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How do translate business processes into required SAP ECC functionality?
5th February 2013
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Grouping SAP modules versus grouping SAP processes
In the early days SAP functionality was grouped into modules which could be implemented separately.
The most important module was and still is Finance (FI) as you need it to set up a company before you can use any functionality
offered by the system. The main objective of the FI module is to allow the company to perform tasks linked to external financial
reporting. When there is a need for internal reporting, then the Controlling module (CO) needs to be added. In essence FI and CO must
be seen as the core of any SAP system.
SAP is an Enterprise Resource Planning system, offering the opportunity to integrate all data collected by all departments by using one
single database. This has many benefits as there is no duplicated data in several independent systems that need attention.
Also linking the entire business into one pool of data trigger synergy. It makes reporting easier and more reliable. Also it makes it more
effective to trace the information, goods and money flows throughout the company. In addition, you can link your customers and
vendors to the system and take advantage of the efficiency when dealing with external partners.
Additional modules were introduced, such as Sales and Distribution (SD), Materials Management (MM) and Production Planning and
Control (PP). Each module have specific subsets of functionality like sales (SD-SLS), billing (SD-BIL), consumption based planning
(MM-CBP), purchasing (MM-PUR) and inventory management (MM-IM).
Throughout the years it became rare that a company would only purchase individual modules. Therefore SAP changed its vision to walk
away from the modular approach and instead focus on integration. Now all the modules mentioned earlier are part of the SAP ECC
Central Component and offered as one single product. This also resulted in an integrated approach regarding development of new
functionality. Terms like Logistics Execution were introduced which focuses on inbound and outbound goods flow, directly linked with
business processes shared with the traditional SD and MM modules.
Still SAP customers are referring to the traditional modules as it provides a quick and high level conceptual idea of the skill set required
when in need of external consult. But it is important to understand that in future it will become more difficult to keep this simplified
approach towards labeling the SAP functionality available. Therefore it would make more sense to focus on grouping processes (such as
Order to Cash, Procure to Pay, Register to Report) used within a specific industry (such as Oil, Retail, Pharmaceutical, Food and
Chemical industries).
SAP ECC functionality in scope for No Tie Generation prototype
When demonstrating a very basic Supply Chain Management prototype, the following decisions were made:
No forecasting
Manufacturing is outsourced
Storage and transportation is outsourced
So in terms of the traditional SAP modules, the focus will be on the integration between the traditional modules SD and MM.
Here a list of grouped sets of functionality that will be part of the basic Supply Chain Management demonstration for the model
company called No Tie Generation:
Consumption based planning (MM-CBP)
Purchasing (MM-PUR)
Inventory management (MM-IM)
Invoice verification (MM-IV)
Sales (SD-SLS)
Customer billing (SD-BIL)
Inbound and outbound shipments (LE-SHP)
Regarding purchasing, both regular purchase orders as subcontracting purchase orders are taken into account. With regard to the
subcontracting, these purchase order created within the MM module can trigger outbound shipments which are commonly associated
with SD module related transactions. This is a perfect example why Logistics Execution cannot be solely associated to either SD or
MM.
Also it is inevitable that there is integration with FI, but that is kept to a bare minimum to allow financial postings triggered by goods
movements, customer payments and vendor payments.
Tags: Sandbox Tycoon SAP SAP ECC SCM Supply Chain Management
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