Functions in Detail

SAP BEST PRACTICES FOR FAST MOVING CONSUMER GOODS

BEST PRACTICES FOR MANAGING FAST-MOVING CONSUMER GOODS, MADE EASY BY SAP SOLUTIONS DESIGNED FOR BUSINESSES OF ALL SIZES

SAP Best Practices for Fast-Moving Consumer Goods (FMCG) supports midsize enterprises that require rapid implementation and large companies that want to create a corporate template for their subsidiaries. Whether you are a new or existing SAP customer, using SAP Best Practices for FMCG gets your solutions up and running quickly. SAP Best Practices for FMCG describes exactly how best to implement various key business processes in your system including how to set up and configure your SAP software. These SAP best practices are delivered to you as an unrivalled combination of detailed business documentation that describes first-in-class business practices and a complete set of technical tools and information to help you implement the business processes. The SAP best practices are described below.
HIGHLIGHTS BEST PRACTICES IN THE BEVERAGE AND MEAT PROCESSING INDUSTRIES

Direct Store Delivery of Beverages with Empties Management The SAP best practice for distributing beverage products directly to the end customer shows how to make beverage goods available to stores and customers quickly, manage empties returned from customers, and directly influence end customers such as bars and restaurants. The best-practice information also helps beverage producers or distributors optimize process settlement in sales and distribution and reduce logistics costs by optimally planning visits to stores.

Empties Processing The SAP best practice for empties processing focuses on the use of empties-specific functionality when processing customer orders and working with inventory management. Empties data is printed on delivery notes and on billing documents, enabling producers and distributors to learn about their complete empties stocks and empties balances with each customer at the touch of a button. Empties-specific reports also make an empties inventory easy to manage. Extended Rebate Processing The SAP best practice for extended rebate processing in the beverage industry focuses on wholesalers adherence to contractual obligations and beverage producers determination of the success of a new product or a new display, regional differences, and so on. The determination requires information on the actual sales quantities and sales values realized by different sales outlets. Beverage producers commit the wholesalers they supply to report the sales that the wholesalers have achieved broken down by materials. Excise Tax Calculation The SAP best practice for excise tax calculation focuses on tracking all goods movements of alcoholic beverages. It assists producers and wholesalers that deal with alcoholic beverages and manage excise taxes by helping them fulfill their legal obligation to declare the amount of alcoholic beverages they sell and scrap in every period. The tax return is the primary document supported by the excise tax calculation. Extended Rebate Processing for Customers The SAP best practice for extended rebate processing for customers focuses on direct sales with a customer. The sales are saved as billing documents. A direct rebate agreement based upon direct sales is created and a rebate is paid to the customer at the end of the agreed period, after the sales quantity agreed upon in the rebate agreement has been reached.

Indirect Sales Without CRM Similar to the best practice for extended rebate processing with pendulum list in the beverage industry, this SAP best practice focuses on the use of sales data to determine the success of a new product or a new display, regional differences, and so on. To acquire this information, a manufacturer or distributor requires its wholesalers to report their sales by material. Using information on the actual sales quantities and sales values reached by various sales outlets, a company can prepare business analyses. Direct Store Delivery of Fresh-Daily Products This SAP best practice is similar to the one for direct store delivery of beverages, but focuses on distributing fresh-daily products, such as ground meat, directly to the end customer. The best-practice information shows how to make fresh-daily goods available to stores and customers quickly. The best-practice information also helps producers or distributors optimize process settlement in sales and distribution and reduce logistics costs by optimally planning visits to stores. Livestock Procurement and Meat Production This SAP best practice focuses on the procurement of livestock and the subsequent production and sale of finished meat products. Especially important is the flexible pricing procedure used to determine the actual value of the delivered livestock and the segmentation of the meat before production. A costobject controlling method can be used to assign the costs of production to the goods produced. Although the best-practice information focuses on meat, this SAP best practice can also be used in the fish and dairy industries. Meat Trading The SAP best practice for trading meat products assists wholesalers who receive and resell meat products. The best-practice methods focus in particular on batch management.

KEY SAP BEST PRACTICES FOR FMCG

In addition to the specialized best practices for beverage and meat processing, SAP provides best practice methods, documentation, and configuration support for the following core business processes involved in managing fast-moving consumer goods. Enterprise Management: Product Cost Planning, Sales Planning, and Overhead Cost Management SAP best practices for enterprise management help companies perform processes ranging from multilevel demand planning to cost center planning, and from product costing to sales and profit planning. The best-practice information is compatible with various other SAP best practices for materials management, production planning and production, and sales processing. Procurement of Stock Material The SAP best practice for procurement of stock material begins with a request for quotation (RFQ) mailed to vendors to inquire about their prices. A price comparison references the completed RFQs and determines the best offer for a product. A contract follows. At this point, a purchase requisition and a purchase order that references the requisition are created. The process continues with goods receipt; batch numbers are then created automatically. Before the goods can be placed into unrestricted stock, a quality inspection must be performed. A usage decision posts the goods into unrestricted or restricted stock. The SAP best practice for procurement of stock material supports quotation handling, procurement contracts, automatic batch management, and quality inspection in purchasing. Internal Procurement: Stock Transfer with or Without Delivery and Cross-Company Stock Transfer SAP supports three best-practice methods of internal procurement. The first is cross-plant, internal procurement of materials for a single company code. This process uses standard functions, such as material requirements planning, purchase requisitions, stock transport orders, transportation planning, and handling

of internal deliveries. The second simplifies the process and omits the delivery documents. The third allows stock transfers among several company codes. Production Planning and Discrete Manufacturing The SAP best practice for production planning and discrete manufacturing describes business processes typical of companies with lot-size-oriented production, such as in the food industry. Automatic batch determination based upon expiration date is performed during production order processing. The SAP best practice supports goods movement (goods issues and goods receipts) and completion confirmation for the production order. The best-practice descriptions also include the primary required functions for cost-object controlling, such as preliminary costing, simultaneous costing, and period-end closing. Production Planning and Process Manufacturing The SAP best practice for production planning and process manufacturing describes methods for process-oriented (regulated) production, such as that found within the food industry and in production by lot size. Automatic batch determination based upon expiration date is performed during production order processing. The best practices also describe in-process and postprocess quality management. The bestpractice descriptions also include the primary required functions for cost-object controlling, such as preliminary costing, simultaneous costing, and period-end closing. Production Planning and Repetitive Manufacturing The SAP best practice for production planning and repetitive manufacturing supports non-lot-based production, in which the order does not store the quantities of the end products and their corresponding costs. Instead, a product cost collector, to which all costs are posted, is used only as a controlling object. After production, the system posts the goods receipt of the finished material (assembly) and backf lushes the components. The costs are posted to the cost collector, and material and accounting documents are created automatically. Automatic

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batch determination based upon expiration date is also performed. The best-practice descriptions also include the primary required functions for cost-object controlling, such as preliminary costing, simultaneous costing, and period-end closing. Sales Order Processing The SAP best practice for sales order processing describes the entire process chain for a standard sales process with a customer. The business process encompasses all steps from creating an order to the billing procedure, including extensive pricing facilities, material substitution, free good items, availability check, batch determination, and invoice lists. Sales Order Processing via EDI The SAP best practice for sales order processing via electronic data interchange (EDI) encompasses a business document exchange between business partners via EDI, which is typical for order processing. The inbound sales order uses the EDI file (PO) from a supplier to create a sales order automatically via EDI. When a billing document referring to the sales order is created, an outbound EDI file (invoice) is generated automatically. Consignment Processing The SAP best practice for consignment processing describes the process in which the products shipped to the customer are still owned by the company until the customer sells them to a third party. The best-practice descriptions cover the following steps: consignment fill-up, consignment issue, and consignment pickup. Foreign Trade The SAP best-practice descriptions for foreign trade provide two examples of foreign trade. The first includes the steps required for the export of finished materials and trading goods. The second includes the import of raw materials and

trading goods. To support foreign-trade processing, SAP provides a software cockpit that helps companies through the steps involved in reporting their exports and imports to the appropriate authorities. Returns and Complaints The SAP best practice for returns and complaints supports all the activities necessary for reclamation processing. The complaints process focuses on processing credit memos if goods are not returned. During returns processing, goods are returned and a quality evaluation is performed. Returnables Processing The SAP best practice for processing returnable goods comprises all activities necessary for the shipment of goods with standard packaging-material pallets. This process can be considered an alternative to handling-unit management. Batch Recall The SAP best practice for batch recall describes all steps required to recall a defective batch already delivered to a customer. A sales activity is created to record the recall. If a batch does not fulfill the customers quality demands or if a defect is discovered, a notification letter is sent to all customers who have received the batch. An automatic follow-up activity is created to handle the returns of the defective batch. During follow-up, a return can be created and processed. The SAP best practice for batch recall uses the functionality of the sales support component to trigger batch-specific returns processing. A report determines the customer addresses of those affected. Cross-Company Sales Order Processing This SAP best practice supports the processing of sales orders across company codes. If a customer places an order that the vendor cannot fill, the vendor sends the goods to the customer from a plant that belongs to another company code.

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