Enterprise Systems Modeling EGN 5620 Enterprise Systems Configuration Spring, 2012

Enterprise Systems Modeling Systems Modeling: Concepts and Tools EGN 5620 Enterprise Systems Configuration

Information systems modeling tools IDEF ◦IDEF0 (activities) ◦IDEF1x (information) ◦IDEF2x (dynamics) OMT ◦Functional model ◦Object model ◦Dynamic model

IDEF Concept (1) IDEF (ICAM Definition) ◦Developed by the US Air Force Integrated Computer Aided Manufacturing (ICAM) Programs in 1981 ICAM Objective ◦To develop structured methods for applying computer technology to manufacturing and to better understand how best to improve manufacturing productivity

IDEF Concept (2) IDEF0 ◦An activity model of a manufacturing system and environment IDEF1 ◦An informational model of the system and environment IDEF2 ◦A dynamic model to describe time-varying system behavior

IDEF Concept (3) IDEF Methodology ◦Modeling process and tools, leading to creation of the three IDEF models  IDEF0 (activities)  IDEF1x (information)  IDEF2x (dynamics) Commercial IDEF software tools ◦Design/IDEF by Meta Software Company ◦AI0WIN by Knowledge Based Systems Inc.

OMT Concepts (1) Object modeling technique (OMT) “Object-oriented” means: ◦Software organized as a collection of discrete objects that incorporate both data structure and behavior, in contrast to conventional programming in which data structure and behavior are only loosely connected. OMT Methodology (in stages): ◦system analysis, ◦system design, ◦Object (implementation) design, and ◦implementation.

OMT concepts (2) - common themes Synergy (i.e., shifting focus from coding technique to packaging, based on consistent ◦identity, ◦classification, ◦polymorphism, and ◦inheritance Abstraction, Encapsulation, Combining data and behavior, Sharing (inheritance of data structure & behavior among subclasses) Emphasis on object structure (not procedure structure),

OMT Concepts (3) - Synergy Identity ◦Data is quantized into discrete, distinguishable entities called objects Classification ◦Objects with the same data structure (attributes) and behavior (operations) are grouped into a class  An operation is an action or transformation that an object performs or is subject to. polymorphism ◦The same operation may behave differently on different classes.  A specific implementation of an operation by a certain class is called a method. Each operation may have multiple methods implementing it. inheritance ◦The sharing of attributes and operations among a hierarchy of object classes

OMT Models (4) 3 OMT models used to describe a system: ◦Object model  describing the objects in the system and their relationships; ◦Dynamic model  describing the interactions among objects in the system; and ◦Functional model  describing the data transformation of the system. Their relationship ◦The object model describes what changes (or transforms) before when (dynamic model) or how (functional model) it changes.

OMT Functional Model (5) It describes the data value transformations within a system. The functional model contains data flow diagrams. ◦A data flow diagram is a graph whose nodes are processes (activities) and whose arcs are data flows.

OMT Object Model (6) It describes the static structure of the objects in a system and their relationships. The object model contains object diagrams. ◦An object diagram is a graph whose nodes are object classes and whose arcs are relationships among classes.

OMT Dynamic Model (7) It describes the aspects of a system that change over time and is used to specify and implement the control aspects of a system. The dynamic model contains state diagrams. ◦A state diagram is a graph whose nodes are states and whose arcs are transitions between states caused by events.

Relationship between the two techniques & among the three models IDEF0/functional model ◦The input to an activity is usually through a user interface for data entry ◦The output from an activity is usually a user interface for a report, though the output may be a write/update to a database. IDEF0’s ◦ICOM  Material is an input object.  Product/process data are output objects.  Rules/regulations and SOPs are constraints. Technical precedence is a constraint  Resources/tools and methods are a mechanism. IDEF1/object model ◦The collection of the ICOM of an IDEF activity model constitutes an inclusive foundation for the object model. IDEF2/dynamics model ◦Each object requires a state diagram to define/govern its life-cycle behavior. ◦A triggering event is associated with each transition from one state to another. One state may transform to multiple states, depending on the triggering event.

SAP System Modeling Design EGN 5620 Enterprise Systems Configuration

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.35 SAP R/3 Enables a company to link it’s business processes Ties together disparate business functions (integrated business solution) Helps the organization run smoothly Real-time environment Scalable and flexible

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.36 Architecture Central relational database ◦Oracle, Informix, Microsoft SQL, etc. Client/Server – three-tiered ERP Components – Oriented towards common identifiable business modules: ◦MM, SD, PP, FI, CO, HR, WM, QM, PM Add-ons: ◦Customer Relationship Mgmt (CRM) ◦Supply Chain Mgmt (SCM) ◦Product Lifecycle Mgmt (PLM) ◦Business Intelligence (BI)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.37 Relational Database Tables: Defines and links a couple of tens thousands of tables of information (25,000+) Advantages ◦Consistent and accurate data ◦Common definitions for terms ◦Shared, but restricted usage (e.g., profiles) ◦Eliminates data redundancy

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.38 Client/Server Environment Client ◦Software/hardware combination that can make a request for services from a central repository of resources Server ◦Software/hardware combination that can provide services to a group of clients in a controlled environment

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.39 Three-Tier SAP Structure GUI – Graphical User Interface or Web Interface Application server (one or many) Database server (one single location)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.40 SAP Enterprise System Database Application Presentation Browser Client PCs, Laptops, etc. Network Application Servers Internet Transaction Server Web Server

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.41 R/3 FI Financial Accounting CO Controlling PS Project System WF Workflow IS Industry Solutions MM Materials Mgmt. HR Human Resources SD Sales and Distribution PP Production Planning QM Quality Mgmt. PM Plant Maintenance SM Service Mgmt. Client / Server Integrated Business Solution EC Enterprise Controlling AM Fixed Assets Mgmt. SAP ERP Modules

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.42 Business Modules Business Modules Collections of logically related transactions within identifiable business functions ◦MM (“Buy”) ◦PP (“Make”) ◦SD (“Sell”) ◦FI and CO (“Track”) ◦HCM (“People”)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.43 SAP R/3 Basics Instance – each install of the SAP R/3 software on an individual application server Configurable – each instance can be distinctively configured to fit the needs and desires of the customer (within limits) Most of the infrastructure decisions, including configuration decisions, occur during project implementation

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.44 Configuration The process of tailoring SAP software by selecting specific functionality from a list of those supported by the software, very much like setting defaults (e.g., Word, Access) DOES NOT involve changes to the underlying software code

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.45 Programming Code Modifications Changes to the delivered code ABAP/4 – Advanced Business Application Programming (ABAP) This should be done sparingly and carefully as it can make migration to new versions of the software much more difficult

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.46 SAP R/3 Document Principle Each business transaction that writes data to the database creates a uniquely numbered electronic document Each document contains information such as ◦Responsible person ◦Date and time of the transaction ◦Commercial content Once created, a document can not be deleted from the database

SAP Business Processes EGN 5620 Enterprise Systems Configuration

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.48 Components of Materials Management Materials Management (MM) Logistics Invoice Verification Material Master Physical Inventory Valuation MRP Service Entry Sheet Service Master Product Catalog Purchasing Inventory Mgmt. Foreign Trade/ Customs

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.49 Integration Procurement Process (Procure-to-Pay) Purchase Requisition Payment to Vendor Notify Vendor Shipment Invoice Receipt Goods Receipt Purchase Order

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.50 Components of Sales and Distribution Sales and Distribution (SD) Sales Support Sales Credit Mgmt. Shipping Transport Billing Foreign Trade Sales Information System Master Data

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.51 Sales Order Process (Order-to-Cash) Integration Sales Order Entry Post Goods Issue Invoice Customer Pick Materials Receipt of Customer Payment Pack Materials Check Availability

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.52 Components of Production Planning Production Planning (PP) Production Planning SOP Capacity Planning MRP Product Cost Planning Repetitive Mfg. Production Control KANBAN Master Data DRP

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.53 Schedule and Release Shop Floor Documents Goods Receipt Order Settlement Goods Issue Production Proposal (Planning/Other) Completion Confirmation Capacity Planning Production Process (Make-to-Stock)

SAP Business Processes Integration (Overview) EGN 5620 Enterprise Systems Configuration

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.55 Functional Areas – Where and When Business Process Integration I ◦Materials Management (MM) ◦Sales and Distribution (SD)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.56 Business Process Integration (I) FI MM SD Org Data Rules FI MM SD Master Data FI MM SD MM

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.57 Organizational Data A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions Are static data and are rarely changed The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.58 Master Data Master data is relatively fixed ◦Material master data ◦Vendor master data ◦Purchasing information record ◦General Ledger master data Before making the master data configurations, you must have completely defined the organizational structures

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.59 Rules Defines the parameters for Master Data and Transactions Determines functionality for Master Data and Transactions Relatively fixed Changes as policy changes

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.60 Transaction Data Includes internal and external exchanges that describe business activities Unlike master data, aggregate transactional data is dynamic – each transaction is unique

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.61 Functional Areas – Where and When Business Process Integration II ◦Materials Management (MM) ◦Production Planning (PP) ◦Sales and Distribution (SD)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.62 Business Process Integration (II) MM PP SD Org Data Rules MM PP SD Master Data MM PP SD MM FI PP

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.63 Learning Approaches ◦Cross business functions ◦Understand business processes and their relationships to SAP's organizational structure ◦Highlight integration/configuration!!

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.64 Learning by Creating a Model Business Understanding business processes and their integrative nature Understanding SAP organizational structures Combining business processes and SAP organizational structure (i.e., configuration) Test the newly configured system View system outputs - statistics, reports, and graphics

PEN, Inc. System Modeling Design EGN 5620 Enterprise Systems Configuration PEN, Inc. System Modeling Design EGN 5620 Enterprise Systems Configuration

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.66 Pen Inc. Start-up company in the promotional pen business Initially buys and re-sells different lines of promotion pens Sells to both wholesale and retail – procure and distribute Later acquires a production facility to manufacture its own product – produce and distribute

Enterprise Structure Plant Client Chart of Accounts CompanyCode Fiscal Year Variant Credit Control Area PurchasingOrganization PurchasingGroup ShippingPoint SalesOrganization DistributionChannel Division Sales Area Controlling Area SL10SL20

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.68 Pen Incorporated Procure for Sales Order Pre-Sales Activity Sales Order DeliveryBilling General Ledger Accounts Purchase Requisition Purchase Order Goods Receipt In Inventory Plant or Warehouse Invoice Receipt Availability Check NO YES Goods to Delivery Goods from Purchase Order Inventory Postings Accounts Receivable Accounts Payable Pen Inc. Business Module I for Selling Trading products

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.69 Pen Inc. Business Module II for Selling Finished Goods by Production Pre-Sales Activity Sales Order DeliveryBilling Planned Order Production Order Completion Confirmation In Inventory Plant or Warehouse Availability Check NO YES Goods Issued to Delivery Goods from Production Order General Ledger Accounts Inventory Postings Accounts Receivable Accounts Payable Issue Goods to Production Order

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.70 Pen Inc. Business Module II for Selling Finished Goods by Production Pre-Sales Activity Sales Order DeliveryBilling Planned Order Production Order Completion Confirmation In Inventory Plant or Warehouse Availability Check NO YES Goods Issued to Delivery Goods from Production Order General Ledger Accounts Inventory Postings Accounts Receivable Issue Goods to Production Order Purchase Requisition Purchase Order Goods Receipt Invoice Receipt Accounts Payable NO

Exercises: 21. Create company code 22. Create chart of accounts 23. Assign company code to chart of accounts 24. Assign company code to fiscal variant 25. Create Credit control area 26. Assign company code to credit control area 27. Assign permitted credit control areas to company code 29. Define plant 30. Define storage locations (inventory and quality) 31. Define purchasing organization 32. Create purchasing group

Exercises: 33. Assign plant to company 34. Assign purchasing org. to company code 35. Assign purchasing org. to plant 36. Set up parameter ID 37. Create Account groups 38. Define retained earnings account 39. Review field status variant 40. Assign company code to field status variant Create 17 general ledger accounts 58. Run general ledger list of accounts reports Homework due date: 1/30/2012