openSAP

SAP Business ByDesign Supply Chain

Management
Week 05 Unit 01

00:00:07 Hello, and welcome to week 5, the last week of this openSAP course. The topic for this week
is Additional Sales Interfaces and Supply Chain Transparency.
00:00:20 My name is Marco Ullrich, and I'm happy to guide you through the coming units. In week 2, Iris
has already introduced the demand generation options in demand planning
00:00:34 or directly creating a sales or service order. All these options have the goal to plan and
schedule the fulfilment of supplies,
00:00:44 and at the end, to generate sales revenue. Unit 1 will cover further options, as a kind of
preceding process step,
00:00:57 to hand over sales order volume to SAP Business ByDesign. Classical B2C businesses, but
also many B2B businesses,
00:01:08 often have shop environments to generate additional sales volume. So, for instance, they have
a physical on-site shop with a small storage,
00:01:19 but also virtual shops, also called web shops. To support such scenarios, there are three
standard options available,
00:01:28 which I will introduce in the next minutes. For an on-site shop, in general you can use a point-
of-sales interface
00:01:38 and/or the Over-the Counter work center. For a web shop, an eCommerce interface can be
used
00:01:47 to integrate an individual or standard web shop environment, for instance built with SAP
Hybris. All of these options hand over sales and service volume
00:02:00 to SAP Business ByDesign for further processing. With the standard point-of-sale integration,

00:02:09 an external point-of-sale application can be connected to receive relevant transactions. For
instance, this point-of-sale interface can be used in a small on-site shop,
00:02:24 with a petty cash, where end-customers can do their purchases. At the end, single or selected
sales transactions can be transferred to SAP Business ByDesign.
00:02:38 Additionally, also cash transactions can be handed over. As I have already mentioned, for the
point-of-sale feature,
00:02:49 two types of transactions are offered: retail and petty cash. Retail covers the sale of an item
via certain means of payment,
00:03:00 like cash, credit card, customer invoice, and others. After the payment, a periodic data transfer
from the point-of-sale application can be initiated.
00:03:14 If the consistency check is transferred and successful, an automatic release can be done.
Otherwise, adjustments might be necessary.
00:03:28 For petty cash transactions, first a counting and entering of the resulted petty cash amount is
necessary.
00:03:36 After this, a data transfer can be done, maybe with a possible cash difference. Correction and
release are the next to-dos for the sales rep.
00:03:48 And at the end, this data will be used in standard finance process steps like payment, liquidity
management, as well as in inventory management, in case we’re dealing with stock items.

1
00:04:04 Now we are coming to the preparation and setup: Point of sale needs to be selected in the
business configuration as the customer invoicing option.
00:04:15 Together with this, also some master data is necessary, like Accounts, Petty Cash, Clearing
Account, Revenue Account, Projects, and Payment Terms,
00:04:27 which are the base for non-stock items. Additional material master and logistics area are
requested for stock items.
00:04:39 So all this data is required to establish a successful data transfer. Ideally you have a master
data integration in place for this.
00:04:53 Point of sale covers not only the straightforward steps for sales volume and cash, but supports
also specialities in case of credit card payments
00:05:05 without account data, other card payments, or online payments. There are also payment splits
and gift certificate options available.
00:05:19 Returning of goods or ticketing handling are possible as well. If there are more complex
transactions, it might be an option
00:05:28 to establish an integration to SAP Customer Checkout, which is a powerful point-of-sale
application provided by SAP.
00:05:42 Our next topic for unit 1 is the over-the-counter sales option, which enables you to sell goods
over the counter at a physical shop
00:05:54 and includes features such as instant invoice creation, goods issue posting, and automatic
determination of prices and discounts.
00:06:06 Compared to the point-of-sale interface, which we saw before, this feature is part of SAP
Business ByDesign standard functionality
00:06:16 and consists of two major steps: The first is the creation of a sale, and the second is the
receivable and payment processing.
00:06:29 In the first step, the cashier creates an over-the-counter sale request within ByDesign. Once
the document is released, a delivery is automatically created in the background
00:06:43 and the goods issue is posted. Also, the corresponding invoice is automatically created and
printed.
00:06:54 Alternatively, combined invoices for same customers can be created at the end of a period.
The second step enables the processing of incoming payments,
00:07:08 initiated either internally by your company or externally by your customers. This process
considers country-specific payment methods as well.
00:07:21 Payments can be made manually, or automatically via a payment run. Once the payments are
released, they are posted in accounting.
00:07:31 Let me do a quick demo of the selling part of this scenario, so sell a product in a shop. So let's
go to our ByDesign system.
00:07:46 I am logged in as a sales rep. And switching to the work center Over-the-Counter Sales.
00:07:56 And here we have these two mentioned views: Over-the-Counter Sales and let's say New >
Over-the-Counter Sale.
00:08:08 Select a customer. So in our case we will take the Silverstar customer. And on the right-hand
side you see some defaults
00:08:23 which came up from our ByDesign pre-settings. So for instance the sales unit, which is Sales
Heating,
00:08:31 and the invoicing unit, which is also Sales Heating. Going a little bit down and insert the
relevant product.
00:08:40 In our case we sell our product P120104, and automatically the list price out of our maintained
price list,
00:08:57 which is in our case 10 USD, comes up. And with this we can do a quick check.
00:09:14 We got a success notification and now if the accountant is interested in a preview he can do
so.
00:09:28 Now here it is. You see here the sales confirmation of our product with the price of 10 USD.
00:09:40 Having done this, let's close this preview and say Invoice. We'll do a refresh.
00:09:55 I can see this new sale and, if I switch to the available outbound deliveries, there is also our
new line item, which I sold one minute before.
00:10:23 Switching back to our slides. And to the next one.
00:10:34 The prerequisite for using the over-the-counter sales feature is to select this option in the
Business Adaptation Catalog.
00:10:42 Furthermore you need to maintain a dedicated logistics area with the logistics use Over-the-
Counter-Stock.
00:10:53 Within a site, this specific logistics use can only be selected for one area. Having a deeper
look to the pay scenario, it can be divided into three variants:
00:11:08 Pay now, pay later with immediate invoice creation, and pay later with deferred invoice
creation.
00:11:16 Pay now' means that a customer buys a product at the counter and picks it up immediately,
paying for it by cash, credit card, or by external payment.
00:11:29 In the scenario 'pay later with immediate invoice creation', a customer buys a product at the
counter, picks it up immediately, but pays for it later.
00:11:41 However, the customer chooses to immediately receive the invoice. Finally, the third variant
'pay later with deferred invoice creation' means
00:11:53 that a customer buys a product at the counter, picks it up immediately, signs the order
confirmation, and chooses to pay later,
00:12:03 which means to receive the actual invoice later as well. Providing a web shop as a further
sales channel for customers is very common,
00:12:18 and to have an integration to the used ERP environment is beneficial. To fulfill this
requirement,
00:12:27 SAP Business ByDesign has a standard E-Commerce web service interface and also a
corresponding E-Commerce work center.
00:12:37 This enables a consumption and collection of sales volume, but also an integration of order
fulfilment, invoicing, and payment receipt,
00:12:49 as post-processing steps. Let me be more clear:
00:12:54 SAP Business ByDesign provides technical interfaces for E-Shops. The E-Shop itself, which
can be built for example on SAP Hybris,
00:13:06 needs to be provided by the customer or a partner. More technical details on this topic will be
provided in our unit 5 of this week.
00:13:22 As mentioned before, the complexity of an e-commerce integration scenario can vary a lot,
depending on industry, product, country, to list only some.
00:13:35 This overview of a web shop and its interactions shows some examples of what can be
achieved. We can see here that a new or already known customer or user is logging in.
00:13:51 He or she is creating a shopping cart, selecting products, and finalizing the processes with a
check-out.
00:14:00 So, during this purchase experience, both the web shop and SAP Business ByDesign can be
triggered
00:14:09 to provide real-time information like product availability, price information, and so on. With an
integration in place, a confirmed order, created in the web shop,
00:14:24 automatically creates a sales order in SAP Business ByDesign. All post-processing steps like
the logistics fulfilment or payment allocation
00:14:37 is part of SAP Business ByDesign Standard. As mentioned, if an account does not yet exist in
the E-Shop, it can be created
00:14:51 and automatically, the same will be done in SAP Business ByDesign. Also, account details can
be updated once changes in the E-Shop have been saved.
00:15:07 Besides these operational tasks, this integration can be used also for self-service information
processes, or side scenarios like, for example, calendar options.
00:15:22 Capabilities for analytics and SAP Cloud Applications Studio enhancements are also available.
To activate a web shop integration, E-Selling needs to be selected
00:15:36 and the corresponding questions need to be answered. This can be done in the Business
Adaptation Catalog
00:15:45 in the business area 'Sales', 'Selling', 'Product and Services'. In addition, a communication
arrangement needs to be maintained with a Certificate Information.
00:16:00 Depending on the selected scenario and customer requirements, a master data integration
could also be necessary to run an efficient process.
00:16:12 Examples for this master data can be Customers, Materials, Users, or Service Agents, and
Ship-From Inputs.
00:16:23 The available web services are providing various service operations like Create, Read, Update
or List.
00:16:33 These offer the needed flexibility to build a professional and modern web UI. As I have
mentioned along the presentation, a payment card process is supported as well.
00:16:51 In this example, the payment authorization is done within the E-Shop, the settlement is done in
SAP Business ByDesign.
00:17:01 As ByDesign does not store confidential payment data, like credit card numbers, it is using
PCI-compliant tokens.
00:17:12 Alternatively, the payment method External Payment can be used to indicate that the sales
order will be externally settled, for example via PayPal.
00:17:30 We are now at the end of our first unit. We had a look at some standard capabilities
00:17:37 to consume sales orders from external applications. We saw the differences between a point-
of-sale interface and the Over-the-Counter work center,
00:17:49 and we had a look to integration use cases to an E-Commerce web shop. Thank you for
joining and I look forward to our next unit.
Week 05 Unit 02

00:00:08 Welcome to Unit 2 of Week 5, 'Product Costing and Inventory Valuation'. In this unit, we will
have a deeper look into the available product cost calculation options
00:00:21 and also some general information regarding inventory valuation. Let’s start with a typical
situation during a product lifecycle:
00:00:35 A new product has been developed, designed, tested, and is ready for the market. All needed
master data in SAP Business ByDesign has been created,
00:00:49 but the product hasn’t been manufactured so far. At this point in time, a product cost
calculation can be done by the feature 'Material Cost Estimate'.
00:01:03 It is based on planned quantities and planned direct and overhead costs, also known as
standard costs.
00:01:13 The cost estimate result does not automatically affect the valuation of material inventory, but it
can be used to create it or, if necessary, to overwrite it later.
00:01:28 With the outcome of the cost estimate, a first cost indication of a manufactured good, bottom-
up,
00:01:36 across all bill of material levels is available. This can be used as a basis for further activities,
for example, to calculate a sales price for it.
00:01:49 Once the first product or product lot is made, so after the production, the calculation can use
the actual quantities out of the reported confirmations
00:02:06 and plan costs based on the maintained valuations. After a period, all necessary periodic-end
tasks like goods receipt/invoice receipt clearing,
00:02:18 overhead distribution, overhead absorption, and work in process clearing, need to be finished.
At this point in time, the calculation of a whole period can be done
00:02:32 based on the actual quantities and costs. This delivers the most accurate cost result. In
between these three options, there is always the chance to compare the results,
00:02:46 analyze the differences and, if necessary, trigger an adjustment for future periods. Now let’s
have a quick look at some fundamentals of inventory valuation.
00:03:02 As SAP Business ByDesign is a fully-integrated ERP solution, stock quantities are not only
related to warehouse and logistics purposes,
00:03:14 but have an immediate impact on the financial balance sheet as well. This means that the
inventory in the balance sheet is the result of material quantities on stock,
00:03:26 multiplied with the current inventory cost price out of the corresponding material master data.
This fact needs to be considered in every case,
00:03:38 and is also the reason why every confirmation in logistics could have an influence in financial
postings.
00:03:47 Inventory cost can be changed as often as necessary during a period, but you cannot maintain
inventory costs for future periods.
00:03:59 And as a consequence, all inventories that belong to the company must be reported in the
balance sheet with a reasonable value.
00:04:08 To meet this requirement, the transfer of ownership must be recorded correctly and in a timely
manner for both, goods issues and goods receipts.
00:04:20 But be careful: Inventories that belong to non-affiliated companies or customers must not be
included in the valuation.
00:04:31 A good example for this is our Service Repair scenario, in which a customer can return broken
goods back for repair service.
00:04:41 In this case, the ownership of these materials remains on the customer side. Coming to the
material valuation master data,
00:04:55 three basic settings are important to control how a material is valuated: cost type, valuation
level, and perpetual cost method.
00:05:09 SAP Business ByDesign offers to valuate products on valuation unit level 'Business
Residence' or 'Product Specification',
00:05:19 which you already know from the previous openSAP weeks. Next to this, the perpetual cost
methods "Moving Average" or "Standard" can be chosen,
00:05:31 based on the selection before. Finally, a valuation price of a physical product needs to be
maintained in the product master data.
00:05:42 This is a mandatory prerequisite to be able to post material-related bookings in Finance. For all
available set of books, an individual valuation price can be maintained time-dependently.
00:06:00 Besides this valuation price, which is the cost type 'Inventory Cost', additional cost types can
be assigned for informative purposes.
00:06:11 These are: Number 2 - Estimated Cost. This can be calculated in material cost estimates or
maintained manually.
00:06:21 Number 3, 4, and 5 - Planned Cost, which are intended for internal planning or anticipate
future material costs.
00:06:34 Number 6 - Book Value. This is based on legal requirements and may be calculated externally
by applying a cost flow assumption such as LIFO.
00:06:46 In some countries, this book value can be a legal requirement. Number 7 - Periodic FIFO Cost,

00:06:54 which is calculated based on the first-in, first-out method. And Number 8 - Actual Cost, which
is the result of actual costing.
00:07:08 There are two kinds of costs that influence the whole cost of a product: direct costs and
overhead costs.
00:07:18 To better understand this concept, let me show you an example with cost centers. Cost
centers provide labor services, which are required to manufacture a production lot.
00:07:30 Therefore they were credited for these services and the production lots debited accordingly.
Because they can easily be assigned to individual production lots,
00:07:43 we consider them as direct costs. However, there might be some costs that remain on the cost
center
00:07:51 after they have been credited with the costs of the services, as not all costs can be identified
with a production lot.
00:08:00 These costs are overheads, and can be allocated to the production lots using overhead rates.
00:08:09 At the end, the sum of direct and overhead costs will give you the complete material cost of a
product.
00:08:22 But what is the basis for the calculation options I have mentioned previously? For the
estimated cost of a material, we will use the selected production model,
00:08:33 which is built on the bill of material and the bill of operation. The details of it have been already
explained in the units before.
00:08:43 So, for instance, the input materials are valuated with their inventory price, and the equipment
resources with their maintained cost rates,
00:08:54 or with the valuated services for the setup and production operations which they have
provided. After finishing a production lot, the calculation is all about actual quantities and
working times
00:09:10 from the production confirmations. So now, the real consumptions for manufacturing a product
can be considered,
00:09:20 which means, no longer out of the production order defaults. The actual costing business topic
is relevant
00:09:32 if you want to determine precise actual costs for your manufacturing scenarios due to legal or
internal controlling requirements.
00:09:42 Actual costing is the complete and precise determination of product costs, based on actual
costs incurred for all objects along the value chain.
00:09:53 The calculation is based on actual cost of materials, actual cost of labor and equipment, and
actual overhead costs incurred for the final product or service,
00:10:08 all for a specific accounting period. These costs are calculated by evaluating business
transactions
00:10:17 that are recorded throughout a period of time. The calculated actual costs of materials,
services, and resources are then used
00:10:27 to valuate materials and services that consume them. At the end, actual costs are used to re-
valuate inventories,
00:10:38 work in process, internal service consumption, and cost of goods sold. Actual costing is a legal
requirement for some countries, and so,
00:10:48 companies must valuate inventories, work in progress, and cost of goods sold per actuals. If
actual costing is not a legal must, companies usually apply standard costing methods
00:11:01 to minimize deviations from given targets, for instance, estimated costs. But, if a company is
fighting with low margins,
00:11:12 actual costing can be a valuable tool to closely monitor performance and to improve
profitability. Actual costing is usually performed for an accounting period,
00:11:26 but can be done for several accounting periods as well. On this example on the slide, we can
see very well
00:11:34 which kind of objects and areas have an influence to calculate actual costing. So, for instance,
the production of a bottle of apple juice,
00:11:44 which has been produced out of two semi-finished products, and their corresponding
production lots.
00:11:55 And also, that the needed components and raw materials for those, have been purchased and
received from suppliers before.
00:12:04 All available and used equipment resources are assigned to a cost center, which could have
direct costs but also overhead costs.
00:12:17 To get a correct result in actual costing, some preparation process steps must be executed
before.
00:12:25 These periodic tasks are needed to calculate actual purchasing cost and to allocate costs from
secondary cost centers to production cost centers.
00:12:37 After these steps are done, the system calculates the actual costing along the entire value
chain,
00:12:45 and it compares posted to actual costs. The valuation of materials will be done with period unit
price,
00:12:54 and this price is the result of the total period cost divided by the total quantities. Actual costing
allocates differences between preliminary postings and actual costs to inventory,
00:13:11 cost of goods sold, and cost centers. At the end, so after actual cost rollup, allocation, and
release,
00:13:21 you can choose to take over the 'actual period unit cost' as the new inventory price. As
mentioned before, in general,
00:13:33 differences incurred on a material are distributed per the quantity flow. If there is a share of
differences from cost centers, service orders, and projects,
00:13:45 then they will remain on 'price difference' accounts. Please have a look at this overview to
summarize what we have heard so far
00:13:57 and see what follow-up steps are available. Estimated costs were calculated in advance of
production or maintained manually.
00:14:10 You can explode and re-evaluate the underlying product structure, and at the end, overwrite
the estimated cost with the results of the 'material cost estimate'.
00:14:22 After this, you are able to overwrite the inventory cost with the estimated cost, either for
individually selected materials, or in a run.
00:14:34 Production lot costing can be used to check the variance between planned results and actual
confirmed results.
00:14:44 More details on this will be covered in the next units of this week. And having done an actual
costing for a past period, then there is the possibility
00:14:56 to adjust the current actual cost price in the material master, but further on, similar to the
estimated price,
00:15:04 to take this new actual cost price and overwrite the current inventory price. A well-known and
often repeated advice is:
00:15:17 high quality of master and transactional data will deliver a high-quality result. This statement is
also valid for the features we saw in this unit.
00:15:30 The table on this slide points out some of the aspects which help compare 'Moving Average',
'Standard Costs' and 'Actual Costing'.
00:15:43 One major difference is the stability of data during a period. With 'moving average', there can
be a change after every goods receipt.
00:15:54 Standard Costs' or 'Actual Costs' are dealing with constant values and are posting the
differences on corresponding financial accounts during a period.
00:16:07 My personal implementation experience is that a lot of my customers have selected the
standard and actual costs approach,
00:16:15 to make their life during a period a bit easier. This is valid also for comparison or
benchmarking of the available values.
00:16:26 So, for many businesses, standard cost and actual costing are a powerful combination to get
the best out of both worlds,
00:16:37 and this approach can be considered besides a moving average approach. To underline this, a
production variance analysis
00:16:47 and a time-series recording for material cost estimates can be mentioned here as well. Coming
to our quick recap of this unit number 2:
00:17:00 Our goal was to understand and differentiate between the available product cost calculation
options like Material Cost Estimate, Production Lot Costing, and Actual Costing,
00:17:15 all with their specifics, and also considering the point of time during the product lifecycle.
Besides this, we have learned which capabilities are provided in material and inventory
valuation.
00:17:31 And, that periodic closing steps in finance are necessary and important to get adequate cost
results.
00:17:41 Thank you for attending and see you in unit 3.
Week 05 Unit 03

00:00:08 Welcome back to Unit 3. In this unit, we will talk about Inventory Transparency
00:00:14 and we’ll cover some of the available inventory reporting capabilities. As SAP Business
ByDesign is an integrated ERP solution,
00:00:25 a major volume of data out of postings, confirmations, inserts etc. is automatically captured in
the various data sources.
00:00:36 Analytics is fully integrated in SAP Business ByDesign to support and monitor business
processes and help you to make informed decisions.
00:00:46 Pre-delivered standard reports can be accessed from the relevant work center views. To make
your life easy,
00:00:54 these views are always located in the same position in most of the work centers. They can
also be embedded into “overview” work center views,
00:01:05 which enables a quick access and transparency of the data provided. The analytics data is real
time.
00:01:14 There is no persistency in a separate business warehouse layer. Analytics data in the solution
is also access context-sensitive.
00:01:25 This means that only users with certain permissions can access a certain set of data. The data
sources provided can be combined for further reportings, and of course,
00:01:39 some more features are available, like creating additional key figures. These all can be done in
the work center “Business Analytics”,
00:01:50 but will not be handled in this course. In the following slide, I will introduce some of the
standard overviews
00:01:58 and reports in the logistics area, which are pre-delivered out-of-the box. Let’s start with the
“confirmation journal”,
00:02:09 which is accessible from standard logistics work centers like Inbound Logistics, Outbound
Logistics, or Internal Logistics, to mention only some.
00:02:19 The Confirmation Journal report shows detailed information on task confirmations, which is
only available in this report.
00:02:28 The report provides managers, supervisors, and workers in a warehouse or a production area
with an overview of production and product-movement activities.
00:02:40 For example, products issued, products received, products moved, inventory counted, and so
on.
00:02:48 The Confirmation Journal report also shows the changes to inventory because of confirmed
warehouse and production tasks.
00:02:58 It offers several search criteria and views on the inventory postings. For instance under
Material, you can see raw materials,
00:03:08 semi-finished, or finished products with confirmed quantity, time stamp, and processor. Also,
other parameters are provided like identified stock, such as batches or lots,
00:03:21 and organization figures, like site, location, or logistics area. So, based on this raw content, the
different roles, for example from the warehouse,
00:03:34 can build their personalized reports, getting individual, detailed, and accurate information for all
kinds of inventory changes caused by the transactions, as mentioned before.
00:03:49 Also, it supports audit trail by showing the history of recorded inventory changes, so when,
how, and by whom the inventory was changed.
00:04:04 The stock overview is one of the most important views used by warehouse and production
staff. It shows, what stock is on hand, belongs to a customer, is in transit,
00:04:17 and is with a third-party logistics provider. It also provides a fast and flexible overview of stock
categories.
00:04:27 The stock overview is located in the common tasks of most of the logistics-related work
centers, which underlines how useful it is in daily logistics business.
00:04:40 The stock overview shows a static view of the inventory and is the main tool for checking
whether your company’s inventory management works correctly.
00:04:53 Let's switch to the system again. So you can specify the data you want to see by selecting
specific fields.
00:05:04 So within the Internal Logistics, go to Common Tasks and Stock Overview, and here you can
insert the product ID and the site ID.
00:05:23 So the most important fields are the product ID and the site and logistics area ID, which is the
physical location where the stock is located.
00:05:34 Now we can see that for product P100401 we have three pieces in our logistics area 01 and
96 pieces on 20.
00:05:49 You can also put the stock overview in your favorites. Let's do this quickly on top. So we have
the stock overview and with this little star you can add it to the launchpad.
00:06:06 Having done this, you have more possibilities to view for instance if the stock is restricted or if
it is inspection stock.
00:06:20 Empty logistics areas do not appear in the stock overview. Besides the stock overview, there is
another feature which needs to be considered,
00:06:29 namely the Projected Material Flow. This view is also available under Common Tasks. And
you can select your site, and product ID, and logistics area ID as well.
00:06:52 It provides concentrated information concerning quantities of products at a specific time and
location,
00:07:00 and it helps identify execution problems and correctly plan inventory replenishments. The
Exception field shows projected shortages in stock.
00:07:18 By using different queries you can display a short-term forecast of planned changes in your
stock, as well as display related product overviews.
00:07:29 In addition, you can look through the documents on which the projected material flow is based
and also, if needed, use identified stocks at a specified location.
00:07:45 So while the stock overview may appear similar to the projected material flow, there is a key
difference. Stock overview provides the actual inventory information
00:08:00 at the logistics area or the bin level; projected material flow allows you to show unavailable
stock and inventory allocation.
00:08:11 And it provides access to the documents on which the projected material flow is based. Now
let's go back to the slides.
00:08:28 It is worth mentioning that in SAP Business ByDesign you can have a financial view on top of
your purely logistic-focused analyses.
00:08:39 We will speak more about these financial management-related reports in the next slides. So,
switching back to a quantity-focused report,
00:08:49 I would like to talk to you about the Inventory Balance report. This report can be assigned to
users who are not interested in inventory values,
00:09:01 but only in the transactions and moves in the stocks. The Inventory Balance report can be
accessed in the work center Physical Inventory.
00:09:12 It provides details of opening and ending balance of inventory at a specific location and
logistics area, and it also shows details of incoming and outgoing inventory over a specified
period.
00:09:32 Let’s look at this slide. How was my inventory situation at the end of last period? How many
apple juice bottles were on stock on July 31st?
00:09:47 These are well-known questions and use cases. Out of the box, SAP Business ByDesign
delivers the answers for those,
00:09:55 with the report “Material Inventories – Balance Summary”, as it displays the quantities and
values of the material inventory for a key date.
00:10:09 These material inventories include warehouse inventories, inventories of goods in transit, and
advance deliveries to service customers.
00:10:20 So, as mentioned before, now we have one of the reports which also provides inventory
valuation. It can be accessed from the work center Inventory Valuation,
00:10:33 which has more than a pure logistics focus. Let’s have a quick look to it.
00:10:46 From the work center overview we go to Inventory Valuation, and to the report area of this
work center, which is always at the bottom.
00:10:59 So, we go to List and then select the report Material Inventories - Balance Summary. Start the
report and we can see that currently we have 100 pieces on stock.
00:11:20 Key date is today, so let's type in our example material and select the key date, which is an
absolute value.
00:11:36 So move to this first tab and say 31st of July. Clicking on Apply we can see that the quantity
has changed to 21 and 10.
00:11:57 Back to our slides. “Material Inventories – Balance History” shows the quantities and values
00:12:06 of the opening and ending balance, receipts, and issues for materials. So, not only focused on
quantities, but also with inventory valuation.
00:12:18 It can be used to identify major inventory movements, and compare the inventory levels over
time.
00:12:27 This allows you to identify trends, and thus, take actions to reduce high stock levels. For
instance, if the opening and ending balance is much higher than the regular periodic
consumption,
00:12:43 than this might be a potential indicator to think about current stock levels. Besides this, the
view on the inventory values,
00:12:52 comparing the single line items and their increases and decreases, can give a good figure if
there is a chance to optimize stock setting parameters,
00:13:03 like, for example, to adjust the safety stock quantity. Now I would like to speak to you about
two reports
00:13:15 which are related to the age of the stored quantities. The first one is the Inventory Aging report.

00:13:23 This report gives the warehouse manager an overview about aging of the materials in stock.
This report is based on the assumption that the materials which came in first
00:13:37 are consumed first, so based on a FIFO approach. Currently, there is a “Confirmation Journal
Report” available,
00:13:46 which gives details on the incoming and outgoing dates for stock items. The “Inventory Aging
Report” uses the data in this report
00:13:56 to calculate the time elapsed in days since the time of incoming entry in the confirmation
journal,
00:14:04 so till the To date field of the report. The second report in this category is the “Inventory Cost
Analysis Based on FIFO”.
00:14:17 This report is also based on the assumption that the materials which came in first are
consumed first.
00:14:25 And, like the previous one, it also makes use of a “Confirmation Journal Report” as an
information source, and gives the inventory age at site level.
00:14:38 It shows the differences between inventory valuation based on the inventory costs in the
material master data,
00:14:46 and inventory valuation based on the actual cost of procurement or production, all as
determined by applying the FIFO cost flow assumptions.
00:14:59 So, coming to the brief summary of our unit 3, we saw the confirmation journal,
00:15:08 which can be a perfect starting point for certain reporting purposes in logistics. It is also the
basis for other standard inventory analyses, like the FIFO aging reports.
00:15:21 Furthermore, we touched upon the stock overview and the projected material flow view. And
we learned that inventory reports can have a quantity-focus only, assigned to pure logistics.
00:15:36 And lastly we saw the financial-related reports with the valuation information on top. Thank you
for joining, and looking forward to Unit 4.
Week 05 Unit 04

00:00:07 Welcome back to our openSAP course SAP Business ByDesign Supply Chain Management,
Unit 4 of Week 5.
00:00:17 As kind of a follow-up of our last unit, first we will continue with analytics. This means we will
focus on reports in the area of production
00:00:27 inbound and outbound logistics, in regards of performance figures. Finally, we will do a quick
excurse to material classification options
00:00:38 for country border crossing trades. As we have already discussed analytics in unit 3, I only
want to recap four highlights:
00:00:50 First, analytics is fully integrated to support and monitor business processes, helping you to
make informed decisions.
00:00:59 Second, analytics data is real time. Third, the provided analytics data for a user is access
context-sensitive.
00:01:09 And fourth, the work center Business Analytics provides a wide range of capabilities, for
instance, to create and build new data sources
00:01:19 and customized reports as well as key performance indicators. After finishing a production lot,

00:01:29 which was planned with available master data information we saw in Unit 2 of this week, one
question might come up:
00:01:37 How accurate was this production planning compared to the confirmed actuals with regard to
times?
00:01:45 An answer to this can be provided with the report 'Production Processing Time', as it lists the
times recorded for completion of production lots or operations.
00:01:57 It contains data such as setup times, run times, and total processing times. Let's switch back to
our ByDesign system.
00:02:07 We go to the work center 'Production Control',... the Reports area, and the Production
Processing Times.
00:02:52 Start the report, and now we have one production order or production lot with the planned
processing times, in this case 19 minutes,
00:03:03 and the actual processing time is 32 minutes, so there is a deviation. Also for the setup time,
which was planned with 5 minutes, and with 8 minutes at the end.
00:03:27 Now let's go back to the slides. If the focus is not only on quantities and times, but also on
costs,
00:03:35 then we need to move to a finance-related area. For instance, we can go to the work center
'Inventory Valuation'.
00:03:45 Do we have differences between the planned costs, which were calculated from the current
master data values,
00:03:52 to the actuals, which were confirmed for a period? For this, the report 'Production Variances'
shows periodic and total variances
00:04:02 between the valuated goods receipts and the actual production costs. Prerequisites to ensure
that the report displays full and accurate business data
00:04:13 are to execute a Goods Issue/Goods Receipt invoice run and a Work-In-Process clearing run.

00:04:24 You can use the report 'Production Variances' to analyze the costs incurred, for example, on a
specific production lot or all production lots for a material.
00:04:39 You can also analyze differences to take corrective actions in order to reduce potential
variances.
00:04:47 To analyze more details on this topic, the report 'Production Variance Details' can be used on
top.
00:04:55 It shows a breakdown of total variances between the standard cost and the actual production
costs by variance category.
00:05:04 This makes it easier to look at the variance between Standard compared to Actuals by material
or production lot.
00:05:17 What are the planned quantities and scheduled dates for a production request compared to
actual confirmed records?
00:05:27 To answer this question, the report 'Production Request Fulfilment' provides the planned
quantities and dates for a production request
00:05:37 and the actual confirmed quantities and dates recorded. So, now we are again in a role of
production controlling,
00:05:46 to analyze if there are differences between what we have planned and scheduled compared to
the actuals confirmed.
00:05:55 Having these facts available, details can be discussed and improvements can be worked out, if
needed.
00:06:04 Moving over from supply chain management to purchasing, which is well-known as Supplier
Relationship Management or SRM.
00:06:15 Delivery reliability of a supplier is an important KPI to analyze whether the supplier kept to the
delivery schedule and quantities.
00:06:26 So this report shows an analysis of purchase order delivery dates and quantities by suppliers.
To answer questions like "Are there any differences between purchased and received goods?"

00:06:42 "Are there any differences between agreed and confirmed delivery dates?" or, "Is there any
improvement potential?",
00:06:51 for those, the 'Delivery Reliability' report is an informative resource. Switching back to the
system...
00:07:06 Going to our work center overview, we go to Purchase Requests and Orders, the report area,
and go to our standard report Delivery Reliability.
00:07:28 I have prepared a selection and view for our supplier Omego and here we can see there was a
purchase order with an ordered quantity of 20
00:07:41 and a delivered quantity of only 18 pieces, so now you can start to analyze. Switching back to
the next report, which is 'Monitoring Suppliers'.
00:08:01 And this is a pretty good report to show the dependency on suppliers for certain product
categories, the spend per supplier,
00:08:10 and the supplier distribution per country, over a certain time period. So who are my key
suppliers?
00:08:19 Is there a critical supplier dependency with regard to a key product category, or with the net
amount volume which has been spent?
00:08:29 Is there a potential purchase volume as a base for future negotiations, for example, to combine
it over different companies?
00:08:37 These questions can be answered with the mentioned report Monitoring Suppliers. Let's look
at the system.
00:08:48 Going back to the work center overview, select Supplier Base, and in the Reports area, we can
find the standard reports which are provided in this area.
00:09:04 And now we go to Monitoring Suppliers. Start the report, and here we can see the standard
view Supplier Dependency per Product Category.
00:09:19 And we see different product categories, the number of suppliers, the products, and the net
amount. You can use other views like Spend per Supplier
00:09:33 to see a list of suppliers and the net amount, and maybe the view Suppliers per Country, which
lists all countries of the different suppliers.
00:09:50 Let's go back to the slides. The report 'Price Reliability in Purchasing' is a further opportunity to
analyze
00:10:01 and, if necessary, to react and adjust. The Price Reliability report shows a comparison of all
products
00:10:10 purchased from one or more selected suppliers, and displays the deviation between the
purchase order price and invoiced price.
00:10:20 For each product of a selected supplier or a group of suppliers, the report calculates an
average purchase order price
00:10:29 and an average invoice price for a product, and compares these prices over a specified period.

00:10:37 This report displays the price deviation as an absolute value and as a percentage. It has two
pre-delivered views: Price Reliability per Supplier or Suppliers
00:10:52 and Price Reliability per Product. After a look at inbound purchasing and at production,
00:11:03 now the last part of this analytics-related unit is the outbound area. How accurate are
outbound deliveries compared to confirmed and promised sales order quantities?
00:11:16 Have we delivered the outbound shipments on time? For these, the Delivery Performance
report provides a multi-level investigation
00:11:26 of which performance your company has provided, with regard to correct and on-time
deliveries.
00:11:34 It is only relevant for companies which have a transport relationship with customers; if they just
provide services or cash sales, then the report is not relevant.
00:11:48 The date on which the delivery will reach its destination is calculated from the shipment date
plus the shipping duration maintained in the corresponding transport lane.
00:12:04 We are almost at the end of the unit. I would like to leave analytics for now and give you some
information on the topics INTRASTAT
00:12:14 which is European Union-related, and exports. SAP Business ByDesign provides the basis for
both:
00:12:22 First to create or upload a commodity catalog, which is issued by statistical authorities, and
then doing a material classification,
00:12:35 which means to assign materials to maintained commodity codes. You can access the Material
Classification view from one of the following work centers:
00:12:46 Intrastat work center, Exports work center, and from the Product Data work center. The
Intrastat business topic allows you to submit periodical declarations
00:12:59 on the movement of goods to the statistical authorities of the company located country,
including both dispatches and arrivals between member states of the EU.
00:13:13 The statistical authorities use this provided data to compile intra-community trade statistics,
thus the term Intrastat.
00:13:23 Respondents in EU member states can directly submit Intrastat declarations to the statistical
authorities of their country.
00:13:32 SAP Business ByDesign supports Intrastat declaration for Germany, Great Britain, Austria,
France, and others.
00:13:41 The Intrastat declaration items can be downloaded in Microsoft Excel format. So, data from
various EU-border transaction documents
00:13:51 is pushed into Intrastat and is shown in the Intrastat item worklist. This is a good starting point
for every EU-country-based company.
00:14:03 In the Intrastat item worklist, you can view all the relevant arrival and dispatch documents and
group them accordingly, doing adjustments, and proceed further,
00:14:15 according to available country-specifics, for instance, to download the available file. We are at
the end of Unit 4, and this is a quick recap:
00:14:28 We saw analytical reports in production to check recorded processing times for production lots,

00:14:36 and which gave the possibility to analyze variances between plan and actuals. Besides this,
we introduced Supplier Relationship Management reports
00:14:47 with regard to delivery and price reliability, as well as with a focus on supplier monitoring. And
with the Outbound Delivery Performance,
00:14:59 we touched upon a prominent report in Customer Relationship Management. And finally, I
have informed you about the possibilities of material classification
00:15:11 with regard to foreign trade. Once again, thank you for your attendance and see you soon in
the final unit.
Week 05 Unit 05

00:00:07 Welcome everybody to our last unit of Week 5, which is also the very final unit of the whole
openSAP course
00:00:16 Business ByDesign Supply Chain Management. SAP Business ByDesign is a complete cloud
business suite,
00:00:24 designed as an open solution to connect your applications and your business network. Within
this unit, we will see some of the extensibility capabilities
00:00:36 which can be used to build, on top or besides, valuable features and functionalities. And for
sure, these options can be used perfectly in the supply chain area,
00:00:50 to make life and processes as easy and efficient as possible. What is the purpose of
integration?
00:01:00 Investing in integration only makes sense if there is a benefit. Good reasons could be, for
example,
00:01:08 to automate a process across multiple applications or with your business partners, to mash up
information from multiple sources,
00:01:17 to empower people to make the right decisions, to navigate along a process chain, across
system boundaries,
00:01:26 or to analyze data out of multiple systems, for instance, analyzing global spend or in a global
sales dashboard.
00:01:37 As a partner or as a customer with Cloud Applications Studio access, you may want to add
and extend the solution.
00:01:45 So now you will see a comprehensive overview on the ByDesign integration portfolio, your
toolbox for your integration projects.
00:01:56 Let me structure the ByDesign integration capabilities in three categories: number 1: Web
Services and Process Integration, number 2: Analytics Integration,
00:02:07 and number 3: file and UI integration, summarized under Interactive Integration. Web Services
and Process Integration allows
00:02:19 to embed ByDesign in your corporate systems landscape and to connect your line-of-business
solutions, web shops, or desktop applications.
00:02:29 Application (or UX) Integration enables people to seamlessly navigate across system
boundaries and to mash up information of multiple business systems and web services.
00:02:44 Business collaboration empowers you to automate the collaboration with your business
partners, for instance, replace e-mail or paper-based communication
00:02:56 by fully automated business-to-business process communication using XML-based inbound
and outbound communication channels.
00:03:06 Analytics Integration capabilities provide you with possibilities to connect SAP Business
ByDesign to your global analytics solution
00:03:16 or to your corporate business consolidation or planning system, or simply to analyze Business
ByDesign data offline in Microsoft Excel.
00:03:28 So the OData API can be used for analytical reports and the SOAP API for analytical data
access.
00:03:37 It is also possible to upload, download, or launch analytical reports or data. And last but not
least, ByDesign can be extended with ByDesign add-ons
00:03:50 or connected to partner solutions, for example, based on SAP Cloud Platform. Further
examples for this interactive integration options are
00:04:02 external navigation to ByDesign Objects, URL, HTML or Data Mashup integration, or using of
the Single Sign-On feature, file integration
00:04:14 and, for sure, data migration and data extraction out-of-the-box. SAP Business ByDesign
complements this integration portfolio
00:04:24 by approximately 60 pre-packaged integration scenarios. Besides this, there are possibilities to
build own solutions (known as intellectual property),
00:04:38 including partner interfaces and integration scenarios. SAP Business ByDesign supports the
interaction with business partners
00:04:49 as well as applications and systems. It provides more than 200 web services, for read and
write access to its business objects.
00:05:00 Application integration interfaces allow you to automate process chains across systems and
are tailored to specific use cases.
00:05:10 Besides the point of sales example which we can see on this slide and have discussed already
in Unit 1,
00:05:17 another use case could benefit by this option: Maybe a logistics service provider integration,
00:05:25 where a logistic task confirmation will be posted by an external application via web services.
Business collaboration interfaces empower you to embed ByDesign in cross-company
processes
00:05:40 to use B2B messages for exchanging business documents with your business partners. For
example, these business collaboration interfaces are embedded in the ByDesign output
management,
00:05:58 where you can decide per account and business document type how the account shall get the
document.
00:06:06 These settings are defaulted and can be adjusted, if necessary, case by case.
Complementarily, ByDesign provides possibilities to create business documents like
00:06:20 supplier invoices via various inbound channels as well. For example, you can create supplier
invoices via ByDesign UI, which is the standard way,
00:06:33 but you can also do it via web service API, B2B interface, or with OCR tools using the
ByDesign collaboration window.
00:06:44 B2B output channels and inbound B2B interfaces are aligned, such that companies using
ByDesign
00:06:52 can easily communicate with each other using B2B communication. By using Microsoft Excel
workbooks, which means downloading report data to it,
00:07:07 you can combine ByDesign analytical capabilities with native Excel features. Additionally,
doing this by using the available add-in for Microsoft Excel,
00:07:21 you can benefit on the following purposes: To create business data, to export business data,
and to analyze report data.
00:07:31 Some of my manufacturing customers are using this option quite extensively to coordinate
their shop floor planning on detailed level.
00:07:43 You also can work offline, but refresh your data from ByDesign, if needed. Or, you can
combine multiple ByDesign reports in one Excel workbook.
00:07:55 The Microsoft Excel add-in can be easily downloaded directly in ByDesign: Go to Home > Self-
service overview > My computer > Install additional software.
00:08:12 OData options offer a wide range of capabilities, for example, you can define ByDesign OData
services for read and write access
00:08:24 to more than 300 business objects. You can access all business objects, nodes, queries, and
actions
00:08:33 that are released by the ByDesign Public Solution Model or you can decide which fields and
actions are exposed,
00:08:42 and which authorizations are needed to access the OData API. The OData modeler in
particular empowers you to build 'freestyle applications'
00:08:54 like HTML5, SAPUI5, or mobile apps, which can be easily connected to ByDesign using self-
defined OData services.
00:09:09 One of the easiest enhancements in ByDesign is to add extension fields, a few clicks for a key
user or as part of an add-
00:09:20 Starting from your UI extension, you can add extension fields, propagate the extension field
throughout process chains,
00:09:31 enhance print forms and output message types, and add the extension field to data sources
and reports.
00:09:39 And with SAP Cloud Applications Studio access enabled, you have the option to place logic
behind extension fields.
00:09:50 To enable key users to work with this feature, their Business ByDesign user profile needs to
have the work center view Flexibility Change Log,
00:10:01 which is located in the Application and User Management work center. As mentioned before,
by using the SAP Cloud Applications Studio,
00:10:14 you can create your own web service APIs. The Cloud Studio offers a wizard to create the API
in three steps:
00:10:24 First, you define a kind of business object view with elements that are relevant for your
scenario. Then you select the operations that you would like to have.
00:10:37 And as a last step, you define required authorizations to access the web service. You can also
bundle multiple web services into a communication scenario
00:10:50 to prepare your own pre-packaged integration scenario. Coming back to core ByDesign, but
also with the aspect of solution openness,
00:11:03 means to benefit from the provided flexibility. Starting with approval processes,
00:11:11 which can be defined in the Approval Processes work center view. Depending on the related
business document,
00:11:18 there are different approver rules and attributes for conditions available. To be able to do so,
the corresponding approval scenario
00:11:28 needs to be scoped in the business adaptation catalog before. By default, an approval process
always consists of one step,
00:11:38 but can be enhanced to a multi-step approval. For example, the release of a sales order for a
specific raw material
00:11:48 requires approval by both a material and a construction expert. It may also be required that
conditions be incorporated into the approval processes,
00:12:01 such as the amount that an approver is allowed to approve. Besides these options, in general,
the defining of an approval process has two steps:
00:12:12 First, editing the requested settings, second, editing a corresponding validity timeframe.
00:12:20 If required, for purchase orders it is also possible to set up rules not only on header but also on
item level.
00:12:33 As a further feature, let’s have a quick look to workflow rules, which is a helpful tool to monitor
business activities or to push information.
00:12:44 With this, notifications are sent to recipients to inform them when items have been created or
have changed under various conditions.
00:12:57 E-mail notifications can also be sent to customers and suppliers if a corresponding
responsibility determination rule is enabled.
00:13:07 So, to summarize: You can set up workflow rules,
00:13:12 you specify the basic data for each rule, such as its conditions, and you define how a
notification should be sent and maintain the list of recipients.
00:13:26 Now let's go to the system and have a quick look at this. I'm logged in as an administrator,
00:13:37 with the work center assignment Application and User Management, and here you have the
view Workflow Rules.
00:13:49 And let's do a quick example of creating a new rule for information that sales orders of a
customer have been created.
00:14:04 So let's type in a quick description: 'A-Account Sales Order', then select the relevant business
object, in this case, 'Sales Order',
00:14:23 say the timing, we say 'On Every Save'. Go to the next step,
00:14:30 add a group. In this case, we select 'ABC Classification', the relevant compare operator in this
case is 'Equal to',
00:14:43 Value', and then we use the value help and say 'A-Account'. Click Next and then, on the third
step,
00:14:56 you have the possibility to maintain the notification and what it should contain. So let's type a
subject: 'A-Customer has raised a Sales Order',
00:15:14 and you can specify a recipient determination or a concrete employee. In our case, let's take
Eddie Smoke.
00:15:30 Do a quick review and activate the workflow... Reaching back to our slides...
00:15:50 Coming to the end of this unit, I have two summary slides: First this one, which shows you
some places to get information on today's topics:
00:16:04 on help.sap.com or in our SAP Community. Now you have a good impression of the
integration capabilities
00:16:18 SAP Business ByDesign offers and how you can benefit from them. In this unit we have
touched web service, process, analytics, and interactive integration.
00:16:32 Also the outbound management, Microsoft Excel and OData options, and with regard to
extensibility, the key user tools and SAP Cloud Applications Studio.
00:16:47 Within the solution we saw the multi-step approval and the workflow rules. Thanks for your
attention to this week 5 but also for the whole course,
00:16:58 and good look for your weekly and final exam.
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