00.SAP Overview

Introduction to
ERP, SCM
Davala Ranga Rao

08.05.2005
© 2004 Deloitte. All rights reserved.

BUSINESS SCENERIO - PRODUCTION CYCLE

Enterprise Integration Scenarios
Accounting Purchasing Shipping
Logistics Human Resources Information Systems

Material Master – Various Views

MATERIAL PROCUREMENT

ROUTINGS AND WORK CENTERS

PRODUCTION PLANNING

DELIVERY AND DISTRIBUTION

ACCOUNTS PAYABLE

PAYING THE VENDOR : [Outgoing]

ACCOUNTS RECEIVABLE

PAYMENT : Receipt [Incoming]

DOCUMENT FLOW

Evolution of ERP
• Requirement plan
• MRP
• MRP-II
• ERP

SAP R/3
• SAP : Systems, Applications & Products in data

processing”.
• R/3 : Real Time 3 Tier Architecture
• SAP R/3 is a suite of client-server, multi lingual
customizable business modules which help
integrating and improving business practices
(conceptually similar to R/2).
• SAP R/3 is fast becoming the worldwide standard of
complementary hardware and software partners.
• Major Implementation partners PwC, E&Y,
Deloitte&Touche, Accenture etc

Advantages of the SAP R/3 System
• Flexible Structure and Enterprise-Wide

Integration
• Real-Time Information
• Best business practices to adopt and BPR
• On-line Integrated graphics.
• Supports Multiple Languages and multiple
currencies

SD
FI
Sales &
Financial
Distribution
Accounting
MM
Materials CO
Mgmt Controlling
PP
Production
Planning R/3 AM
Fixed Assets
Mgmt.
Client/Server
QM
Quality
ABAP/4 PS
Project
System
Mgmt.
PM WF
Plant Main- Workflow
tenance HR
IS
Human
Industry
Resources
Solutions

Sales and Distribution
 Computer Aided Sales

 Quotations
SD 

Sales Order Management
Pricing
 Delivery
 Invoicing

Materials Management
 Procurement
 Inventory Management
MM  Vendor Evaluation
 Invoice Verification
 Warehouse Management

Production Planning
 Sales & Operations

Planning
 Demand Management
PP  Material Requirements
Planning
 Production Activity
Control
 Capacity Planning
Financial Accounting
 General Ledger
 Accounts Receivable
 Accounts Payable
FI  Tax and Financial
Reports
 Special Purpose Ledger
 Legal Consolidations

Controlling
 Cost Center Accounting

 Profit Center Accounting
 Product Cost
CO Controlling
 Profitability Analysis
 Activity Cost
Management
 Internal Orders
Fixed Asset Management
 Depreciation
 Property Values
AM  Insurance Policies
 Capital Investment
Grants

Project System
 Project Tracking
 Work Breakdown
Structure
PS  Budget Management
 Cost and Revenue
Planning
 Networks and Resources

Plant Maintenance
 Representing/Structuring
Technical Systems
 Maintenance Planning
PM  Maintenance
Notifications
 Maintenance Orders
 Resource Planning
 PM Info System
Quality Management
 Quality Planning
 Quality Notifications
 Quality Costing
QM  Quality Control
 QM Info System

Human Resources
 Personnel
Administration
 Payroll, Benefits
HR  Time Management
 Planning and
Development
 Organization
Management

SAP Organizational Units
Client
Company Company
Plant Plant Plant Plant Plant
Storage Storage Storage

Storage Storage
Location Location Location
Location Location
SAP Organizational Units
. Client
U.S. Canada Company
Phila.
(Bikes) Plant
Raw Finished
materials products Storage Location

Typical Organization
Customer
Customer
Vendor
Production
Customer
Vendor Vendor
 Functions are separate

 Interface and communication links with other Functions.
 Variety of systems
 Each function maintains its own master data
 Duplication of data entry
SD FI
MM CO
PP
SAP
R/3
HR
SD
Sales & Distribution . . . . . . . .

Sales and Distribution Process
Inquiry
Sales Quotation
from Contract
Activities to
Customer
Customer
Sales
Order
Functions
Finance/Accounts
Receivable Transport
Delivery
Customer Customer Shipment

Payment Invoice
Inventory
Management
© 2004
© 1996 Deloitte & Touche Consulting Deloitte. All
Group/ICS. All rights
rights reserved.
reserved.
Order Entry
PP MM PP
FI FI MM FI
Sold to party: C100

Item Material Qty Credit Management
10 6301 10
20 6412 10
30 1507 25 Dynamic Availability Check
.
.
.
.
Order Cash Forecast
?
Sales Rep.
OK

Credit Management
Sold to party: C100

NO !
Item Material Qty
10 6301 10
20 6412 10
30 1507 25
.
.
.
.
Order
SD
Inventory Management
MRP elements
+ purchase
requisitions
planned
orders production dependent
purchase orders reser-
orders dependent vations
require-
ments Time
sales
require- reser- deliveries
ments vations
SD
Delivery / Shipment Processing
FI MM
FI
WM
MM MM MM
Sold to party: C100
Item Material Qty
10
20
30
6301
6412
1507
10
10
25
Credit Management
.
.
Picking
.
.
Order Static Availability Check
List
Picking
Packing
Transportation

Goods Issue
FI
MM
Goods issue " integrated flow of quantity and values"

Postings in FI: General Ledger
Balance sheet
Finished goods
1000 300
Income
Costs of goods sold statement
300
SD
Invoicing
CO
PA
CO
Profit center accounting / Profitability analysis PCA FI
FI
Accounts receivable / General Ledger
Cash Forecast
Single invoices
EDI
Collective invoices
Invoice lists
Credit / debit notes

Accounts Receivable
FI
Accounts receivable / General Ledger
Cash
n
1000
Customer
1000 1000 n
SD

Customer Payment
SD FI
MM CO
PP AM
SAP
QM
PM
R/3
MM
SD
Materials Management. . . . . . .

Materials Management Process
Quota arrangement
Source List
Purchase Vendor Outline Agreement

Requisition Selection
Purchase
Order
Business Purchasing
Functions
Finance/Accounts Warehouse
Payable Goods
Receipt
Vendor Invoice
Payment Verification Inventory
Management
Material Requirements Planning
Requisitions
direct requests
consumption
PP + demand
MM SD driven MRP

Procurement
??
OK !
purchase requisition
Determine
source
Release of
procedure supply

Procurement
CO FI Cash forecast
Orders / Projects / Cost centers
vendor 2
vendor 1 vendor 3
MRP ? ?
purchase Source
requisition list
Determine Outline
agreement
source
Release
procedure of Release
purchase requisition
supply purchase
order
© 19xx SAP America, Inc. All rights reserved.
Goods Receipt
CO QM
FI
Orders / Projects / CC
G/L accounts posting
Quality inspection
vendor 3
Vendor evaluation
PO histories
Purchasing information
goods
receipt system
Inventory controlling

Invoice Verification
FI
CO CO FI
Orders / Projects /Cost centers
G/L accounts / Accounts payable Payment
Vendor
Vendor
Vendor
vendor 3 invoiceinvoice Tolerance check ?
OK !
blocked invoice
Invoice e.g.
release of
verification blocked invoice
Delivery invoice
Preliminary posting
Automatic price update

Inventory Management
Main Storage
Loc.1 Loc.2 Loc.3
Vendor Customer
Transfer
Plant Goods Goods Plant
Receipt Issue
Plant
PLANT Stock
Plant
count
Production Line
Raw Finished
Material Material
SD FI
MM CO
PP
SAP
QM
R/3
HR
PP
SD
Production Planning . . . . . . .

Manufacturing Process
Sales and
Master
Operations
Production
Planning
Scheduling
Master
Management
Scheduling
Material
Requirements
Functions Capacity
Materials Planning
Planning
Production
Finished Control & Planning
Goods
Receipt
Production Planned
Order Order Purchase
Requisition
Inventory Raw
Management Materials
© 2004 Deloitte. All rights reserved. Issue
© 1996 Deloitte & Touche Consulting Group/ICS. All rights reserved.
Production Processes
Production Repetitive KANBAN

by lot size mfg JIT Assembly
Production orders
by project Process
flow prod.
Sales planning Material master

Material requirements Simulation planning record
planning
Master production Capacity planning Bills of materials
scheduling Configuration
© 2004 Deloitte. All rights reserved. Classification
Production Control / Capacity Planning
FI
CO
FI CO
MM
Goods movement - issue
Costs
Open
Production order
Status
Quantity
Date
...
Planned orders ----------------------------
Capacity / Material
available?/Prel. Costs

Production Control / Capacity Planning
FI
CO
FI CO
MM
Goods movement - receipt
Costs
Open Production order
Release Production order
Confirm Production order
Planned orders
Receipt of
finished Production order
product from
Settle Production order

Process Industry Manufacturing
MPS
Master data
MRP
Materials
Stammdaten
Resources
Process
order
planning Process data
Quality documentation Master recipes
management Process data
Process evaluation
management
LIMS Automatic Manual

Laboratory (PCS) (PI sheet)
Overview
QM Functions
MM
Quality planning
PP
PM
Quality inspection
SD
Quality control CO

QM - Procurement
The procurement chain
Quotation Vendor selection Purchase order Goods receipt
 Technical  Vendor  QA agreements  GR inspection

delivery evaluation:  Certificates  Dynamic
terms  quality score modification
 Vendor release
 audits (Q-Info)  Inspection stock
 complaints  Inspection at the  Defects,
vendor's Nonconformities
premises  Q-Notifications

QM and Production Planning
Production Planning and Control
Production
Production order Order confirmation Goods receipt
planning
 Routings  Inspection lots

with
inspection
characteristics
 Sample
calculation
 Result
recording
 Stock
movements
 Batch
classification

QM - Sales and Distribution
Sales and Distribution
Sales order Delivery Service
 Quality
information
 Inspection
lots
 Certificates
 Customer
notifications

PM – Plant Maintenance Overview
Two Basic Forms of Maintenance
 Breakdown Maintenance
 Preventive maintenance

PM Functionality
Technical Objects Maintenance Processing PM Reports
 Equipment  Maintenance Notifications  MTBR

 Functional Locations  Maintenance Orders  Breakdown history

SAP R/3 - Screens

Screen Body

Minimize button Toggle maximize and
Print customize button
Close
Application Logo
Page Up/Down
Transaction Code
F11 Save
F3 Back F1 Help
F15 Exit
F12 Cancel
Explorer Menu
Screen & toolbar
Q&A

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00.SAP Overview

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Introduction to

Davala Ranga Rao

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

Accounting Purchasing Shipping

Logistics Human Resources Information Systems

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

• SAP : Systems, Applications & Products in data

© 2004 Deloitte. All rights reserved.

• Flexible Structure and Enterprise-Wide

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

 Computer Aided Sales

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

 Sales & Operations

© 2004 Deloitte. All rights reserved.

 Cost Center Accounting

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

Plant Plant Plant Plant Plant

Storage Storage Storage

U.S. Canada Company

© 2004 Deloitte. All rights reserved.

 Functions are separate

© 2004 Deloitte. All rights reserved.

Customer Customer Shipment

Sold to party: C100

© 2004 Deloitte. All rights reserved.

Sold to party: C100

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

Accounts receivable / General Ledger

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

Purchase Vendor Outline Agreement

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

© 2004 Deloitte. All rights reserved.

Production Repetitive KANBAN

Sales planning Material master

© 2004 Deloitte. All rights reserved.

Open Production order

Release Production order

Confirm Production order

Settle Production order

LIMS Automatic Manual

© 2004 Deloitte. All rights reserved.

Quotation Vendor selection Purchase order Goods receipt