INDIVIDUAL ASSIGNEMENT

SAP Portfolio Project

by

Juan MENDEZ FRIAS

Work presented to
Ms. Jackie Shemko
In the course
COMP 3204, Intro to Business Processes

Durham College
December 9, 2019
Contents
Introduction: ................................................................................................................................................. 3
Sales inquiry .................................................................................................................................................. 4
Purchase Order Cycle .................................................................................................................................... 6
Sales Order Cycle ........................................................................................................................................ 12
Production of NRG-A dough........................................................................................................................ 14
Production of NRG-A bars ........................................................................................................................... 16
Receive Payment from Meijer Inc. .............................................................................................................. 19
Credit limit adjustment ............................................................................................................................... 20
Sales Order for Health Express ................................................................................................................... 21
Bill of Material for NRG-A bars ................................................................................................................... 23
PRODUCT GROUP........................................................................................................................................ 24
SOP Meeting ............................................................................................................................................... 25
Rough Cut Plan ............................................................................................................................................ 26
Transfer Sales and Operations Plan ............................................................................................................ 27
Run MRP...................................................................................................................................................... 28
Conclusion ................................................................................................................................................... 30
Introduction:
This document is the final project for the course COMP 3204, Intro to Business Processes, taken in the
second year of Durham College’s Supply Chain and Operations Management program. The vast bulk of
the course focussed on a single ERP system, SAP. Throughout the course we acted in a sort of roleplay as
an employee of a fictional energy bar company called Fitter Snacker. Students learned to create sales
orders, purchase orders, sales and operations plans, etc all in the guise of Fitter Snacker. The two
products that this company sells are NRG-A and NRG-B bars. These will be mentioned frequently
throughout the course of this document which aims to showcase the student’s skills and understanding
in SAP.
Sales inquiry

Meijer Inc, a customer in the wholesale

distribution channel, contacted fitter
snacker about whether 4 cases of NRG-B
bars are in stock, how much they would
pay for them, and if they would qualify
for any discounts.

Since they did not explicitly ask to make a

purchase and only want information, the
appropriate response is to create a sales
inquiry. As can be seen in the Net Value
section, Meijer would pay $1180 USD.

To determine availability, I select the item line and click on the display availability icon. To check for
discounts, clicking the item conditions icon is necessary.

There are over 923 cases of NRG-B

bars available to purchase, more
than enough for Meijer’s inquired
4.
Meijer Inc. will be paying $295 USD for each case, totalling at $1180 USD. They will not be eligible for
any discount whatsoever. Fitter Snacker will make a total profit of $200.80 USD.

Inquiry was saved as inquiry # 10000233

Purchase Order Cycle

In preparation for a supposed worldwide

shortage of honey, I check my current
inventory availability which was at 490
gallons.

An employee within fitter snacker decided that 490 gallons was not enough in anticipation of the
shortage and created a purchase requisition. This is an internal document sent to the speciality
purchasing department because only they have the authorization to acquire such materials.
 Price simulation for Battle Creek

Price simulation for Farmington

After reviewing the purchase requisition, the purchasing department decides to go ahead and create a
purchase order based on it. Now comes the time to select a supplier. There are two options, Farmington
and Battle Creek. A useful way to do this is to conduct a price simulation to determine the cheaper
option and if any discounts are available. Other things such as proximity and quality are to be
considered but for the purposes of this exercise, price alone is what the decision will be based on.

Both suppliers ask for the same price ($3200 USD). Fitter Snacker is not eligible for discounts in either
option. Therefore, it is inconsequential which one is picked. I decided Battle Creek should be the
supplier.
With the vendor selected the purchase order is created. This external document enters fitter snacker
into a contract with Battle Creek. The stipulations of which are that 500 gallons of honey are to be
delivered to fitter snacker within two weeks of the PO creation (December 13th 2019).
Fitter Snacker has successfully received the material highlighted in the purchase order. Therefore, a
goods receipt must be created in order to reflect the reality in SAP and link it to PO 450000192. This way
other people in the purchasing department can see the received 500 gallons of honey and not go
hounding Battle Creek for not fulfilling the agreed upon purchase order.
Since the material was successfully delivered, Battle Creek sends an invoice of $3200 USD to Fitter
Snacker demanding payment for the honey. Creating the invoice receipt reflects this is SAP.

In the post outgoing payment step, an amount of $3200 USD must be entered in the assigned box. This
ensures that the invoice is paid in full by fitter snacker to Battle Creek. If left blank the invoice would not
be paid. Once assured that the proper amount is entered in the “assigned” box, the outgoing payment is
posted.
This is the updated stock/requirements list for “honey”. After a goods receipt was posted acknowledging
the receipt of 500 gallons from Battle Creek, the stock increased from 490 to 990. That goods receipt
was the product of a purchase order which was itself the result of purchase requisition. The second line
still shows this purchase requisition which must still be open, this is not a reflection of actual physical
inventory. The material is stored in storage location 100.
Sales Order Cycle

Meijer Inc calls back wanting to buy the 4 cases of NRG-B they inquired about earlier. They provide the
PO # Review19. Meijer Inc is a customer in the wholesale distribution channel. A standard sales order
was created in the with reference to the previous inquiry made for Meijer Inc. This order will cost them
$1800 USD.

With the sales order saved the outbound delivery is created to effectively “hand off” delivery
responsibility to the warehouse. This allows the warehouse to pick the material, pack it, and then ship it.
This will affect the stock/requirement list for NRG-B bars, reducing the available stock by 4 because
these cases are effectively being “reserved”. Total stock however will not change because those 4 cases
have not left the warehouse yet.
The material is then picked in the warehouse, packed, and shipped. In SAP, the post goods issue button
records the change in stock level of the material and financial position of the company. Total stock of
NRB-B bars will be reduced by 4 cases in the stock/requirement list.

After the material has been shipped, Fitter Snacker send an invoice to Meijer Inc for the $1180 USD
owed to them by Fitter Snacker. This effectively completes the outbound delivery as seen in the above
screenshot of the document flow for this sales order cycle thus far. Payment has not yet been received
so the accounting document is not yet cleared.
Production of NRG-A dough

I have been asked to carry out production of 7 cases of NRG-A bars. Unfortunately, I do not have any
dough to pursue this so first I must produce dough.

The above screenshot shows the creation of a production order for Dough NRG-A, this converts a pre-
existing “Planned Order” created by running the MRP. A planned order is merely a suggestion to the
scheduler by SAP that if any concrete production effort is to be taken, they need to be converted to
production orders to fulfil dependant requirements. SAP does not do this itself because there are many
extraneous and qualitative factors that can only be taken into consideration by a planner/scheduler. An
example of this could an impending labour strike after a union dispute that would stall production.

The next step in the process of constructing Dough NRG-A is issuing the raw materials from storage
location 100 (designated specifically for raw materials) to the production area. This is done through a
goods issue in SAP. SAP determines the correct amount of each raw material for a batch of 500 lbs of
dough the BOM (bill of material).
After the raw materials were successfully issued to the production area, Dough NRG-A was made. To
reflect this action in SAP, a confirmation of production must be entered with the associated order
number, material, and batch quantity made.

The above screenshot is the execution of the goods receipt of production. This is SAP acknowledging
that the completed WIP item (dough NRG-A) is being moved from the production area to the
appropriate storage location (Sloc 200). Unlike the previous step, this is not confirming the actual
production of the goods, but merely the receipt of the goods in the correct warehouse.
Production of NRG-A bars

With NRG-A dough successfully created, production of NRG-A bars can now commence.

The above screenshot shows the creation of a production order for NRG-A bars. This converts a pre-
existing “Planned Order” created by running the MRP. A planned order is merely a suggestion to the
scheduler by SAP and if any concrete production effort is to be taken, they need to be converted to
production orders to fulfil dependant requirements. SAP does not do this itself because there are many
extraneous and qualitative factors that can only be taken into consideration by a planner/scheduler. An
example of this could an impending labour strike after a union dispute that would stall production.

The next step in the process of manufacturing NRG-A bars is issuing the WIP (works in progress) from
storage location 200 (designated specifically for WIP) to the production area. This is done through a
goods issue in SAP. SAP determines the correct amount of dough for a batch of 7 cases of bars through
the BOM (bill of material).
After the dough was successfully issues to the production area, NRG-A bars were made in production
area. To reflect this action in SAP, a confirmation of production must be entered with the associated
order number, material, and batch quantity made.

The above screenshot is the execution of the goods receipt of production. This is SAP acknowledging
that the completed finished good (NRG-A bars) is being moved from the production area to the
appropriate storage location (Sloc 300). Unlike the previous step, this is not confirming the actual
production of the goods, but merely the receipt of the goods in the correct warehouse.
Now, because of the successful production of NRG-A dough through the acquisition of raw materials,
conversion of a planned order to a production order, goods issue, production confirmation, and goods
receipt; a batch of NRG-A bars were able to be produced and properly stored in the correct warehouse.
This is why there is a current stock of 14 cases on the stock/requirements list where there was 7 before.
The production process for the bars is the same as the one for the dough. As seen in the above steps.
Receive Payment from Meijer Inc.

After receiving a check from Meijer Inc in full payment of the invoice sent to them for their order of 4
cases of NRG-B, I set out to post the incoming payment in SAP to record the receipt of payment.

With the incoming payment posted, the accounting document has a status of “cleared” and this
particular sales order cycle is completed.
Credit limit adjustment

This is the “Cutomer Credit Management Change: Status” screen, used for adjusting a customer’s credit
limit among other things. A credit limit is the maximum dollar value a customer can buy goods using
credit within a certain time horizon, or general static conditions. A customer can only go over a credit
limit if they payed paid an invoice, which reduces their credit with fitter snacker below the limit, or, if
they’re given an exemption from a credit manager.

Someone in the Fitter Snacker credit department has asked toadjust the credit limit for health express to
$2500 USD. The previous credit limit was $1000 which is why 59% of the credit limit is being used. This
changes to 23.6% after the new $2500 credit limit is put into effect.
Sales Order for Health Express

After setting its credit limit, Health Express calls and places an order of 9 cases of NRG-B bars. They
expressly want to buy and not merely inquire. The net value of the 9 cases of NRG-B bars is $2655, $745
over the $2500 credit limit. As it should, SAP displayed a pop-up window that the dynamic credit check
had been exceeded.
Because the sales order exceeds the credit limit it is blocked from further processing. Which means that
an outbound delivery cannot be created and the material cannot be picked, packed, and shipped.
Someone in the credit department has decided that an exemption can be made and so the sales order
was released. This allows an outbound delivery to be made for it and all the subsequent steps that come
afterward.
Bill of Material for NRG-A bars

This is the bill of material (BOM) for NRG-A bars. This shows all the raw materials and semi finished
goods that go into creating NRG-A bars. The bath size for these bars is 7 cases, production runs must
always be made in 7 cases at a time. 500 lbs of NRA-A dough, 300 lbs of oats, etc all go into making 7
cases of NRG-A bars.
PRODUCT GROUP

Above is the product group by the name of 19 NRG GROUP. The aim is to simplify production and
planning for materials NRG-B and NRG-A by combining and assigning production proportions to each. In
this example, whatever amount of lbs is planned for the product group, 70% will be NRG-A bars and 30%
will be NRG-B bars.
SOP Meeting
After attending an SOP meeting, it was decided that the next tree month sales forecast would be the
following:

Sales Forecast Production IndReq NRG-A IndReq NRG-B

January 25 25 18 8
February 35 35 25 11
March 15 15 11 5

It was decided that the production plan would be “synchronous with sales”, which essentially means a
chase production strategy. Without any safety stock considerations this just means that monthly
production will just match forecasted sales. Because of the product group’s 70/30 split, the IndReq for
both types of bars are affected. As seen in the above chart.
Rough Cut Plan

Above is the development of an initial sales and operations plan for NRG product group in SAP. The SOP
meeting in fitter snacker determined the sale forecast for the next three months would be 25 cases for
January, 35 for February, and 15 for March. A chase production strategy was. Now the production level
will be recalculated to produce enough cases to meet at the end of each period.
Transfer Sales and Operations Plan

The sales and operations plan has been transferred to the previously made “19 NRG GROUP”.
Run MRP

The MRP process has been executed. This means that SAP will look at future needs for finished goods
and devise a plan in order to meet those needs.

This is the stock requirement list for NRG-A

bars. After running MRP SAP created three
independent requierments (IndReq) at the start
of January, February, and March based on the
previously created rough cut sales & operations
plan. Because of the 70% skew, these
requirements mimic my predicted IndReq
figures.
 This is the stock requirement list for NRG-B
bars. After running MRP SAP created three
independent requierments (IndReq) at the
start of January, February, and March based
on the previously created rough cut sales &
operations plan. Because of the 30% skew,
these requirements mimic my predicted
IndReq figures.

This is the collective stock overview for all items/material in my fitter snacker plant. The plant stock
column shows which items have any amount of inventory in one of our storage locations. Note that the
unit of measurement for these numerical amounts are specified in the right adjacent column. The traffic
lights indicate whether it is currently possible to meet independent requierments.
Conclusion
In brief, it is my hope that this document has effectively demonstrated my capabilities and skills in SAP.
Although not every business utilizes SAP due to high costs and a myriad of other reasons, it still
maintains a level of universality with other ERP systems. All are tasked to solve and facilitate common
tasks such as inventory management, accounting, logistics, sales and operations, etc. An understanding
of one system lends itself very well to an easier and faster transition to another, even if they be
antiquated and DOS based.