Professional Documents
Culture Documents
Overview
• Provide an overview of the various logistics processes covered by
the mySAP Business Suite.
Objectives
After completing this unit, you’ll be able to:
• Discuss the various key operational processes
• Illustrate the integration between the key operational processes
• Outline the tasks associated within the procurement cycle
• Explain how SAP within mySAP ERP supports the key processes in
procurement
• Outline the tasks associated with sales order management
• Explain how SAP within mySAP ERP supports the key processes in
sales order management
• Outline the tasks associated with production planning and
manufacturing execution
• Explain how mySAP ERP supports key processes in production
Contents
• Logistics Overview
• Procurement
• Sales Order Management
• Production
Key Operational Activities
• The basic logistics process comprises procurement of materials,
manufacturing items using these materials, and then sale of the
manufactured products.
• The procurement process is composed of purchasing, inventory management,
and invoice verification.
• Production comprises of planning and manufacturing.
• Sales order management includes creation of the sales order, delivery by the
vendor, and billing.
• Procurement, sales, and production are different key operational
processes often handled in different functional departments, but each
of these key processes triggers activities in the other processes.
• As an example, production might be started by a sales orders or by an independent
demand plan; procurement needs are triggered by a need from production
planning or due to the sell of stocked products.
• These processes can happen independently of each other or as a
group
Key Operational Activities
• Depending on a company's requirements, their products, and their
processes, certain operational activities may play very different roles
with very different priorities.
• For example, in addition, several accompanying process Quality Management,
more important than an actual sales process.
• All of these processes needed by a company are part of the mySAP
ERP solution.
• Procurement, Sales, and Production are considered to be the primary operational
activities. Secondary activities might include Quality Management, Plant
Maintenance, Customer Service, and Warehouse Management.
• The process importance is determined by a company’s needs.
• All of the key operational processes integrate with each other and can
be running within one central ERP system.
• They also integrate with mySAP ERP Financials and mySAP ERP Human Capital
Management.
Key Operational Activities
Enhancing Processes with mySAP
Business Suite
• The operational processes delivered through mySAP ERP can be
extended with the solutions included in mySAP Business Suite.
• For example:
• Optimize and centralize company’s production planning processes by
using mySAP SCM.
• Expand company’s marketing and sales capabilities by using mySAP CRM.
SCM Extends Production
• The company may
optimize and centralize
its production using
mySAP SCM.
• It includes features such
as advanced planning
systems and covers
functions of sales order
management.
CRM Extends Sales Order
Management
• mySAP CRM is a
comprehensive solution
for managing business
relationships with
customers.
• It supports all customer-
focused business areas,
from marketing to sales
and service, as well as
customer interaction
channels such as
interaction center,
internet, and mobile
clients.
SRM Extends Procurement
• mySAP SRM manages the
business relationship with the
supplier.
• It provides strategic value
through sustainable cost
savings, contract compliance,
and instant assessment, with
tools to drive superior results
through end-to-end source-to-
pay process.
• Activities such as spend
analysis, category
management, requisitioning,
sourcing, operational
contracts, invoicing, and
supplier management are part
of an integrated platform.
Procurement Process Overview
• Procurement in mySAP ERP covers processes such as requisitioning,
purchase order management, and invoice verification, and also
catalog-based self-service requisitioning for maintenance,
repair, and operations (MRO) materials and services.
• Procurement in mySAP ERP improves procurement processes
• Facilitates plan-driven and ad hoc purchasing, complete inventory
management, and intelligent reporting on all procurement activities.
• Enables supplier selection and qualification, contract negotiations, bid
invitations, and vendor evaluation.
• Support for process variant optimization allows individual categories
of material or services to be procured in the most appropriate way
• For example, the subcontracting process supports the delivery of components
required by outsourced manufacturing steps, and procurement through invoicing
plans helps improve rental and leasing processes.
Basic Procurement (Purchase to
Pay) Cycle
Basic Procurement (Purchase to
Pay) Cycle
1) Determination of Requirements
• Purchase requisitions (PRs) can be created manually or generated
automatically by the materials planning and control system.
• This can cover both the demand-based and material requirement planning
(MRP) approach to inventory control. The regular checking of stock levels of
materials defined by master records, use of the order-point method, and
forecasting on the basis of past usage are important aspects of inventory
control.
2) Source Determination
• Requests for quotation (RFQs) can be created manually or by referring to
PR, after PR approval.
• mySAP ERP helps identifying potential sources of supply based on past
orders and existing longer-term purchase agreements.
• This speeds the process of creating RFQ, which can be sent to vendors
electronically via EDI, if desired.
Basic Procurement (Purchase to
Pay) Cycle
3) Vendor Selection and Comparison of Quotations
• mySAP ERP is capable of simulating pricing scenarios, allowing user to
compare a number of different quotations. Rejection letters can be sent
automatically.
4) Purchase Order Creation
• Purchase order (PO) can be created with reference to PR, RFQ, contract, and
material record; by user or automatically by system.
5) Purchase Order Follow-Up
• The status about the delivery date and quantity to be delivered can be
monitored.
• After issuing PO to the vendor, the system will check the reminder periods
specified before and, if necessary, automatically print reminders or expediter
at the predefined intervals, also provide an up-to-date status of all PRs,
quotations, and POs.
Basic Procurement (Purchase to
Pay) Cycle
6) Goods Receiving and Inventory Management
• Goods receipt (GR) can be confirmed simply by entering the PO number (PO
status will be updated). Goods can be received without the PO.
• GR will create material document.
• By specifying permissible tolerances, buyers can limit over- and under-
deliveries of ordered goods.
7) Invoice Verification
• Invoice can be posted before or after GR.
• SAP use goodreceipt/invoice receipt (GR/IR) clearing account
• The system supports the checking and matching of invoices. The accounts
payable (AP) clerk is notified of quantity and price variances because the
system has access to PO and GR data. This speeds the process of auditing and
clearing invoices for payment.
Purchase Orders
• PO is a formal request to a vendor to supply certain goods or services
under the stated conditions.
• PO can be created without reference, or with reference to a PR, a
RFQ, or another PO.
• When entering the purchase order data, the system suggests default
values. For examples:
• The system suggests the ordering address, terms of payment, and freight
(incoterms) from the vendor master record, as well as the material short text, the
material group, and unit of measure from the material master.
• If a purchasing info record already exists in the system, the system copies a price
proposal to the PO.
• Procurement staff can either send the PO to a vendor or carry out a
stock transport order in another plant. In both cases, user can
include the associated freight costs in the purchase order.
Purchase Order
• While creating a purchase order, procurement staff have to enter the
company code, purchasing organization, purchasing group, and also
plant.
Purchasing Organization &
Purchasing Group
• A purchasing organization is the unit within an enterprise that
performs strategic activities related to purchasing for one or more
plants.
• It evaluates and identifies vendors, negotiates contracts and agreements, pricing,
and other terms. An enterprise may have one or more purchasing organizations.
• Typically, there are three models of purchasing organizations: enterprise level,
company level, and plant level.
• A purchasing group is an individual or a group of individuals who
are responsible for purchasing activities for a material or a group of
materials.
• Whereas purchasing organizations are responsible for the strategic aspects of
purchasing, such as negotiating contracts with vendors, purchasing groups carry
out the day-to-day purchasing activities.
• These activities include planning, creating PRs, requesting quotations from
vendors, and creating and monitoring POs.
• The purchasing group also serves as the main point of contact with vendors.
Self-Service Procurement
• Self-service requisitioning means purchasing non-strategic goods,
that is, goods not directly linked to the value chain (often called MRO
items), like: office materials, work clothes, and IT equipment.
• The self-service procurement (SSP)
empowers employees to easily
procure needed materials using
a Web-based shopping cart.
• This shopping cart enforces
compliance with corporate
purchasing policies.