Enterprise Resource Planning (ERP) systems integrate internal and external management of information across an entire

organization—embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc.
ERP systems automate this activity with an integrated software application. ERP facilitates information flow between all
business functions inside the organization, and manages connections to outside stakeholders.

History:-

 Origin of "ERP": In 1990 Gartner Group first employed the acronym ERP as an extension of material
requirements planning (MRP), later manufacturing resource planning and computer-integrated manufacturing.
Without supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application
integration beyond manufacturing. Not all ERP packages were developed from a manufacturing core. Vendors
variously began with accounting, maintenance, and human resources. By the mid–1990s ERP systems addressed
all core functions of an enterprise.

 Expansion: ERP systems experienced rapid growth in the 1990s because of the year 2000 problem and
introduction of the euro disrupted legacy systems. Many companies took this opportunity to replace such systems
with ERP.
 ERP systems initially focused on automating back office functions that did not
directly affect customers and the general public.

"ERP II" was coined in the early 2000s.It describes web–based software that provides employees and partners
(such as suppliers and customers) with real–time access to ERP systems. The ERP II role expands traditional
ERP's 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.

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.

It involves following steps:

Process preparation

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.
It is therefore crucial that organizations thoroughly analyze business processes before implementation. This 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 the 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

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 operation.
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 configuration options that let organizations incorporate their own business rules, but
often feature gaps remain even after configuration is complete. To meet the demands of the customers customisation has to
be done.
 Customization is always optional, whereas the software must always be configured before use.
 The software is designed to handle various configurations, and behaves predictably in any allowed configuration.

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. The following steps can structure
migration planning:
 Identify data to migrate
 Determine migration timing
 Generate data templates
 Freeze the toolset
 Decide on migration-related setup.

Advantages:-

The fundamental advantages of ERP include:

 Provides an integrated system that operates in real time.

 Provides a common database which supports all applications.
 Faster decision making with fewer errors.
 Sales forecasting, which allows inventory optimization
 Data becomes visible across the organisation.

Types of ERP Softwares:-

 SAP R/3: It is software from SAP. Here R stands for “real time data processing” and 3 represents the 3-layered
architecture (database, application, presentation).

 SAP B1 (business one): It is also a software from SAP .It is made for SME (small and medium enterprise)
segment to fulfil their requirement at lower cost.

 LN/BAAN: It is software from Infor Global and provides support for order-driven, project-based discrete
manufacturing.

 JD Edward Enterprise One: An integrated application suite of enterprise resource planning software from
Oracle.
  Oracle PeopleSoft Enterprise: These applications are designed for more complex business requirements. It
provides business and industry solutions.

System Application and Product in data processing (SAP):

SAP AG is a German multinational software corporation that makes enterprise software to manage business operations and
customer relations. Headquartered in Walldorf, Germany with regional offices around the world, SAP is the leader in the
market of enterprise applications in terms of software and software-related service.

The company's best-known software products are its enterprise resource planning application systems and management
(SAP ERP), its enterprise data warehouse product – SAP Business Warehouse (SAP BW), SAP Business Objects software,
and most recently, Sybase mobile products and in-memory computing appliance SAP HANA. SAP is one of the largest
software companies in the world.

History:-

Foundation:

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 in this
software, only to be told that it would be no longer necessary. Rather than abandon the project, they decided to leave IBM
and start another company.

In June 1972 they founded Systemanalyse und Programmentwicklung ("System Analysis and Program Development") as
a private partnership under the German Civil Code. The acronym was later changed to stand for Systeme, Anwendungen
und Produkte in der Datenverarbeitung ("Systems, Applications and Products in Data Processing").

The SAP ERP:

In 1973, their first commercial product was launched. The SAP R/1, as it was called, offered a common system for
multiple tasks. This permitted the use of centralized data storage, improving the maintenance of the data.

In 1976, "SAP GmbH" was founded, and moved its headquarters the following year to Walldorf. SAP AG became the
company's official name after the 2005 annual general meeting. AG is short for Aktiengesellschaft (corporation).

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 developed and released several versions of SAP R/3 in 1992 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 NetWeaver:-

SAP NetWeaver is SAP's integrated technology computing platform and is the technical foundation for many SAP
applications since the SAP Business Suite. SAP NetWeaver is marketed as a service-oriented application and integration
platform. SAP NetWeaver provides the development and runtime environment for SAP applications and can be used for
custom development and integration with other applications and systems. SAP NetWeaver is built using primarily the
ABAP programming language, but also uses C (programming language), C++, and Java EE.

Products:-

SAP's products focus on Enterprise Resource Planning (ERP). The company's main product is SAP ERP. The current
version is SAP ERP 6.0 and is part of the SAP Business Suite. Its previous name was R/3. The "R" of SAP R/3 stood for
real-time. The number 3 related to the 3-tier architecture: database, application server and presentation/client (SAP gui).

The 3-Tier Architecture of SAP

Overview of these layers is given below:

 Database Layer: The database layer consists of the database system - the database and DBMS (Data Base
Management System). It stores the data – business data, system tables, and SAP programs – all conceivable data
which may be present in an SAP system.

 Application Layer: Application layer is where SAP software runs. It consists of at least one application server
(one computer system) which offers the services to users. It aims to meet the increased business needs.

 Presentation Layer: This is the software component for graphic user interface. It is called SAP gui and is the
interface between an SAP system and the user. It gets the user input, sends it to application server for processing
receives data, formats and output it.

SAP Business Suites:

SAP ERP is one of five enterprise applications in SAP's Business Suite. The other four applications are:

 Customer Relationship Management (CRM) – helps companies acquire and retain customers, gain marketing
and customer insight
 Product Lifecycle Management(PLM) – helps manufacturers with product-related information
 Supply Chain Management(SCM) – helps companies with the process of resourcing its manufacturing and
service processes
 Supplier Relationship Management (SRM) – enables companies to procure from suppliers.
Advantages of using SAP:-

SAP is an integrated software system which has various advantages. Some of them are:

 It incorporates all the functions (modules) of a business into one system by solving data sharing problem between
departments in real time.
 SAP combines all business processes and makes them a complete functional chain.
 Management of a group of companies using a single system.
 Improved customer service.
 SAP helps to reduce the costs of goods manufacturing through integration of the production.
 SAP offers the possibility of reducing the costs of procurement and cooperation with the suppliers and
increasing the effectiveness of inventory management in the company.
 Enhanced security of the company’s IT systems, optimized internal processes of the company.
SAP Logon Screen:
 SAP ERP Modules:

SAP's ERP solution includes several modules that support key functional areas some of them are:

SAP ERP Financials

SAP ERP provides a comprehensive financial management solution for the most complex businesses across a broad range
of industries. SAP ERP financials include:
 Financial Accounting (FI) module: FI collects all the data in company relevant to accounting, providing complete

documentation and comprehensive information, and is at the same an up-to-the-minute basis for enterprise-wide control

and planning.

 Controlling (CO) module: CO is a complete array of compatible planning and control instruments for company-wide

controlling systems, with a uniform reporting system for coordinating the contents and procedures of company's internal

processes.
 Investment Management (IM) module: IM offers integrated management and processing of investment measures and

projects from planning to settlement, including pre-investment analysis and depreciation simulation.

 Treasury (TR) module: TR is a complete solution for efficient financial management that ensures the liquidity of

worldwide company, its structures, financial assets, profitability and minimizes risks.

 Enterprise Controlling (EC) module: EC continuously monitors company's success factors and performance indicators

on the basis of specially prepared management information.

SAP ERP Logistics:

Logistics comprises all processes involved in purchasing, materials management, manufacturing, warehousing, quality
management, plant maintenance, service management and sales and distribution. It includes:
 Sales & Distribution (SD): SD actively supports sales and distribution activities with outstanding functions for pricing,

prompt order processing, and on-time delivery, interactive variant configuration, and a direct interface to profitability

analysis and production.

 Production Planning and Control (PP): PP provides comprehensive process for all types of manufacturing: from

repetitive, make-to-order, and assemble-to- order production.

 Project System (PS): PS coordinates and controls all phases of a project, in direct cooperation with Purchasing and

Controlling.

 Materials Management (MM): MM optimizes all purchasing processes with workflow-driven processing functions,

enables automated supplier evaluation, lowers procurement and warehousing costs with accurate inventory and warehouse

management, and integrates invoice verification.

 Quality Management (QM): QM monitors, captures, and manages all processes relevant to quality assurance along the

entire supply chain, coordinates inspection processing, initiate’s corrective measures, and integrates laboratory information

systems.

 Plant Maintenance (PM): PM provides planning, control, and processing of scheduled maintenance, inspection, damage-

related maintenance, and service management to ensure availability of operational systems, including plants and equipment

delivered to customers.

 Service Management (SM): SM provides highly integrated customer service functionality to compete in today's global

markets.
 Product Data Management (PDM): PDM supports in creating and managing product data throughout the product life

cycle

SAP ERP Human Resource Management:

HR provides solutions planning and managing company's human resources. SAP ERP HR includes:
 Personnel Management (PM): PM is a complete solution for personnel administration, recruitment management, travel

management, benefits administration and salary administration.

 Organizational Management (OM): OM assists in maintaining an accurate picture of organization's structure, no matter

how fast it changes.

 Payroll Accounting (PA): PA addresses payroll functions from a global point-of-view and gives the capability to

centralize payroll processing or decentralize the data based on country or legal entities.

 Time Management (TM): TM is integrated with payroll accounting, controlling, production planning, plant maintenance,

project system, external services and shift planning

 Personnel Development (PD): PD assists with planning, monitoring, and analyzing scheduled seminars, training courses,

and business events, registration and booking, price determination and invoicing.
Purpose: Following document will define the activities or steps involved in purchase
requisition to GRN of Material. And issue the material with reference the
Reservation.

Scope: All SAP Users in Production Environment

Steps at a glance:

Step no Description T Code

1 Create the purchase requisition of material with account ME51N

assignment category

2 Change the purchase requisition ME52N

3 Print of purchase Requisition ZMMPR

4 Release the purchase requisition ME54n

5 Create the purchase order with the reference of purchase ME21N

requisition

6 Change the purchase order ME22N

7 Release the purchase order ME29N

8 Gate entry with the reference of Purchase order ZGE

9 Good receipt with reference of purchase order(GR into block MIGO(103

stock) movement
type)

10 Release the GR into block stock MIGO(105

Movement
type)

11 Create the reservation MB21

12 Change the reservation MB22

13 Issue the Material with Reference the reservation MB1A

Step No 1: Create Purchase Requisition of Material

TCODE: ME51N

Enter any notes for Purchasing in the ‘Header note’ field as shown

Document type ZNB

In the account assignment category column if you enter P your stock will be direct consume.

If you enter Q then Material stock will be available in the special stock Q.

Enter Plant, purchasing group and Requisitioner name

Enter the WBS element

Click on save button

After save PR No has been Generated 2001700170

STEP2: If you want to change the Purchase Requisition

TCode :ME52N
Step3: For Release the PR

Tcode: ME54N

Click on Release button

Click on Save Button.

Step4: With the Reference of PR you have to create a Purchase order.

TCode : ME21N

Document overview on must be display

Selection Variant: Left-click on Selection Variant icon.

Purchase Requisitions: Left-click on Purchase requisitions

Purchase Requisition screen may have data, if so, delete all data. Enter
purchase requisition number in field.
Execute Icon: Left-click on Execute Icon.

Document number should now appear in the Document Overview box.

Highlight and left-click on Adopt icon.
Make changes: Make any changes and then save document. Remember you
must have a vendor; tax code and payment terms.

Save: Left click on the save icon and purchase order number will appear at
SAnR.g./P
Domestic PO created under the number 2001100180

STEP-5 For changes in purchase order

Tcode: ME22N
Step6: For Release the Po

T code: ME29N

Click on Release button and same for others and then Save
Click on save button
Step7:For Gate Entry with the Reference of Purchase order

Tcode :ZGE

Click on create gate entry with PO NO

Enter Purchase docs no,gate no,plant,challan no,challan date,gate entry origin,mode of transport

After entering all the data click on save button

Step8: After gate entry you have to do the Good Reciept

S

A/
Enter deliver note and header text always both are same

Enter the quantity in delivery note

Check and post

Material document 5000003434 posted
Step8:Then Release the GR Block Stock with the Reference of material Docs S./P
Then enter
Material document 5000003435 posted

Step9:For printing the GRN

TCODE: ZGRN_PRINT

Step10: For Create Reservation

Tcode :MB21
Enter WBS Element ,Material,quantity
Step11: Issue the material with the Reference of Reservation no

Tcode:MB1A
S./P
Then post the Document