Production – Process Industries• Integrated planning tool for batch-orientated process manufacturing

• Design primarily for chemical, pharmaceutical, food and beverage

industries along with batch-oriented electronics

SAP ERP


Structure



Page 1-142© 2008 SAP AG

Client

Company Code

Plants

Storage Locations

Work Center Locations

SAP ERP


PP Master Data



Page 1-143© 2008 SAP AG

Materials

Bill of Materials (BOM)

Routings

Work Centers

Product Groups

SAP ERP


Material Master Record



Page 1-144© 2008 SAP AG

SAP ERP





Page 1-145© 2008 SAP AG

List of components that make up a product or assembly

Frame

Pedal

Break Kit

Front Wheel- Front Rim

- Front Tire

- Front Tube

Rear Wheel

- Rear Rim- Rear Tire

- Rear Tube

- Gear

Saddle- Post

- Seat

- Clip

Handle Bar - Bell

- Clasp

- Handle

SAP ERP





Page 1-146© 2008 SAP AG

Single-Level

Single-Level

Finished Bike

Front WheelFrame

Rear WheelPedal Kit

SaddleBrake Kit

Handle Bars

SAP ERP





Page 1-147© 2008 SAP AG

Single-Level vs. Multi-Level

Single-LevelFinished Bike

FrontWheel

Rear Wheel

Rear Rim

Multi-Level BOM

Frame Pedal BrakeHandleBars

Saddle

Rear Tire

Tube

Gear

FrontRim

FrontTire

Tube

Single-Level

Bell

Clasp

HandleBar

Bell

Clasp

HandleBar

Single-LevelSingle-Level Single-Level

SAP ERP





Page 1-148© 2008 SAP AG

Variant Bill of Material (BOM)

- Several products with a large proportion of identical parts.

Single-Level

Finished Bike

Front WheelGraphite Frame

Rear WheelPedal Kit

SaddleBrake Kit

Handle Bars

Single-Level

Finished Bike

Front WheelTubular Frame

Rear WheelPedal Kit

SaddleBrake Kit

Handle Bars

SAP ERP


BOM – Item Categories



Page 1-149© 2008 SAP AG

Item Category

- Stock Item- Non-stock Item

- Variable Material – Sheet of steel

- Intra Item – Phantom material – process industry

- Class Item – place holder

- Document Item- Text Item

SAP ERP


Routings



Page 1-150© 2008 SAP AG

Routings enable you to plan the production of materials (products).

Routings are used as a template for production orders and runschedules

Routing are also used as a basis for product costing.

Series of sequential steps (operations) that must be carried out to

produce a given product Routings contain:

- What, Where, When, How

SAP ERP


Routings



Page 1-151© 2008 SAP AG

Routing – Operation 10

- Explains the steps involved in this operation BOM – Front Wheel, Rear Wheel and Frame

- Outlines the components that will be consumed in the routing

Work Center – 00WC1

- Identifies were the operations will take place and identifies thebusiness transaction to be carried

SAP ERP


Routings



Page 1-152© 2008 SAP AG

Routing for Finished Bike

Operation

Work Center

Plant

Control Key

Description

Time and Unit of Measure

Activity Type

SAP ERP


Routing and BOM



Page 1-153© 2008 SAP AG

Routing

Material Master – Finished Bike

BOM

Oper. 10

Oper. 20Oper. 30

Front Wheel

Rear Wheel

Frame

Saddle

Handle Bars

Pedals

Component assignment in routing

Time

Op.

10

Op.

20

Op.

30

FrontWheel

Rear Wheel

Frame

HandleBars

Saddle

Products arrive at thebeginning of the operationto which they are assigned

Oper. 40

Oper. 50Pedals

SAP ERP


Work Center



Page 1-154© 2008 SAP AG

A location within a plant where value-added work (operations or activities) areperformed

- Work Centers can represent• People or Groups of People– Johnny Storm, Day Shift 1

• Machines or Groups of Machines– Ink Mixer, Ink Injection Machine

• Assembly Lines– Pen Assembly Line 2

Work center used to define capacities- Labor - Machine- Output- Emissions

Capacities used in- Capacity requirements planning (CRP)

Detailed scheduling

Costing

SAP ERP


Work Center



Page 1-155© 2008 SAP AG

Work centers capture and use the following Resource Related data

- Basic Data• Person Responsible, Location of Work Center

- Scheduling Information• Queues and Move Times (interoperation), Formula Keys

- Costing Data• Cost Center, Activity Types

- Personnel Data• People, Positions, Qualifications

- Capacity Planning• Available Capacity, Formulas, Operating Time

- Default Data• Control Key, Standard Text Key

SAP ERP


Product Group



Page 1-156© 2008 SAP AG

Aggregate planning that group together materials or other product

groups (Product Families) Multi- or Single- Level Product Groups

- The lowest level must always consist of materials

BikesTouringMountain

24 Speed18 Speed 18 Speed 24 Speed

Red 24T Blue 24TRed 24M Blue 24M

SAP ERP


Material Planning



Page 1-157© 2008 SAP AG

SOP provides a method for Sales Planning, Production Planning,Feasibility

Sales, Production, Inventory

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Jan

ua

Februa

Marc

A

pri

M

ay

June

July

Au

gu

Septem

Octob

Novem

b

Dece

mb

Uni

Sales

Production

Inventory

SAP ERP





Page 1-158© 2008 SAP AG

DemandManagement

Forecasting

Sales & OperationsPlanning

SIS CO/PA

MPS

MRP

ManufacturingExecution

Order Settlement

ProcurementProcess

Strategic Planning

Detailed Planning

Manufacturing Execution

SAP ERP





Page 1-159© 2008 SAP AG

Players in the Game

- Strategic Planning• CEO, COO, CIO,CFO, Controller,MarketingDirector

- Detailed Planning

• Line Managers,ProductionScheduler, MRPController,CapacityPlanners

- Execution• Line Workers,Shop Floor Supervisors

DemandManagement

Forecasting

Sales & OperationsPlanning

SIS CO/PA

MPS

MRP


Order Settlement

ProcurementProcess

StrategicPlanning

DetailedPlanning


SAP ERP


Forecasting



Page 1-160© 2008 SAP AG

Forecasting is the foundation

of a reliable SOP Accurate forecasts are

essential in the manufacturingsector

Overstocked & understockedwarehouses result in the samething: a loss in profits.

Forecasts are ALWAYSWRONG

SAP ERP


Forecasting



Page 1-161© 2008 SAP AG

Forecasting Models

- Trend- Seasonal

- Trend and Seasonal

- Constant

Selecting a Model- Automatically

- Manually

SAP ERP


Planning Levels



Page 1-162© 2008 SAP AG

Bikes

55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T

50%

Blue 24T

40%

Red 24M

60%

Blue 24M

Planning atProduct

Group Level

Planning at Material Level

SAP ERP


Sales and Operations Planning (SOP)

I f ti O i i ti



Page 1-163© 2008 SAP AG

Information Origination

- Sales- Marketing

- Manufacturing

- Accounting

- Human Resources

- Purchasing Intra-firm Collaboration

- Institutional CommonSense

SAP ERP


Sales and Operations Planning (SOP)

Fl ibl f ti d



Page 1-164© 2008 SAP AG

Flexible forecasting andplanning tool

Usually consists of threesteps:- Sales Plan

- Production Plan

- Rough Cut Capacity Plan

Planned at an aggregatelevel in time buckets

SAP ERP


Demand Management

Li k b t St t i Pl i (SOP) & D t il d Pl i



Page 1-165© 2008 SAP AG

Link between Strategic Planning (SOP) & Detailed Planning(MPS/MRP)

The results of Demand Mgmt is called the Demand Program, it isgenerated from our independent requirements - PIR and CIR

Bikes

55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T50%

Blue 24T40%

Red 24M60%

Blue 24M

D i s a g g r e g a

t i o n

Product Groups

Material

SAP ERP


Demand Management



Page 1-166© 2008 SAP AG

PlannedIndependent

Requirements

Customer Independent

Requirements

SalesForecast

DemandProgram

MPS / MRP

SAP ERP


Transfer from High Level to Detailed Planning



Page 1-167© 2008 SAP AG

Bikes55%

Touring45%

Mountain

70%

24 Speed30%

18 Speed40%

18 Speed60%

24 Speed

50%

Red 24T50%

Blue 24T40%

Red 24M60%

Blue 24M

DemandPlanningData

Planning atMaterial Level

D i s a g g r e g a t i o n

Planned Independent Requirements

At Material and Plant Level

Transfer

OperativePlanning

Data

Planning atGroup Level



SAP ERP


Planning Strategy for Make-to-Stock

Planning takes place using Independent Requirements



Page 1-169© 2008 SAP AG

Planning takes place using Independent Requirements-

Sales are covered by make-to-stock inventory Strategies

- 10 – Net Requirements Planning

- 11 – Gross Requirements Planning

- 30 – Production by Lot Size

- 40 – Planning with Final Assembly

SAP ERP


Planning Strategy for Make-to-Order

Planning takes place using Customer Orders



Page 1-170© 2008 SAP AG

Planning takes place using Customer Orders-

Sales are covered by make-to-order production Strategies

- 20 – Make to Order Production

- 50 – Planning without Final Assembly

- 60 – Planning with Planning Material

SAP ERP


Master Production Scheduling (MPS)

MPS allows a company to distinguish planning methods between



Page 1-171© 2008 SAP AG

MPS allows a company to distinguish planning methods betweenmaterials that have a strong influence on profit or use criticalresources and those that do not

Bike Set

FG-0010-00 GlovesHelmet

SaddleFrame Etc.Handle Bars

MPS run MPS Items

Non-MPS Items

SAP ERP


Material Requirement Planning (MRP)

In MRP the system calculates the net requirements while



Page 1-172© 2008 SAP AG

In MRP, the system calculates the net requirements whileconsidering available warehouse stock and scheduled receiptsfrom purchasing and production

During MRP, all levels of the bill of material are planned

The output of MRP is a detailed production and/or purchasing plan

Detailed planning level- Primary Functions

- Monitor inventory stocks

- Determine material needs• Quantity

• Timing- Generate purchase or production orders

SAP ERP


Demand-Independent vs. Dependent

Independent Demand Original source of the demand



Page 1-173© 2008 SAP AG

Independent Demand – Original source of the demand.

Dependent Demand – Source of demand resides at another level.

MPSBike Set

Planned Order

MPSFG-0010-00

MRPHelmet

Planned Order Purchase Order

MRPBrake Kit

Purchase Order

Dep Dep

Dep

Indep

S i ngl e-L ev el

Mul t i -L ev el

SAP ERP


Material Requirement Planning (MRP)

MRP is used to ensure the availability of materials based on the



Page 1-174© 2008 SAP AG

MRP is used to ensure the availability of materials based on theneed generated by MPS or the Demand Program- 5 Logical Steps

• Net Requirements Calculation

• Lot Size Calculation

• Procurement Type

• Scheduling

• BOM Explosion

SAP ERP


Net Requirements



Page 1-175© 2008 SAP AG

ProcurementProposal

Firmed Receipts

Firmed Ordersor PurchaseRequisitions

Requirements –Planned Ind. Req.,

ReservationsSales Orders,

Etc.

StockSafety Stock

Shortage

SAP ERP


Lot sizing

Static



Page 1-176© 2008 SAP AG

Static- Based on fixed values in the Material Master

Periodic- Groups net requirements together from multiple periods

Optimum- Calculates the optimum lot size for a several periods of net

requirements

SAP ERP


Procurement Type

External Procurement



Page 1-177© 2008 SAP AG

External Procurement- Purchase Requisition

- Purchase Order

- Schedule Line

Internal Procurement- Planned Order

- Production Order - Process Order

SAP ERP


Multi-Level Scheduling

Requirements



Page 1-178© 2008 SAP AG

Time

Finished Product

Assembly 1

Semi-Finished Good

Raw Material

Component

RequirementsDatePlanned Order

Purchase Requisition

SAP ERP


MRP vs. Consumption-Based

Whether or not a material is planned using MRP or Consumption



Page 1-179© 2008 SAP AG

Whether or not a material is planned using MRP or ConsumptionBased is determined by the MRP Type on the MRP1 screen of theMaterial Master

MRP

VB – Reorder-Point

Consumption Based

VV – Forecast Based

RP – Replenishment

PD – MRP

VSD – Seasonal MRP



SAP ERP


Orders, orders, orders

Planned Order (planning)



Page 1-182© 2008 SAP AG

Planned Order (planning)- A request created in the planning run for a material in the future

(converts to either a production or purchase order)

Production Order (execution)- A request or instruction internally to produce a specific product at a

specific time

Purchase Order (execution)- A request or instruction to a vendor for a material or service at a

specific time

SAP ERP


Manufacturing Execution Process

Capacity



Page 1-183© 2008 SAP AG

Scheduleand Release

Shop Floor

Documents

GoodsReceipt

Order Settlement

GoodsIssue

ProductionProposal(Planning/Other)


Capacity

Planning

SAP ERP


Production Order

Production orders are used to control production operations and



Page 1-184© 2008 SAP AG

p passociated costs- Production Orders define the following

• Material produced

• Quantity

• Location

• Time line

• Work involved• Resources used

• How to costs are settled



SAP ERP


Release

Two release processes



Page 1-187© 2008 SAP AG

p- Header Level

• Entire order and all operations are released for processing, order is given aREL status

- Operation Level• Individual operations within an order are released, not until the last

operation is released does the order obtains a REL status until then it is in a

PREL status Automatic vs. Manual

SAP ERP


Availability Check

Automatic check to determine whether the component, production



Page 1-188© 2008 SAP AG

p presource tools, or capacities in an order are available- Can be automatic or manually executed

- Determines availability on the required date

Generates an availability log- Displays results of the check

- Missing parts list- Reservations that could not be verified

SAP ERP


Schedule & Release

The time between scheduling and releasing an order is used for



Page 1-189© 2008 SAP AG

g gcompany checks and any preparation needed for the processing of the order

Once an order has been released it is ready for execution, we canat this time- Print shop floor documents

- Execute goods movements- Accept confirmations against the order

SAP ERP


Shop Floor Documents

Shop Floor Documents are printed upon release of the Production



Page 1-190© 2008 SAP AG

Order, examples would be:- Operation-based Lists

• Time Tickets, Confirmation Slips

- Component-based Lists• Material Withdrawal Slips, Pull List (consumption list)

- PRT Lists

• Overview of PRT’s used and in which operations

- Multi-Purpose Lists• Operation Control Ticket, Object Overview

SAP ERP


Material Withdrawal

When a production order is created it references a BOM to



Page 1-191© 2008 SAP AG

determine the necessary components to produce the material, itthen places a reservation on each of the components

Upon release of the order (or operation) you can withdraw thereserved materials from inventory- Reservation is updated

- Inventory is updated- Costs are assigned to the order as actual costs

SAP ERP


Confirmations

Confirmations are used to monitor and track the progression of and th h it d ti l



Page 1-192© 2008 SAP AG

order through its production cycle

- Confirmation can be done at the operation or order level

Exact confirmation shortly after completion of an operation isessential for realistic production planning and control

Data that needs confirmation include

- Quantities – yield, scrap, rework- Activity data – setup time, machine time- Dates – setup, processing, teardown started or finished- Personnel data – employee who carried out the operation, number of

employee involved in the operation- Work center

- Goods movements – planned and unplanned- Variance reasons- PRT usage

SAP ERP


Confirmations



Page 1-194© 2008 SAP AG

order into stock- Effects of the Goods Receipt

• Updates stock quantity

• Updates stock value

• Price stored for future valuation changes

• Production order is updated

- Three documents are created• Material document

• Accounting document

• Controlling document

SAP ERP


Order Settlement

Consists of settling the actual costs incurred in the order to one or i t bj t



Page 1-195© 2008 SAP AG

more receiver cost objects

- Receivers could include: a material, a cost center, an internal order, asales order, a project, a network, a fixed asset

Parameters for Order Settlement- Settlement Profile

• Specifics the receivers, distributions rules and method

- Settlement Structure• Determines how the debit cost elements are assigned to the settlement

cost elements

Settlement Rule- Automatically assigned on creation of order, the parameters are used

to define this rule• Has one or more distribution rules assigned to it• Distribution rules defines: cost receiver, settlement share, settlement type

SAP ERP


Order Settlement

Settling a Production Order to Stock



Page 1-196© 2008 SAP AG

- Debt posting is made to the Production Order with the value of thematerial

- Difference between the debt posting and credit posting is posted to aprice difference account

Material Prod. Order Price Diff.

100 2080

**Material Price determine by the quantity produced times the Standard Price in the MaterialMaster.

SAP ERP


Order Settlement

Costs analyzed



Page 1-197© 2008 SAP AG

- Primary• Materials

• External Processing

- Secondary• Production, Material, and Administrative Overhead

• Labor

Cost Analysis Reporting- Calculate and analyze planned costs, target costs, and actual costs of

the production order.

- Calculate and analyze variances



SAP ERP


Order Status



© 2008 SAP AG

Financial Accounting (FI)


Version 1.0



LevelBeginner

FocusCross-functional integration

Financial Accounting

SAP ERP


Goal of FI

Financial accounting is designed to collect the transactional datath t id f d ti f i th t d d tf li f



Page 1-201© 2008 SAP AG

that provides a foundation for preparing the standard portfolio of

reports

In general, these reports are primarily, but not exclusively, directedat external parties

Standard reports include:

- Balance Sheet- Income Statement

- Statement of Cash Flows

SAP ERP


Target Audience

Internal External



Page 1-202© 2008 SAP AG

- Executives

- Senior Management

- Administrative Staff

- Employees

- Legal Authorities

- Banks

- Auditors

- Shareholders

- Insurance

- Taxing Authorities

- Media

- Financial Analysts

SAP ERP


Organizational Objects

These represent the legal and/or organizational views of ant i



Page 1-203© 2008 SAP AG

enterprise

They form a framework that supports the activities of a business inthe manner desired by management

Permit the accurate and organized collection of businessinformation

Support the development and presentation of relevant informationin order to enable and support business decisions

Organizational Objects:- Company Code

- Chart of Accounts

SAP ERP


Company Code

Represents an independent legal accounting unit



Page 1-204© 2008 SAP AG

Balanced set of books, as required by law, are prepared at thislevel

A client may have more than one company code- United States

- United Kingdom

- South America- Canada

- GermanyLiabilities &

Owners Equity Assets



SAP ERP


General Ledger (G/L) Accounts

The unique combination of Company Code and Chart of Accountcreates a data storage area called a General Ledger



Page 1-206© 2008 SAP AG

creates a data storage area called a General Ledger

The General Ledger contains a listing of the transactions effectingeach account in the Chart of Accounts and the respective accountbalance

It is utilized in the preparation of financial accounting statements

SAP ERP


Posting a G/L Entry



Page 1-208© 2008 SAP AG

Account number 100100 Bank AccountCompany code 00A1

Period Debit Credit DC bal. BalanceC/f bal. 750,000.00Period 1 5,250.00 3,540.00 1,710.00 751,710.00Period 2 25,000.00 15,000.00 10,000.00 761,710.00

SAP ERP


Balance Sheet

Presentation of an organization’s Assets, Liabilities, and Equity ata point in time



Page 1-209© 2008 SAP AG

a point in time

Assets: What the company owns

Liabilities: What the company owes

Equity: The difference between Assets and Liabilities

Assets = Liabilities + Equity

SAP ERP


Balance Sheet – Sample

Assets Liabilities



Page 1-210© 2008 SAP AG

Assets

Cash 1,000Accounts Receivable 3,000Equipment 500

Total Assets 4,500

Liabilities

Accounts Payable 750Taxes Payable 250

Total Liabilities 1,250

EquityCommon Stock 2,000

Retained Earnings 250Total Equity 2,250

Total Liabilitiesand Equity 4,500

SAP ERP


Income Statement

Presentation of an organization’s Revenues and Expenses for agiven period of time (e g monthly quarterly or yearly)



Page 1-211© 2008 SAP AG

given period of time (e.g., monthly, quarterly, or yearly)

Revenues, in a simple sense, are inflows of cash as a result of selling activities or the disposal of company assets

Expenses, in a simple sense, are outflows of cash or the creationof liabilities to support company operations

Revenues - Expenses = Net Income



SAP ERP


Statement of Cash Flows

Considers the associated changes, both inflows and outflows, that haveoccurred in cash – arguably the most important of all assets – over a given



Page 1-213© 2008 SAP AG

g y p g

period of time (e.g., monthly, quarterly, or annually)

SAP ERP


Customer and Vendor Accounts

Customer and Vendor account balances are maintained in FI through fullyintegrated accounts receivable and accounts payable sub-modules



Page 1-214© 2008 SAP AG

g p y

Financial postings for Customers and Vendors are made directly to their respective individual accounts and accompanied by a concurrent automaticposting to the General Ledger

SAP ERP


Customer Accounts

Accounts Receivable Sub-Module- Information with respect to Customers who purchase the enterprise’s goods and



Page 1-215© 2008 SAP AG

Information with respect to Customers who purchase the enterprise s goods and

services such as sales and payments made- Substantive and important integration between Sales and Distribution (SD) and

FI

- Billings in SD generate FI journal entries for sales activity

Accounts Receivable(General Ledger)

950

300

Customer 142

150

Customer 123

400

Customer 135

100

Customer 189



SAP ERP


Accountants and Audit Trails

Audit trails allow an auditor to begin with an account balance on a financialstatement and trace through the accounting records to the transactions



Page 1-217© 2008 SAP AG

g g

that support the account balance Audit trails enable an auditor to trace individual transactions to the effected

account balance(s) on a financial statement

SAP ERP


SAP Document Principle

Each business transaction impacting FI writes data to the SAP databasecreating a uniquely numbered electronic document



Page 1-218© 2008 SAP AG

The document number can be used to recall the transaction at a later date

It contains, for example, such critical and necessary information as:- Responsible person

- Date and time of the transaction

- Commercial content

Once written to the SAP database, a financial document (one impacting thefinancial position of the company) can not be deleted from the database

It can be changed to some degree

The SAP document principle provides a solid and important framework for

a strong internal control system – a requirement of law for companies thatoperate in the United States

SAP ERP


SAP Document Principle



Page 1-219© 2008 SAP AG

Period 1Doc. no. DT Doc.date Currency Amount1500000013 KZ 01/05/04 USD 1,800.00 -1500000014 KZ 01/06/04 USD 990.00 -

100000012 SA 01/08/04 USD 750.00 -1400000342 DZ 01/14/04 USD 5,250.00 -

SAP ERP


SAP FI Module

Fully integrated with other SAP modules including, but not limited to:- Sales and Distribution (SD)



Page 1-220© 2008 SAP AG

( )

- Materials Management (MM)- Production Planning and Execution (PP)

- Managerial Accounting (CO)

SAP ERP


Summary

Purpose

SAP FI Organizational Objects



Page 1-221© 2008 SAP AG

SAP FI Organizational Objects

Financial Statements

Customer/Vendor Accounts

Audit Trails

Document Principle Integration



SAP ERP




© 2008 SAP AG

Controlling (CO)


Version 1.0



LevelBeginner

FocusCross-functional integration

Controlling

SAP ERP


Goal of CO

Managerial accounting – termed controlling – is designed to collectthe transactional data that provides a foundation for preparing



Page 1-225© 2008 SAP AG

internal reports that support decision-making within the enterprise These reports are exclusively for use within the enterprise and

include:- Cost center performance

- Profit center performance

- Budgets analyses

SAP ERP


Target Audience

Executives



Page 1-226© 2008 SAP AG

Senior Management Department Managers

Controllers

Cost Accountants

SAP ERP


Organizational Objects

These represent the legal and/or organizational views of anenterprise



Page 1-227© 2008 SAP AG

They form a framework that supports the activities of a business inthe manner desired by management

Permit the accurate and organized collection of businessinformation

Support the development and presentation of relevant informationin order to enable and support business decisions

Organizational Objects:- Company Code - Cost Center

- Chart of Accounts - Internal Order - Controlling Area - Profit Center

SAP ERP


Company Code

Represents an independent legal accounting unit



Page 1-228© 2008 SAP AG

Balanced set of books, as required by law, are prepared at thislevel

A client may have more than one company code- United States

- United Kingdom

- South America- Canada

- GermanyLiabilities &

Owners Equity Assets

SAP ERP


Chart of Accounts & Controlling Area

Chart of Accounts- A complete listing of the accounts that exist in the General Ledger for



Page 1-229© 2008 SAP AG

a company- Since a given enterprise (e.g., General Motors) can consist of several

separate legal entities (e.g., Cadillac, Chevrolet), separate companycodes can be created for each entity while each uses the same chartof accounts so that consolidated statements can be prepared.

Controlling Area- A self-contained, organizational element for which the management of

revenues and expenses can be performed

- A controlling area may include one or more company codes; therefore,an enterprise can perform management accounting analyses and

reports across several companies- A way to identify and track where revenues and costs are incurred for

evaluation purposes

SAP ERP


Profit Center & Cost Center

Profit Center - Responsible for revenue generation and cost containment



Page 1-230© 2008 SAP AG

- Evaluated on profit or return on investment- Enterprises are commonly divided into profit centers based on

• Region• Function• Product

Cost Center - Responsible for cost containment, not responsible for revenuegeneration

• One or more value-added activities are performed within each cost center • Unit that is distinguished, for example, by area of responsibility, location, or

type of activity

• Copy center • Security department• Maintenance department

SAP ERP


Internal Order

Temporary cost center responsible for cost containment, notresponsible for revenue generation



Page 1-231© 2008 SAP AG

It is used to plan, collect, and monitor the costs associated with adistinct short-term event, activity, or project- Company picnic

- Trade show

-Recruiting campaign

SAP ERP


Revenue Elements

A one-to-one linkage (mapping) between General Ledger revenueaccounts and CO revenue elements is established to permit the



Page 1-232© 2008 SAP AG

transfer of FI revenue information to CO Posting in FI that impact revenue accounts lead to an posting in

CO to a revenue element

In other words, revenue account = revenue element – just different

words depending on whether FI object or CO object

SAP ERP


Cost Elements

A one-to-one linkage (mapping) between General Ledger expenseaccounts and CO cost elements is established to permit the transfer of FI



Page 1-233© 2008 SAP AG

expense information to CO Postings in FI that impact cost accounts lead to an posting in CO to a cost

element

In other words, expense account = cost element – just different wordsdepending on whether FI object or CO object

Primary Cost Element- Originate in the General Ledger within FI and are automatically transferred to

CO when an FI transaction is recorded in the General Ledger

Secondary Cost Element- Used exclusively in CO for allocations and settlements between and amongstcost centers

SAP ERP


Primary and Secondary Cost Elements

FinancialManagerial



Page 1-234© 2008 SAP AG

Accounting(FI)

General Ledger Accounts

RevenueAccounts

BalanceSheet

IncomeStatement

Expense

Accounts

Accounting(CO)

Aggregate Cost Elements

Primary Cost

Elements

Secondary Cost

Elements

SAP ERP


Posting Primary Cost Element




Page 1-235© 2008 SAP AG

Primary Cost

Element

Debit Credit

1,500

Cost

Center A

Debit Credit

1,500

Supplies Expense Cash

Managerial Accounting (CO)

SAP ERP


Posting Primary Cost Element




Page 1-236© 2008 SAP AG

(FI) TransactionDocument

AmountG/L Account #Cost Center

1900012432

(CO) TransactionDocument

Cost Center Cost Element

20000657

1,5001,500

CashDebit Credit

Supplies ExpenseDebit Credit

Cost Center

1,500

Managerial Accounting (CO)



SAP ERP


Statistical Key Figures

Provide the foundation for accurate and effective cost allocationsbetween cost objects



Page 1-238© 2008 SAP AG

Utilized to support internal cost allocations involving allocations,assessments, and distributions

Examples: number of employees, square footage, minutes of computer usage

CopyCenter Activity

(20 Hours)

10 Hours

6 Hours

4 Hours

Executive Offices

MaintenanceDepartment

Information ServicesDepartment

SAP ERP


Posting Secondary Cost Element

Rent Expense

Executive Offices



Page 1-239© 2008 SAP AG

Debit Credit

1,500

Debit Credit

2,500

Supplies Expense

Debit Credit

2,000

Labor Expense

1,5002,500

2,000

1,800

3,000

1,200

P r i m a r y C o s t E l e m e n t

Primary Cost Elem

ent

Primary

Cost El

emen

t

Sec. Cos

t Elemen

t

Sec. Cost Element

S e c . C o s t E l e m e n t

CopyCenter

Information Services

MaintenanceDepartment

SAP ERP


Types of Allocation

Distributions – primary cost elements

Assessments – combination of primary and/or secondary cost elements



Page 1-240© 2008 SAP AG

Distribution- Method for periodically allocating primary cost elements- Primary cost elements maintain their identities in both the sending and receiving

objects

- Sender and receiver cost centers are fully documented in a unique Controlling(CO) document

Assessment- A method of allocating both primary and secondary cost elements- Primary and/or secondary cost elements are grouped together and transferred

to receiver cost centers through use of a secondary cost element- Sender and receiver cost centers are fully documented in a unique Controlling

(CO) document

SAP ERP


Distributions

Receivingcost centers



Page 1-241© 2008 SAP AG

A010 – 600

sq ft

A005 – 400

sq ftD010 – 550

sq ft

D005 – 900sq ft

S010 – 100

sq ft

S005 – 200

sq ft

A020 – 100

sq ft

A015 – 150

sq ft

Sendingcost center Primary costelementmaintains its

identity

A010 – AdministrationRent Expense

$1,500Distribution

SAP ERP


Distributions

Receivingcost centers



Page 1-242© 2008 SAP AG

A015

$75A020

$50S005 –

$100S010 – $50

A010 –$300

D005 –

$450

D010 –

$275

A005 –

$200

A010 – AdministrationRent Expense

$1,500Distribution

Sendingcost center

Primary costelement

maintains itsidentity

SAP ERP


Assessments

Receivingcost center



Page 1-243© 2008 SAP AG

A020 – 0%

A005 – 15%

A010 – 5%

A015 – 10%

S005 – 30%S010 – 10%

D005 – 20%

D010 – 10%

A020 – ITSoftware Expense

$4,200

A020 – ITSupplies Expense

$500

Assessment

Sendingcost center Primary and

secondarycost elements

SAP ERP


Assessments

Receiving



Page 1-244© 2008 SAP AG

S010 – $470

D010 – $470A005 – $705

A010 – $235

A015 – $470

A020 –$0

S005 – $1,410

D005 – $940

A020 – ITSoftware Expense

$4,200

A020 – ITSupplies Expense

$500

Sendingcost center Primary andsecondary

cost elements

cost center

Assessment

SAP ERP


SAP CO Module

Fully integrated with other SAP modules including, but not limited to:- Financial Accounting (FI)



Page 1-245© 2008 SAP AG

- Materials Management (MM)- Sales and Distribution (SD)

- Production Planning and Execution (PP)

SAP ERP


Summary

Purpose

SAP CO Organizational Objects



The End