1. ERP / SAP Overview
ERP / SAP Overview
4/17/2017

2. Objectives The participants will be able to:
Recognize the evolution of ERP solutions.
Appraise the concept, benefit and use of ERP solution.
Define the SAP ECC Overview.
Identify the different SAP ECC Functional modules/areas.
Distinguish the components of SAP ECC.
Judge the use of ABAP programming language.
ERP / SAP Overview
4/17/2017

3. Enterprise Resource Planning
ERP Overview
Enterprise Resource Planning
The evolution of ERP solutions
Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools for forecasting demands and planning according to the forecast
ERP / SAP Overview
4/17/2017

4. Enterprise Resource Planning
... synchronization of Company functions...
Purchase
Manufacturing
Finance
An integrated suite of business applications, which..
Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money
Enables corporate firms to readily change their processes to adapt to the ever changing business scenario
Provides expertise in industry specific business processes
Sales
ERP / SAP Overview
4/17/2017

5. Enterprise Resource Planning
… and extended to the complete value chain...
Tier I Component
Manufacturer
Vehicle OEM
Tier II Component
Supplier
ERP / SAP Overview
4/17/2017

6. Enterprise Resource Planning
... delivering administrative and decision support with...
Decision support and analysis
Processes monitoring & feedback
Administrative registration
So, ERP is ….
An integrated suite of Applications to meet corporate needs
Entails
Parameterization
Designing & Customization
Implementation
Training
Expertise in industry specific business processes
ERP / SAP Overview
4/17/2017

7. Planning and Execution
What is an ERP solution...?
…Integrated across the primary and support processes
Distribution
Manufacturing
Marketing
Planning and Execution
Materials
Finance
Engineering
ERP - What It Is
ERP is not just a software…but a complete business solution integrated across the entire value chain which creates an information infrastructure for efficient planning and effective execution.
Sales
Human Resources
ERP / SAP Overview
4/17/2017

8. The ERP application
An integrated suite of business applications, which..
Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money.
Enables corporates to readily change their processes to adapt to the ever changing business scenario.
Provides expertise in industry specific business processes.
Entails
Parameterization / Configuration
Designing & Customization
Testing and Implementation
Training
ERP - What It’s Not ……
ERP facilitates the decision making but does not decide.
ERP provides comprehensive information to optimize but does not optimize dynamically.
It automates and integrates transactions but does not target the cycle time.
ERP / SAP Overview
4/17/2017

9. Why clients buy ERP? Corporate Initiatives Technology
Strategic initiatives
A requisite capability in a competitive global business
Operational initiative
A foundation for performance and cost improvement via integration
Organizational initiative
To initiate a major organizational change within the company
Technology
IT is making the transition from a supporting operational entity to becoming a strategic competitive tool.
Because others are buying it !!!
ERP will impact
Communication and information domain
Leadership and authority
Company policies
Jobs and rewards
Company structure and culture
Skills and knowledge of employees
Information is available online generally to a much broader audience
ERP can alter how work gets done and thus how people work together
ERP alters the level of decision-making authority
ERP can alter organizational structure
ERP / SAP Overview
4/17/2017

10. Recent business trends favoring ERP growth
Business Process Reengineering ( BPR )
Most large companies are attempting to cut in-house development costs, improve customer service, and speed products to market by reorganizing their existing business processes.
Software Pricing
Licensing and pricing of mainframe based packaged applications are tied to the size of mainframe system on which the applications run, but now customers are now demanding user-based licensing options and major corporate applications like SAP provide this instead of the conventional platform-based pricing technique.
ERP / SAP Overview
4/17/2017

11. Recent business trends favoring ERP growth
Globalization
As businesses are becoming more global in scope, people are demanding packaged corporate applications that are available in a variety of languages with support for multiple currencies.
Integration
As more and more companies are going for BPR, there is increase in demand for integrated solution e.g.. different applications sharing a common database and thus enabling data definitions and business rules to be applied across an entire organization with the facility of doing modifications at one location only.
ERP / SAP Overview
4/17/2017

12. Business process benefits clients expect from an ERP project
Global process/ Product management
Integrated Supply Chain Management
Leverage purchasing and vendor management
Order cycle time/ customer service improvement
Inventory reductions
Reduced information systems costs on an ongoing basis
Improved business management through worldwide integration and information
Logistics and Distribution
Sales & Customer Service
Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer
Logistics
ERP / SAP Overview
4/17/2017

13. Major ERP vendors SAP ECC
Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier, but are subsets of Oracle now )
Peoplesoft
JD Edwards
Baan
Recipe for a successful ERP application
Comprehensive functionality
Integration among modules and functions
Best Business Practices
Global support
ERP / SAP Overview
4/17/2017

14. What results can be expected from an “ERP culture”?
Reduced working capital requirements
Improved customer service
Improved direct labor productivity
Reduced purchase costs
Reduced obsolescence
Reduced overtime
Having the figures to make decisions
Having accountability throughout the organization
Improved quality of life
ERP
ERP / SAP Overview
4/17/2017

15. SAP ECC Overview Systems Applications & Products ERP / SAP Overview
4/17/2017

16. SAP AG – At a Glance Founded in Germany in 1972
Market Leader in Industrial Enterprise Application (IEA)
About 56% market share in the ERP market
Worldwide presence in over 50 countries
18,000+ employees
Trained consultants doubled since 1996 (40,000)
About 20,000 companies in 120 countries
Around 64,500 installations of SAP
Strength lies in its high degree of integration, mainly for large, global corporate enterprises
Significant presence in Global Fortune 500 companies
ERP / SAP Overview
4/17/2017

17. SAP R/1 , R/2 The R/1 system The R/2 system Developed for ICI Chemical
Released 1972
Focused on Sales & Distribution and Materials Management
Discontinued after release of R/2
R/2 Basis System
The R/2 system
Reorganized as leading mainframe software for large multinational corporations
No sales effort planned – reactive only
4,300 copies worldwide in 1993
Mainframe-based to replace user legacy software; co-existence and migration strategy underway for R/2 and ECC
ERP / SAP Overview
4/17/2017

18. SAP ECC : Latest Release
From Release 4.0 (released May, 1998), SAP has an object-oriented, component-based architecture, which splits applications into separate components, each with its own database, but a common underlying Business Framework.
The latest SAP R3E Enterprise Architecture, have separate release numbers and release cycles for each of the 3 layers. There is no R3E release number as a whole.
SAP Web Application Server (6.20)
SAP ECC Enterprise Core (4.7)
SAP ECC Enterprise Extension Set (1.10)
1. SAP Web Application Server (6.20)
The SAP Web AS adds native support for
Unicode
HTTP(HTTPS, SMTP, SOAP, …)
J2EE
It is maintained through Support Packages and annual release upgrades (6.30, 6.40, …).
It can actually function as a standalone Web Application Server.
ERP / SAP Overview
4/17/2017

19. SAP ECC : Latest Release (Contd.)
2. SAP ECC Enterprise Core (4.7)
Enhances and freezes 4.6C Financial, Logistics, and HR functionality.
Incorporates some Industry Solutions.
It will be maintained by Support Packages and no Release Upgrades are planned at least for several years.
3. SAP ECC Enterprise Extension Set (1.10)
New, enterprise-centric Financial, Logistics, and HR functionality is delivered in “encapsulated” Extension Sets (also referred to as being contained in Enterprise Add-Ons).
Maintained through Support Packages and annual release upgrades (2.00, 3.00, …).
You must upgrade an Extension Set in its entirety - the entire Extension Set must be installed, but the customer can then selectively activate individual Extensions.
Extension Set 1.10 has five Extensions:
SCM
PLM
Financial HR
Travel Management
ERP / SAP Overview
4/17/2017

20. SAP R3E and mySAP.com
R3E has another layer known as Plug-In. It’s first shipment release number is The Plug- In provides basis technology and “connectors” to support communication with mySAP components and communication with Extension Sets that contain mySAP components. The Plug-In is also supported through Support Packages.
In March, 2003, SAP announced mySAP ERP, which “extends ERP into a truly collaborative environment”mySAP ERP, “powered by NetWeaver,” incorporates mySAP Financials and mySAP HR as well as Operations (e.g., purchase order management, inventory management) and Corporate Services (e.g., real estate and travel management).
The mySAP Business Suite now consists of: mySAP ERP, mySAP CRM, mySAP SCM, mySAP SRM, and mySAP PLM.
ECC Enterprise is a distinct product, but is fully compatible and incorporated within mySAP ERP. Customers have the option of switching from ECC Enterprise to mySAP ERP. This is not a technical upgrade, but a conversion of their license/contract SAP ends support of all SAP ECC releases 4.6C and earlier at the end of Upgrades to ECC Enterprise are a necessary step before (optional) license/contract conversion to mySAP ERP.
ERP / SAP Overview
4/17/2017

21. SAP NetWeaver Existing Systems
SAP has since broadened the integration vision of mySAP Technology into a blueprint they call the Enterprise Services Architecture (ESA).
SAP NetWeaver is a comprehensive integration and application platform”, mySAP Technology is now renamed SAP NetWeaver™; NetWeaver delivers the ESA blueprint.
SAP NetWeaver is a vision, or paradigm, of total integration of :
People
Information
Business Processes
Applications
SAP has a team of over 2000 developers in a single organization, working on NetWeaver.
Existing Systems
ERP / SAP Overview
4/17/2017

22. SAP ECC : 3 Tier Architecture
Those SAP ECC software components that
specialize in the management , storage and
retrieval of data form the Database Layer
The Database Layer
specialize in processing business
applications form the Application Layer.
The Application Layer
specialize in interacting with end-users
form the Presentation Layer.
The Presentation Layer
ERP / SAP Overview
4/17/2017

23. SAP ECC : 3 Tier Architecture
Presentation Layer
components
Application Layer
components
Database Layer
components
reside in:
reside in:
reside in:
Presentation servers:
Systems capable of
providing a graphical
interface.
Application servers:
Specialized systems
multiple CPUs and
vast amounts of RAM.
Database servers:
Specialized systems
with fast and large
hard drives.
Heterogeneous Platforms
ERP / SAP Overview
4/17/2017

24. SAP ECC : 3 Tier Architecture
Presentation Layer components are installed across many PCs
The Application Layer
components are installed
across one or more high-
end servers.
The Database Layer
components are installed on
high-end database server.
ERP / SAP Overview
4/17/2017

25. SAP ECC Overview ECC Client/Server ABAP/4 SD FI Sales & Distribution
Financial
Accounting MM CO
Materials
Mgmt.
Controlling PP
ECC TR
Product
Planning
Treasury
Client/Server
ABAP/4 QM PS
Quality
Mgmt.
Project
System PM WF
Plant Mainte-
nance
Workflow HR IS
Human
Resources
Industry
Solutions
ERP / SAP Overview
4/17/2017

26. Finance and Accounting
Integration
S U P P L I E R
C U S T O M E R
S A P R / 3
Procurement
Production
Distribution
Finance and Accounting MM PP SD FI CO
All business processes throughout the supply chain are executed in one system sharing all information
Workflow
All business processes throughout the supply chain are INTEGRATED & executed on a common system sharing all information
Scalability
Modular
Model innumerable business processes
Industry best practices
Can be customized
IS- Plug-in
ERP / SAP Overview
4/17/2017

27. SD: Sales and Distribution
SAP
ECC SD SD SD
Sales & Distribution
ERP / SAP Overview
4/17/2017

28. SD SD Overview Inquiry Quotation Purchasing Materials Planning
Sales Order
Production
Pricing
Delivery to Customer
Picking
Goods Receipt
Packing
Goods Issue
Customer Stock
The dynamic nature of SD means that a wide range of activities must be carried out in the sales department. The SD system provides solutions for the most varied requirements in the area of quotation, sales order and outline agreement processing.
It provides:
Processing of inquiries, quotations, sales orders as well as outline agreements. The SAP system excels in its monitoring / reporting functionality in this area.
Processing in a make-to-order environment
Complaint Processing, returns, and other various debit and credit memos
Delivery Scheduling which takes into account, transit, loading, picking/packing and transportation planning lead times.
Availability Checking is automatically carried out for the specified plant. In addition, you can manually check other plants when full quantities are not confirmed.
Tax determination
Credit Management allows for flexible rules processing and control
Input tools to make for more efficient and accurate sales order processing
Pricing
Flexible printing of commercial papers and production of various other outputs mediums, for example, EDI.
Invoicing
Transportation
ERP / SAP Overview
4/17/2017

29. Process Chain: Sales Distribution
Inbound Logistics
from Materials
Management
Outbound Logistics
to Customer
Sales Order & Distribution
Process
Receive Payment FI
- Create pick list
- Create trans-
portation
work list
- Create loading
Support Customer Sales
(Customer Info Analysis)
- Optional -
Create Invoice
FI/CO/PA
Process Customer
Inquires
- Optional -
Issue Goods
(Ship Product) FI MM
Provide Customer
Quotations
- Optional -
(Documents)
Create Delivery Note
- Check credit
- Check product availability
- Determine pricing
- Estimate delivery schedule
- Determine conditions of
sale
Sales allows you to execute different business transactions based on sales documents defined in the system.
Four groups of sales documents are differentiated:
Customer inquiries and quotations
Sales orders
Outline agreements, such as contracts and scheduling agreements
Complaints, such as free of charge deliveries, credit and debit memo requests and returns
Deliveries and billing documents can be created and processed from the sales document. Some sales documents, such as cash sales and rush orders, automatically trigger the creation of subsequent deliveries and billing documents
Create Sales Order
FI/CO/PA
Support Customer
Agreements
- Optional - MM
(Activities) PP
ERP / SAP Overview
4/17/2017

30. ? ? Order Entry OK PP FI MM FI Credit Management
Dynamic Availability Check
Cash Forecast ? OK ?
Sales Order Definition :
Request from a customer to a company to deliver a defined quantity of products or provide a service at a certain time.
The sales area that accepts the inquiry is responsible for completing the agreement.
Sales-related business transactions are recorded in the system as sales documents. These are grouped into four categories:
Pre-sales documents: inquiries and quotations
Sales orders
Outline agreements, such as contracts and scheduling agreements
Customer problems and complaints, leading to free-of-charge deliveries and credit memo requests
ERP / SAP Overview
4/17/2017

31. Delivery/Shipment ProcessingMM WM FI MM
Ship to party: C100
Item Material Qty
Credit Management
Static Availability Check .
Delivery
Note
Picking
List
Picking
Packing
Transportation
When you enter a sales order, you can only confirm the delivery of the goods for the required delivery date if the goods are available for all the necessary processing activities which take place before delivery:
The shipping department must ensure that freight forwarding or another shipping company is advised early enough so that sufficient time remains for packing and loading to be carried out. An availability check can be carried out on the deadline date for availability for the goods.
The procurement department must ensure that the production and purchasing departments are advised of inadequate stock quantities so that goods can either be produced punctually or ordered. Sales transfers the information on materials ordered as requirements to material requirements planning. Requirements are planned outward movements of stock. The transfer of requirements informs production that goods must be produced, or advises purchasing that purchase requisitions have been created for which purchase orders must be created and sent to the suppliers. An availability check can only be carried out if these requirements are transferred.
When you create a delivery, an availability check is initiated for the picking date. This check is carried out along the same lines as in the sales order. If you do not carry out an availability check for particular materials in the sales order, you should definitely check whether the order quantity is available and can be delivered when you create the delivery. Even if you have checked the availability situation in the order, it makes sense to check it once again in the delivery. The availability check is calculated using planned inward and outward movements of goods. Therefore the delivery situation might have changed in the meantime due to unforeseen circumstances, such as lost output. The availability check in the delivery takes any such changes into account.
ERP / SAP Overview
4/17/2017

32. Picking/Packing Picking without Picking Confirmation
Sales Order
Delivery
Picking without Picking Confirmation
Picking with Picking Confirmation
Picking
Request
Print Picking List
Confirm Picking
Request
Picking
Confirmation
Picking The picking process involves taking goods from a storage location and staging the right quantity in a picking area where the goods will be prepared for shipping. Depending on the picking procedure being used, you can either determine delivery-relevant data before picking or wait until after picking is completed to record it. Delivery-relevant data may be made up of the following:
Which batches a material is picked from
Which serial numbers are picked
Which valuation types the stock is taken from
Packing Packing is part of delivery- and shipment processing. When you process a delivery, you can select delivery items for packing and assign them to handling units. The Packing component and related packing information enables you to:
Update the stock situation of packing materials
Monitor returnable packaging stocks at the customer's or forwarding agent's place of business
Help you find you what was in a particular container (for example, if a customer maintains that they have received an incomplete delivery)
Make sure that the weight and volume limits have been adhered to
Ensure that products have been packed correctly
Goods Issue
ERP / SAP Overview
4/17/2017

33. EDI Invoicing FI FI Single Invoices Collective Invoices Invoice ListsPA
Profit Center Accounting/Profitability Analysis
Accounts Receivable/General Ledger
Cash Forecast CO
PCA FI FI
Single Invoices
Collective Invoices
Invoice Lists
Credit/Debit Notes
EDI
You can create billing documents:
with reference to a sales order
with reference to a delivery
with reference to external transactions:
ERP / SAP Overview
4/17/2017

34. Materials Management . . MM MM Overview SAP ECC ERP / SAP Overview
4/17/2017

35. MM MM Overview (Contd.) Material requirement planning
External procurement
Purchasing
Internal procurement
Production
Invoice
verification
Master data
Goods
receipt
Warehouse
management
Material
Batch
Vendor
Customer
G/L
Storage bins
Inventory
management
Goods
issue
Transfer
posting
The main tasks of materials planning are monitoring stocks and automatically generating order proposals for purchasing. This is achieved using different planning methods.
Purchase requisitions are approved through a release procedure. The release procedure determines who is authorized to approve the release and in what order. Purchase requisitions can subsequently be converted into purchase orders.
A source of supply must be found for each released purchase requisition in the system. This allocation can be made manually or automatically, for example, if steady vendors exist.
If no source of supply can be allocated, then the purchase requisition is marked for RFQ processing. Requests for quotations can be sent directly to various vendors.
Comparisons are made for incoming quotations and the information can be stored in the system as purchasing information records. If the buyer has enough information, he can generate a purchase order from a purchase requisition.
Vendor evaluation simplifies the process of source selection. It allows continuous tracking and reviewing of existing relationships. Vendors are evaluated on the basis of uniform criteria such as price, on-time delivery performance, quantity reliability, and customer service. Each vendor is given a score for each of the criteria, as well as an overall score.
Internal and external accounting
Sales and distribution
ERP / SAP Overview
4/17/2017

36. MM MM Overview (Contd.) Material requirement planning
External procurement
Purchasing
Internal procurement
Production
Invoice
verification
Master data
Goods
receipt
Warehouse
management
Material
Batch
Vendor
Customer
G/L
Storage bins
Inventory
management
Goods
issue
Transfer
posting
Purchase orders can be created with or without reference to a purchase requisition or quotation.
Purchase orders can support the procurement of goods and services. In addition, goods can be purchased for inventory or consumption.
Maintenance of long-term agreements with a vendor is supported using either a contract or scheduling agreement. A contract is an agreement with a vendor that specifies a target quantity or value over a validity period. Release orders (purchase orders) can then be created throughout the life of the contract. SAP also supports ‘centralized purchasing’ in which the terms and conditions of a contract can be used by various companies (legal entities). A scheduling agreement designates a specific quantity within the validity period and contains definite delivery dates in the form of a delivery schedule.
If order requirements point to account assignment objects, such as cost centers or projects, then these are updated when the purchase order is created.
SAP supports third-party, subcontract, and consignment processing.
Statistics and history information is available for purchase orders.
Release 3.0 provides the functionality to apply release procedures to RFQs, purchase orders, contracts, and scheduling agreements.
When goods are received, they are compared with the corresponding purchase order. Any variations are checked against defined tolerance levels and are rejected if necessary.
The posted goods immediately update the stock levels.
The value of the incoming and outgoing goods is updated at the same time in Financial Accounting.
Internal and external accounting
Sales and distribution
ERP / SAP Overview
4/17/2017

37. Material - Central Master “Record” for Logistic
456
Inventory
Purchasing
Desc:
Raw Material - 456
123
Inventory
Quality
Sales Information
Production Information
Desc:
Product - 123
Material Master Data
Details on materials an enterprise procures externally or produces in-house. The unit of measure and the description of a material are examples of the data stored in a material master record. Other SAP Logistics components also access the material data.
ERP / SAP Overview
4/17/2017

38. Data in the Vendor Master
Maintenance Level
Client Purchase Organization Company Code
Mandatory maintenance at the
Purchasing Organization Level
Optional Maintenance at the Plant Level, the Vendor Sub-Range Level or a combination of the two
General Data
Address
Phone and Fax No.
Control Data
Purchasing Data
Terms of Payment
Contact Person Minimum Order Value
Account Data
Payment Terms
Payment Method
Accounting Clerk
Vendor Master Data
Information about external suppliers (creditors). The vendor’s name and address, the currency the vendor uses, and the vendor number (stored in the SAP system as an account number) are typical vendor data.
ERP / SAP Overview
4/17/2017

39. External Procurement Environment
Requirement
Determination
RFQ
Source List
Purchase
Requisition
Quotation
Quota
Arrangement
Source
Determination
Vendor
Selection
Price History
Purchasing Data
Outline
Agreement
Info Record
Goods Receipt
Invoice
Receipt
Purchase
Order
Purchasing communicates with other modules in the SAP System to ensure a constant flow of information. For example, it works side by side with the following modules:
Controlling (CO)
The interface to the cost accounting system (Controlling) can be seen above all in the case of purchase orders for materials intended for direct consumption and for services, since these can be directly assigned to a cost center or a production order.
Financial Accounting (FI)
Purchasing maintains data on the vendors that are defined in the system jointly with Financial Accounting. Information on each vendor is stored in a vendor master record, which contains both accounting and procurement information. The vendor master record represents the creditor account in financial accounting.
Through PO account assignment, Purchasing can also specify which G/L accounts are to be charged in the financial accounting system.
Sales and Distribution (SD)
Within the framework of materials planning and control, a requirement that has arisen in the Sales area can be passed on to Purchasing. In addition, when a requisition is created, it can be directly assigned to a sales order.
ERP / SAP Overview
4/17/2017

40. Goods Movement Ad hoc. Delivery Production Inventory Inventory Goods
Receipt
Delivery
Production
Inventory
Inventory
Transfer
Posting
Goods
Issue
Goods
Issue
Planning, Entry, and Documentation of all Goods Movements
Goods movements include both "external" movements (goods receipts from external procurement, goods issues for sales orders) and "internal" movements (goods receipts from production, withdrawals of material for internal purposes, stock transfers, and transfer postings).
For each goods movement a document is created which is used by the system to update quantities and values and serves as proof of goods movements. You can print goods receipt/issue slips to facilitate physical movements and monitor the individual stocks in the warehouse.
Consumption
Samples
Sales Order
ERP / SAP Overview
4/17/2017

41. Automatic Price Update
Invoice Verification FI CO
Orders / Projects /Cost centers
G/L accounts / Accounts payable
Payment
Vendor
invoice
Tolerance Check?
Vendor 3
OK !
Blocked Invoice
e.g...
Invoice
Verification
Release of
Blocked Invoice
Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that incoming invoice are verified in terms of their content, prices, and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.
In Materials Management, Logistics Invoice Verification has the following features:
It completes the material procurement process, which started with the purchase requisition and resulted in a goods receipt.
It allows invoices that do not originate in materials procurement (such as services, expenses, course costs) to be processed.
It allows credit memos to be processed, either as invoice reversals or return deliveries.
Delivery Invoice
Preliminary Posting
Automatic Price Update
ERP / SAP Overview
4/17/2017

42. Production Planning . . PP PP Overview SAP ECC ERP / SAP Overview
4/17/2017

43. Production Planning CyclePP
Sales and Operations Planning
Master Data
Material Master
Bill of Materials
Work Centers
Routings
PRT
Master Production Scheduling
Sales & Distribution
Demand Management
Materials Management
MRP
Capacity Planning
MRP List
Plant Maintenance
Production Order Cycle or
Purchase Order Cycle
Costing
ERP / SAP Overview
4/17/2017

44. Production : Process Chain
Production Chain
Inbound Logistics from
Procurement or Production Chain
Outbound Logistics to Materials
Management or Sales Chain
Manufacturing
Process
Archive/Delete Order
Determine Production Requirements
via MRP Output or Manually)
Settle Production Order FI
Create production order
(via conversion of planned order
to production order or manually) CO
Transfer Produced Goods to Inventory FI
Check material availability
(Automatic)
Confirm production of
goods is completed
Release Production Order
Produce Goods
Print shop floor papers
(actual work orders)
Withdraw materials from
inventory (automatic/manual) MM
ERP / SAP Overview
4/17/2017

45. Production Planning Production Planning Functionality Master Data
Sales and Operations Planning &
Demand Management
MRP
Production Order & Capacity Planning
ERP / SAP Overview
4/17/2017

46. Material Requirements Planning
Demands
Quantity:
12.000
Stochastic
Deterministic Planning
Bill of
Material
Explosion
Demands
3. Qrt
4. Qrt
Capacity Planning
Lot Sizing Procedure Net Change
MRPII - The production planning philosophy aiming to integrate individual plans with the supply.
The BOM is exploded and the planned order is scheduled during the MRP run to determine the material requirements and create purchase requisitions.
ERP / SAP Overview
4/17/2017

47. MRP - Planning Procedures
Deterministic
MRP
Consumption-Based
Planning
Forecast-Based
Planning
Reorder Point
Planning
Automatic
Reorder Point
Manual
Reorder Point
ERP / SAP Overview
4/17/2017

48. Release Production Order
Production Control MM FI CO
Goods Issue
Costs
Open Production Order
Release Production Order
Planned Orders
ERP / SAP Overview
4/17/2017

49. Quality Management . . QM QM Overview SAP ECC ERP / SAP Overview
4/17/2017

50. QM
QM Overview
The QM application module is a quality control and information system supporting quality planning, inspection, and control for manufacturing and procurement SD FI
Sales &
Distribution
Financial
Accounting MM CO
ECC
Materials
Mgmt.
Controlling PP AM
Product
Planning
Fixed Assets
Mgmt. QM PS
Quality
Mgmt.
Project
System PM WF
Plant Mainte-
nance
Workflow HR IS
Human
Resources
Industry
Solutions
ERP / SAP Overview
4/17/2017

51. QM in Logistics Goods receipt
History-dependent intensity of quality inspections
Production
Inspection during production
Defects recording in QM
Control charts
Goods issue
Quality management in SD (certifies quality)
ERP / SAP Overview
4/17/2017

52. Plant Maintenance . . PM PM Overview SAP ECC ERP / SAP Overview
4/17/2017

53. Plant Maintenance - OverviewPM
Pre-defined
work steps
External
Services
Material
Requisitions
Parts/Supplies
Reporting
Notifications
Create
Work
Orders
Planned
Work Orders
Schedule
WO’s
Close and
Settle WO
Emergencies
Labor
Shop
Papers
Special
Tools
Preventive/Predictive
Maint. WO’s
ERP / SAP Overview
4/17/2017

54. Finance . . FI FI Overview SAP ECC
The SAP Financial Accounting module is a multi-ledger system which views accounts payable, accounts receivable, and the general ledger as a single block.
The Financial Information System is used to evaluate and analyze financial operations such as customer payments, cash discount history, and overdue items.
ERP / SAP Overview
4/17/2017

55. Components of FI FI General Ledger FI-GL Special Ledger FI-SL
FI-AR
Accounts Receivable
FI-LC
Legal Consolidation
FI-AP
Accounts Payable
FI-AA
Asset Accounting
There are two major components of FI: configuration and functionality.
Configuration includes all the customizing and settings that the business determines in order for the application to be tailored to the business industry needs.
As far as functionality is concerned, the SAP system offers accounts receivable with integrated credit management and financial information systems, accounts payable with integrated invoice verification, a general ledger, and components for consolidation, foreign currency, and cash management.
ERP / SAP Overview
4/17/2017

56. Corporate Structure Financial Management Area
Corp. Group Level
Company Code (Company)
Legal Entity
Controlling Area
Controlling Area
Controlling Area
Controlling Area
Controlling Level
Plant Cost Centers
Management Units
To accomplish financial reporting and control accounting, several structural elements have been defined.
These levels form the corporate structure to which SAP speaks. The SAP system consists of several organizational units. All the organizational units can be linked in a wide variety of different relationships within the overall system.
The group level is, for example, used for consolidations and profitability.
The legal entity is reported upon based on the company code.
Controlling monitors the internal management of the business.
Within each management unit, the local organization can monitor the business.
Work Place/Job
Material Product
ERP / SAP Overview
4/17/2017

57. The Elements of Financial Accounting
Finance Information System
Executive Information System
G/L Information System
Foreign Exchange Management
Business Analysis
Cash Management and Forecast
Multiledger
Bank Accounts
General Ledger
Payables
Receivables
Extended General Ledger
Consolidation
Accounts Payable
Invoice Verification
Accounts Receivable
The SAP Financial Accounting module is a multi-ledger system which views accounts payable, accounts receivable, and the general ledger as a single block.
The Financial Information System is used to evaluate and analyze financial operations such as customer payments, cash discount history, and overdue items.
Credit Management
ERP / SAP Overview
4/17/2017

58. The Components of FI Functionality Modules Configuration
Organizational Structures
Company Codes
Business Area
Organization of Accounting
Ledger/Sub-ledger
Chart of Accounts
Credit Control
Setting Credit Limits
Master Records
G/L Accounts
Customers
Vendors
Banks
Chart of Depreciation
Depreciation Areas
Assets
Extended General Ledger
Functionality
Documents/Transactions Fiscal Year Posting Adjustments Payment Terms Balance Sheets/Income Statements Foreign Currency Closings Taxes On-Line Display Special G/L Transactions Interest Calculation Planning Correspondence Payment Program Fixed Assets Reporting Analysis Legal Consolidations
Modules
General Ledger Special Ledger Accounts Payable Legal Consolidations Accounts Receivable Credit Management Asset Accounting Cash Management and Forecast Treasury
There are two major components of FI: configuration and functionality.
Configuration includes all the customizing and settings that the business determines in order for the application to be tailored to the business industry needs.
As far as functionality is concerned, the SAP system offers accounts receivable with integrated credit management and financial information systems, accounts payable with integrated invoice verification, a general ledger, and components for consolidation, foreign currency, and cash management.
ERP / SAP Overview
4/17/2017

59. Controlling. . CO CO Overview SAP ECC
What is controlling in the CO System?
Controlling refers to the management accounting tasks performed within a company which provide the basis for:
A reliable and efficient decision making process
The realization of company profit targets
ERP / SAP Overview
4/17/2017

60. CO Components of CO CO Modules Functionality CO Configuration
Organization Structures
Master Data
Planning Setup
Criteria and Values
Valuation
CO Modules
Cost Center Accounting
Order and Project Acctg.
Transaction-Based Postings
Periodic Allocations
Profit Center Acctg.
Product Costing
Activity-Based Costing
Budgeting
Profitability Analysis
Business Planning & Control
Functionality
Settlement
Internal Orders
Open Item Management
Profitability Analysis
Overhead Management
Planning
Transaction-Based Posting
Periodic Allocations
Monitoring Actual Activities vs. Planned
There are two major components of CO: configuration and functionality. The purpose of configuration is to arrange the main functional areas of the company into a detailed organizational structure, which can then be used as a basis for the detailed cost structure required for any fully integrated controlling system.
Costs are classified using cost elements. Cost centers typically represent a department that incurs costs and orders and are used to track and allocate costs to receivers. Cost center hierarchies drive reporting structures in cost center accounting.
Within controlling, there are several functional modules which can be used to plan, monitor and analyze overhead costs, product costs, and profitability, for example. These modules provide sales, marketing, product management, and corporate planning departments with information for the purpose of controlling and analyzing business information.
ERP / SAP Overview
4/17/2017

61. The Elements of Managerial Accounting
Overhead Cost Controlling
Overhead Cost Controlling
Profitability Analysis
Report
Structure:
Market Segment
Region Division
Cost Centers PA
Cost of Sales
PCA
Cost of Period
Report Structure:
Profit
Center, GL
Accounts
Controlling
What is controlling in the CO System?
Controlling refers to the management accounting tasks performed within a company which provide the basis for:
A reliable and efficient decision making process
The realization of company profit targets
ERP / SAP Overview
4/17/2017

62. Integration within FI/CO
Chart of Accounts
Financial Accounting
Management Accounting
Product & Production Controlling
Sales & Profitability Controlling
Asset Accounting
Asset Accounting
Overhead Cost Controlling
Asset Accounting
Gen. Ledger Accounting
Cost Center Controlling
Mass Production
Cost of Sales Accounting
Investment Controlling
Accounts Receivable
Actual Costing
Continuous Flow Prod.
Period Accounting
Static Standard Costing
Plant Maintenance
Accounts Payable
Batch Production
Account
Cash Management
Flexible Standard Costing
Revenue
Make to Order Prod.
The CO module receives a large part of its information from various modules within financial accounting, especially the general ledger, as well as the sub-ledger accounts in both asset accounting and materials management.
The overall planning process is integrated by manually reconciling the individual operational plans in the financial, operational, and profit and loss areas. This integration with the financial accounting system is a major component of a comprehensive planning and controlling system.
Central Line Items
Order Controlling
Central Documents
Project Controlling
Central Totals
ERP / SAP Overview
4/17/2017

63. Integration PP SD MM FI CO FI Planned Requirement Customer MRP Order
Requirement on component level
Planned
Shipping
Order
Purchase
Production
Order
Invoicing
Order
Goods
Account
Receipt
Receivable
Production
completed
Invoice FI
Verification CO FI
Order
Settlement
Accounts
Which modules are involved?
Payable
ERP / SAP Overview
4/17/2017

64. SAP ECC : Components Master Data Application Transaction Data ABAP
Programs
Organization Structure
Configuration
Key Data Elements
Functionality Configurations
ERP / SAP Overview
4/17/2017

65. What is Customization ? Customization Coding Configuration
The adaptation of application software to customer-specific needs is accomplished in two ways :
Coding
Programming customer-specific code that replaces or complements components of the application
Configuration
Rendering the application appropriate to a specific customer by specifying data on which the application operates
Because configuration is captured in data, as opposed to code, it survives software upgrades and other changes.
ERP / SAP Overview
4/17/2017

66. Organizational Structures in ECC
Organizational Units
Cost Accounting
Client
External Logistics
Controlling Areas
Accounting
Company Codes
Internal Logistics
(MRP/Production)
Plants
Sales
Organizations
Purchasing
Valuation Areas
Objectives for the organizational structures in ECC:
The ability to fully portray complex organizational structures.
Be able to incorporate possible changes into these structures.
Separation of logistic views (purchasing, sales), the internal accounting view and the accounting view.
Inter-company processing can be handled by these structures.
Inventory Management
Storage Locations/Batches/Special Stocks
ERP / SAP Overview
4/17/2017

67. Organizational Structure in SAP ECC
Production Planning
Financial Accounting
Plant
Company
Code
Client
Controlling
Human Resources
Controlling
Area
Personnel Area
Sales and Distribution
Materials Management
Sales
Area
Purchasing
Organization
ERP / SAP Overview
4/17/2017

68. ABAP Programming
SAP ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System.
ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAP GUI) at presentation level.
ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System.
ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAPGUI) at presentation level.
ERP / SAP Overview
4/17/2017

69. Why do we need ABAP Development ?
SAP ECC scope
ABAP programs are objects of the ECC Repository. Like all other Repository objects, you maintain them using an ABAP Workbench Tool.
To open ABAP programs directly from the tool ABAP Editor, select the menu path Tools -> ABAP Workbench ->Development -> User Interface -> ABAP Editor from the SAP menu of SAP Easy Access (or start Transaction SE38). If you want to change a program using this method, you must already know its name and environment.
This procedure is only suited for maintaining or creating relatively simple or short programs, which have few or no additional components. It is better to access ABAP programs through Tools -> ABAP Workbench -> Overview -> Object Navigator from the SAP menu of SAP Easy Access (or start Transaction SE80).
ERP / SAP Overview
4/17/2017

70. SAP Solution Specific company requirements SAP ECC scope
ERP / SAP Overview
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71. SAP Solution Specific company requirements SAP ECC scope
New Functionality
Development
Non SAP
applications
ERP / SAP Overview
4/17/2017

72. Summary
Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools for forecasting demands and planning according to the forecast.
ERP is an integrated suite of Applications to meet corporate needs.
Some major ERP vendors are : SAP ECC, Peoplesoft, Oracle, Baan and JD Edwards.
SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial Enterprise Application (IEA).
The latest SAP R3E Enterprise Architecture, have separate release numbers and release cycles for each of the 3 layers. There is no R3E release number as a whole.
SAP Web Application Server (6.20)
SAP ECC Enterprise Core (4.7)
SAP ECC Enterprise Extension Set (1.10)
SAP NetWeaver is a vision, or paradigm, of total integration of :
People
Information
Business Processes
Applications
ERP / SAP Overview
4/17/2017

73. Summary (Contd.)
SAP has a 3 tier architecture comprising of the Presentation layer, Application layer and the Database layer.
The SAP solution is divided in different areas or Functional Modules like SD, MM, PP, QM, PM, FI, CO etc.
ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System.
ERP / SAP Overview
4/17/2017

74. Questions What is MRP ? What is ERP ? When was SAP AG founded ?
What are the 3 layers of the SAP ECC ?
What is SAP Netweaver ?
What is the latest version of SAP ?
What are the different functional modules of SAP ?
What programming language is used for SAP applications ?
Why do we need ABAP developments ?
ERP / SAP Overview
4/17/2017