TERP10 - ERP Business Process Integration Based on R3 Enterprise(2005Q1)

TERP10 ERP Basic Process Integration

TERP10

ERP Business Process Integration based on R/3 Enterprise

THE BEST-RUN BUSINESSES RUN SAP SAP AG 2004  SAP AG©2004

mySAP ERP – R/3 Enterprise, BW3.2, SEM3.5 2005/Q1 Material number: 50069275

Copyright

Copyright 2005 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.

 SAP AG 2004

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Prerequisites for Participants

z Knowledge of business processes in enterprise planning and management z Proficiency in navigation within SAP systems

 SAP AG 2004

Target Audience

z Participants

Solution architects, project managers, project team members, and solution consultants who want to gain a broad fundamental understanding of the processes, business interrelations, and integration of the individual business areas within the mySAP ERP solution.

z Duration: 10 days

 SAP AG 2004

User notes

These training materials are not a teach-yourself program. They complement the explanations provided by your course instructor. Space is provided on each page for you to note down additional information.

There may not be sufficient time during the course to complete all the exercises. The exercises provide additional examples that are covered during the course. You can also work through these examples in your own time to increase your understanding of the topics.

Course Overview

Contents: z Course Goals z Course Objectives z Course Content z Course Overview Diagram z Main Business Scenario

 SAP AG 2004

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Course Goals

This course will prepare you to: z Explain how the fundamental business processes interact with mySAP ERP in the areas of Sales Order Management, Material and Production Planning, Procurement, Inventory Management, Project Management, Plant Maintenance, Human Capital Management, and Financial and Management Accounting. z Understand the analytical & reporting functions in mySAP ERP, especially in the components SAP SEM and SAP BW

 SAP AG 2004

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Course Objectives

At the conclusion of this course, you will be able to: z Describe enterprise resource planning based on mySAP ERP. z Explain SAP NetWeaver as the technical platform of my SAP ERP. z Describe the integration of the mySAP ERP core applications. z Perform integrated processes in mySAP ERP.

 SAP AG 2004

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Course Content I Preface Unit 1 Course Overview Unit 2 ERP Basics Unit 3 SAP NetWeaver Unit 4 Business Warehouse Unit 5 Sales Order Management Unit 6 Material Planning Unit 7 Manufacturing Execution Unit 8 Procurement Cycle Unit 9 Inventory and Warehouse Management

 SAP AG 2004

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Course Content II

Unit 10 Lifecycle Data Management Unit 11 Project Management Unit 12 Enterprise Asset Management Unit 13 Human Capital Management Unit 14 Financial Accounting Unit 15 Management Accounting Unit 16 Strategic Enterprise Management Exercises Solutions Appendices  SAP AG 2004

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Course Content III Appendices Appendix A – Navigation Appendix B – Glossary Appendix C – Outlook to Business Suite Components Appendix D – Process Manufacturing Appendix E – Process Manufacturing - Exercises and Solutions Appendix F – Repetitive Manufacturing Appendix G – Repetitive Manufacturing - Exercises and Solutions Appendix H – Additional Procurement Functionality

 SAP AG 2004

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Course Overview Diagram TERP10

Course Overview ERP Basics ERP SAP NetWeaver Business Warehouse Sales Order Management Material Planning Manufacturing Execution Procurement Cycle Inventory and Warehouse Management Lifecycle Data Management Program and Project Management Enterprise Asset Management Human Capital Management Financial Accounting Management Accounting Strategic Enterprise Management

 SAP AG 2004

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Main Business Scenario

z You are involved in the implementation of mySAP ERP components. Therefore, you need to understand the integrated logistics and financial processes in R/3 Enterprise, and the use of analytical components such as Business Warehouse and Strategic Enterprise Management.

 SAP AG 2004

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ERP Basics

Contents: z mySAP ERP Positioning z Organizational Levels z Master Data z Transactional Data z Reporting (including BW)

 SAP AG 2004

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ERP Basics: Unit Objectives

At the conclusion of this unit, you will be able to: z Positioning of R/3 Enterprise towards mySAP ERP z Describe the SAP R/3 Enterprise organizational levels z Describe the function of SAP R/3 Enterprise Master Data z Explain mySAP ERP reporting solutions

 SAP AG 2004

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ERP Basics: Course Overview Diagram TERP10


 SAP AG 2004

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ERP Basics: Business Scenario

z Organizational levels and master data provide the framework that supports the business transactions. Reporting allows you to view master data, as well as the output of business transactions. As a project team member, it is important that you understand the fundamental concepts of organizational levels, master data, transaction data, and reporting.

 SAP AG 2004

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ERP Basics: mySAP ERP Positioning Topic Objectives

At the conclusion of this topic, you will be able to: z Understand the positioning of R/3 Enterprise towards mySAP ERP

 SAP AG 2004

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A New Wave of Information Technology Business Requirements

SAP R/2

SAP R/3

mySAP ERP

Adaptable business

Leverage

Ï

Integrated processes

Replace

X

Service-Oriented Architectures

Strategic Value

Client/Server Architecture

Efficiency & Control

Centralized Computing

Automation Advancement in Technology  SAP AG 2004

Enterprise Services Architecture (ESA) enables business innovation by leveraging existing IT assets, maximizing agility, and reducing Total Cost of Ownership (TCO). SAP Netweaver is the application and integration platform that best supports ESA using Web Services Technology.

Starting from the 70‘s there have been major technology waves – from mainframe computing to client server architectures, and now from client server technology to service oriented architectures In the past such shifts in technology have caused a complete replacement of the underlying IT infrastructure, but with the shift from SAP R/3 to mySAP ERP that‘s no longer true SAP will protect and leverage the 200 billion $ investments already made in R/3 and will take an evolutionary approach for the next technology shift towards web services driven architectures

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Architecture of mySAP ERP

Application

Focus in this course mySAP ERP Edition 2004

mySAP ERP Edition 2003

Additional Components Self-Service Procurement

Additional Components

Internet Sales

Self Services Self-Service Procurement

Self Services

Internet Sales

Strategic Enterprise M anagement

SAP R/3

SAP R/3 Enterprise

Strategic Enterprise Management

… and more

… and more

Composite Applications

Application

SAP R/3 Enterprise

SAP R/3 Enterprise

SAP ECC 5.00

SAP Basis

SAP Web Application Server

Portal

Collaboration

INFORMATION INTEGRATION

Bus. Intelligence Know ledge Mgm t Master Data Mgm t PROCESS INTEGRATION Integration Business Broker Process Mgmt APPLICATION PLATFORM J2EE ABAP DB and OS Abstraction

Composite Application Framework

SAP NetWeaver™ ‘04

PEOPLE INTEGRATION Multi Channel Access

PEOPLE INTEGRATION Multi Channel Access Portal

Collaboration

INFORMATION INTEGRATION Bus. Intelligence Know ledge Mgm t Master Data Mgm t PROCESS INTEGRATION Integration Business Broker Process Mgmt

Life Cycle Mgmt


SAP NetWeaver™

Life Cycle Mgmt

Technology

up to 4.6C

APPLICATION PLATFORM J2EE ABAP DB and OS Abstraction

 SAP AG 2004

This picture gives a good overview of the evolution of the ERP solutions from SAP. After the SAP R/1 and SAP R/2 products, SAP introduced SAP R/3 in 1992. Now there was a two layer architecture (SAP Basis and SAP Application). With mySAP ERP, which has been available since March 2003, SAP offered a bundle of components supporting ERP business processes. At this point, SAP R/3 Enterprise was one of those components. As you can see here, even from this point mySAP ERP was more than just SAP R/3 Enterprise plus SAP NetWeaver, since it offered many functional enhancements like Self Services, SAP SEM, and others. As mentioned in previous slides, the next steps include a tighter integration within mySAP ERP (especially with the SAP NetWeaver capabilities), enhancements in the area of usability and employee efficiency, and the reduction of TCO. The SAP ERP Central Component (ECC) represents the next step in this evolution. As you can see, the orange boxes represent the items that can be operated on an SAP ERP Central Component. And in the SAP NetWeaver area, you can see the dark blue frames that are technically integrated in the SAP ERP Central Component (Business Intelligence only on a project basis). Looking at the 2004 edition, it is clear that mySAP ERP is more than just SAP ERP Central Component plus SAP NetWeaver. Please note, that the value for the individual customer might come from one component of mySAP ERP – or the combination of several components inside mySAP ERP. When you explain the value to your customers, it is wise not to focus only on a single component. In this slide you can see the evolution of the SAP ERP solution. However, it is important to understand that this page mixes together two different views: the technical and the license view. We will come to this in the next slides in detail. But first, let’s view the benefit the customer already received with SAP R/3 Enterprise and how they are well-prepared for mySAP ERP, once they are on SAP R/3 Enterprise.

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Since Release 4.6C, SAP R/3 consisted of two parts: SAP Basis (the technology platform) and the application. To come to a higher SAP R/3 Release, customers had to upgrade both the technology and the application. With SAP R/3 Enterprise, the latest version of SAP R/3, SAP was introducing a new part within SAP R/3, the SAP R/3 Enterprise Extensions. From that point, new functionality could be delivered in the SAP R/3 system by just upgrading the SAP R/3 Enterprise Extension layer. Even if upgrading requires some investment, the upgrade of this layer has been reduced, because the Enterprise Core is not touched by this upgrade. With mySAP ERP, a new mySAP solution was born. Although there are many other SAP components included in mySAP ERP, SAP R/3 Enterprise is also included in mySAP ERP. This explains why a customer who has implemented SAP R/3 Enterprise has nothing to do from a technical perspective when changing his license to mySAP ERP.

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From R/3 to mySAP ERP SAP R/3 customers need to be aware of the fact that their “Enterprise Application Base”, SAP R/3, needs to evolve into mySAP ERP to be ready for the future … There are factors that are leading SAP R/3 customers to consider modernization, consolidation, and rationalization of their ERP environment. Some situations to look out for: z They want to consolidate multiple SAP R/3 systems to reduce cost and optimize system landscape z They have new reporting & analytics, regulatory, and transparency requirements z They need to integrate multiple, diverse ERP and other systems z Restructuring activities, mergers, and acquisitions require new target ERP landscapes z Some want to go to the mySAP Business Suite, but the step is too large and they are looking for a next step z Some simply want to extend the scope of their existing ERP functionality

… mySAP ERP provides a solution to these problems!  SAP AG 2004

What is mySAP ERP today and what will it be tomorrow? On the previous slide, you can see the first stage of mySAP ERP. The first step was to offer a bundle of existing SAP components to cover today’s requirements in ERP software. This offered additional functionalities in all areas of ERP (compared with a SAP R/3 license). The next step, now, is to start tighter integration of the SAP components included in mySAP ERP. One focus is usability and employee efficiency. This means that SAP will develop new functionality in such a way that it utilizes the full SAP NetWeaver stack. That would allow, for example, Web applications to get accessed through the SAP Enterprise Portal. Even traditional functionality, which required the SAPGUI, can be re-developed in a way that makes it optionally available through the portal infrastructure via Web applications. Another focus is reducing TCO by simplifying the system landscape. A first step in this direction will be carried out in 2004. We will come back to this later, when we are talking about integrated SAP components. However, beside lowering TCO and enhancing usability and employee efficiency, a further goal is to offer new functionality in all areas of ERP, as this is beneficial to customers.

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mySAP ERP and SAP NetWeaver mySAP ERP is the successor ERP offering to SAP R/3. z Functionality-wise mySAP ERP includes all the functionality of SAP R/3 Enterprise

mySAP ERP Analytics Financials Human Capital Management Operations Corporate Services

Plus a large number of additional business processes Integrated and Personalized functionality

z Technology-wise mySAP ERP is built on SAP NetWeaver

…Financial Supply Chain Management, Self-Service Procurement… …Self Services, Adobe Printing Forms…

Portal

INFORMATION INTEGRATION Bus. Intelligence

Knowledge Mgmt

Master Data Mgmt PROCESS INTEGRATION Integration Broker

…

Collaboration

Business Process M gmt

Life Cycle Mgmt

… Strategic Enterprise Management, Manager Self Services…

PEOPLE INTEGRATION Multi channel access Composite Application Framework

… Self Services, Collaborative Folders and Collaborative Projects…

SAP NetWeaver™

APPLICATION PLATFORM J2EE

ABAP

DB and OS Abstraction

Some examples of functionality leveraging NetWeaver technologies  SAP AG 2004

mySAP ERP is powered by SAP NetWeaver. Let’s now have a look at how the solution is already making use of the capabilities of SAP NetWeaver. This slide gives some examples that answer this question. One very good example is the Self Services provided with mySAP ERP. They utilize the portal capabilities, make use of SAP Business Information Warehouse (BW) through the Manager Self Services, and are technically based on the SAP Web Application Server. Other functionalities, like the Self-Service Procurement, utilize the Integration Broker (SAP Exchange Infrastructure).

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mySAP ERP Bill of material SAP R/3 Enterprise (default until end of ramp-up of SAP ECC)

SAP Strategic Enterprise Management

SAP ERP Central Component (mass availability from April 2005 with end of ramp-up)

SAP Learning Solution

SAP E-Recruitment

SAP Financial Supply Chain Management

SAP Business Warehouse (as part of SAP NetWeaver)

Employee Self-Services / Manager Self-Services

SAP Enterprise Portal (as part of SAP NetWeaver)

SAP cProject Suite SAP Internet Sales Web Application Component

SAP Exchange Infrastructure (as part of SAP NetWeaver) SAP Supplier Relationship Management (Self-service procurement classic scenario only)

Focus in this course  SAP AG 2004

Here you can find the bill of material for mySAP ERP. All the components shown are shipped with mySAP ERP. Since SAP ERP Central Component will reach its mass availability with the end of the SAP ramp-up process, it will only be part of the shipment starting in July 2004 if the customer is part of the rampup. Please note that this bill of material represents the software a customer can install/upgrade. It does not reflect the complete functionality of mySAP ERP, since one SAP component can offer different functions.

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mySAP ERP is a solution within mySAP Business Suite

mySAP Business Suite mySAP PLM

Purchase Order Requisitioning

mySAP SRM

mySAP ERP Inventory & Warehouse Mgmt. Manufacturing & Transportation

Sales Order Mgt. Internet Sales

Lifecycle Data-, Project-, Quality- and Asset Management

mySAP CRM

mySAP SCM

SAP NetWeaver  SAP AG 2004

mySAP ERP is the solution suite within the mySAP Business Suite It is based on SAP´s listening to customers, user groups and further inputs from analysts and other thought leaders to better serve market demands of our customers and prospects. It is ready to service operational, tactical and strategic needs of enterprise and beyond enterprises ensuring collabortion among partners. Business Solutions are part of mySAP ERP which before had to be licensed separately with the benefit to be pre – integrated due its development being continously based on our Netweaver platform. Let us have a closer look at the solution map you are all familiar with from a high level perspective :

mySAP ERP 2004 going into ramp – up end of june / beginning of July 2004

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mySAP ERP Solution Map 2004 Analytics


Corporate Governance *

New General Ledger *

E-Learning and E-Recruiting

Manager and Employee Self Services

Financial Supply Chain Management

Self Services Analytics


Financial Analytics

Operations Analytics

Workforce Analytics

Financials

Corporate Governance

Financial Accounting

Management Accounting

Financial Supply Chain Management

Human Capital Management

Employee Relationship Management

Employee Lifecycle Management

Operations: Value Generation Operations: Support Corporate Services Solution & Integration Platform Self-Service Procurement

Inventory Manufacturing Management Product Structure Project Management Management Environment, Health & Travel Management Safety

Purchasing

People Integration Mobile Business

SAP NetWeaver

Information Integration

Collaborative Project Management *

Enterprise Portal

Business Warehouse

Industry Retrofits *

Employee Transaction Workforce Deployment Management Distribution

Sales Order Management

Service Order Management

Quality Management

Asset Management

Incentive and Commission Management

Real Estate Management

Process Integration

Application Platform

Exchange Infrastructure

Internet Sales

PeopleCentric ERP *

(*) coming new with mySAP ERP 2004

 SAP AG 2004

The picture you see here represents the solution map of mySAP ERP. As with all other mySAP solutions, a solution map shows you the content provided by the specific solution.

This picture just shows the top-level of the mySAP ERP solution map. To find out more, you can look at the solution map at the SAP Service Marketplace, where you can click on the different areas in the map to get more detail. The map is available at http://service.sap.com/businessmaps --> CrossIndustry Maps --> Enterprise Resource Planning. Note: You must have a registered user id to access the map.

As you can see, this slide also highlights several areas. These are the areas where mySAP ERP offers additional capabilities compared with SAP R/3 Enterprise. As an example, a mySAP ERP customer can use SAP NetWeaver capabilities by implementing the SAP Business Warehouse or the SAP Enterprise Portal. Or the customer can implement Self-Service Procurement, Internet Sales, or other functionalities. All these functions are not available to the SAP R/3 license customer.

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Future scope of mySAP ERP vs. SAP R/3

SAP R/3 Scope Your Suppliers & Partners

Your Organization

Your Customers

mySAP ERP Scope ADAPTABLE business processes supported by FLEXIBLE platform Improved PRODUCTIVITY and increased INSIGHT by Role-based Portal/User Interface

 SAP AG 2004

So – what’s new with mySAP ERP ? First, the value chain coverage, aiming at better integrating customers and partners – key to growth strategies across industries – calls for additional functionality like e-selling and procurement y With mySAP ERP, organizations now have the flexibility to extend real-time operations beyond the enterprise to customers, partners and suppliers to speed change and fuel growth. y Second , across industries – and mostly in mid-market – flexibility/adaptability have become have become key success factors (new products faster, react to competition, …). SAP NetWeaver supports this requirement at the operational (RFID, …) and tactical levels (integrated BI and collaboration). y mySAP ERP is powered by SAP NetWeaver. Let’s have a look at how the solution is already making use of the capabilities of SAP NetWeaver. y One good example is the Self Services provided with mySAP ERP. They utilize the portal capabilities, make use of SAP BW (SAP Business Information Warehouse) through the Manager Self Services, and are technically based on the SAP Web Application Server. y Other functionalities, like the Self-Service Procurement, utilize the Integration Broker (SAP Exchange Infrastructure). y Third, the adaptive extended enterprise requires every employee to have the information he/she needs to make timely and efficient decisions. y mySAP ERP’s intuitive Web- and role-based portal environments enable easier system-wide access to one consolidated and consistent business process view which accelerates user adoption and improves collaboration

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THE ‘NEW NEWS’ MESSAGING Overarching Positioning Statement With mySAP ERP, you can swiftly sense and respond to customer requirements in real time and strategically learn and adapt to market insights by extending processes beyond the enterprise to include your entire business ecosystem. With this complete and integrated suite of next generation analytics, Human Capital Management, Financials, Operations and Corporate Services built on powerful open technology, you benefit from improved productivity, increased insight, and advanced flexibility and adaptability in accelerating business strategies. All of which means that mySAP ERP is the best choice for gaining tight operational control of all activities today, while planning for and better responding to the market and technology changes that impact your business performance and growth. Improved Productivity for Greater Efficiency and Quicker Responsiveness Accelerate operations to the next level of efficiency by extending the reach of real time business processes to engage and connect more users within and beyond your enterprise—including customers, suppliers and partners. This coupled with mySAP ERP’s intuitive Web- and role-based portal environments, ensures easier system-wide access to one consolidated and consistent business process view which increases user adoption, collaboration and productivity. With this improved efficiency, you empower everyone in your organization with the information they need to react and proactively respond to market changes quicker than their competitors. Increased Insight for More Assured Decision-Making Deepen your understanding of activities across your entire business network to improve decision-making. With mySAP ERP, you’re assured the right information, in real time, providing the insight you need to proactively isolate potential areas of concern and exploit pockets of opportunity. As one example, mySAP ERP delivers the most comprehensive and efficient corporate governance functionality by enabling you to confidently comply with the unique requirements of multiple international standards—including Sarbanes-Oxley, Basel II and IAS as well as global HR regulations. Unlike other vendors, SAP tightly integrates corporate reporting, analysis and compliance with your underlying business process and transaction systems into one complete system. The result is the sound internal control and transparent financial environment you need to mitigate risk, assure regulatory compliance and increase corporate trust. Advanced Flexibility and Adaptability to Lower Costs and Speed Change mySAP ERP, as the cornerstone of mySAP Business Suite, lets you seamlessly integrate end-to-end processes into one scalable and adaptable industry solution with the option to incrementally add the right mix of CRM, SCM or PLM functionality as your business scenarios demand over time. Open Web technology gives you the flexibility and agility you need to enable, modify and deploy processes that automatically adapt and accelerate business strategies. In addition, with mySAP ERP, powered by SAP NetWeaver™ technology, you can manage IT costs more effectively by uniquely protecting and leveraging the investments you’ve already made in SAP R/3. People’s skills and training, as well as data locked away in legacy and non-SAP systems can be easily extended to the mySAP ERP environment to lower your operational costs further. And, as new business scenarios and technologies emerge, you’ll be well positioned to speed change. Trust SAP As Your Partner for Long-Term Growth For new customers, SAP is the safest and most cost-effective choice in today’s increasingly complex global environment. The market leader with 30 years’ experience in companies of all sizes and in more countries than any other vendor, SAP with its world class partner network, is uniquely qualified to leverage the best practices of more than 25 industries into your business. SAP offers the only complete, fully-integrated suite of Human Capital Management, Financials, Operations and Corporate Services functionality that can be quickly implemented to achieve a fast time to benefit with minimal disruption to your business. You can trust SAP to solve your complex business challenges today, and stay with you as your business grows and needs change in the future.

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ERP Basics: mySAP ERP Positioning Topic Summary

You are now able to: z Understand the positioning of R/3 Enterprise towards mySAP ERP

 SAP AG 2004

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ERP Basics: Organizational Levels Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the SAP Enterprise organizational levels

 SAP AG 2004

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Organizational Structure – Terminology SAP Enterprise

Company

Client Company Code

Subsidiary

Plant

Factory

Sales Organization

Sales Organization Department

Division

Business Area

Division Storage Locations

Warehouses

 SAP AG 2004

Organizational Elements: A company’s enterprise structure is mapped to SAP applications using organizational elements. They are used to represent the enterprise structure in terms of legal and/or business-related purposes. Organizational elements include legal company entities, plants, storage locations, sales offices, and profit centers. Examples: y The highest-level element of all organizational elements is the Client. The Client represents the enterprise/headquarters group. y A Company Code is a unit included in the balance sheet of a legally-independent enterprise and is the central organizational element of Financial Accounting. y In the context of Sales and Distribution, the Sales Organization is the central organizational element that controls the terms of sale to the customer. Division is usually used to represent product line. y In the context of Production Planning, Plant is the central organizational unit. A Plant can manufacture product, distribute product, or provide a service. y In Inventory Management, material stocks can be differentiated within one plant according to Storage Location. Organizational elements may be assigned to a single application (such as Sales Organization assigned to Sales and Distribution, or to several applications (such as Plant assigned to Materials Management and Production Planning).

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Organizational Structure – Levels

Client

Company Code 1000

Company Code 3000

Controlling Area 2000 Plant 1000

Storage Location 0001

Plant 1100


Plant 1200


 SAP AG 2004

The highest-level element of all organizational elements is the client. The client can be an enterprise group with several subsidiaries. All of the enterprise data in an SAP System implementation is split into at least the client area, and usually into lower level organizational structures as well. Flexible organizational elements in the SAP System enable more complex enterprise structures to be represented. If there are many organizational elements, the legal and organizational structure of an enterprise can be presented in different views. By linking the organizational elements, the separate enterprise areas can be integrated and the structure of the whole enterprise represented in the SAP System. This links are defined in Customizing. When defining the organizational elements, bear in mind that they define the structure for how data is to be entered, tracked, and extracted from the SAP system.

© SAP AG

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ERP Basics: Organizational LevelsTopic Summary

You are now able to: z Describe the SAP Enterprise organizational levels

 SAP AG 2004

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ERP Basics: Master Data – Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the function of Master Data

 SAP AG 2004

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Master Data – Customer Master

General Data (cross-enterprise)

Master Data (Customer Master Data)

Financial Accounting Data

Sales Data (only salesrelevant data)

(only relevant for company code)

 SAP AG 2004

Master Data: Data which is used long-term in the SAP System for several business processes. Master data is created centrally and can be used by all applications and all authorized users. Examples of master data in SAP include customers, materials, and vendors. A customer master contains key information that defines the business relationship between a company and its customer. The master data is used to support execution of key business processes such as customer requests, deliveries, invoices, and payments. Master data also has an organizational aspect as the information is organized into views which are assigned to organizational elements.The customer master is organized into three views which are each located at a different organizational level: General Data (Client), Financial Accounting Data (Company Code), and Sales Data (Sales Area). Data on the client level can be used by all company codes. The customer account number is assigned on this level. That means the same customer has an explicit accounts receivable number in all company codes from a financial view.

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Transactions

Company Code

Customer Master Material Master

Ordering Party

Item

1xxx

Material Quantity

10

HD-1300

1

20

P-103

2

Sales Organization Distribution Channel Division Plant Storage Location

Sales Document

 SAP AG 2004

Transactions: Application programs which execute business processes in the SAP System such as creating a customer order, posting an incoming payment, or approving a leave request. Document: A data record that is generated when a transaction is carried out. When creating an order for a customer, you must take transport agreements, delivery and payment conditions, and so on, with business partners into consideration. To avoid re-entering this information each time for every activity related to these business partners, relevant data for the activity from the master record of the business partner is simply copied. In the same way, the material master record stores information, such as the price per unit of quantity, and stock per storage location that is processed during order entry. This concept is valid for processing data for each master record included in the activity. When performing each transaction, applicable organizational elements must be assigned. Assignments to the enterprise structure in the document are generated in addition to the information stored for the customer and material. The document generated by the transaction contains all relevant pre-defined information from the master data and organizational elements. A document is generated for each transaction carried out in the SAP System.

© SAP AG

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ERP Basics: Master Data – Topic Summary

You are now able to: z Describe the function of Master Data

 SAP AG 2004

© SAP AG

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ERP Basics: Reporting Solutions – Topic Objectives

At the conclusion of this topic, you will be able to: z Explain ERP analytical & reporting solutions

 SAP AG 2004

© SAP AG

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Data Warehouse Concepts

Online Analytical Processing

OLAP Analysis tools

DATA WAREHOUSE Aggregated information

OLTP

External data

Materials management Sales and distribution

Production planning

Financial accounting

Online Transaction Processing

Integrated application modules  SAP AG 2004

While you are using the transactions in the Logistics applications, the Logistics Information System (LIS) updates relevant information. You can also update information from other systems in the LIS. The LIS aggregates and stores this information in the data warehouse. Data can be aggregated on a qualitative as well as on a quantitative basis: y quantitative reduction by aggregating on period level y qualitative reduction by selecting specific key figures You can then use the tools in the Sales Information System (SIS) to analyze this aggregated information. The aggregation leads to an improvement of the response times and of the quality of the resulting reports.

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Distinction: Operative/Informative Environments

Operative Environment

Customers Business Processes Products Business Strategy

Orders OLTP

Informative Environment

OLAP

Extraction

Transformation

Knowledge

Data Warehouse

(Homogenization Cleansing)

 SAP AG 2004

SAP BW enables the analysis of data from operative SAP applications as well as all other business applications and external data sources such as databases, online services, and the Internet. Administrator Workbench (AWB) functions allow you to control, monitor, and maintain all data procurement processes. SAP BW enables Online Analytical Processing (OLAP) for staging information from large amounts of operative and historical data. OLAP technology permits multi-dimensional analyses according to various business perspectives. The BW server, which is preconfigured by Business Content for core areas and processes, allows you to examine the relationships in every area within your company. Business Content provides targeted information to companies, divided into roles. This helps your employees to carry out their tasks. As well as roles, Business Content includes other preconfigured objects such as InfoCubes, queries, key figures, and characteristics. These objects facilitate the implementation of SAP BW. The Business Explorer (BEx) component provides users with extensive analysis options.

© SAP AG

TERP10

2-27

Reporting

SAP BWs Three Layer Architecture 35.0 00 ,00 EUR 30.0 00 ,00 EUR 25.0 00 ,00 EUR 20.0 00 ,00 EUR

Auftra gse inga ng

15.0 00 ,00 EUR 10.0 00 ,00 EUR 5.0 00 ,00 EUR -

EUR

Becke r Ber il n

Baye r

VW

Da imler

Bex Analyzer (MS Excel)

Web Application

Mobile Intelligence

BW Server

OLAP Processor InfoProvider

Metadata Repository

Master Data

Administrator Workbench

Transaction Data

Data Sources

Staging Engine

SAP R/3

File

SAP BW

mySAP Business Suite

Non-SAP

Provider

Database

XML

 SAP AG 2004

BEx is the SAP BW component that provides flexible reporting and analysis tools that you can use for strategic analysis and supporting the decision-making process in your company. Employees with access authorization can analyze historical and current data at differing levels of detail and from different perspectives. BEx allows a wide spectrum of users to access information in SAP BW. This can be done in Enterprise Portal from an iView that you can call alongside the applications where you extract the data, in the Internet or Intranet (Web Application Design), or using a mobile device (for example, WAP-enabled mobile telephones, and personal digital assistants). Web Application Design allows you to implement generic OLAP navigation in Web applications and in Business Intelligence cockpits for both simple and highly-individual scenarios. Highly individual scenarios with customerdefined user interface elements can be realized using standard markup languages (HTML) for example. Web Application Design encompasses a wide spectrum of interactive Web-based Business Intelligence scenarios that you can modify to suit your requirements using standard Web technology. Portal Integration includes (1) single point of entry, (2) role-based staging of information, (3) personalization, (4) publication of iViews, and (5) integration of unstructured data. Query, Reporting, and Analysis include (1) query design using the BEx Analyzer, (2) multi-dimensional (OLAP) analysis, (3) geographical analysis, (4) ad-hoc reporting, and (5) alerts. Web Application Design includes (1) interactive analytical content, (2) information cockpits and dashboards, (3) basis for creating analytical applications, (4) creation of iViews for a portal, and (5) wizard-help.

© SAP AG

TERP10

2-28

ERP Basics: Reporting Solutions – Topic Summary

You are now able to: z Explain ERP reporting solutions

 SAP AG 2004

© SAP AG

TERP10

2-29

ERP Basics: Unit Summary

You are now able to: z Describe the SAP R/3 Enterprise organizational levels z Describe the function of Master Data z Explain ERP analytical & reporting solutions

 SAP AG 2004

© SAP AG

TERP10

2-30

SAP NetWeaver

Contents: z Basics of NetWeaver

 SAP AG 2004

© SAP AG

TERP10

3-1

SAP NetWeaver: Unit Objectives

At the conclusion of this unit, you will be able to: z Describe the components of NetWeaver z Explain how NetWeaver supports the business processes z Describe the strategic advantage of NetWeaver

 SAP AG 2004

© SAP AG

TERP10

3-2

SAP NetWeaver: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

TERP10

3-3

SAP NetWeaver: Business Scenario

z As a comprehensive integration and application platform, SAP NetWeaver works with your existing IT infrastructure to enable and manage change. As a project team member, you need an overview of SAP NetWeaver.

 SAP AG 2004

© SAP AG

TERP10

3-4

SAP NetWeaver: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the components of NetWeaver z Explain how NetWeaver supports the business processes z Describe the strategic advantage of NetWeaver

 SAP AG 2004

© SAP AG

TERP10

3-5

SAP NetWeaver Integration mySAP Business Suite mySAP PLM mySAP SCM

mySAP SRM

mySAP Financials

mySAP CRM

mySAP HR SAP BI

Corporate Services Operations

SAP Enterprise Portal

Industry Solutions

SAP Customer Service Network

SAP xApps

mySAP ERP

SAP R/3 Enterprise

SAP

SAP NetWeaver NetWeaver

Application Platform (SAP Web AS)

PeoplePeople Integration (SAP EP) Integration (Portal) Information Integration (BW, MDM) Information Integration (SAP BW) Process Integration (XI)

Process Integration (SAP XI) Application SAP Platform (SAP Web AS) Business One

 SAP AG 2004

SAP NetWeaver is the technical foundation on which almost all SAP solutions are currently based. SAP NetWeaver provides core functions for the infrastructure of your business solutions in four subcomponents including (1) people integration, (2) information integration, (3) process integration, and (4) application platform. Not all SAP solutions are based on SAP NetWeaver, in particular SAP Business One. SAP Business One is a completely new product that can be easily linked to existing SAP landscapes by XML. The software is programmed in C++ and can be installed under various Microsoft Windows operating systems. SAP Business One contains functions important for running your business, such as financial accounting, customer management, purchasing, and warehouse management. Even the smallest companies can use this software profitably. SAP Cross Applications – (SAP xAPPS) SAP Enterprise Portal – (SAP EP) SAP Business Intelligence (SAP BI) SAP Exchange Infrastructure (SAP XI) SAP Web Application Server (SAP Web AS)

© SAP AG

TERP10

3-6

SAP NetWeaver: Integration of People z Integration of people, information and processes

Across technological and organizational boundaries Full .NET and J2EE interoperability

Solutions with lower total cost of ownership (TCO)

The Enterprise Services Architecture (ESA) increases the flexibility and extendibility of business processes

People Integration Multi-Channel Access

IBM Web Sphere

Microsoft .NET

…

Portal

Collaboration

Information Integration Business Intelligence

Knowledge Manage ment

Master Data Manage ment

Process Integration Integration Broker

Business Process Manage ment

Life Cycle Management

z The technological foundation for SAP customers and partners

SAP NetWeaver™ …


Application Platform J2EE

ABAP

DB andOS OSAbstraction Abstraction DB and

 SAP AG 2004

People integration ensures that your employees have the information and functions that they require to perform their work as quickly and efficiently as possible. The functions of the SAP Enterprise Portal are of key importance here.

© SAP AG

TERP10

3-7

SAP NetWeaver: Application Server SAP Mobile Infrastructure z

Closely linked to and integrated with SAP business applications

SAP Enterprise Portal z z z

SAP NetWeaver™

Optimized aggregation of information Roles Knowledge Management & Collaboration

People Integration Multi-Channel Access

Closely integrated with SAP Open architecture (Crystal, Ascential) High quality business data

Master Data Management z

Consistent storage of master data

SAP Exchange Infrastructure z z z

Proxy generation and mapping tools Integration Directory with content Enterprise and vendor potential of SAP

SAP Web Application Server z z

Portal

Information Integration Business Intelligence

Knowledge Manage ment

Master Data Manage ment

Process Integration Integration Broker

Business Process Manage ment

Application Platform J2EE

Tested, scalable, and powerful platform Modernization of existing IT infrastructures and leveraged investments

Collaboration Life Cycle Management

z z z


SAP Business Information Warehouse

ABAP

DB andOS OSAbstraction Abstraction DB and

 SAP AG 2004

With SAP Web Application Server, the Application Platform has Java 2 Enterprise Edition (J2EE) and Advanced Business Application Programming (ABAP) runtime environments and therefore supports Web applications and Web services in an open development environment.

© SAP AG

TERP10

3-8

SAP NetWeaver: Application Platform IBM WebSphere z Portal Development Kit for WebSphere z Integration of Lotus Sametime

z Integration with IBM Content Manager

z Interoperability with WebSphere Business Integration

z Technical, standardsbased connectivity (XML, Web Services) z Eclipse Based Java IDE

SAP NetWeaver People Integration Multi-Channel Access Portal Collaboration

Information Integration Knowledge Management Business Intelligence Master Data Management

Microsoft .NET z Portal Development Kit for .NET z Smart Client on .NET z MS Office Integration z MS Exchange Integration z Integration of MS Content Management Server z Integration of SQL Server Analysis Services

Process Integration Integration Broker, Business Process Mgmt

Application Platform J2EE ABAP DB and OS Abstraction

z Interoperability with MS Biztalk Server

z Visual Studio .NET integration z Technical, standardsbased-connectivity (XML, Web Services)

 SAP AG 2004

SAP Net Weaver is an extensive, strategic integration and application platform that allows you to reduce the Total Cost of Ownership (TCO) of your SAP landscape. SAP NetWeaver helps you to bring together and organize people, information, and business processes across ystem and organization boundaries. All SAP solutions will be based on SAP NetWeaver in the future. At the same time, it supports cross-application software, known as xApps. xApps are the new class of integrated standard software. xApps extend existing (heterogeneous) IT landscapes with new business processes. SAP NetWeaver therefore provides the technical foundation for an Enterprise Service Architecture. Different software interfaces ensure full interoperability of applications that are running on Microsoft .NET and IBM WebSphere. SAP xApps (SAP Cross Applications) allow you to integrate existing applications with each other by accessing existing datasets and functions using open interfaces. This means that you can implement new applications based on an existing infrastructure.

© SAP AG

TERP10

3-9

SAP NetWeaver: System Integration

R/3

CRM

SAP R/3 Enterprise

SAP CRM 4.0

Application Functions

SAP Web AS

SAP Web AS

Basis Functions

Many SAP software components, such as SAP R/3 Enterprise, SAP BW, SAP CRM, and SAP APO use SAP Web AS  SAP AG 2004

The Information Integration level provides access to all structured and unstructured information in your company. The core component here is the SAP Business Information Warehouse which provides data from many different systems for evaluation. Knowledge Management, a component of the SAP Enterprise Portal, and Master Data Management also provide functions for central data storage. Structured information generally means SAP data or data from SAP systems. All other information is described as unstructured. This does not mean structureless; the data could very well have its own structure, but not a SAP-specific structure. Process integration ensures that business processes run across system boundaries in a heterogeneous system landscape. This is achieved by using XML data packages and workflow scenarios, among other things. The SAP Exchange Infrastructure (SAP XI) plays a central role here.

© SAP AG

TERP10

3-10

SAP NetWeaver: Architecture SAP Web Application Server offers:

Presentation Level

z Multi-level architecture z Reliable, tested runtime environment for ABAP and Java programs z High scalability External Systems (SAP, Non-SAP)

Support for various user interfaces (SAP GUI, browser)

Application Level JAVA (J2EE)

ABAP

Support for various operating systems (such as Microsoft Windows, UNIX)

z Operating system and database independence z Convenient development environment z Support for various protocols (such as HTTP, RFC) z Highest security standards for the execution of complex business processes

Database Level Support for various databases (such as DB2, SAP DB)

 SAP AG 2004

In addition to the traditional runtime environment for ABAP programs, SAP Web Application Server also has a runtime environment for J2EE-based Java programs, the SAP J2EE Engine. Together with the database, SAP Web AS forms the Application Platform of SAP NetWeaver.

© SAP AG

TERP10

3-11

SOAP/XML

HTTP(S)

SMTP

Browser

SAP NetWeaver: Database System

Internet Communication Manager SAP Web AS RFC

SAP J2EE Engine fast RFC

ABAP

External Systems, SAP GUI SAP GUI

Operating System

DIAG

Windows Linux Unix OS/400 OS/390

DB Server Database System SAP DB Informix MS SQL Server Oracle DB2 (“DB4”, “DB6”)  SAP AG 2004

SAP Web Application Server is the logical result of further development of the SAP Application Server Technology (formerly known as SAP Basis with particular attention being paid to Web-based applications. SAP Web Application Server offers: y A reliable and thoroughly tested runtime environment, evolved over more than 10 years. y A framework for executing complex business processes that meets the highest security standards. y A reliable and user-friendly development environment. y Support for open techniucal standards such as: HTTP, HTTPS, SMTP, WebDAV, SOAP, SSL, SSO, X.509, Unicode, HTML, XML, and WML. y High scalability inherited from SAP Basis. y Support for various operting systems and database systems.

© SAP AG

TERP10

3-12

SAP NetWeaver: Openness Immediate Integration

Openness and Extendibility z Entirely based on open technologies and standards

z Allows complete integration of people, information, and business processes in companies

Lower Total Cost of Ownership

Clear Roadmap

z Leverages existing IT investments by integrating different systems

z SAP NetWeaver is the technological foundation of all future SAP solutions

 SAP AG 2004

In summary, SAP NetWeaver consists of the following technical scenarios: SAP Business Information Warehouse is a robust and scalable data warehouse. The reporting and analysis tools with BW offer a quick and easy way to gain access to the information you need. Business Intelligence Information Broadcasting enables information broadcasting with SAP BW. SAP Enterprise Portal serves as the single point of entry for the end user to access the complete business intelligence information portfolio. As one of the building blocks of NetWeaver, SAP Enterprise Portal provides key capabilities such as Portal Infrastructure, Knowledge Management and Collaboration, all based on open technology and standards, which make SAP NetWeaver a powerful integration and application platform. SAP Exchange Infrastructure adds business value because SAP XI can be used as single point to channel information exchange between various systems. SAP Mobile Infrastructure is a technology solution for NetWeaver on which mySAP Mobile Business applications are based. With SAP MI, however, you can also make applications mobile that are not SAP-based. SAP Knowledge Warehouse delivers the technical infrastructure you need to setup and manage your own enterprise-specific knowledge base in the areas of documentation, training, and manuals. SAP Master Data Management aligns master data management with SAP NetWeaver. SAP NetWeaver Development Environment is used to develop both ABAP and JAVA applications.

© SAP AG

TERP10

3-13

SAP NetWeaver: Topic Summary

You are now able to: z Describe the components of NetWeaver z Explain how NetWeaver supports the business processes z Describe the strategic advantage of NetWeaver

 SAP AG 2004

© SAP AG

TERP10

3-14

SAP NetWeaver: Unit Summary

You are now able to: z Describe the components of NetWeaver z Explain how NetWeaver supports the business processes z Describe the strategic advantage of NetWeaver

 SAP AG 2004

© SAP AG

TERP10

3-15

© SAP AG

TERP10

3-16

Business Warehouse

Contents: z Business Information Warehouse z Reporting in Business Warehouse

 SAP AG 2004

© SAP AG

TERP10

4-1

Business Warehouse: Unit Objectives

At the conclusion of this unit, you will be able to: z Explain the basic concepts and architecture of SAP Business Information Warehouse z Explain how SAP Business Information Warehouse reporting and analysis tools support the different business processes

 SAP AG 2004

© SAP AG

TERP10

4-2

Business Warehouse: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

TERP10

4-3

Business Warehouse: Business Scenario

z Your company has identified a need for users to access and receive reports from one integrated Business source.

 SAP AG 2004

© SAP AG

TERP10

4-4

Business Warehouse: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the basic concepts and architecture of SAP Business Information Warehouse

 SAP AG 2004

© SAP AG

TERP10

4-5

Business Warehouse: Data Warehouse System

Reporting

Data Warehouse

Loading Processes

Source System 1

Source System 2

Source System 3

Heterogeneous Source System Environment  SAP AG 2004

The information is staged in various forms including personalized reports, freely definable queries, and predefined reports. Recipients of information can use these reporting and analysis functions to analyze the data for deviations and significant facts. In the Planning and Campaign Management areas, a data warehouse is used to carry out data analysis. The following issues might arise when using a data warehouse in Sales Order Managmenet: (1) checking ranges of goods in order to identify slow moving items and big sellers (2) analyzing regional locations to investigate the profitability of different branches (3) investigating the effectiveness of market analyses (4) evaluating customer surveys and complaints (5) analyzing warehouse stock levels A concrete query might be: What were the sales volumes for the Cosmetics, Electrical Goods, and Household Goods departments in the years 2000 and 2001 in New York and Washington DC? In brief, a data warehouse can (1) pool data from different, mostly heterogeneous sources, (2) overcome this heterogeneity on different levels (system, schema, and data), and (3) stage data in the form required by the user.

© SAP AG

TERP10

4-6

Business Warehouse: What We Expect From BW

Source System 1 Product line Source System 2

Data Warehouse

Net Sales

Foils

23,234.98 EUR

Noble metal

33,234.00 EUR

Steel

34,324.56 EUR

Noble Gas

22,314.36 EUR

Source System 3

Database

 SAP AG 2004

Decision-makers urgently need reliable information from Production, Purchasing, Sales and Distribution, Finance, and Human Resources departments. They require an up-to-date and comprehensive picture of each individual business area and of the business as a whole. This places considerable demands on data staging from the underlying data sources. The information must be stored in a homogeneous and consistent form at a central location where it can be called up. Therefore, modern data warehouses require a separate database that an independent application environment can use to provide the required services objectively. Efficient analysis techniques with powerful multi-dimensional visualization are indispensable on the presentation side of the data warehouse. The system must be able to cope with the information needs of the various user groups. The demands made on the source systems are not so high. What is needed here is an economic and comprehensive preparation of the data that is required by the data warehouse. The following demands are made on a data warehouse: (1) standardized structuring and presentation of all company information, (2) an easy-to-use, single-point of access to all company information, (3) sophisticated business reporting methods for self-service analysis at all levels, (4) fast and costeffective installation, (5) a high performance environment, (6) data staging from heterogeneous environment, (7) release of source systems and IT organization, (8) data access independent of the source system, and (9) analysis of data over a specific period of time, and the storage of historical information (time-dependent master data).

© SAP AG

TERP10

4-7

Business Information Warehouse

z Business Content

Source Systems

SAP R/3

z OLAP Engine z Automated Warehouse z Standardized Structures

Non-SAP

SAP BW

Business Explorer

XML

Database

Database

 SAP AG 2004

The SAP BW allows you to analyze data from operational SAP R/3 applications or any other business application. You can also extract and analyze data from external sources such as databases, online services, and the Internet. The system (data storage, loading and reporting), which is preconfigured by Business Content for core areas and processes, allows you to examine the relationships in every area of your company. The realization of SAP BW aimed for the following: (1) data warehousing system with optimized data structures for reporting and analysis, (2) separate system, (3) OLAP engine and tools, (4) comprehensive data-warehousing architectural base, (5) automated data warehouse management, and (6) preconfiguration using SAP global business know-how. With these goals in mind, SAP has opted for a separate data-warehousing solution that handles reporting activities as an autonomous business component, even providing a separate server with its own database and SAP system: SAP Business Information Warehouse. All of the requirements and objectives mentioned so far have been met in the conception and architecture of SAP BW. Having implemented SAP BW and its metadata repository (description of data), the customer has the clear advantage of being able to use the entire SAP know-how built up over the many years of experience in developing business software solutions. SAP R/3 systems can be configured as source systems, and provide data for all SAP Business Content.

© SAP AG

TERP10

4-8

Business Warehouse: Terminology Assignment using the AWB

InfoObjects Characteristics z z z z z z z

Key Figures

Division Segment Product Product line Segment Business Unit Company

z z z z z z

Net Sales variable COGS Contrib. Margin I Sales Overhead R & D Overhead ...

If a characteristic (for example, zip code) is assigned to another characteristic (for example, sold-to party), the first characteristic becomes an attribute of the second

A data record (posting record) is a combination of characteristics and key figures

Company

Product line

1000

Foils

Product 310000

Net Sales …

1,000 EUR

 SAP AG 2004

InfoObject Business analysis-objects (companies, sales volumes, and so on) are called InfoObjects in SAP BW. These InfoObjects can be divided into characteristics and key figures. Characteristics can be further divided into units, time characteristics, and technical characteristics (for example, request ID). Key figures are all data fields that are used to store values or quantities (sales volumes, net sales, costs, and so on). Characteristics describe the affiliation of key figures.

© SAP AG

TERP10

4-9

Business Warehouse: Terminology (Continued) Info Cube with Transaction Data (Key Figures)

Master Data for 'Sold-To Party'

Attribute 3

11

Becker Inc.

Berlin

Fact Table Sales 24 Revenue .................. Texts

DIM 1

11 5 ..............

3

DIM 2

24

Short Text

Long Text

3 ... .............. Hierarchies

Keys

3 Father Nodes Child Nodes Simplified depiction of the star schema with links to master data  SAP AG 2004

InfoCube The central data containers that form the basis for reports and analyses in SAP BW are called InfoCubes. They contain key figures (sales volumes, incoming orders, actual costs, and so on) and a link to the characteristics (master data of the SAP BW system such as cost centers, customers, materials, and so on). Key figures and characteristics are InfoObjects. Each individual InfoCube should contain a self-contained dataset, since queries refer primarily to one InfoCube. Master data in the BW system consists of attributes of a characteristic (for example, the person responsible for a cost center), as well as hierarchies and texts of a characteristic. An InfoCube consists of several database tables that are linked according to the star schema. They include a fact table that contains the InfoCube key figures, as well as several surrounding dimension tables that store the links to the characteristics. Each InfoCube has one fact table and a maximum of 16 dimension tables. Each fact table can contain a maximum of 233 key figures. A dimension can contain up to 248 freely available characteristics. InfoCubes are stored in structures in the SAP BW system. If you want to store an InfoCube, you create a new folder or use an existing one. This is similar to the method used when storing data on your PC: These folders are called InfoAreas in SAP BW.

© SAP AG

TERP10

4-10

Business Warehouse: Terminology (Continued) Physical Data Stores Key Figures

Characteristics

Texts

Basis Cube

Logical views of physical data stores include: InfoSet Queries Virtual Info Cubes

Attributes Hierarchies

ODS

Source System

Remote Cubes

Multi Providers

Reporting

Business Explorer

 SAP AG 2004

InfoProvider InfoProvider is the super-ordinate term for an object that you can use to create reports in Business Explorer (BEx). InfoProviders are objects or views that are relevant to reporting. InfoProviders include various database metaobjects that deliver data for query definitions. The type of data procurement differs depending on the InfoProvider used. However, the type of data procurement has no influence on reporting. InfoProviders deliver data that can be analyzed using a query. There are two types of data stores. Physical stores include (1) BasicCubes, (2) ODS Objects, and (3) InfoObjects. Logical views of physical data stores include (1) InfoSets, (2) RemoteCubes, (3) VirtualInfoCubes, and (4) MultiProviders. The previous figure gives an overview of SAP BW reportable objects, divided into data targets that contain physical data, and InfoProviders that only contain logical views. From the BEx view, only InfoProviders are accessed. The way in which the data is modeled is inconsequential to the BEx toolset. Operational Data Store (ODS) An ODS, a data store, stores data at the basic level (document level). It is normally used to resolve and consolidate datasets. These datasets are often from various data sources and/or source systems Administrator Workbench (AWB) Administrator Workbench (AWB) is a workplace for SAP BW administrators. AWB functions are used to configure, control, and administrate SAP BW.

© SAP AG

TERP10

4-11

Business Warehouse: Architecture Portal Integration


Business Explorer

Metadata Repository Master Data

OLAP

Info Cube

Staging Engine

SAP Systems

SAP BW

ODS

Non-SAP Systems

 SAP AG 2004

SAP BW enables the analysis of data from operative SAP applications as well as all other business applications and external data sources such as databases, online services, and the Internet. AWB functions allow you to control, monitor, and maintain all data procurement processes. SAP BW enables Online Analytical Processing (OLAP) for staging information from large amounts of operative and historical data. OLAP technology permits multi-dimensional analyses according to various business perspectives. The BW server, which is preconfigured by Business Content for core areas and processes, allows you to examine the relationships in every area within your company. Business Content provides targeted information to companies, divided into roles. This helps your employees to carry out their tasks. As well as roles, Business Content includes other preconfigured objects such as InfoCubes, queries, key figures, and characteristics. These objects facilitate the implementation of SAP BW. The Business Explorer (BEx) component provides users with extensive analysis options.

© SAP AG

TERP10

4-12

Business Warehouse: Topic Summary

You are now able to: z Explain the basic concepts and architecture of SAP Business Information Warehouse

 SAP AG 2004

© SAP AG

TERP10

4-13

Business Warehouse: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain how SAP Business Information Warehouse reporting and analysis tools support the different business processes

 SAP AG 2004

© SAP AG

TERP10

4-14

Business Warehouse: Reporting Logical and Physical InfoProviders in BW

OLAP Business Explorer BEx Analyzer (Microsoft Excel or MS Internet Explorer)

Web Application

Formatted Reporting

Mobile intelligence

35.000,00 EUR 30.000,00 EUR 25.000,00 EUR 20.000,00 EUR Auftragseingang

15.000,00 EUR 10.000,00 EUR 5.000,00 EUR - EUR

Becker Berlin

Bayer

VW

Daimler

Product line

Net Sales

Foils

23,234.98 EUR

Noble metal

33,234.00 EUR

Steel

34,324.56 EUR

Noble Gas

22,314.36 EUR

Portal Integration

 SAP AG 2004

BEx is the SAP BW component that provides flexible reporting and analysis tools that you can use for strategic analysis and supporting the decision-making process in your company. Employees with access authorization can analyze historical and current data at differing levels of detail and from different perspectives. BEx allows a wide spectrum of users to access information in SAP BW. This can be done in Enterprise Portal from an iView that you can call alongside the applications where you extract the data, in the Internet or Intranet (Web Application Design), or using a mobile device (for example, WAP-enabled mobile telephones, and personal digital assistants). Web Application Design allows you to implement generic OLAP navigation in Web applications and in Business Intelligence cockpits for both simple and highly-individual scenarios. Highly individual scenarios with customerdefined user interface elements can be realized using standard markup languages (HTML) for example. Web Application Design encompasses a wide spectrum of interactive Web-based Business Intelligence scenarios that you can modify to suit your requirements using standard Web technology. Portal Integration includes (1) single point of entry, (2) role-based staging of information, (3) personalization, (4) publication of iViews, and (5) integration of unstructured data. Query, Reporting, and Analysis include (1) query design using the BEx Analyzer, (2) multi-dimensional (OLAP) analysis, (3) geographical analysis, (4) ad-hoc reporting, and (5) alerts. Web Application Design includes (1) interactive analytical content, (2) information cockpits and dashboards, (3) basis for creating analytical applications, (4) creation of iViews for a portal, and (5) wizard-help.

© SAP AG

TERP10

4-15

Business Warehouse: Different User Types in SAP BW high

Experienced Users

Occasional Users

10% analytical needs

Query Developers

20%

70%

low

 SAP AG 2004

New studies have shown that up to 70 percent of all OLAP system users are basic users. Compared to the advanced users and query developers, basic users only use the analytical functions of the system on a very small scale. This is because the basic users usually carry out predefined queries with fixed datasets. Therefore, most of SAP users need a simple user interface. However, the experienced users and query developers who design and carry out information analyses on several levels must be able to use a comprehensive and effective range of tools for their analyzing options. SAP catered to these various user needs when developing the Business Information Warehouse.

© SAP AG

TERP10

4-16

BEx Analyzer BEx Analyzer (MS Excel and MS Internet Explorer)

Web Application

Portal Integration

Mobile Intelligence

35.000,00 EUR 30.000,00 EUR 25.000,00 EUR 20.000,00 EUR Auftragseingang 15.000,00 EUR 10.000,00 EUR 5.000,00 EUR - EUR Becker Berlin

Bayer

VW

Daimler

Product line

Net Sales

Foils

23,234.98 EUR

Noble metal

33,234.00 EUR

Steel

34,324.56 EUR

Noble Gas

22,314.36 EUR

Business Explorer InfoProvider in BW

OLAP  SAP AG 2004

The

BEx Anlayzer is the analysis and reporting tool of the Business Explorer that is embedded in Microsoft Excel.

© SAP AG

TERP10

4-17

Business Warehouse: SAP BEx: Choose Query 3. Create new query

1. 2.

Workbooks Queries Saved Views Exceptions

SAP BEx: Choose Query

History Favorites Roles InfoAreas

Delta Training Role Sales and Distribution Role Purchasing Training TERP10 Reporting Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7

Description/Technical Name OK

Cancel

 SAP AG 2004

Using the SAP BW reporting functions, you can evaluate a dataset from an InfoProvider according to various characteristics and key figures. To do this, you define a query for your chosen InfoProvider in the BEx Query Designer. By selecting and combining the InfoObjects in a query, you determine the way in which data from the chosen InfoProvider is evaluated. You have various options for calling up the Query Designer: From the BEx Analyzer open dialog box; As a separate program using Start → Programs → Business Explorer → Query Designer; Using the Web Application Designer (see the BEx Web Application Designer unit); With Crystal Reports (Crystal Reports >=8.5 including CR add-ons for SAP). The Open Dialog Box - If you choose to access the Query Designer from the BEx Analyzer, the SAP BEx: Choose Query dialog box is called before the Query Designer opens. This dialog box is context sensitive, which means that it offers different choices depending on the type of object selected. Object Type: Dialog Box Available: (1) Workbooks: History, Favorites, Roles, (2) Queries: History, Favorites, Roles, InfoAreas, (3) Stored Query Views: History, Favorites, Roles, InfoAreas, and (4) Exceptions: History, InfoAreas Within the relevant dialog box, you have the option of creating a new query or of finding and selecting an existing query. You can then change or execute the query.

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Business Warehouse: Functions of the BEx Query Designer (1) Quit and Use Query

Query Where-Used List Exception Open Query

Display Query on the Web

New Query

Exit Query

Table Display Condition Save Query As...

Check Query

Query Properties

Delete Query

Save Query

Context Menu

Define Cells

Change Query (Global Definition)

Display <-> Change

Help

Technical Name

 SAP AG 2004

The figure gives an overview of the BEx Query Designer functions that you can call from the Query Designer toolbar. The functions are described within the context of query definition: y Quit and Use Query: With this function, you leave the Query Designer and use the query you have defined. y Exit Query: Choose Exit Query if you want to leave the Query Designer. Your entries are not saved. y Display Query on the Web: Using this function, you can display the query with a default template on the Web, once you have saved your query definition. y New Query: Choose this function if you want to create a query. The BEx Open dialog box appears and you can select the InfoProvider here that contains the data that you want to evaluate in the query. y Open Query: This function takes you directly to the BEx Open dialog box. You can choose from queries in your History, Favorites, Roles, or from the InfoAreas. y Save Query: You use this function to save a modified query under its current name. If the query does not yet have a technical name, the system automatically offers the function Save Query As.... y Save Query As...: You use this function to save a query under a new technical name. You can save the query in your favorites or in a role. y Delete Query: You use this function to delete the query. You can only delete the query if it is not being used in workbooks, Web templates, Crystal Reports, or Reporting Agent settings.

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New Query

Exit Query


Check Query

Query Properties

Delete Query

Save Query

Context Menu

Define Cells


Display <-> Change

Help

Technical Name

 SAP AG 2004

Exception: You use this function to define exceptions for a query. Note: Exceptions are deviations from normal key figure values, as defined by you, and are highlighted in color in the executed query. Using the small arrow next to the exceptions symbol, you can change or create exceptions. For more information, see the Exceptions and Conditions unit. Condition: You use this function to define conditions for a query. Using the small arrow next to the conditions symbol, you can change or create conditions. Note: For each characteristic, you can give limit conditions to the key figure values in order to determine, for example, all sales revenues above or below a specified threshold value. The chosen characteristics are displayed in the query with restricted key figures. Define Cells: This function is only available for queries with two structures. You can define formulas and selection conditions for cells explicitly. In this way, you control the values of cells that appear at the intersections of structural components. This function enables you to access individual cells in queries or to assign special values to these. Query Properties: Choose this function if you want to change the description of the query or define the settings for the result position, display options, numeric display, zero display and key date of the query.

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New Query

Exit Query


Check Query

Query Properties

Delete Query

Save Query

Context Menu

Define Cells


Display <-> Change

Help

Technical Name

 SAP AG 2004

Check Query: Using this function, you can check a new or saved query for errors before you save it. Query Where-Used List: Using this function, you can find out in which objects (Workbooks, Web templates, Crystal Reports, or Reporting Agent settings) the query is used. Display <-> Change: Using this function, you can switch between the display and change modes. Change Query (Global Definition): You choose this function if you are in the Local Query Definition and want to switch to the Global Definition. Table Display: You can create a query for tabular reporting, as well as for Online Analytical Processing (OLAP) reporting, by activating or deactivating the Table Display mode in the query definition when defining a query. This function is only available for queries with one structure. You can only have queries with two structures in the multi-dimensional display. They are not suitable for OLAP reporting. Technical Name: Using this function, you can show/hide the technical names of the query components. ContextMenu: This function enables you to display the current context menu without using the right mouse button (for example, for use with a touch screen). Help: This function takes you to the SAP BW online documentation.

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Business Warehouse: Creating a Query Query Designer: New Query TERP10 Customer Cube Structure Key Figure Dimensions Technical Charact. Organization Sales area Value Type Time Unit Data Package …

Filter

1.

5. Free Characteristics

Columns

4.

2.

3.

6.

Rows

 SAP AG 2004

To define a new query, start the Query Designer and choose New Query. In the New Query: Select InfoProvider dialog box, select the required InfoProvider. Once you have selected the InfoProvider, the Query Designer displays as shown in the graphic. The Query Designer is divided into six subareas: 1.Directory tree of the selected InfoProvider Once you have selected the required InfoProvider, all available objects (dimensions, key figures, structures) display in the directory tree in the left screen area of the Query Designer. In this example, you can see the directory tree for the InfoProvider InfoCube Customer Cube T_SDDEMO2; 2. Columns - You define the columns of your report in this area; 3. Rows - You define the rows of your report in this area; 4. Free Characteristics - You transfer those characteristics into the free characteristics area that do not display in the initial view of the results when you execute the query in the BEx Analyzer or on the Web. You can then integrate these characteristics into the results through navigation steps. You can also use free characteristics for selecting filter values in the report; 5. Filter - The characteristics displayed in the filter appear neither in the drilldown nor as free characteristics in the query analysis. These characteristics are only used as global filters on the InfoCube data. It is possible to use a filter a key figure, even in combination with characteristics; and 6. Preview (displayed in gray on the screen) This area gives a preview of the query results area. To create a query, you can expand or collapse the InfoProvider directories by choosing the plus or minus symbol. By expanding the key figure node in the InfoProvider tree, for example, you can display a list of all the key figures of the InfoProvider. .

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Business Warehouse: Finding a Query Search for Queries Search String Search in

TERP10 contri. margin schema GRX## Description

Technical Name

Only Queries from InfoProvider Created or Changed No User-Specific Restriction By Me By User No Time Restriction Time Interval

Last 7 Days

From

17.12.2004

17.01.2005 Find

Cancel

 SAP AG 2004

In order to find a query for which you already know a part of the description or other information, choose Find. In the Search for Queries dialog box, enter the technical name or description of the query. If necessary, you can restrict the search to additional criteria. Choose Find . If you are in the BEx Analyzer and have called the search function from the Choose Query dialog box, the query result displays as an Analyzer report. If you are using the search function from the Query Designer, the query definition displays.

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Business Warehouse: Filtering Data in the Query Definition Selection for Material Selection

Value Range

Fixed Values

1. Select single values or a value range

2. Restrict value range

Between

Variables

Description

5. Select highlighted values using Drag&Drop or using the arrow

Casing Spiral Casing Blank Flat Washer Runner 100777004

4. Select multiple values using CTRL and left mouse button

100

OK

3. Search by technical name or description

Cancel

6. Transfer selected values

 SAP AG 2004

The figure shows the selection dialog box for the Material characteristic. It is often necessary to restrict (filter) characteristics to specific characteristic values in your reports. For example, if you are interested in the sales volume of a particular branch of a worldwide corporate group, but the InfoProvider contains the sales volume for the entire organization, you can restrict the query definition to the relevant branch, so that only the key figure for this branch appear in the report. You can restrict (filter) the characteristic values of a characteristic in the Rows, Columns, Free characteristics, and Filter areas of the Query Designer. There are two ways of restricting characteristics: 1. By selecting a characteristic from the InfoProvider of the characteristic (in the tree structure in the left part of the screen) and doubleclicking on the Values icon, the selection menu for fixed values displays. You can select single values or values from a value area. The fixed values selected appear in the directory tree under Values. You can use Drag&Drop to include these in your query definition. 2. You can also restrict a characteristic that you have already included in the definition. Call the context menu for the characteristic and choose Restrict. The Selection for ... dialog box appears. You can find all of the characteristic values available for the chosen characteristic in the left screen area. The right screen area contains the characteristic values that you want to use to restrict the characteristic. To select a characteristic value, highlight the relevant value in the left screen area. You can select single or multiple characteristic values. Using the Input field in the lower left area of the selection dialog box, you can find specific characteristic values by entering their description or technical name. The found values are then automatically highlighted. You can then use Drag&Drop to move the highlighted values into the right screen area. Alternatively, you can transfer the selected values using the arrow. If you want to remove the restriction, simply reverse the procedure.

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Query Designer: New Query

Billing Key Figure No. Document Items Invoiced Quantity Sales Volume Net Sales Dimensions Technical Charact. Customer Organization Company Division Product Product line Segment Sales Area Document Classification Time Unit Data Package

Filter

Free Characteristics

Columns Key Figures Sales Volume (Net Value)

Drag & Drop

Sales Volume (Net) EUR

Rows Company

Company A Company B

 SAP AG 2004

Using Drag & Drop, drag the selected objects of the InfoProvider tree to the appropriate subarea, ex. Rows, Columns or Free Characteristics in the right-hand screen area of the screen.

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Business Warehouse: Including Text Elements in BEx Analyzer Reports ... Display text elements ...

Layout

SAP

All GeneralFiltersVariables Text elements

Bus i n s es Exp l oe r r

Customer Material Division Customer A B

Customer Material Division

Prod-line X Y X Z

2004 2 3 1 2

2005 1 1 1 3

Author Last Changed by InfoProvider Query Technical Name Key Date Changed at Status of Data Current User Cust. A B

PL X Y X Z

SCHMITT SCHULZ T_SDC03 TEST 01.01.02 ... 02.03.02 ... 02.03.02 Schumacher 2004 2 3 1 2

2005 1 1 1 3

 SAP AG 2004

You have the option of displaying different text elements as additional information in a query (for example the author, last changed by, InfoProvider, etc.). These text elements are referred to as the header information of the query. ChooseLayout and Display Text Elements. You can either display all or individual (General, Filters, Variables) text elements. The text elements are displayed between the filter cells and the results area. You can move or delete individual text elements by moving or deleting the corresponding cells using Microsoft Excel menu functions. Explanation of the Text Elements: (1) Author: User who defined the query. (2) Last Changed by: User who last changed the query definition. Navigation steps are not recorded as changes to the definition. (3) InfoProvider: InfoProvider whose data is evaluated in the query. (4) Query Technical Name: Technical name that you entered when you saved the query. (5) Key Date: Contains the date for which the time-dependent master data is selected. You create a key date either in the query definition (in Query Properties) or provide the value using a variable. If no key date has been defined, the system date is taken as the key date. (6) Changed At: Date and time at which the query definition was last changed. (7) Status of Data: Time at which the data from the last request was posted to the InfoProvider. This can be evaluated for reporting. Note: For MultiProviders, the current InfoPackages are determined from the individual BasicCubes and from there, the one with the oldest date is referred to for the status of the data. (8) Current User: User who currently has the query open or who has inserted it into a workbook. (9) Last Refreshed: Data and time at which the query data was last refreshed. This is the time when you displayed the text elements (the system has to refresh the query in order to display the text elements). (10) Variables, Filter Values, Conditions, Exceptions: Depending on the current query definition, additional text elements (variables, filter values, conditions, and exceptions) may also display.

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Web Query

First Query

Product line

Key Figures

Product line

Net sales

Noble metal

878,698.33 EUR

Noble gas Foils

98,443.41 EUR 770,000.75 EUR

 SAP AG 2004

To publish the query on the Web, save it and choose Display Query on the Web . The query displays in a standard Web template. You can change the standard Web template, if required.

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Business Warehouse: Topic Summary

You are now able to: z Explain how SAP Business Information Warehouse reporting and analysis tools support the different business processes

 SAP AG 2004

© SAP AG

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Business Warehouse: Unit Summary

You are now able to: z Explain the basic concepts and architecture of SAP Business Information Warehouse z Explain how SAP Business Information Warehouse reporting and analysis tools support the different business processes

 SAP AG 2004

© SAP AG

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Business Warehouse: Exercises Unit: Business Warehouse Topic: Create a Query Report At the conclusion of this exercise, you will be able to: • Create a BEx query report

In order to evaluate the data from an InfoProvider, you require queries that are tailored to your individual requirements. You have been given the task of creating these query definitions.

1-1

You are interested in finding out the net sales and operating profit of your customers for product lines in 2004 and 2005. You want to enable the users of your report to select by specific product lines. Create a new query using the Customer Cube TERP10 in the InfoProvider Customer Training TERP10 You can use the predefined structure “contribution margin schema” or manually create a row structure.

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Key Figures.

Fiscal Year 2004

Fiscal Year 2005

Overall Results

Net sales Variable COGS Contr. Margin I Fixed COGS Contr. Margin II Sales Overhead R&D Overhead Admin Overhead Operating Profit 1-1 Save the query in your favorites folder with the name: Description: GRX## TERP10 Customer Query 1 Technical name: TERP10_X## (X= Participant Group A, B, C or D; ## is your participant number within the group. For example: You log on to SEM System with User: SEMA-01. The Query is named TERP10_A01.) Execute the query and view the results. If the Internet Explorer is installed on your workstation and default language is set to English you can run the query in the web using the icon in the explorer bar.

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1-2 What are the net sales in 2004 and 2005? -----------------------------------------------------------------------------------------1-3 Which Product line has a better performance record in 2004 and 2005? -----------------------------------------------------------------------------------------1-4 What are the fixed COGS for each product line? ------------------------------------------------------------------------------------------

1-5 Which product line’s operating profit decreased between fiscal years 2004 and 2005?

-----------------------------------------------------------------------------------------1-6 In which product line does the R&D Overhead increase between 2004 and 2005? -----------------------------------------------------------------------------------------1-7 In which product line does the contribution margin II decrease between fiscal years 2004 and 2005? ------------------------------------------------------------------------------------------

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Business Warehouse: Solutions Unit: Business Warehouse Topic: Create a Query Report At the conclusion of this exercise, you will be able to: • Create a BEx query report

In order to evaluate the data from an InfoProvider, you require queries that are tailored to your individual requirements. You have been given the task of creating these query definitions.

1-1

You are interested in finding out the net sales and operating profit of your customers for product lines in 2004 and 2005. You want to enable the users of your report to select by specific product lines. Create a new query using the Customer Cube TERP10 in the InfoProvider Customer Training TERP10 You can use the predefined structure “contribution margin schema” or manually create a row structure.

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Key Figures.

Fiscal Year 2004

Fiscal Year 2005

Overall Results

Net sales Variable COGS Contr. Margin I Fixed COGS Contr. Margin II Sales Overhead R&D Overhead Admin Overhead Operating Profit To open the BEx Analyzer, choose SAP Menu → Business Information Warehouse → Business Explorer → Business Explorer Analyzer. (Choose local BW System as RFC Destination) Microsoft Excel will be launched in a separate window. In that window, from the BEx toolbar, choose Open → Queries. In the next frame choose the NEW icon and select your InfoProvider. You select your InfoProvider by clicking on the InfoAreas Icon. Open the InfoArea Training/ TERP. Select the InfoCube Customer Training TERP10 and click the OK button.

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From the Structure Folder you can transfer the contribution margin schema into the ROWS using Drag&Drop.

From the Time dimension, transfer the Fiscal Year variant into the Filter into using Drag&Drop. Now transfer the fiscal year from the Time dimension, into the Columns using Drag&Drop. Click on Fiscal Year in the columns section, then restrict the fiscal year using the context menu (right mouse button-> RESTRICT) and select 2004 and 2005 into the Selection. Press OK and return to the query designer.

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Now the query should look like this:

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From the Organization Folder, under the Dimensions Folder, transfer the Product Line into the Free Characteristics using Drag&Drop. The Product Line is in the Organization Dimension. Save the query in your Favorites folder using the diskette icon: Description: GRX## TERP10 Customer Query 1 Technical name: TERP10_X## (X= Participant Group A, B, C or D; ## is your participant number within the group. For example: You log on to SEM System with User: SEMA-01. The Query is named TERP10_A01.) Choose save Execute the query as a report in the BEx Analyzer by choosing Quit and Use Query. If the Internet Explorer is installed on your workstation and default language is set to English you can run the query in the web using the explorer bar.

icon in the

View the results, and then close the report results without saving them. Leave the BEx Analyzer open for the next exercise step. 1-3 What are the net sales in 2004 and 2005?

© SAP AG

Net Sales in 2004

$ 220,970,000.00

Net Sales in 2005

$ 227,940,000.00

TERP10

4-37

1-4 Which Product line has a better performance record in 2004 and 2005? To answer this question, you have to breakdown the total values by product line. In the query designer you assigned the characteristic product line to the frame “Free characteristics”, so that you can drill down to the total values. To breakdown the contribution margin schema by product line, select in the header Product Line and choose drilldown by context menu. The results by product line Foils and product line A appear.

The net sales and operating profit is higher for Product line A then for product line Foils. Therefore, product line A has the better performance record. 1-5 What are the fixed COGS for each product line? fixed COGS 2004 PL: Foils

$ 250,000.00

fixed COGS 2004 PL: Foils

$ 260,000.00

fixed COGS 2005 PL: A

$ 35,499,200.00

fixed COGS 2005 PL: A

$ 35,534,400.00

1-6 Which product line’s operating profit decreased between fiscal years 2004 and 2005? Operating profit 2004 Foils

$ 125,000.00

Operating profit 2005 Foils

$ 60,000.00

Operating profit 2004 A

$ 68,340,800.00

Operating profit 2005 A

$ 75,345,600.00

Product line Foils’ operating profit decreased between fiscal years 2004 and 2005

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1-6 In which product line does the R&D Overhead increase between 2004 and 2005? The R&D overhead did not increase in either product line. Product line Foils reported a decrease of $ 5,000.00 between 2004 and 2005. Whereas, product line A did not have any movement between 2004 and 2005. 1-7 In which product line does the contribution margin II decrease between fiscal years 2004 and 2005? Contribution margin II 2004 Foils

$ 460,000.00

Contribution margin II 2005 Foils

$ 390,000.00

Contribution margin II 2004 A

$ 132,000,000.00

Contribution margin II 2005 A

$ 139,040,000.00

The contribution margin II decreased in product line Foils and increased in product line A between 2004 and 2005.

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Business Warehouse: Test Your Knowledge 1.

Business analysis-objects (product line, net sales, sales volumes, and so on) are called __________ in SAP BW. Fill in the blank to complete the sentence

2.

The central data containers that form the basis for reports and analyses in SAP BW are called _________. Fill in the blank to complete the sentence

3.

_________ is the super-ordinate term for an object that you can use to create reports in Business Explorer (BEx). Fill in the blank to complete the sentence

4.

The Query Designer is divided into six subareas. Determine whether this statement is true or false.

5.

There are four ways of restricting characteristics. Determine whether this statement is true or false.

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Business Warehouse: Answers 1.

Business analysis-objects (product line, net sales, sales volumes, and so on) are called InfoObjects in SAP BW. These InfoObjects can be divided into characteristics and key figures. Characteristics can be further divided into units, time characteristics, and technical characteristics.

2.

The central data containers that form the basis for reports and analyses in SAP BW are called InfoCubes. They contain key figures (sales volumes, incoming orders, actual costs, and so on) and a link to the characteristics (master data of the SAP BW system such as cost centers, customers, materials, and so on).

3.

InfoProvider is the super-ordinate term for an object that you can use to create reports in Business Explorer (BEx). InfoProviders are objects or views that are relevant to reporting.

4.

The Query Designer is divided into six subareas. Determine whether this statement is true or false. True: 1. Directory tree of the selected InfoProvider. 2. Columns 3. Rows 4. Free Characteristics 5. Filter 6. Preview

5.

There are four ways of restricting characteristics. Determine whether this statement is true or false. False There are two ways of restricting characteristics: 1. By selecting a characteristic from the InfoProvider 2. You can also restrict a characteristic that you have already included in the definition.

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Contents: z Organizational Units and Master Data z Order to Cash Business Process z Reporting and Analysis Tools

 SAP AG 2004

© SAP AG

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Sales Order Management: Unit Objectives

At the conclusion of this unit, you will be able to: z List the organizational units and master data that are critical to the Sales Order Management process z Perform the order to cash business process z Identify key integration points with other mySAP ERP processes z Identify the reporting and analysis tools used in Sales Order Management process

 SAP AG 2004

© SAP AG

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Sales Order Management: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

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Sales Order Management: Business Scenario

z In your enterprise, a customer places an order for material or services. This order is delivered and then invoiced to the customer. In some cases, the ordered material may not be available to satisfy the customer’s requested delivery date. As a project team member, you need to test the functionality of the order to cash process.

 SAP AG 2004

© SAP AG

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Organizational Units and Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z List the organizational units that are critical to the Sales Order Management process z List the master data elements that are critical to the Sales Order Management process

 SAP AG 2004

© SAP AG

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5-5

Organizational Units in Sales Order Management

R/3

z Company code

Document

z Sales Area

Î Sales Organization Î Distribution Channel Î Division z Plant z Storage Location z Shipping Point

 SAP AG 2004

Organizational units represent the structure of an enterprise organization. Organizational units represent the legal and organizational views of an enterprise. The Sales and Distribution module uses some organizational units that can only represent sales and distribution processes, such as sales organization, distribution channel, division, or shipping point. Other organizational units, such as company code or plant, are used in Sales and Distribution and in other modules. You can represent your enterprise structure using organizational units based on your business processes. This is not a complete list of all organizational units relevant for the sales and distribution processes.

© SAP AG

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Organizational Units: Company Code

Company code

z Legal entity and independent accounting unit z At company code level, you create: Î balance sheets required by law Î profit and loss statements

 SAP AG 2004

For a company code, a complete independent accounting unit can be represented as the smallest organizational unit in external accounting. This includes entry of all accountable transactions and the creation of all proofs for a legally required individual account closing, such as the balance sheets and the profit and loss statement. Examples of a company code are: a company within a corporate group or a subsidiary.

© SAP AG

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Organizational Units: Sales Organization

Sales organization

z Responsible for: Î distributing goods and services Î negotiating sales conditions Î product liability and rights of recourse

 SAP AG 2004

The sales organization is an organizational unit in Logistics which groups the enterprise according to the requirements of sales and distribution. A sales organization is responsible for distributing goods and services. Therefore, it is also liable for the sold products and responsible for the customers' rights of recourse. The sales organization is also used to take, for example, a regional, national or international subdivision of the market into account. A sales organization is uniquely assigned to a company code. More than one sales organization can be assigned to a company code. If you use the Sales and Distribution module, you need at least one sales organization. You maintain own master data for a sales organization. In the sales statistics, the sales organization is the highest summation level. All items in a sales and distribution document, that is, all items of an order, an outbound delivery or a billing document, belong to a sales organization.

© SAP AG

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Organizational Units: Distribution Channel

Sales organization

Distribution Channel 1

Distribution Channel 2

z Is a means through which sales materials reach the customer z Represents your strategies to distribute goods and/or services to your customer z For example: wholesale trade, retail trade, internet trade, ...  SAP AG 2004

A distribution channel is a means through which salable materials or services reach the customer.

Several distribution channels can be assigned to a sales organization. If you use the Sales and Distribution module, you need at least one distribution channel. For example, it is used to: y Define responsibilities, y Achieve flexible pricing and y Differentiate sales statistics.

© SAP AG

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Organizational Units: Division

Sales organization

Division 1

Division 2

z Represents a product line z For example: motorcycles, spare parts, services, ...

 SAP AG 2004

A division is used to group materials and services. A sales organization can have several divisions assigned to it, for which it is responsible. If you use the Sales and Distribution module, you will need at least one division. The system uses the division to determine the sales areas a material or a service is assigned to. A division can, for example, represent a product group. Therefore, you can, for example, restrict price agreements with a customer to a certain division. You can also conduct statistical analysis by division.

© SAP AG

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5-10

Sales Area

Sales Organization

1 Frankfurt

Distribution Channel

2 Retail trade

2 Berlin

5 Internet

1 Wholesale trade

Division 2 Motorcycles

3 Computers

3 Computers

2 Motorcycles

1 Pumps

1 2 2

1 2 3

1 5 3

2 1 2

2 1 1

Sales Areas

 SAP AG 2004

A sales area is a combination of the sales organization, distribution channel, and division. It defines the distribution channel a sales organization uses to sell products from a certain division. Each sales and distribution document is assigned to exactly one sales area. This assignment cannot be changed. A sales area can belong to only one company code. This relationship is created by assigning the sales organization. During the processing of sales and distribution documents, the system accesses various master data, according to the sales area. This master data includes, for example, customer master data, material master data, prices, and discounts. In addition, the system carries out several checks concerning the validity of certain entries according to the sales area. Note: A simple organizational structure can be better than a complex one. For example, it simplifies updating master data. Do not define complex organizational structures in order to have detailed reporting options. Use fields on the master data screen.

© SAP AG

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Sales and Distribution Structures of IDES AG

IDES AG

Company

Sales Office

Distribution channel

Product line

Sales and Distribution Frankfurt

Sales and Distribution Berlin

Reseller

Service

Chain stores

Industry Consumer

Motor cycles

Services

Food

Paint

 SAP AG 2004

© SAP AG

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Organizational Units: Plant and Storage Location

1 2

2 1

2 2

(Delivering) Plant

Plant 1

Plant 2

Plant 3

Storage location

 SAP AG 2004

The plant is a location where material stock is kept. A plant can, for example, represent a production facility or simply a grouping of locations (storage locations) in physical proximity. Plant and storage location are organizational units that can be used by all logistic areas. y Materials management is primarily concerned with the material flow. From a materials management point of view, a plant is, above all, a location where material stock is kept. y In production, a plant can represent a manufacturing facility. y In sales and distribution, a plant represents the location from which materials and services are distributed and corresponds to a distribution center. The relevant stocks are kept here. y If you sell a service, a plant can represent the location services are rendered from (that is, an office). In sales and distribution, the plant has a central function: y You have to create at least one plant in order to be able to use the Sales and Distribution module. y A plant must be uniquely assigned to a company code. y The assignment between sales organizations and plants does not have to be unique. y The plant is essential for determining the shipping point.1

© SAP AG

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Organizational Unit: Shipping Point

Plant 1

Shipping point 1

Plant 2

Shipping point 2

Shipping point 1

 SAP AG 2004

Shipping is an integrated module of sales and distribution processing. The shipping point is the highest-level organizational unit of shipping that controls your shipping activities. Each outbound delivery is processed by one shipping point. The shipping point can be a loading ramp, a mail depot, or a rail depot. It can also be, for example, a group of employees responsible (only) for organizing urgent deliveries. You assign a shipping point at plant level. A shipping point is a physical place and should be near the delivering plant. More than one shipping point can be assigned to a plant. You can also assign several shipping points to a plant. This can also be appropriate for plants in physical proximity.

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Master Data Control tables

Order Customer master data

Sold-to party 2300 Ship-to party 788

Customer master data Material master data

Customer-material Info record

Output master data

Item Material Quantity 10 1400-100

10

20 1400-200

20

30 1400-410

15

Condition master data

Control tables  SAP AG 2004

Several sources of data can be copied into a sales order or into another sales and distribution document. Most of them are default values that you can overwrite in the sales and distribution document, if necessary. These sources of data include, for example: y Customer master data y Material master data y Condition master data (You create and maintain this master data in the sales and distribution master data for automatic pricing. This could be, for example, a material price or a customer discount). y Output is information that is sent to the customer using various media, such as mail, EDI, or fax. Examples include the printout of a quotation or an order confirmation, order confirmations using EDI, or invoices by fax. Control tables: You can create and maintain these tables in Customizing. The default values of several data can be controlled in the sales and distribution documents, depending on the table settings. One sales document can serve as a source of data for another sales document. For example, a quotation can serve as a data source for a sales order.

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Customer Master Customer master data

Sales Area Data

General Data

Company Code Data

Relevant for sales and distribution

Relevant for sales and distribution and accounting

Relevant for accounting

Valid for: Sales Organization Distribution Channel Division

Valid for: all organizational units

Valid for: Company Code

 SAP AG 2004

The customer master groups data into categories: general data, sales area data, and company code data. The general data is relevant for sales and distribution and for accounting. It is stored centrally (clientspecific), in order to avoid data redundancy. It is valid for all organizational units within a client. The sales area data is relevant for sales and distribution. It is valid for the respective sales area (sales organization, distribution channel, division). The company code data is relevant for accounting. It is valid for the respective company code. The customer master includes all data necessary for processing orders, deliveries, invoices, and customer payments.

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Material Master Material master data Basic Data 1

Purchasing

Other ...

Relevant for all areas

Relevant for materials management

Relevant for engineering, materials planning, accounting, …

Valid for all organizational units

Valid for: Plant

Sales: Sales Org

Sales: General/ Plant Data



Valid for: Sales organization Distribution channel

Valid for: Delivering plant

 SAP AG 2004

The material master is grouped into several views: Basic data, sales and distribution data, purchasing data, various further data for engineering/design, accounting, costing, warehouse management, and so on. Basic data is relevant for all areas. It is valid for all organizational units within a client. Sales: sales organization data is relevant for sales and distribution. It is valid for the respective sales organization and the distribution channel. The sales: plant data is also relevant for sales and distribution. It is valid for the respective delivering plant. There is additional data for several other areas. This is valid for various organizational units.

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Customer- Material Information Record

Customer Master

Material Master

Customer-material Info record Customer

2300

Sales Organization Distribution Channel

1000 12

Material Description

Customer-specific data: Customer-material description

1440-100 Headlight Deluxe 1400-200 Rear Light

S3000H front light R1700 rear light

+ additional data

 SAP AG 2004

You can use the customer-material information to record data for a combination of certain customers and materials. If a customer-material info exists for a customer and a material, these default values are preferred to the values from the customer or the material master when processing a document (order, or delivery) You can use the customer-material information record to maintain the following data: y Cross-reference from your customer's material number to your material number and the customer's material description. y Specific shipping information for this customer and material (such as delivery tolerances, specifying if the customer accepts partial deliveries, or the default delivering plant).

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Output Output Master Data

Sales Order

Output type:

Output type: Transm. medium: Partner function: Time:

Partner function Trans. medium Time Language

Output determination

Language:

Order confirmation Print output AG 2300 immediately when saving DE

Print Order Confirmation 6177 Motomarkt Heidelberg Customer number 2300 We will deliver: Item Material Quantity Value 1 S3000 10 650 2 R1700 10 300 Total 950

 SAP AG 2004

Output is information that is sent to the customer using various media, such as mail, EDI, or fax. Examples include: the printout of a quotation or an order confirmation, order confirmations using EDI, or invoices by fax. As with pricing, output determination takes place using the condition technique. Output can be sent for various sales and distribution documents (order, delivery, billing document) In the output master data, you define the transmission medium, the time, and the partner function for an output type. Output types include, for example: quotation, order confirmation, invoice. Partner functions include, for example: sold-to party, ship-to party, and bill-to party. Transmission media include, for example: printer, telex, fax, mail, EDI. Times at which output is sent include: immediately when saving, or by using a standard program (RSNAST00) that is run regularly. The layout of an output is defined by a form in SAPscript. The form is assigned to an output type.

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Condition Master Condition master data Prices

Freights

Material price Price list Customer-specific Other

Freight Incoterms 1+ 2 Other

Taxes Value-added tax Jurisdictional taxes Other

Surcharges/ Discounts customer material pricing group mat. pricing group customer/material cust./mat. pricing group pricing group/ mat. pricing group Other

 SAP AG 2004

The condition master data includes prices, surcharges and discounts, freights, and taxes. You can define condition master data (condition records) to be dependent on various data. You can, for example, maintain a material price customer-specifically or define a discount to be dependent on the customer and the material pricing group. In Customizing, you can control the data on which prices, surcharges and discounts, freights or taxes can be dependent. (You can define conditions to be dependent on any document fields). Frequently occurring cases have already been set in the standard system.

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Organizational Units and Master Data: Topic Summary

You are now able to: z List the organizational units that are critical to the Sales Order Management process z List the master data elements that are critical to the Customer Order Management process

 SAP AG 2004

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Order to Cash Business Process: Topic Objectives

At the conclusion of this topic, you will be able to: z Execute the order to cash business process within mySAP ERP z Define key integration points with other mySAP ERP processes

 SAP AG 2004

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Order to Cash Business Process: Overview

Pre-Sales Activities

Sales Order Processing

Inventory Sourcing

Shipping Payment Billing

 SAP AG 2004

Effective sales order processing connects all activity to customer demand in a series of integrated processes. The application component Sales and Distribution makes this sales order processing possible. The steps in a sales process are then reproduced by electronic documents that are linked to each other. The customer order management process begins with establishing and maintaining customer relationships, and ends with invoicing for delivery of goods or service provided to the customer. Posting the customer incoming payments is part of the application component Financial Accounting. The Customer Order Management cycle can begin with Pre-Sales Activities. For example, in response to a customer inquiry , you create and send a quotation. As part of sales order processing, you create a sales document. During procurement, the system determines the supplier of the goods, based on data that you have stored in the system. Is the supplier from one of your delivering plants, and, if so, which one? Is the supplier a third-party vendor, and, if so, which one? As part of shipping processing, you organize and perform the delivery of goods. In the billing process, you create the invoice and transfer all the necessary data into Accounting. As part of handling payments, you check open items and post incoming payments.

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Pre-Sales Activities

z Establishing and maintaining customer relationships z Pre-Sales activities may include: Creating and tracking customer contacts Mailing campaigns Answering customer questions received by e-mail, fax etc. Inquiries Quotations

 SAP AG 2004

Specific marketing measures, for example, direct mailing campaigns, internet campaigns, trade fair sales activities or telephone campaigns, can trigger sales processes. Possible sequences of such campaigns can be a non-binding customer inquiry or a request for a quotation. Inquiries and quotations help you to determine important sales-related data and can be saved as documents. If the customer then places an order, you can refer to this data. Use this pre-sales information to plan and evaluate your marketing and sales strategies and as a basis for establishing long term business relationships with your customers, for example by y Tracking lost sales y Recording pre-sales data to help negotiate large contracts y Selling goods and services to large organizations that require documentation of the entire process.

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Sales Order Processing

z The employees in your department Customer Service take orders in writing and over the phone. z Standard orders normally contain: Customer and material information Pricing conditions for each item Delivery dates and quantities Shipping information Billing information

 SAP AG 2004

A sales order is an electronic document that records your customer's request for goods or services. The sales order contains all information to process the customer's request during sales order processing. The sales component thus automatically proposes data from master records and control tables that you previously stored. As a result, possible input errors occuring during sales order processing and entering of redundant data is avoided. You can enter a sales order with many items on a single screen. Sales orders can also be created via the internet or through messages received from business partners.

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Creating an Order

Quotation 1 Cust. 1

Quotation 2 Cust. 1

Quotation 3 Cust. 2

Open items? Quotation still valid?

Order 1 OR 6732

Order confirmation

Order 3 OR 7191

Order 2 OR 6911

 SAP AG 2004

A sales document is created in a sales area. A sales order can refer to a business transaction that already exists in the system. For example, one or more inquiries and quotations can be reference documents. In this case, the SAP System copies the relevant data to the sales order. A quotation can also result in several sales orders. This allows you to group all the quotations for one customer.

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Sales Document Structure

Standard order

Header Item 1 Schedule line 1

Sold-to party

2387

Ship-to party

4876

Item

Material

Quantity

10

1400-100

20 PC

1

01 Nov

20 PC

20

1400-200

50 PC

1

01 Nov

20 PC

2

01 Jan

30 PC

Item 2 Schedule line 1 Schedule line 2

 SAP AG 2004

A sales document is grouped into three levels: header, item and schedule line. Data is distributed on these levels as follows: y Sales document header The data in the document header is valid for the entire document. This includes, for example, customer-related data. y Sales document items Each item in the sales document contains its own data. This includes, for example, data about the material and quantities ordered. Each sales document can have several items, while individual items can be controlled differently. Examples include material item, service item, free-of-charge item or text item. y Item schedule lines Schedule lines contain delivery quantities and delivery dates. They belong uniquely to an item. Every item that has a subsequent outbound delivery in the sales and distribution process must have at least a schedule line. The item can have several schedule lines, for example when the quantity ordered is to be delivered in several partial deliveries at different times. To process the sales documents efficiently, the data can be displayed and processed in different views. The views are grouped into overview, header and item screens. A new sales document is entered on an overview screen.

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Inventory Sourcing

z In this process step, you can: check the availability of the ordered goods and publish the demand in materials planning

z Materials planning organizes and monitors the actual procurement process. This includes products that are: inhouse-produced or / and externally-produced

 SAP AG 2004

The way in which a material is obtained for a sales order can depend on the type of material and on the sales transaction. The procurement can, for example: y Be from available stock y Be guaranteed by replenishment y Trigger make-to-order production y Initiate the outbound delivery using external suppliers (third-party business transaction) y Organize the outbound delivery from another warehouse (stock transfer).

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Availability Check in the Sales Order

Standard order

Material Master

Item Material Quantity 10 1400-310 10

Material: 1400-310 Availability check: 02

Control tables

An availability check occurs during sales order processing if: z The material requires an inventory check z The availability check is set in Customizing for this transaction  SAP AG 2004

On the Sales and Distribution tab page in the material master you can: enter in Gen./Plant in the availability check field, which and/or what type of availability check should be carried out for this material during order processing. There are also various tables in Customizing, on which the availability check is also dependent. From the availability control screen, you can access the Available to Promise (ATP) quantities, the scope of check for determining available quantity, and the other plants that may have the material available.

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Incompletion Log

Sales order Sold-to party 2300 Purchase order no. Terms of payment

Incompletion log

Item

Material

Qty

Weight

10

1400-100

10

-

20

1400-200

10

12 KG

Item:

Missing data PO number Terms of payment Weight

W: Please enter purchase order number Call: a) automatically when saving b) via menu bar

 SAP AG 2004

Each sales and distribution document contains data required for the document and for further processing. The system determines which fields are displayed in the incompletion log when the user does not fill them during sales order processing. The incompletion log will be displayed a) automatically when you save your entries. You can also call it by choosing Edit -> Incompletion log. In Customizing, you can decide which fields should be part of the incompletion log. The incompletion log functions are available in the sales order and in the delivery.

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Internet Sales with or without CRM Internet Sales R/3 Edition Product Catalog FI

Customer Master

SD

SAP R/3

Mobile Sales

CRM Internet Sales CRM/EBP Web shop profile Product Catalog

LES

Customer Master Sales (Order)

Call center

 SAP AG 2004

Internet Sales R/3 Edition and CRM Internet Sales are SAP’s Web Shop solutions for selling products on the Internet. Advantages of the two solutions: y Internet Sales R/3 Edition: - The customer works with the R/3 System and wants to establish an additional distribution channel on the Internet. This channel can be set up very quickly with the Internet Sales R/3 Edition. - The only additional software required is a J2EE-Server. y CRM Internet Sales - Integral component of the SAP CRM system - Enhanced functionality in comparison with the Internet Sales R/3 Edition (e.g. Marketing integration) - It is possible to run the CRM without a SAP R/3 in the back end.

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Shopping Process

Virtual Shopping Basket

Customer Registration

Secure Payment Transactions

Document Status

Pricing

Product Search, Configuration

Product Catalog

 SAP AG 2004

Product Catalog: The Web catalog contains precisely one product catalog. Configuration: This function allows your customers to configure products using the Internet Pricing and Configurator (IPC) and to order them as they have been configured. Pricing: When you create an order or an order template, catalog prices are used. Catalog prices can be list prices or prices calculated by the IPC. Shopping Basket: Net price, gross price, freight, and tax are identified separately Customer Registration: The customer registration is only possible in the B2C scenario Document Status: The system reports the successful arrival of the purchase order and the purchase order number under which customers can track the status of the purchase order

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Shipping

z Shipping processing supports: Creating outbound deliveries Picking (by creating transfer orders) Packing Posting the goods issue

 SAP AG 2004

Shipping processing in Sales and Distribution begins when you create the delivery document. The delivery document controls, supports and monitors numerous sub processes for shipping processing such as y (Optional) picking and confirming (transfer requests), y (Optional) Packing, y (Optional) planning and monitoring of transport (shipment document) and y Posting the goods issue (goods issue documents). Creating a delivery document includes copying information from the sales order, such as the materials and quantities, onto the delivery document. Creating a transfer order includes copying data from the delivery document to the transfer order for processing within the warehouse. The transfer order is essential for controlling the movement of goods within your warehouse. The transfer order is based on a simple principle: where you are taking goods from and to, within your warehouse. There is a source location and a destination location for every transfer order. The posting of the goods issue can bring about a change based on a quantity basis as well as on a value basis in change stock. Changes based on a quantity basis are made on the relevant balance sheet accounts and stock change accounts in financial accounting.

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Creating an Outbound Delivery

Order 1 Cust. 1

Order 2 Cust. 1

Order 3 Cust. 2

Shipping point? Delivery date? Ship-to party?

Delivery 1 DEL 80006732

Delivery note



 SAP AG 2004

You can create an outbound delivery in a shipping point for orders that are due for delivery. The SAP System copies the relevant data from the order to the outbound delivery. You can create one or several outbound deliveries from the order. You can also combine items from several orders into one outbound delivery. To combine them successfully, the orders must all have the same characteristics that are essential for the shipping process, for example: y shipping point y Due date y Ship-to address The SAP System can create deliveries either on-line or as a background job to be executed during off-peak hours.

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Structure of Delivery Document

Delivery

Header

Ship-to party

4876

Item 1 Item 2 Item 3

Item

Material

Quantity

10

1400-100

20 PC

20

1400-200

30 PC

30

1400-300

10 PC

 SAP AG 2004

A delivery document is grouped into two levels: header and item. The data is distributed across these levels as follows: y Delivery document header The data for the document header is valid for the entire document. This includes, for example, data for the ship-to party and schedules for shipping processing. y Delivery document item Each item in the sales document contains its own data. This includes data about the material, quantities and weights as well as stock information. Each sales document can have several items.The items can be controlled differently. Examples include material item, free-of-charge item or text item. The delivery document does not contain schedule lines. Each schedule line in the sales document can become an item in the delivery document. To process delivery documents efficiently, the data can be read and processed in different views. The views are grouped into overview, header and item screens.

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Picking in Shipping Processing

shipping point

Delivery

Warehouse (number)

Delivery quantity

Item Material Delivery Pick quantity quant. 10 1400-100 20 20 20 1400-200

12

12

Transfer order Item Material

Picked quantity

10

Pick quant. 1400-100 20

20

1400-200

TO

12 Pick quantity

 SAP AG 2004

You can control an item in an outbound delivery so that picking is required. Picking is carried out by creating transfer requests with which you trigger and survey warehouse movements. The items in the transfer requests contain the materials and the quantites to be picked, which correspond to the delivery quantities. At the same time the delivery quantites are transferred into the outbound delivery as picking quantities. You can print the pick list for use in the warehouse from the transfer request. Picking confirmation can either be automatic or can be carried out in a spearate processing step.

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Loading and Packing Shipments

 SAP AG 2004

At the time of shipment, items which were not already packed in the delivery, can be packed in shipping units using shipping materials. The functionality used here is basically the same as for loading in the delivery. Packed items are assigned to the required means of transport (e.g., trucks). Shipping units from the delivery are copied and can no longer be changed. Unlike packing in the delivery, packing in the shipment can be carried out for several deliveries.

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Post Goods Issue

Delivery

Goods issue

Supply and demand

Quotation Sales order

Delivery

Valuated stock

Material M1 Sales price

100 PC 25 UNI

Accounting document

Cost

12 UNI

M1

Billing due list Billing Document date ; 10 Jun 80002673

; 12 Jun ; 17 Jun

UNI

CO documents

80002697 80002763

 SAP AG 2004

When you post goods issue, the system automatically: y Updates the quantities in inventory management and delivery requirements in materials planning y Updates the value change in the balance sheet accounts for inventory accounting (the postings from the relevant accounting document are based on the cost of the material) y Generates additional documents for accounting, for example, for controlling y Generates the billing due list y Updates the status in all relevant sales documents

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Billing

z Billing supports: Creating invoices for products and services Creating credit and debit memos Cancelling previously posted billing documents Automatically transferring billing document data to accounting

 SAP AG 2004

When you create a billing document, data is copied from the sales order and the delivery document to the billing document. Delivery items as well as order items (for example services)can be references for the billing document. The billing document serves several important functions: y It is the sales and distribution document that helps you to generate invoices. y The billing document serves as a data source for financial accounting (FI) to help you to monitor and process customer payments. When you create a billing document, the G/L accounts will normally be updated automatically. During this process, the R/3 system carries out y a debit posting on the customer receivables account and y a credit posting on the revenue account.

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Creating a Billing Document

Delivery 1 Cust. 1

Delivery 2 Cust. 1

Delivery 3 Cust. 2

Payer? Billing date? Destination country?

Bill. doc. 1 F2 90003733

Invoice

Bill. doc. 2 F2 90006834

Bill. doc. 3 F2 90006913

 SAP AG 2004

You can create an invoice for one delivery or sales order. You can group invoices using selection criteria, such as customer, billing date and destination country. The SAP System can combine deliveries into a billing document, provided these deliveries share some essential billing characteristics, for example: y Payer y Billing date y Destination country The SAP System can create invoices either online or as a background job to be executed during offpeak hours.

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Billing Document Structure

Billing doc.

Header

Payer

Item 1

Item Material

Item 2 Item 3

3761 Invoiced Quantity

10

1400-100

20 PC

20

1400-200

30 PC

30

1400-300

10 PC

 SAP AG 2004

A billing document includes two levels: header and item. The data is distributed as follows: y Billing document header The data for the document header is valid for the entire document. This includes, for example, data about the payer and billing date. y Billing document items Each item in the sales document contains its own data. This includes, for example, details about the material, billing quantities and net values for the items. Each billing document can have several items. To process billing documents efficiently, the data can be read and processed in different views. The views are grouped into overview, header and item screens.

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Effects of Billing Document

Cust. Credit manag. account

Sales Info System

Bill.doc. 90006834

Accounting document 10006834

Profit. analysis Sales order Delivery

 SAP AG 2004

When you save the billing document, the system automatically generates all the required documents for accounting. In accounting, the R/3 system carries out a debit posting on the customer receivables account and a credit posting on the revenue account. The accounting document contains all the completed postings in financial accounting that refer back to pricing in SD, for example, the receivable on the customer account or the obtained net sales and taxes on the relevant G/L accounts. When you save the billing document, further documents for accounting can be automatically generated by the system, for example, for the components Controlling (CO), profitability analysis, market segment analysis (CO-PA) or consolidation (FI-LC). When the billing document is posted, the following also occurs: y the status in all related sales, delivery and billing documents, is updated y the sales statistics in the sales information system are updated y the customer credit account is updated

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Payment

z Payment is a process that is part of the application module Financial Accounting. z Payment supports: Posting payments against invoices Reviewing differences

 SAP AG 2004

When you post an incoming payment, the relevant G/L accounts will be updated automatically. During this process, the R/3 system carries out y a debit posting to the cash account and y a credit memo to the customer receivables account.

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Document Flow in the SAP System

Standard order

Outbound delivery

Billing doc.

Accounting document

Document Standard order 6839 . Delivery 80002832 .. WMS transfer order 482 .. GD goods issue: delvy 4900001537 .. Invoice 90005371 … Accounting document 100001276

 SAP AG 2004

The documents in a sales process are linked to each other using the document flow. This enables you to access the history and current status of your sales processes at any time. You can display the document flow as a list of linked documents. All preceding and succeeding documents are displayed, depending on the document you call the list from. From this list, you can display the relevant documents or call up status overviews for the documents. This provides an overview of the development of your sales processes at any time, and you can answer customer questions quickly and reliably.

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Document Flow at Item Level

Sales order

Delivery

Billing doc.

Sales order

Delivery

Billing doc.

Item 1

Item 1

Item 1

Item 2

Item 2

Item 3

Item 3

Schedule line 1 Item 2 Schedule line 1 Schedule line 2

 SAP AG 2004

The document flow is updated on the document header and document line level. Only sales documents contain schedule lines. Since each schedule line contains its own delivery date, each deliverable schedule line becomes an item in a delivery document. Therefore delivery documents and billing documents do not need schedule lines.

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Sales and Distribution: Integration


Profitability Analysis

Post Goods Issue Billing

Sales Information System

Materials Management

Stock Reservation Stock removal Availability check

Sales Orders

Data

Warehouse Management

Sales and Distribution

Make to Order

Picking Removal from stock location

Project Systems

Production Planning

 SAP AG 2004

Sales and Distribution integrates with a variety of other modules. Your company manages customer orders from initial request for product to the receipt and posting of customer payment as part of the Customer Order Management cycle. To begin the cycle, your company typically enters customer orders which contain customer and product information, as well as delivery schedules. Order entry personnel use this information to advise customers about prices and delivery dates before they confirm an order. Here Sales and Distribution integrates with Materials Management for availability checking. For make to order product, Sales and Distribution integrates with Production Planning so that the product is made to satisfy the customer order requirement. Delivery and billing processing both integrate with Project Systems. Following order entry, your company schedules and organizes customer orders for optimal delivery. Product is picked in the Warehouse Management module (noting any discrepancies from the ordered quantity) and print the shipping documents. When the delivery is released to the customer (truck leaves the dock), inventory quantities must be reduced and the general ledger must be updated appropriately. Here Sales and Distribution, by means of Posting Goods Issue, integrates with Materials Management and Financial Accounting and possibly Controlling. After you deliver the product, an invoice must be generated and the transaction posted to the general ledger. The Financial Accounting periodically reviews the customer’s open items and posts the incoming payments when received.

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Order to Cash Business Process: Topic Summary

You are now able to: z Execute the order to cash business process within mySAP ERP z Define key integration points with other mySAP ERP processes

 SAP AG 2004

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Reporting and Analysis Tools: Topic Objectives

At the conclusion of this topic, you will be able to: z Discuss the reporting and analysis tools used in the Sales Order Management process

 SAP AG 2004

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Reporting and Analysis on the Processes in Sales Order Management Contents: Information sources in Sales Order Management List/worklist ; ; ; ;

z Lists and reports

Online lists and online reporting

Worklists

Document flow

z Sales Information System

Information structures

Standard analyses

Flexible analyses

 SAP AG 2004

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Sources of Sales Order Information

Info library

Standard analyses

ABAP query

Flexible analyses

lists & reports

SIS Info structure

Master and document data

 SAP AG 2004

The Sales Information System (SIS) belongs to Sales and Distribution. With SIS, you can compress data from sales documents to obtain information which will help you make strategic business decisions. SIS contains standard analyses as well as flexible analyses to help you evaluate statistical data. SAP provides list functions to create worklists in sales, delivery, picking, and billing. The Logistics Information Library allows you to integrate standard and flexible analyses as well as your own reports. You can structure and enhance the information library as you require. If the standard reports do not fulfill your requirements, you can use ABAP queries to extract information from the database into a report.

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Lists and Reports z Online lists

Backorders

provide data from documents

display documents, for example, – for a customer or a material – with a specific status

allow you to review and change documents

Delivery list ; Billing due list ; ; ; ; ;

; ;

; Open ; quotations ; ; ; ; ; ; ; ;

; ; ; ;

z Worklists

display work that needs to be processed

allow you to organize tasks into efficient work units

 SAP AG 2004

Lists fall into two categories. y Online lists: - Online lists display, for example, sales, delivery, or billing documents for a customer, a material, or a combination of both. - Other online lists display documents with a certain status that requires action from someone (for instance, all documents blocked for delivery). y Worklists: - Worklists allow you to select certain tasks in sales and distribution for processing. You select the tasks according to your area of responsibility and to various selection criteria (such as, date, organizational element, or customer).

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Example: List of Sales Orders Sold-to party: C1

Sold-to party: C1 Sales order 1241 Sales order 1549 Sales order 1600

Functions: Sort

- Other field

Find

- Change document

Sum

- Document status

 SAP AG 2004

Enter the information you want to use to restrict the options on the selection screen. The system then displays a list of the relevant documents. You can edit the list further by y using filter, sort and sum up functions y adding or deleting additional fields (columns) From the list, you can also: y display or change a sales order and return to the list y display status information (overall status, delivery status, etc) for each document

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Logistics Information System

LIS SIS

QMIS

PURCHIS

PMIS

INVCO

TIS

SFIS 1988 ----------------

SD QM

MM PUR PM

1994 ----------------

MM IM

WM

PP

 SAP AG 2004

A series of application-specific information systems are available in LIS which have a standardized interface and similar basic functionality. The following information systems are available in Logistics: y SIS Sales Information System y PURCHIS Purchasing Information System y INVCO Inventory Controlling y TIS Transportation Information System y SFIS Shop Floor Information System y QMIS Quality Management Information System y PMIS Plant Maintenance Information System

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How Information Structures are Organized

Sxxx

Time unit 398 157

Characteristics

005

Key figures

Week Sales organization

April April

Customer

Mo Tu We Th

11 11 Fr Sa Su

Incoming orders

Sales volume

Number of order items

Delivery … quantity

 SAP AG 2004

The Sales Information System is based on information structures. These are special statistic tables which contain transactional data from the different applications. This data is constantly collected and updated by the system. Information structures contain three basic types of information: y Characteristics are criteria which you specify to collect data on a certain subject. In SD, you normally require sales information on sales organizations, sales offices, customers, and materials. y A period unit is also a criterion used in information structures. You can collect data for a particular period, for example, for a day, a week, a month, or a posting period. y Key figures are performance measures. They provide important business information specific to a characteristic. Incoming order, sales volume, and returns, for example, are critical in SD.

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Information Structures in Sales Order Management Time unit

398 157

Characteristics

005

Key figures

Sxx . . S001 Customer Cust.

Material

SOrg.

DCh

…

Time unit

Incoming orders

Sales volume

Return

…

S002 Sales office

S501 own info structure

S066/67 Credit limit

S003 Sales organization

...

S060

S004 Material

S999 own info structure

S009/14 Sales support

Rebate

Sxxx . . .

S005 Shipping point Sxxx . . .

 SAP AG 2004

There are several standard information structures for Sales and Distribution available (for example, S001 to S006). You can use the standard analyses to evaluate data without having to make additional settings in Customizing. There are also information structures available in the standard system for internal use: for example, information structures for Credit Management, Rebate Processing, Sales Support, or for processing contracts. Alternatively, you can create your own information structures in Customizing using the name range S501 to S999.

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Standard Analyses Additional information

Customer analyses

z Material master z Customer master z Documents

Sales Order Invoiced Org. value amount Drill-down to view period

1000 100.000 90.000

Sales org.: 1000 Drill-down to view customer

Sales org.: 1000 Customer: Smith Inc. Month

PO Invoiced value amount

Customer

PO Invoiced value amount

Smith Inc. 60.000 50.000 Brown Inc.

40.000 40.000

Feb.1998 25.000 20.000

Functions

Mar.1998 35.000 30.000 . . .

z z z z z z

ABC analysis Classification Dual classification Planned/actual comparison Cumulative frequency curve Correlation

 SAP AG 2004

Standard analyses provide extensive functions to create sophisticated presentations and analyses for the data. The analysis is based on the information structures. In the first step, you select the required data scope according to the characteristics and the period of the info structure. This data is displayed in an initial list. A variety of drill-down features are available in the lists. Each analysis can be saved. You can call up the standard transactions directly from the current analysis to display, for example, master data or document information. You can use a wide range of tools to analyze the selected data and present the results. These include cumulative frequency curves, ABC analyses, time series, correlation, Top N evaluations, and other tools for comparison. You can then graphically display this data. In addition, the results of the analyses can be y printed y downloaded as a file to your local PC y downloaded into a spreadsheet program y sent to one or more employees using the SAP R/3 Office component.

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Flexible Analyses 398 157

Characteristics

Key figures

Pick-up technique

Customer Material Month

March 1996 Order value Total Smith Inc. Printer 6512 Computer H217 Miller Inc. Laser printer Personal computer

005

$ 200.000 $ 90.000

No. of order items 66 24

$ 40.000 $ 50.000

Order value No. of order items

April 1996 Order value $ 240.000 $ 100.000

No. of order items 75 26

18 8

$ 40.000 $ 60.000

16 10

$ 110.000

42

$ 114.000

49

$ 60.000 $ 50.000

2 40

$ 75.000 $ 65.000

4 45

 SAP AG 2004

Flexible analyses in the LIS allow you to determine the way in which data should be combined in an individual report procurement You define the form and the contents of the required list via the menu. The relevant program will then be generated in the background. The resulting list provides a variety of possibilities for interactive online processing. This procedure enables you to y combine characteristics and key figures from different information sturctures in one list y use your own formulas to calculate new key figures from existing ones y choose between a variety of layouts.

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Reporting and Analysis Tools: Topic Summary

You are now able to: z Describe the reporting and analysis tools in the SAP System z Use list processing to locate transaction information and organize tasks z Analyze Sales Order information using the tools available in the Sales Information System (SIS) z Define the components of information structures

 SAP AG 2004

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Sales Order Management: Unit Summary

You are now able to: z List the organizational units and master data that are critical to the Sales Order Management process z Perform the order to cash business process z Identify key integration points with other mySAP ERP processes z Identify the reporting and analysis tools used in Sales Order Management process

 SAP AG 2004

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Sales Order Management: Exercises Unit: Sales Order Management Topic: Organizational and Master Data At the conclusion of this exercise, you will be able to: • Change the payment terms in the customer master record for an existing customer • Create a customer master record • Create a material master record As your relationship with existing customers changes, you need to be able to update the existing customer master record to reflect the changes. As new customers are identified, the new customer information must be entered into the system. The customer master record stores all customer information necessary to fulfill the order cycle. Your customer may negotiate special pricing or discounts with you. These special deals are maintained in the R/3 system as ‘conditions’. As new products are developed, they must be entered into the system as well. The material master record stores all the data required to define and manage a material. To validate the master data configuration has been defined according to your business requirements; you will update and create a customer master record, create a customer discount, and create a material master record. In all exercises, ## represents your group number. For example, if you are assigned to Group 01 and the data indicates input AB##, you would enter AB01.

1-1

Due to changes with an existing customer, you need to update the customer master record for customer T-S50B##. You need to verify the language and change the payment terms. 1-1-1 Change customer T-S50B## in sales area 1000 / 12 / 00. 1-1-2 Verify that the language key is the language of the course, and change it, if necessary. 1-1-3 Change the payment terms of the customer to ZB00. 1-1-4 Save the master record.

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1-2

A new international customer calls the customer service department wanting to place an order. Create a new sold-to customer master record using the data specified below so an order can be processed. 1-2-1 Create a complete sold-to customer master record for your new customer 123## using company code 1000, sales organization 1000, distribution channel 12 and division 00. Maintain the fields based on the customer data sheet found below. You may choose the value for any required fields that are not specified on the sheet. The system will display many screens associated with the creation of a sold-to customer record. In the interest of time, you will only be entering critical data. Review each screen and enter data as needed. Proceed to the next screen by choosing the Enter icon. Save when prompted.

Customer Data Sheet Address

Name

At your discretion

Search term

TERP-##

Street

At your discretion

Postal Code (Zip Code in US)

70563

City

Stuttgart

Country

DE

Transportation Zone

0000000001

Language

Language of the course

Accounting Management Reconciliation account

140000

Sales

Customer group

02

Shipping

Shipping conditions (Shp.Cond.)

## + 50 (i.e. 51, 52…70)

Delivery plant

1000

Payment terms

ZB01

Tax classific.

0 (tax exempt)

Billing Document Partner Functions

No Entries Required

1-2-2 Save the customer master record.

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1-3

Display the customer record (123##) you just created and answer the following questions. 1-3-1 What is the definition of Customer Group? How did you locate this information? _____________________________________________________________ _____________________________________________________________

1-4

What is the definition of sales organization? Use the glossary to verify your answer. __________________________________________________________________ __________________________________________________________________

1-5

A new product is being offered to your customers. It is a headlight, similar to the existing material T-AS1##. In order to facilitate the entry of the material master record, you can use T-AS1## as a reference material. You enter the material master for plant 1000, sales organization 1000, and distribution channel 12. 1-5-1

Create material M##, using industry sector M and material type HAWATrading Goods. Use the ‘copy from’ feature to create by referencing the material located in the previous exercise.

1-5-2 Create the following views for your material master record: •

Basic data 1 and 2

•

Sales: Sales Org. Data 1 and 2

•

Sales: General / Plant data

•

MRP 1 and 2

•

Accounting 1 and 2 To ensure that all the views will be created, select the Create Views Selected indicatory.

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1-5-3 Enter the organizational elements for your new material on the left side of the window, and the organizational elements for the existing material on the right side of the window. New material: •

Plant 1000

•

Storage location 0001

•

Sales organization 1000

•

Distribution channel 12

Existing material: •

Plant 1000

•


•


•


1-5-4 Make the following changes to the fields on the Basic Data 1 tab. •

Insert “## “ before the existing material description in your language

•

Change the old material number to TERP-##

1-5-5 Advance to the Sales Org. Data 1 tab. From this tab, navigate to the conditions screen and maintain a price (rate) 60 EUR per unit. 1-5-6 Advance to the Accounting 1 tab. Enter 44 EUR in the standard price to indicate the standard cost for this product. 1-5-7 Display remaining views. Save the material master record when prompted to do so. 1-6

Display the Sales: Sales Org Data 1 and Sales: General / Plant Data views for the material master record you just created (M##) for plant 1000, sales organization 1000 and distribution channel 12. Answer the following questions. 1-6-1 Has a default delivering plant been maintained? If so, what value has been maintained in that field? How did that field get populated? _____________________________________________________________ _____________________________________________________________ 1-6-2 What is the definition of loading group (LoadingGrp) field on the Sales:General / Plant Data view? _____________________________________________________________ ___________________________________________________________

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Unit: Sales Order Management Topic: Order to Cash Business Process At the conclusion of this exercise, you will be able to: • Create a standard order • Create a delivery for the sales order • Pick the product by processing a transfer order for the delivery • Post goods issue for the delivery • Create an invoice • Post customer payment • Display document flow throughout the COM cycle A customer places an order for materials. Sales orders contain customer and product information, as well as delivery schedules. Customer service representatives use this information to advise customers about prices and delivery dates before they confirm an order. They also use this information to answer customer questions. Following order entry, warehousing personnel will pick the products for the order (noting any discrepancies from the ordered quantity) and print the shipping documents. When the delivery is released to the customer (truck leaves the dock), inventory quantities must be reduced and the general ledger must be updated appropriately. After the products are shipped to the customer, an invoice must be generated and the transaction posted to the general ledger. The accounting department periodically reviews the customer’s open items and posts the incoming payments when received. As a project team member, it is your responsibility to understand the customer order management cycle and key Sales and Distribution functions that support it.

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2-1

One of your customers calls to place an order for motorcycle headlights and taillights. Create a standard sales order based on the information provided below. 2-1-1 Create a standard order (OR) using Sales Organization 1000, Distribution Channel 12, and Division 00 for customer T-S50B## based on this purchase order: Purchase Order Customer: T-S50B## Purchase Order Number: ## - 1 Requested Delivery Date: 1 week from today Material

Quantity

T-AS1##

24

T-AS2##

36

2-1-2 Save the order and record the order number. Order number: ____________________ 2-2

Display the sales order you just created and answer the following questions. 2-2-1 What are the terms of payment for the entire sales order? _____________________________________________________________ 2-2-2 From which master data record was the terms of payment copied? ( ) customer master

( ) material master

( ) pricing conditions

( ) vendor master

2-2-3 Did the customer qualify for any discounts? If so, which ones? _____________________________________________________________ 2-2-4 Which plant is the second line item being shipped from? _____________________________________________________________

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2-3

What are the 3 components (or levels) of a sales document? What type of data is found on each? __________________________________________________________________ __________________________________________________________________ __________________________________________________________________

2-4

Once the order has been completed and the delivery date is near, the delivery process can begin. Create a delivery document to initiate shipping activities. 2-4-1 Create a delivery in shipping point Z0## for the order created previously. Specify a selection date of one week from today. 2-4-2 Save the document and record the delivery number. Delivery number: ____________________

2-5

Access the delivery you just created in change mode and answer the following questions. 2-5-1 What is the delivery quantity for the first line item? Delivery quantity: ____________________ 2-5-2 What is the pick quantity for the first line item? Can this value be edited? _____________________________________________________________

2-6

View document flow for the delivery and record the overall processing status of the order and the delivery. Order overall processing status: ____________________ Delivery overall processing status: ____________________

2-7

The next step in the delivery process is picking. In Lean WM, a transfer order is processed to facilitate the picking process. Create a transfer order. 2-7-1 Create a transfer order for warehouse (whse number) 010, plant 1000 and the delivery you created previously. Process it in the foreground and have the system transfer the pick quantity back to the delivery document (adopt pick. quantity = 1). 2-7-2 Save the transfer order and record the document number. Transfer order: ____________________

2-8

Access the delivery document in display mode and answer the following question. 2-8-1 What is the pick quantity for the first line item? Can it be edited? _____________________________________________________________

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2-9

View document flow and record the overall processing status of the delivery document and the transfer order. Delivery overall processing status: ____________________ WMS transfer order overall processing status: ____________________

2-10

Once picking is complete and the product has left the plant, the ‘post goods issue’ process takes place. Change the delivery document and execute the process. Answer the following question. 2-10-1 Change the delivery document and post goods issue. 2-10-2 What message did you receive after the posting was processed? _____________________________________________________________

2-11

View document flow for the delivery and answer the following questions. 2-11-1 What is the overall processing status of the delivery document? Delivery overall processing status: ____________________ 2-11-2 Why does this overall processing status make sense? _____________________________________________________________ _____________________________________________________________ 2-11-3 What entry was added to document flow to record the ‘post goods issue’? _____________________________________________________________

2-12

Can the delivery quantities in the delivery document be changed after the post goods issue process occurs? Why or why not? __________________________________________________________________ __________________________________________________________________

2-13

Can the plant associated with the first line item in the sales order be changed after the delivery has been created? Why or why not? __________________________________________________________________ __________________________________________________________________

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2-14

Products that are physically shipped to customers are ‘eligible for billing’ after goods issue has been posted. Create a billing document for your delivery and record the net value of the invoice. 2-14-1 Create a billing document for your delivery document. 2-14-2 Record the net value and the total value of the invoice. In the next line add then Net value and total value. Net value: ____________________ Go to the header pricing screen and view the ‘Total’ line within the conditions list. This will include the value of the line items and any taxes that the customer is responsible for.

2-14-3 Save the invoice and record the document number: Billing document: ____________________ 2-15

View document flow and answer the following questions. 2-15-1 What is the overall processing status of the delivery, billing and accounting documents? Delivery overall processing status: ____________________ Invoice overall processing status: ____________________ Accounting document overall processing status: ____________________ 2-15-2 What two entries were added to document flow when this transaction was saved? _____________________________________________________________ _____________________________________________________________

2-16

Can the payment terms for the billing document be changed? Why or why not? __________________________________________________________________ __________________________________________________________________

2-17

Can the pricing of the first line item of the sales order be changed at this point in the process? Why or why not? __________________________________________________________________ __________________________________________________________________

2-18

How is the structure of a billing document different than the structure of a sales order? __________________________________________________________________

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2-19

The customer has submitted payment for the invoice you just processed. Post the payment to the customer’s A/R account. 2-19-1 Post the total value of the invoice (identified previously) to company code 1000 to bank account 113100. Today is the document date. Specify the customer number T-S50B## in the open item selection – account field. 2-19-2 Save the payment transaction and record the accounting document number. Accounting document: ____________________

2-20

View document flow for the sales order and answer the following questions. 2-20-1 What is the overall processing status of the accounting document? Accounting document status: ____________________ 2-20-2 Was another entry added to document flow to reflect the receipt of payment against the invoice? Why or why not? _____________________________________________________________

2-21

Your customer is so delighted with the shipment of headlights and taillights, that they would like to order additional products, to be delivered today. They would like to order 50 motorcycle helmets. 2-21-1 Create an order for customer T-S50B## for 50 T-AS5##, with a delivery date of today. What screen is displayed? _____________________________________________________________ 2-21-2 Review the ATP (available to promise) quantities for this product located in plant 1000 by displaying the Availability Overview screen. Stock-cum. ATP quantity: ____________________ SimReq-Rec/reqd quantity: ____________________ SimReq-Cum. ATP quantity: ____________________ 2-21-3 Check the inventory situation in all other plants. In what plant can the quantity be confirmed on the requested delivery date? _____________________________________________________________ 2-21-4 Your customer decides to wait until the product can be shipped from their preferred plant. Choose the complete delivery option. What date will the product be delivered to the customer? _____________________________________________________________ 2-21-5 Save the order. You will not perform any further processing with this order.

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Unit: Sales Order Management Topic: Reporting and Analysis Tools At the conclusion of this exercise, you will be able to: • Generate a list of all sales orders for a customer using list processing tools • Execute a standard analysis in SIS In order to ensure that all phases of customer order management are efficient and effective, you require instant access to lists and online reporting for customer service, shipping and accounting activities. You may also use lists to answer basic customer questions. In addition, your management often requests sales analysis reports to analyze buying patterns and review the amount of business with each customer. To verify that the reporting and analysis tools meet your requirements, you will run various online reports using online lists and the sales information system 3-1

The sales and distribution departments require reporting and analysis for the current SD processes on a monthly basis at document level. 3-1-1 Process a report listing all of the orders for your customer T-S50B##. 3-1-2 Choose the display variant order item. 3-1-3 Sort the list in ascending order based on material numbers. 3-1-4 Include the information on order quantity, plant and shipping point at the end of the list. 3-1-5 Total the Net Value field for your customer. 3-1-6 Optimize the column width. 3-1-7 Exit the report.

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3-2

You’ve been asked to review the customer sales history for your sales organization by performing a standard customer analysis in the Sales information system. Create a list of your top 10 customers according to invoiced sales then display that information graphically for the top customer. . Since you are going to frequently run this report, create a report variant. 3-2-1 Execute a customer analysis within SIS for sales organization 1000. The period you are interested in is January of the previous year to the current month / year. 3-2-2 Create a report variant. 3-2-3 Display the top 10 customers based on invoiced sales. 3-2-4 Display both the customer name and number by changing how the characteristic is displayed. 3-2-5 Change the column width of the characteristic to 35. 3-2-6 Add the key figures invoiced quantity and open order quantity to your report, and remove the credit memo key figure. 3-2-7 Drill-down into more detail for your top customer. Drill-down until the statistics are displayed by period. 3-2-8 Display the statistic invoiced sales graphically for this customer.

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Sales Order Management: Solutions Unit: : Sales Order Management Topic: Organizational and Master Data In all exercises, ## represents your group number. For example, if you are assigned to Group 01 and the data indicates input AB##, you would enter AB01.

1-1

Due to changes with an existing customer, you need to update the customer master record for customer T-S50B##. You need to verify the language and change the payment terms. 1-1-1 Change customer T-S50B## in sales area 1000 / 12 / 00. Logistics → Sales and Distribution → Master Data →Business Partner → Customer →Change →Complete Enter Customer Number and Sales Area Organizational Data. Select the Continue icon. 1-1-2 Verify that the language key is the language of the course, and change it, if necessary. On the Address tab, verify that the language key is the language of the course. If not, make the necessary change. 1-1-3 Change the payment terms of the customer to ZB00. Select Sales Area Data button Select Billing document tab and change the Terms of Payment to ZB00. 1-1-4 Save the master record. Choose Save icon.

1-2

A new international customer calls the customer service department wanting to place an order. Create a new sold-to customer master record using the data specified below so an order can be processed. 1-2-1 Create a complete sold-to customer master record for your new customer 123## using company code 1000, sales organization 1000, distribution channel 12 and division 00. Maintain the fields based on the customer data sheet found below. You may choose the value for any required fields that are not specified on the sheet. Logistics → Sales and Distribution → Master Data → Business Partner →Customer →Create →Complete Use Account Group 0001 (Sold-to Party) Enter Customer Number, Company, and Sales Area Organizational Data. Select the Continue icon.

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The system will display many screens associated with the creation of a sold-to customer record. In the interest of time, you will only be entering critical data. Review each screen and enter data as needed. Proceed to the next screen by choosing the Enter icon. Save when prompted. Customer Data Sheet General Data: Address

Name

At your discretion

Search term

TERP10-##

Street

At your discretion

Postal Code (Zip Code in US)

70563

City

Stuttgart

Country

DE

Transportation Zone

0000000001

Language

Language of the course

Control Data

No Entries Required

Payment Transactions

No Entries Required

Marketing

No Entries Required

Unloading Points

No Entries Required

Export Data

No Entries Required

Contact Persons

No Entries Required

Company Code Data: Accounting Management

Reconciliation account

Payment Transactions

No Entries Required

Correspondence

No Entries Required

Insurance

No Entries Required

140000

Sales Area Data Sales

Customer group

02

Shipping

Shipping conditions (Shp.Cond.)

## + 50 (i.e. 51, 52…70)

Delivery plant

1000

Payment terms

ZB01

Tax classific.

0 (tax exempt)

Billing Document Partner Functions

No Entries Required

1-2-2 Save the customer master record. © SAP AG

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1-3

Display the customer record (123##) you just created and answer the following questions. Logistics →Sales and Distribution → Master Data →Business Partner → Customer →Display → Complete Enter Customer Number, Company, and Sales Area Organizational Data. Select the Continue icon. Select Sales Area Data pushbutton, Billing Documents tab 1-3-1 What is the definition of Customer Group? How did you locate this information? Customer Group identifies a particular group of customers for the purpose of pricing or generating statistics. The definition can be found by placing the cursor on the field and choosing the F1 function key or pressing the Help icon; or the definition can be found in the glossary.

1-4

What is the definition of sales organization? Use the glossary to verify your answer. Sales organization is the highest level organizational element in SD. It is responsible for selling goods and services.

1-5

A new product is being offered to your customers. It is a headlight, similar to the existing material T-AS1##. In order to facilitate the entry of the material master record, you can use T-AS1## as a reference material. You enter the material master for plant 1000, sales organization 1000, and distribution channel 12. 1-5-1

Create material M##, using industry sector M and material type HAWA – Trading Goods. Use the ‘copy from’ feature to create by referencing the material located in the previous exercise.

Logistics → Sales and Distribution → Master Data → Products → Material → Other material → Create On the Create Material (Initial Screen) enter the following data: Field

Data entry

Material

M##

Industry Sector

Mechanical Engineering

Material Type

HAWA – Trading Goods

Copy From

T-AS1##

Enter

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1-5-2 Select the following views for your material master record: •

Basic data 1 and 2

•

Sales: Sales Org. Data 1 and 2

•

Sales: General / Plant data

•

MRP 1 and 2

•

Accounting 1 and 2 To ensure that all the views will be created, select the Create Views Selected indicatory.

Choose Enter icon 1-5-3 Enter the organizational elements for your new material on the left side of the window, and the organizational elements for the existing material on the right side of the window. New material: •

Plant 1000

•


•


•


Existing material: •

Plant 1000

•


•


•


Choose Enter icon 1-5-4 Make the following changes to the fields on the Basic Data 1 tab. 1)

Insert “## “ before the existing material description in your language

2)

Change the old material number to TERP10-##

3)

Change the division to 00

1-5-5 Advance to the Sales: sales org. 1 tab. From this tab, navigate to the conditions screen and maintain a price (rate) 60 EUR per unit. Select the Sales: sales org. 1 tab. Choose the Conditions button Enter 1 in the Scale quantity field. Enter 60 in the Amount field. Select the Back icon. © SAP AG

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1-5-6 Advance to the Accounting 1 tab. Enter 44 in the standard price to indicate the standard cost for this product. Select the Accounting 1 tab. In the Standard Price field, enter 44 1-5-7 Display remaining views. Save the material master record when prompted to do so. Choose the Enter icon until prompted to save. 1-6

Display the Sales: Sales Org Data 1 and Sales: General / Plant Data views for the material master record you just created (M##) for plant 1000, sales organization 1000 and distribution channel 12. Answer the following questions. Logistics → Sales and Distribution → Master Data → Products → Material → Other material → Display → [enter material number] → Choose ‘Enter’ icon → Select views → Choose the Enter icon → [enter organizational elements] → Choose the Enter icon 1-6-1 Has a default delivering plant been maintained? If so, what value has been maintained in that field? How did that field get populated? Yes, delivering plant 1000 has been maintained. This field was copied from the reference material. 1-6-2 What is the definition of loading group (LoadingGrp) field on the Sales:General / Plant Data view? The loading group is a grouping of materials that share the same loading requirements. It is used with other fields to determine a shipping point.

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Unit: : Sales Order Management Topic: Order to Cash Business Process

2-1

One of your customers calls to place an order for motorcycle headlights and taillights. Create a standard sales order based on the information provided below. 2-1-1 Create a standard order (OR) using Sales Organization 1000, Distribution Channel 12, and Division 00 for customer T-S50B## based on this purchase order: Purchase Order Customer: T-S50B## Purchase Order Number: ## - 1 Requested Delivery Date: 1 week from today Material

Quantity

T-AS1##

24

T-AS2##

36

Logistics → Sales and Distribution → Sales → Order → Create On the Create Sales Order: Initial Screen, enter the following data: Field

Value

Order Type

OR

Sales Organization

1000


12

Division

00

Enter

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On the Create Standard Order: Overview screen enter the following data: Field

Value

Sold-to Party

T-S50B##

Ship-To Party

T-S50B##

PO Number

##- 1

Requested Delivery Date

1 week from today

In the line item section of the order, enter on two separate lines, the material numbers and quantities listed above. 2-1-2 Save the order and record the order number. After all values have been entered → Choose Save icon Order number: ____________________ 2-2

Display the sales order you just created and answer the following questions. Logistics → Sales and Distribution → Sales → Order → Display → [order number defaults] → Choose the Enter icon 2-2-1 What are the terms of payment for the entire sales order? Field located on Sales tab. Terms of payment: ZB00 Pay immediately, due net 2-2-2 From which master data record was the terms of payment copied? (X) customer master

( ) material master

( ) pricing conditions

( ) vendor master

2-2-3 Did the customer qualify for any discounts? If so, which ones? Goto → Header → Conditions The customer did not qualify for any discounts. 2-2-4 Which plant is the second line item being shipped from? Select the Back icon. The Plant field is located on the Sales tab for each line item. Plant: 1000 Exit the order. 2-3

What are the 3 components (or levels) of a sales document? What type of data is found on each? Header – data that applies to the entire document. i.e. sold-to party, PO number Line item – data that applies to the material being ordered. i.e. material number, item pricing Schedule line – delivery dates and quantities

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2-4

Once the order has been completed and the delivery date is near, the delivery process can begin. Create a delivery document to initiate shipping activities. 2-4-1 Create a delivery in shipping point Z0## for the order created previously. Specify a selection date of one week from today. Logistics → Sales and Distribution → Shipping and Transportation → Outbound Delivery → Create → Single Document → With Reference to Sales Order→ [enter required data] Enter 2-4-2 Save the document and record the delivery number. Choose the Save icon Delivery number: ____________________

2-5

Access the delivery you just created in change mode and answer the following questions. Logistics → Sales and Distribution → Shipping and Transportation → Outbound Delivery → Change → Single Document Your delivery document number defaults, select Enter. 2-5-1 What is the delivery quantity for the first line item? Select Picking Tab Delivery quantity is 24 (value copied from the order) 2-5-2 What is the pick quantity for the first line item? Can this value be edited? Pick quantity is 0. The field cannot be edited.

2-6

View document flow for the delivery and record the overall processing status of the order and the delivery. Environment → Document flow Order overall processing status: Completed Delivery overall processing status: Open Exit the delivery document.

2-7

The next step in the delivery process is picking. In Lean WM, a transfer order is processed to facilitate the picking process. Create a transfer order. 2-7-1 Create a transfer order for warehouse (whse number) 010, plant 1000 and the delivery you created previously. Process it in the foreground and have the system transfer the pick quantity back to the delivery document (adopt pick. quantity = 1). Logistics → Sales and Distribution → Shipping and Transportation → Picking → Create Transfer Order → Single Document → [enter required data] Choose the Enter icon 2-7-2 Save the transfer order and record the document number. Choose the Save icon

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2-8

Access the delivery document in change mode and answer the following question. 2-8-1 What is the pick quantity for the first line item? Can it be edited? Logistics → Sales and Distribution → Shipping and Transportation→ Outbound Delivery → Change → Single Document Your delivery document number defaults, select Enter. Pick quantity is now the same as the delivery quantity. It can be edited.

2-9

View document flow and record the overall processing status of the delivery document and the transfer order. Environment → Document flow Delivery overall processing status: Being processed WMS transfer order overall processing status: Completed

2-10

Once picking is complete and the product has left the plant, the ‘post goods issue’ process takes place. Change the delivery document and execute the process. Answer the following question. 2-10-1 Change the delivery document and post goods issue. Logistics → Sales and Distribution → Shipping and Transportation → Outbound Delivery → Change → Single Document → [enter delivery number] → Choose the Post goods issue button 2-10-2 What message did you receive after the posting was processed? ‘Delivery 8xxxxxxx has been saved’ message displays.

2-11

View document flow for the delivery and answer the following questions. 2-11-1 What is the overall processing status of the delivery document? Logistics → Sales and Distribution → Shipping and Transportation → Outbound Delivery → Display → Environment → Document flow Delivery overall processing status: Being processed 2-11-2 Why does this overall processing status make sense? The invoice has not been created yet. The delivery will not be completed until invoiced. 2-11-3 What entry was added to document flow to record the ‘post goods issue’? GD: Goods issue: delvy 49xxxxxx

2-12

Can the delivery quantities in the delivery document be changed after the post goods issue process occurs? Why or why not? No the quantities cannot be changed. Once the post goods issue has happened, the product has been shipped, so the fields can no longer be changed.

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2-13

Can the plant associated with the first line item in the sales order be changed after the delivery has been created? Why or why not? No the plant cannot be changed. Once a delivery has been created, key delivery related fields become display only.

2-14

Products that are physically shipped to customers are ‘eligible for billing’ after goods issue has been posted. Create a billing document for your delivery and record the net value of the invoice. 2-14-1 Create a billing document for your delivery document. Logistics → Sales and Distribution → Billing → Billing Document → Create Your delivery document number defaults, select the Execute icon. 2-14-2 Record the net value of the invoice. Goto → Header → Pricing conditions header Net value: 2,520 EUR Total Value: 2,923.20 EUR Go to the header pricing screen and view the ‘Total’ line within the conditions list. This will include the value of the line items and any taxes that the customer is responsible for.

2-14-3 Save the invoice and record the document number: Select the Save icon. Exit. 2-15

View document flow and answer the following questions. Logistics → Sales and Distribution → Billing → Billing document → Change Your billing document number defaults, select Enter. 2-15-1 What is the overall processing status of the delivery, billing and accounting documents? Environment → Display document flow Delivery overall processing status: Completed Invoice overall processing status: Completed Accounting document overall processing status: Not cleared 2-15-2 What two entries were added to document flow when this transaction was saved? The Invoice and Accounting document entries were added to document flow

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2-16

Can the payment terms for the billing document be changed? Why or why not? Select the Back Arrow to return to the previous screen Goto → Header → Header No the payment terms cannot be changed. Once the billing document is saved, that information is passed to accounting and is used in accounts receivable. Exit the billing document without saving.

2-17

Can the pricing of the first line item of the sales order be changed at this point in the process? Why or why not? Logistics → Sales and Distribution → Sales → Order → Change → [enter order number] → Choose ‘Enter’ icon Select a line item, then Goto → Item → Conditions No, pricing cannot be changed. Once an invoice has been created, key billing related fields can no longer be edited.

2-18

How is the structure of a billing document different than the structure of a sales order? A sales order has a header, line items and schedule lines; while a billing document only has a header and line items.

2-19

The customer has submitted payment for the invoice you just processed. Post the payment to the customer’s A/R account. 2-19-1 Post the total value of the invoice (identified previously) to company code 1000 to bank account 113100. Today is the document date. Specify the customer number T-S50B## in the open item selection – account field. Accounting → Financial Accounting → Accounts Receivable → Document entry → Incoming payment On the Post Incoming Payments: Header Data screen, enter the following data: Field

Value

Document Date

Today

Bank Data: Account

113100

Bank Data : Amount

Total Value from exercise 2-14-2

Open Item Section :Account

T-S50B##

Enter In the lower right section of the screen, the Not assigned field should equal zero. 2-19-2 Save the payment transaction and record the accounting document number. Choose the Save icon.

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2-20

View document flow for the sales order and answer the following questions. Logistics → Sales and Distribution → Sales → Order → Display → Environment → Display Document flow 2-20-1 What is the overall processing status of the accounting document? Accounting document status: Cleared 2-20-2 Was another entry added to document flow to reflect the receipt of payment against the invoice? Why or why not? No, there is no new entry in document flow. The status of the original posting was updated; but since the incoming payment transaction was initiated in accounting (and not with reference to a SD document) the document number is not visible in document flow.

2-21

Your customer is so delighted with the shipment of headlights and taillights, that they would like to order additional products, to be delivered today. They would like to order 50 motorcycle helmets. 2-21-1 Create an order for customer T-S50B## for 50 T-AS5##, with a delivery date of today. What screen is displayed? Logistics → Sales and Distribution → Sales → Order → Create On the Create Sales Order: Initial Screen, enter the following data:

Field

Value

Order Type

OR

Sales Organization

1000


12

Division

00

Enter On the Create Standard Order: Overview screen enter the following data: Field

Value

Sold-to Party

T-S50B##

Ship-To Party

T-S50B##

PO Number

##- 2

Requested Delivery Date

Today

Material

T-AS5##

Order Quantity

50

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The Availability Control screen is displayed after you choose Enter. 2-21-2 Review the ATP (available to promise) quantities for this product located in plant 1000 by displaying the Availability Overview screen. Select the ATP quantities button. Stock-cum. ATP quantity: ____________________ SimReq-Rec/reqd quantity: ____________________ SimReq-Cum. ATP quantity: ____________________ After recording the information, select the Back icon. 2-21-3 Check the inventory situation in all other plants. In what plant can the quantity be confirmed on the requested delivery date? Select the Other plants button. Choose the Select all button to select both plants. Select the Check plant button. Plant 1400 can commit quantity to meet the requested delivery date. Select Back to return to the Standard Order: Availability Control screen. 2-21-4 Your customer decides to wait until the product can be shipped from their preferred plant. Choose the complete delivery option. What date will the product be delivered to the customer? Choose Complete Dlv button To view when the product will be delivered to your customer: Select the line item. Choose the Schedule lines for item button and view the delivery date field. 2-21-5 Save the order. You will not perform any further processing with this order. Choose the Save icon

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Unit: Sales Order Management Topic: Reporting and Analysis Tools

3-1

The sales and distribution departments require reporting and analysis for the current SD processes on a monthly basis at document level. 3-1-1 Process a report listing all of the orders for your customer T-S50B##. Logistics → Sales and Distribution → Sales → Information System → Orders → List of Sales Orders On the List of Sales Orders screen enter your customer number – TS50B##. Select Enter. If the message “Please check the entries. No work list selected.” displays check the organizational data (choose Organizational data button to view). It is likely that a sales area the customer does not do business with defaulted. If that is the case, delete the distribution channel and division – only run the report for sales organization 1000. 3-1-2 Choose the display variant order item. SettingsÆ Layouts Æ Choose Select Layout 1SAP Order item 3-1-3 Sort the sales documents in descending order based on material. Mark the Material column and choose Sort in ascending order icon. 3-1-4 Include the information on order quantity, plant and shipping point at the end of the list. Choose the Current icon. Select the relevant entries in the right table choose Show selected fields then Transfer. 3-1-5 Total the Net Value field for your customer. Mark the Net Value column and choose Add up values icon. 3-1-6 Optimize the column width. Choose Æ Settings Æ Columns Æ Optimize width. 3-1-7 Exit the report.

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3-2

You’ve been asked to review the customer sales history for your sales organization by performing a standard customer analysis in the Sales information system. Create a list of your top 10 customers according to invoiced sales then display that information graphically for the top customer. Since you are going to frequently run this report, create a report variant. 3-2-1 Execute a customer analysis within Sales Information System for sales organization 1000. The period you are interested in is January of the previous year to the current month / year. Logistics → Sales and Distribution → Sales Information System → Standard analyses → Customer On the Customer Analysis: Selection screen, enter the following information: Field

Value

Sales Organization

1000

Month From

January of Previous Year

Month To

Current Month and Year

Delete any values in the other fields. Do not process the report. Remain on the selection screen for the next exercise. 3-2-2 Create a report variant TERP10-## with a description Group## Report Variant. On the Customer Analysis: Selection screen, select the Save icon. Enter the Variant name and description. Select the Save icon. Select the Execute icon to process the report. 3-2-3 Display the top 10 customers based on invoiced sales. Select Invoiced Sales key figure → Choose ‘Top N….’ Icon → Choose ‘Enter’ icon 3-2-4 Display both the customer name and number by changing how the characteristic is displayed. Settings → Characteristic Display → Key and description 3-2-5 Change the column width of the characteristic to 35. Settings → Column width → Characteristic → [Change column width to 35] → Choose the Enter icon. 3-2-6 Add the key figures invoiced quantity and open order quantity to your report, and remove the credit memo key figure. Edit → Choose key figures → Select Credit memo key figure → Choose Do not choose icon → Select Incoming orders qty and Open orders qty key figures → Select the Choose icon → Select the Enter icon © SAP AG

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3-2-7 Drill-down into more detail for your top customer. Drill-down until the statistics are displayed by period. Double-click to drill-down to next level until period displays 3-2-8 Display the statistic invoiced sales graphically for this customer. Choose ‘Graphics’ icon → Deselect all key figures except Invoiced Sales → Choose the Enter icon Exit the graph. Exit the report. Do not save the report.

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Sales Order Management: Test Your Knowledge 1.

What are the six business processes within the Sales Order Management cycle? ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

2.

What tool allows you to quickly view the status of a document? ____________________________________________________________

3.

What are the 3 components or levels of a sales document? ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

4.

What term is used to define prices and discounts? ____________________________________________________________

5.

How do you know that payment has been received from the customer for a particular invoice? __

6.

What does the scope of availability check determine? ____________________________________________________________

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Sales Order Management: Answers 1.

What are the six business processes within the Sales Order Management cycle? Answer: Pre-sales, sales, inventory sourcing, delivery, billing and payment

2.

What tool allows you to quickly view the status of a document? Answer: Document flow

3.

What are the 3 components or levels of a sales document? Answer: Header, line item, and schedule line

4.

What term is used to define prices and discounts? Answer: Conditions

5.

How do you know that payment has been received from the customer for a particular invoice? Answer: The overall processing status of the accounting document changes to ‘Cleared’

6.

What does the scope of availability check determine? Answer: The scope of check determines the types of current stock as well as inward and outward movements of inventory that are included in the availability check.

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Material Planning

Contents: z Organizational Levels and Master Data z Material Planning

 SAP AG 2004

Material Planning: Unit Objectives

At the conclusion of this unit, you will be able to: z Identify the organizational levels and master data use by material planning. z Explain the difference between Material Requirements Planning and Consumption Based Planning z Identify the integration points with Materials Management and Sales Order Management

 SAP AG 2004

Material Planning: Course Overview Diagram TERP10


 SAP AG 2004

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Material Planning: Business Scenario

z In your enterprise, Marketing creates sales forecasts for products or product groups. Material Planners, then create a material plan based upon these sales plans. The output of material planning is the input of manufacturing execution. As a project team member, you need to understand the material planning process.

 SAP AG 2004

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Organizational Levels and Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the organizational levels used in Material Planning z List the master data used by Material Planning

 SAP AG 2004

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Organizational Levels in Material Planning The Material Planning process uses the following organizational levels:

z Client

z Company Code

z Plant

z Storage location  SAP AG 2004

Organizational Levels are structures that represent the legal and/or organizational views of an enterprise. You can design your company structure based on your business processes. The manufacturing planning and execution process uses the following organizational elements: y Client – all manufacturing organizational elements exist within a client. y Company code – represents an independent accounting unit. Balance sheets and Profit & Loss Statements, required by law, are created at the company code level. y Plant – an organizational element within a company. A plant produces goods, renders services, or makes goods available for distribution. A plant can be a manufacturing facility or a warehouse distribution center. y Storage location – an organizational element within a plant. A storage location identifies the general area in the plant where material is stored. Plants can have multiple storage locations.

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Material Planning Master Data Master data used by Material Planning includes: z Material Master z Bill of Material (BOM) z Routings z Purchasing Documents

 SAP AG 2004

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Material Master: Primary Views

Account

Basic Data

Purchasing

MRP

Sales

Stocks in plant/ storage location

Work scheduling


Quality management

Storage

Material Master

Warehouse management

Forecasting

Classification

 SAP AG 2004

The material master represents the central source for releasing material-specific data. It is used by all of the SAP Logistics components. The stored data can be used by all areas, such as purchasing, inventory management, materials planning, invoice verification, and so on. The Material Requirments Planning (MRP) and Execution (Work Scheduling) views must be maintained for manufacturing. Basic Data, Accounting, Quality Management, Forecasting, Purchasing, and Classification data is used by various manufacturing planning and execution processes.

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Material Master Record: Data Structure

Basic data Material Description z Unit of measure z z

MRP Procurement type MRP controller z Lot size key

Work Scheduling Lot size times In-house prod. time z Tolerance data

Accounting

z

z

z

z

z

z

Plant

1000

Plant 2000 Plant 3000

Plant

1000

Plant 2000 Plant 3000

Price control Prices

Plant 1000 Plant 2000 Plant

3000

 SAP AG 2004

Basic data in the material master is applicable to the entire company and is stored at the client level. This includes, for example, the product description, material number, the material group, the unit of measure and conversion factors for alternative units of measure. The MRP (Production Planning), Work Scheduling (Production Execution), and Accounting views are specific to the plant.

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Material Master Settings for Material Planning Material master PUMP MRP 1

...

MRP type Lot size Procurement type

MRP 4 MRP EX E

In-house prod. time 8 days Safety stock

20 pc

z How should I plan material requirements? z How much needs to be procured? z Will the material be produced inhouse or procured externally?

Strategy group

40

Availability check group

02

Production versions 0001 Normal production

z Do I need to plan a safety stock? z How should I plan? z How does the ATP Check take place? z What production procedure should I use?

 SAP AG 2004

The fundamental settings for Material Planning can be found in Material Planning views 1 to 4 of the material master. The MRP type specifies how a material should be planned (MRP, consumption-based planning, no planning). The lot-sizing procedure determines the lot size of each of the procurement proposals. The procurement type controls how a material is to be procured (in-house production or external procurement). The in-house production time or rather the planned delivery time specifies how long procurement will last. A safety stock can be set. The behavior of planned independent requirements is controlled by the strategy group. Moreover, control of the Available to Promise (ATP) check takes place on the basis of the availability check group. A production procedure can be defined by a production version. In a production version, routing and BOM can be selected in particular.

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Material Type

1. Raw materials

3. Semi-finished products

Examples of material types

2. Operating supplies

1. raw materials 2. operating supplies 3. semi-finished products 4. finished products

4. Finished products

 SAP AG 2004

The material type is the most important value assigned to a material. The material type attached to a product identifies the business processes and functions allowed. It determines, for example: y The screens that appear in the material master record y The department-specific data that can be maintained y How the material number assignment is carried out y The procurement types that are allowed (in-house production or external procurement) y The general ledger accounts that are updated Material type definitions are controlled through customizing. Materials with similar basic attributes are grouped together by material type. This means you can manage your materials according to their business requirements. You can create additional company-specific material types in Customizing.

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Bills of Material (BOM) Pump P-100

BOM PUMP 0010

Material

P-100

Plant

1000

Usage

0020

Base quantity

0030

0040

Pump

1 Production 1 pc

Item 0010

100-100

Casing

1 pc

0020

100-200

Fly wheel

1 pc

0030

100-300

Hollow shaft

1 pc

0040

100-400

Electronic turbo-drive

1 pc

0050

100-130

Hexagon head screw

8 pc

z Bills of material are single-level z Items of a bill of material can themselves contain a further bill of material  SAP AG 2004

The BOM contains the assemblies or components, that are to be included in the production of a material. BOMs are used in Material Requirements Planning, production, procurement and for product costing. A BOM consists of a BOM header and the BOM items. The base qauntity in the BOM header specifies to which amount of the finished product the item quantities refer. Bills of material are single-level. An item of a BOM can itself also contain components. In this way, multilevel production is described using the single-level BOMs of the finished product and those of the assemblies and where required, using the BOMs of the assemblies of the assemblies and so on. A BOM can also contain documents or text items in addition to stock items that are required for the finished product.

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Bills of Material Structure BOM Structure BOM PUMP

Header

Material

P-100

z Status

Plant

1000

z Description

Usage Base Quantity

1

z Validity

1 pc

z Lot size area

Item 0010

100-100

1 pc

Items

0020

100-200

1 pc

z Item category

0030

100-300

1 pc

z Descriptions

0040

100-400

1 pc

z Quantities

0050

100-130

8 pc

z Control data

for example, Stock item Non-stock item Variable-size Item Document item

 SAP AG 2004

The settings that apply for the whole BOM can be found in the BOM header. BOM usage determines the business applications for which a BOM can be used. The status of the BOM controls whether the BOM is active for particular applications (MRP, for example). Multiple BOMs, which consist of multiple alternative BOMs, can also exist in addition to simple BOMs. The different alternative BOMs can then be valid for each of the different lot-size areas, for example. Components necessary for the production of the finished product are entered as items of the BOM. The item category specifies what kind of item you are dealing with: Stock items are executed in the warehouse and are used in production. In contrast, non-stock items are directly assigned to a manufacturing order (and not via the warehouse). Variable-size items contain variable-size data (a steel sheet with a certain surface area, for example) and finally, document items contain a supplementary document that describes production (a kind of design and construction diagram). Individual items themselves can also bear a multitude of further settings, which then only refer to the respective item.

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Multi-Level Bill of Material Structure Pump Single-Level BOM

Casing Shaft

Slug

Seal

Casing Single-Level BOM

Pump

Drive Wheel

Shaft

Slug

Slug

Drive Wheel Single-Level BOM

Shaft Single-Level BOM

 SAP AG 2004

All bills of material are created and maintained as single-level bills. The picture above shows 4 single-level bills of material. A single-level bill of material describes an assembly by means of components and their quantities. The Pump is comprised of components which are themselves comprised of components identifying Pump as having a multi-level bill of material. A multi-level BOM structure is exploded automatically by MRP and Product Cost Planning. It can also be exploded as a master data evaluation.

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BOM Item Categories

Stock Item Non-Stock Item Variable-Size Item Text Item Document Item Class Item Intra Material

 SAP AG 2004

You must assign an item category to every component when you add or change components in a bill of material. The item category influences the processing of the component. For example, the item category controls whether a material number is required, optional or not allowed for the component. A stock item must have a material master. A non-stock item, on the other hand, does not require that a material master record exist. It can also be stored in a material group.

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Routings Production of Pump P-100 Routing PUMP Material

P-100

Pump

Task list group

50000222

Group counter

01

Pump (standard process) Plant Work Operatn. center

Work center

Work center

Work center

Work center

Work center

1310

1320

1906

1904

1905

1000 Times

Description

0010

1310

Staging according to pick list

5 min. fixed

0020

1320

Press flywheel in casing

10 min. per 1 pc.

0030

1906

Paint casing

15 min. per 1 pc.

0040

1904

Mount shaft in casing

20 min. per 1 pc.

0050

1905

Final assembly pump

10 min. per 1 pc.

 SAP AG 2004

Routings contain the steps that are necessary for production, that is, the corresponding operations, their sequence and the work centers in which these operations are to be executed. mySAP ERP routings can be transferred to SAP Advanced Planning and Optimization (APO) in the form of production process models (PPMs). An SAP R/3 routing can be defined using the routing group and the group counter. Moreover, the routing contains reference to the material whose production it describes. A routing can contain parallel or alternative sequences in addition to the standard sequence. Alongside the standard values, the routing also contains the time elements that are relevant for scheduling operations. Therefore you need to make sure that each operation in the routing can contain its own base quantity, to which these time elements can refer.

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Routing and Bill of Material Component Assignment in Routing Material master PUMP Production version 0001 Routing Op. 10 Op. 20

z Procurement and consumption of components occur at the beginning of the processes to which they are assigned Manufacturing order PUMP

BOM Mat. PUMP Mat. A

Op. 10

Mat. B

Op. 30

Mat. C

Mat. A

Op. 20

Op. 30

Mat. B Mat. C

Component assignment in routing

Time

 SAP AG 2004

Production is described via a routing and a BOM. For this reason, BOM components can be assigned to a certain operation. The procurement of these components is then planned at the beginning of the particular operation. Component assignment is dealt with in the routing. BOM components that are not explicitly assigned are considered as being assigned to the first operation. In addition to BOM components, production resources/tools can also be assigned in the routing. Production resources/tools are operating facilities that are not location-bound, but that are necessary for production, such as a measuring instrument or a support.

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Purchasing Info Records Info record 5300000816

Vendor 1234

Vendor: Material: PurchOrg:

1234 A21 1000

Material A21

Planned deliv. time: 4 days ... Conditions Price/UoM Freight Discount

6 EUR/CS 2% 4%

Last purchase order 4500006398  SAP AG 2004

The purchasing info record provides the option of storing information about a vendor and a material as the master data at purchasing organization and plant level. You can define the following information in info records: y Current and future prices and conditions (for example, freight and discounts) y Delivery Data (for example, planned delivery time and overdelivery and underdelivery tolerances) y Vendor data (for example, contact person) and vendor-specific data about the material (such as the vendor subrange to which the material belongs, description of material at vendor) y Number of the last purchase order y Texts

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Organizational Levels and Master Data: Topic Summary

You are now able to: z Describe the organizational levels used in Material Planning z List the master data used by Material Planning

 SAP AG 2004

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Material Planning: Topic objectives

At the conclusion of this topic, you will be able to: z Explain the importance of planning strategies on business processes z Explain the difference between Materials Requirements Planning and Consumption Based Planning procedures z Describe and perform the steps in the Material Planning process z Identify the integration points with Materials Management and Sales Order Management

 SAP AG 2004

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Sales and Operations Planning SOP provides a method for: z Sales planning z Production planning z Feasibility estimates

Stock Sales Plan Master Plan

Q U A N T I T Y May

June

Capacity estimate

July

••• TIME

 SAP AG 2004

Sales and operations planning (SOP) is a planning and forecasting module within the logistics area. We can use SOP to help us forecast future sales, develop production plans and perform feasibility studies. A sales plan could be developed, for example, from information in the Sales and Distribution module. We could use built-in forecasting tools to project future sales. A production plan could be developed based on the sales plan. The feasibility of the production plan could be checked at a rough-cut level against key resources. If necessary, we can change the plan. We use a planning table in SOP to help us perform these functions. It resembles a spreadsheet.

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Disaggregation

Planning Levels in Standard SOP Planning at product group level

Product group 1 Rotary pumps

60%

40%

Product group A Low-speed rotary pumps

50%

Material P-101

30%

Material P-102

Product group B High-performance rotary pumps

20%

Material P-103

75%

25%

Material P-200

Material P-300

Planning at material level  SAP AG 2004

Standard SOP uses product groups to help in the planning process. A product group can be thought of as a product family. It groups together products with similar planning characteristics. A product group may have other product groups as its members. For example, product group 1 has product group A and product group B as its members. The lowest product group in the hierarchy must have materials as its members. Product groups require a proportion factor. This is used when a sales plan or a production plan at a higher level is "disaggregated" to a lower level. The sum of the proportion factors at one planning level is usually 100%. A proportion factor could be zero.

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Planning Using the Standard Planning Table

Create Rough-Cut Plan Product group

PUMPS

Plant

1000

Version

A00 Active version

Planning in multiple versions possible

M 01

M 02

M 03

M 04

M 05

Sales

100

110

130

140

140

Production

100

110

150

132

128

Stock level

20

12

Target stock

20

12

Day's supply

2

1

Target day's supply

Forecasts can be transferred Production plan can be created synchronous to sales, according to target day's supply or target stock level

 SAP AG 2004

The SOP planning table is where we develop our sales and production plans. A planning table exists for all members of the product group hierarchy. The standard SOP planning table has a row for the sales plan, the production plan, the stock level (system calculated), the target stock level, the days' supply (system calculated) and the target days' supply. The time periods in the planning table could be days, weeks or months, or a combination. We also may define other time periods that correspond, for example, to accounting periods or sales periods. A sales plan can created several ways: y By transferring data from the sales information system (SIS) y By transferring data from the controlling / profitability analysis module (CO/PA) y By using history to forecast future sales y By transferring data from another product group y By manual entry Once a sales plan is developed, a production plan can be created based on the sales plan. A production plan can be created several ways: y Synchronously to sales (Equal to sales plan) y Target stock level y Target days supply y Inventory to Zero (reduces inventory on-hand to zero balance and then plans equal to sales plan) y Manual entry

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Disaggregation and Transfer to Demand Management Planning data at product group level

Demand Planning data

Product group A Low-speed rotary pumps

Disaggregation 50% Planning data at material level

Material P-101

30%

Material P-102

20%

Material P-103

Transfer

Planned independent requirements (at material-plant level) in demand management Operative planning data  SAP AG 2004

Creating a sales plan or a production plan at one level of the product structure hierarchy does not automatically create lower level plans. To do this, we must disaggregate. Many options exist when disaggregating. We could, for example, disaggregate the production plan of product group 1. Another option is to disaggregate the sales plan of product group 1. It would become the sales plan for product groups A and B. Now we would develop production plans at this level, and disaggregate them to the materials. Yet another option is to simply disaggregate the sales plans of all the product groups down to the materials, and develop production plans at that level. We can transfer planning data of all members of a single level product group (such as product group A) to demand management. We could also transfer planning data for one material (such as T-F101) to demand management. After this, planned independent requirements exist in demand management. We can have different planning scenarios for each product group structure, because each plan is saved with a version number and a description. Only one version is considered active, which is the default version A00. We may transfer the active version, or an inactive version, to demand management. The plan that is sent to demand management is used in planning the material requirements.

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Demand Management Planned independent requirements and sales orders Warehouse requirements

Customer requirements

Forecast

Plnd. indep. reqmts.

Sales orders

Sales

Demand program Material Requirements Planning Coverage of requirements through z In-house production z External procurement

 SAP AG 2004

Demand Management pertains to the administration of so-called independent requirements. The way in which independent requirements behave in Material Requirements Planning (for example, if they affect requirements, if they consume other requirements) can be determined by their requirement type or their planning strategy. Planned independent requirements are warehouse requirements that can be derived from a forecast of the future requirement situation. In make-to-stock production, you want to initiate the procurement of the materials concerned, without having to wait for concrete sales orders. Using such a procedure, delivery times can be shortened on the one hand, and on the other hand, it is possible, through foresighted planning, to debit one's own production resources as evenly as possible. Sales orders (customer independent requirements) are created by sales and distribution. Customer requirements can be received directly in Material Requirements Planning, independently of their defined requirements type. This is desired when customer-specific planning takes place. Sales orders can serve as exclusive requirements sources, for which procurement is then specifically triggered (make-to-order production), or, together with planned independent requirements, they can create the total demand. Consumption is also possible with planned independent requirements.

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The Demand Planning Process

Aggregated historical data

Future demand forecast

Update

Release

Sales orders

Planned independent requirements Consumption possible

 SAP AG 2004

The slide shows the Demand Planning cycle: Past sales order quantities form a basis for the forecasting of future demands. In addition, market intelligence or one-off events (such as trade fairs) can be included in the forecast. As a result of the forecast, the demand plan is released as a planned independent requirement. Planned independent requirements form a basis for procurement and production planning and can, for example, consume the current sales orders.

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Sales Orders and Planned Independent Requirements Customer K1000

DC 2500

Sales Sales order Sold-to party K1000

Becker Berlin

Supplying plant 2500

DC Rotterdam

Material P-100 10 pc 20. 12. 2002

z What product does the customer require, on what date, and what quantity? z From which plant or DC should the customer receive supplies?

Forecast Planned ind. reqmnts Plant 1000

z What quantities of the product should be produced?

Planning table Plant

1000

New York M 1.2003 M 2.2003 M 3.2003 M 4.2003

Material P-100

100 pc

110 pc

110 pc

120 pc

...

 SAP AG 2004

Sales orders are created in Sales and Distribution (SAP R/3 SD). They portray an order made by a customer, whereby a certain quantity of a product is required by a predetermined date. Sales orders represent a requirement in the supplying plant. Make-to-stock planning is realized in a DC or a production plant via planned independent requirements. Planned consumptions are thus forecast. Procurement takes place as a result of this planning and forecast. Ideally, if concrete requirements subsequently exist (in the form of sales orders or dependent requirements, for example), these can be met from the warehouse.

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Planning Strategies

z Make-to-stock production Production due to make-to-stock planning, requirements covered by warehouse stock

z Subassembly planning Make-to-stock production for assemblies

z Make-to-Order production Finished products to individual customer stock using make-to-order production, and where necessary, assemblies to stock using make-tostock

 SAP AG 2004

A multitude of posibilities are available for planning for production with the help of planned independent requirements. The different mode of action of planned independent requirements is controlled by the so-called planning strategy. If strategies are used for make-to-stock production, production usually takes place, without sales orders already having to be present for the material concerned. If sales orders are then received, these can be met by warehouse stock, so that shorter delivery times can be realized. Moreover, in make-tostock production, it is possible to realize as consistent a production process as possible, independent of current demand. Make-to-stock production can also be executed for assemblies. In this case, the finished products themselves are not produced to stock; rather the necessary assemblies are procured. A sales order for a finished product can then usually be fulfilled quickly, as it is only final assembly that has to be executed since the assemblies already exist. Sales-order based production does not deal with planning in its actual sense; rather a product is procured for an existing sales order. Make-to-order production is often used in connection with subassembly planning for components, to keep delivery times as short as possible.

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Make-to-Stock Production

z Planning takes place by means of planned independent requirements z Sales orders are covered by make-to-stock inventory.

Requirements strategy for make-to-stock production

R/3

z Make-to-stock production

10

z Planning with final assembly

40

z Planning at assembly level

70

 SAP AG 2004

Using make-to-stock production strategies, production or procurement is planned; using planned independent requirements that arise from the forecast of sales expected in the future. According to the choice of strategy, sales orders can affect requirements, consume planned independent requirements, or have no effect on planned independent requirements. In make-to-stock production, sales orders are usually fulfilled by warehouse stock. Make-to-stock production strategies are used, for example, in situations where demand and sales fluctuate but where production may be kept at full capacity. Fluctuations in demand and sales are smoothed by warehouse stock. Planning can also take place at assembly level. This makes sense, for example, when an assembly, that is to be used in different finished products, has to be procured before the demands (sales orders) for these finished products exist.

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Planning with Final Assembly

R/3 Strat. 40 1. Planning at finished product level using plnd. ind. reqs. 2. Consumption of planning by sales orders Planning

Consumption

Sales Order

Production

Finished Product

 SAP AG 2004

In planning with final assembly, a flexible or fast reaction to customer demand is prominent, whereby as smooth as possible a production process is also simultaneously strived for. Sales orders affect requirements and consume planned independent requirements. The procurement and production of all components and assemblies including their final assembly is triggered by planned independent requirements before sales orders arrive. You plan the planned independent requirements for the finished product in demand management. Incoming sales orders consume these planned independent requirements. If customer requirements exceed planned independent requirements, the system automatically creates a planned order for the unplanned quantity in the next MRP run. (Sales orders thus affect requirements). You can check availability from a sales order using the ATP logic. The consumption of planned independent requirements by customer requirements depends on the settings defined for the consumption mode and the consumption periods.

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Consumption Planned ind. reqmts.

Mode 1

Customer Reqs.

Example:

Backward consumption only 20 20

40

Time

60

Backward consumption per.

Bwd per.

Forward consumption only

Mode 3

Within the given period of time, 60 pieces are produced for the sales order and 20 pieces are produced (anonymously) to stock.

Time Forward consumption period

Fwd per.

Backward/forward consumption 1

2

Mode 2/4

Time Bwd per.

Fwd per.

 SAP AG 2004

The consumption mode determines the direction on the time axis in which the arriving sales orders are to consume the planned independent requirements. In backward consumption (consumption mode 1), the sales order consumes planned independent requirements that lie before the customer requirement. In forward consumption (consumption mode 3), the sales order consumes planned independent requirements that lie after the customer requirement. You can combine backward and forward consumption provided that you take the consumption periods into account (consumption mode 2 or 4). You can define the consumption mode and the consumption periods either in the material master or for each MRP group. If no values for either consumption mode or consumption period have been entered, then the system uses the default setting with backward consumption for 999 days (Note: If a consumption mode has been entered and the consumption period is left blank, only requirements on the same day are consumed).

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Production Based on Sales Orders

z Sales orders are planned on a customer-specific basis z Planning is possible

Requirements strategy for production based on sales orders

R/3

z Make-to-stock production

20

z Planning without final assembly

50

z Planning with planning material

60

 SAP AG 2004

When working with the strategies for make-to-order production, the sales order is the pegged requirement. In addition to classic make-to-order production, planning without final assembly is also possible. Moreover, different strategies for assembly processing exist.

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Master Production Scheduling (MPS) MPS creates planned orders for top-level items to satisfy independent requirements from Demand Management. Independent Requirement

Planned order for the pump creates dependent requirements for all components

Pump

Spiral casing

Fly wheel

Support

There are no planned orders at this level, only dependent requirements.  SAP AG 2004

The purpose of Master Production Scheduling (MPS) and Material Requirements Planning (MRP) is to guarantee material availability on a two step planning process. MPS is an optional step in the planning process. Master scheduled items (MPS items) are usually materials that greatly influence company profits or dominate the production procedure. The general idea is to schedule these products first resolving any capacity, etc. problems and then execute MRP for the remaining product levels. SAP provides a variety of functions to support master production scheduling, including a graphical planning table and a whole series of evaluation reports. The MPS run results in planned orders for the master schedule items and dependent requirements for the level directly below the MPS items.

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MRP Procedures How should I plan material requirements in SAP R/3? Material master MRP1 MRP Type

...

PD Material Requirements Planning

...

Based on independent requirements Further control via requirements strategies (MRP3)

Consumption-Based Planning VB Reorder-Point Planning VV Forecast-Based Planning R1 Time-Phased Planning

...

Based on consumption in the past

 SAP AG 2004

The basic planning type is defined per material using the MRP type, that is entered in the MRP 1 view of the material master. Planning of a material can be MRP or consumption-based. A material can also be excluded from MRP using the corresponding MRP type. Material requirements planning takes current and future sales as its reference point and is executed for the whole BOM structure. The planned requirements quantity (in the form of planned independent requirements or sales orders) triggers requirements calculation. Consumption-based planning is based on consumption values in the past and uses forecast or statistical procedures to determine future requirements. Consumption-based planning is characterized by its simplicity and is mainly used for "B and C parts", or in other words, those with low values.

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Consumption-Based Planning Using reorder point planning as an example Stock

Lot Size

Reorder stock Safety stock Reorder point

Delivery time-spot

Time

Replenishment lead time

 SAP AG 2004

Manual reorder point planning is a typical process in consumption-based planning. It is characterized by its simplicity. Consumption-based planning procedures use past consumption data (historical data) to calculate future requirements with the help of the material forecast or static planning procedures. Consumption-based planning procedures have no reference to the master plan. This means that the net requirements calculation is not triggered by an independent or a dependent requirement. Instead, the net requirements calculation is triggered when stock levels fall below a reorder point or by forecast requirements calculated from past consumption data. You control the planning using a manually entered reorder point (for example, 50 pieces). During the planning run, the system checks only whether stock has fallen below this reorder point or not (that is, whether there are less than 50 pieces in stock). If that is the case, the system triggers procurement to the amount of the lot size (a fixed lot size of 500 pieces for example). If schedule lines are created directly by the planning run, for example, for materials procured externally, the administrative work for this sort of planning is minimal. Reorder point planning is appropriate only for materials with demand that stays relatively consistent. Real-time inventory management is also necessary.

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Material Requirements Planning: Results

In-house production

MRP

External procurement

Material A Planned order

Directly possible for externally procured materials only

Convert

Production order

Purchase requisition

Schedule lines

Process order Purchase order

 SAP AG 2004

If MRP discovers shortage quantities, procurement proposals are generated: purchase requisitions and planned orders are internal planning elements which can be changed, rescheduled or deleted at any time. In the case of in-house production, the system creates planned orders for the planning of production quantities. When planning is complete, plannned orders can be converted into production orders. In the case of external procurement, the system creates either a planned order, or directly creates a purchase requisition, or a schedule line for a pre-existing scheduling agreement for planning the external purchase order quantity. When planning is complete, planned orders can be converted into purchase requisitions and, at a later date, the purchase requisitions can be converted into purchase orders. You control whether the system immediately creates purchase requisitions or firstly creates planned orders for externally procured materials in the initial screen of the planning run using the "creation" indicator for purchase requisitions. If a scheduling agreement exists for a material and is relevant to MRP in the source list, then you can also create schedule lines directly in MRP. You control this using the creation indicator for schedule lines in the initial screen of the planning run.

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Multilevel Material Requirements Planning Single-item, multilevel planning

MRP Finished Product

Sales Order, Plan. Ind Req

Single-item, single-level planning

Planned Order Dep.req. Dep.req.

MRP

MRP

Assembly 1

Assembly 2

Planned order

Purch. requis.

Dep.req.

MRP Component 1

...

 SAP AG 2004

MRP can be executed as total planning for all materials or as individual planning. The task of individual planning is to plan a material separately (for example, interactively), whereas multilevel individual planning takes place over all BOM levels of this material. In single-level planning it is only the header material that is planned. In multilevel planning, dependent requirements are thus also planned. Secondary requirements that arise from the planning of a finished product's BOM components, are set via secondary requirements, that arise from the explosion of a material's BOM. Dependent requirements depend on respective planned orders. Materials (assemblies) are needed to realize these planned orders. If a planned order is converted into a production order, the dependent requirements are transferred to order reservations.

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Net Requirements Calculation in Material Requirements Planning

Procurement proposal

lot-size Firmed receipts Within the rescheduling horizon

Material shortage

Reqmts

Firmed planned orders Firmed purchase requisitions

(Sales orders, planned independent requirements, secondary requirements, reservations, and so on)

Stock

Safety stock

Purchase orders, for example

Supply

Demand

 SAP AG 2004

In MRP, a net requirements calculation is also executed in the planning run to determine whether a material shortage exists for a certain material. In addition, stock and fixed receipts that currently exist (purchase orders, production orders, fixed purchase requisitions and planned orders...) are compared with the safety stock and requirements. The result of this comparison is the quantity available for planning. If the quantity available for planning is lower than zero, a material shortage exists. MRP reacts to material shortages by creating new procurement proposals, that is, by creating purchase requisitions or planned orders, independently of their procurement type. The suggested procurement quantity results from the lot-sizing procedure, that is set in the material master.

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Mutilevel Backward Scheduling Reqmts date Finished product Finished product

Assembly 1 Assembly 2

Component 1

Today

Time

Planned order Purchase requisition

 SAP AG 2004

MRP uses backward scheduling - the system calculates the necessary start dates based on a predefined end date. MRP reacts to the requirements needed for the finished product (a sales order, for example) Procurement proposals are created for the finished product and dependent requirements for the components are calculated via the BOM explosion. The dependent requirements date arises from the start date of the planned order that caused the requirements. Assuming the dependent requirements date is the availability date, the system determines the basic order dates of the components by means of backward scheduling using in-house production time or planned delivery time.

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MRP Run

Planning Total planning Online

Planning of all materials of one or several plants

As background job Ind. planning Multilevel

Planning of a material's BOM

Ind. planning Single-level

Planning of a material

Ind. planning Interactive

Interactive single-level planning

 SAP AG 2004

You can carry out the planning run on two levels: as total planning for a plant or for an individual material. It is thus possible to execute a total planning run for several plants and/or MRP areas. You can execute a single-item planning run either for a specific material only (single level) or for all BOM levels (multi level). Interactive planning of a material is also possible. A total planning run can be executed online or as a background job. Total planning for a plant encompasses all materials relevant to MRP for this plant and includes the BOM explosion for materials with BOMs. From the MRP menu, you can execute total planning "Online" or "As background job". In order to execute the total planning run as a background job, you select a report variant limiting it to the corresponding plant and plan the job. A user exit enables you to limit the total planning run specifically to those materials which fulfill freely definable criteria. You can use this, for example, to select all the materials belonging to a particular MRP controller.

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Scope of the Planning Run Processing key

NEUPL

Regenerative planning z Planning of all MRP-relevant materials

Processing key

NETCH

Net change for total horizon z Planning all materials which have undergone a change relevant to the planning run

Processing key

NETPL

Net change for planning horizon z Planning all materials for which MRP-relevant changes have been made in the planning horizon z Planning within the planning horizon only

 SAP AG 2004

During regenerative planning, the system plans all materials of a plant. This is practical when carrying out the planning run for the first time and on rare occasions when, due to technical errors, the consistency of the data cannot be guaranteed. In a working plant, it usually makes sense (especially when you are using many materials) to only carry out MRP for those materials that have undergone MRP-relevant changes (through goods issues, new sales orders, changes to the BOM struscture, for example). Due to its short run-time, net change planning - which is used to plan these materials only - enables you to carry out the planning run in short time intervals, so that you can always work with the current planning result. During net change planning in the planning horizon, the system only takes changes within the planning horizon into account. The system plans only those materials that have been subject to an MRP-change within the planning horizon. The materials are planned within this horizon only. You set the planning horizon in Customizing for MRP as a plant or MRP group parameter. The planning horizon should at least span the time period in which sales orders are received, and, furthermore, contain the delivery and total lead times for the material. You specify the type of planning run via the "processing key" field in the initial screen for planning. In single-item planning, you are only able to differentiate whether "net change planning" (NETCH) or "net change planning in the planning horizon" (NETPL) is to be performed. In total planning, you also have the option of using the key NEUPL, with which all materials in the planning file are planned.

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Control Parameters for MRP

Processing key

NEUPL NETCH NETPL

Create purch. requisition

1 2 3

Purchase Requsition Purchase Requisition for the opening period Planned Orders

Schedule lines

1 2 3

No Schedule lines Schedule lines in the opening period Schedule lines

Create MRP list

1 2 3

Planning mode

1 2 3

MRP Group

always only for exception messages never Adjust data New BOM and routing Delete planning data

 SAP AG 2004

The following control parameters for MRP are required for the planning run: Processing key: You define the planning type as regenerative planning or net change planning over the whole period or restricted to the planning horizon. The indicators "Create purchase requisition" and "Schedule lines" are only relevant for materals that are procured externally. You can determine whether or in which period purchase requisitions and schedule lines are required as the result of the planning run. You can determine further whether the planning run is to generate MRP lists. It is also possible to have the system generate MRP lists only when certain exception messages have appeared for a material (the exception messages that should trigger an MRP list to be generated can be defined in the Customizing IMG activity "Define and group exception messages"). The planning mode defines whether the existing planning data should simply be adjusted, whether BOMs and routings should also be re-exploded or whether the planning should be started from the very beginning again. You can also set the creation indicator for purchase requisitions, schedule lines and MRP lists in the MRP group. The materials that are assigned to this MRP group are then planned accordingly in the total planning run.

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Stock/Requirements List and MRP List

General structure

Current stock/reqmts.list

Variable header Current

Material tree

Elements

MRP elements

Planning run

z z z z z z z z z z

Planned orders Purch. requisitions Production orders Purchase orders ... Plant stock/ Storage location stock Sales orders Plnd. ind. requirements ...

MRP list

 SAP AG 2004

The current stock / requirements list contains up-to-date information on the current status of stocks, requirements and receipts. You are able to view any changes immediately. This can be done as soon as the current stock / requirements list is called up or, upon displaying the current stock / requirements list, the elements are re-read from the database using the "Refresh" function. The MRP list depicts the result of the latest planning run and is therefore static: Changes that are made after the planning run cannot be seen. You can control whether or not an MRP list is generated during the planning run. The basic structure of both lists is the same: y Links are in the form of a tree for the worklist of the MRP controller. y Above the list is the header with the material number. You can display additional data in the header details. y The list itself contains the individual MRP elements and the corresponding available quantities. User-specific settings enable you to adapt the lists to personal requirements - these apply to both lists (see the corresponding Customizing documentation in the evaluations for MRP "Configure MRP list / stock/requirements list"). You can display additional data, which can then be accessed using a function key, over a customer exit (see Customizing, "Customer-Exit: Program additional columns")

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Planned Orders and Production Orders The material "Pump" is produced in plant 1000 (procurement type: in-house production)

Planned Order Material

P-100

Plant

1000

Order quantity

10 pc

Start

End

10.12.2002

17.12.2002

...

Dep. req. 10 pc Casing

Convert

Production Order Plant 1000

Material

P-100

Plant

1000

Order quantity

10 pc

Start

End

0010 0020 10.12.2002 AR-RES

...

0030 0040 17.12.2002 10 pc Casing

 SAP AG 2004

Planned orders are used to plan the in-house production of a material. Planned orders already contain the basic dates within which production should take place. Moreover, they contain, in the form of dependent requirements, the component requirements for the components that are needed for production. Capacity Requirements Planning can be executed based on planned orders. For the ultimate execution of production, the planned order is converted into a production order, that is, a production order (PP) or a process order (PP-PI).

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Purchase Requisitions and Purchase Orders The material "screw" is bought for plant 1000 (procurement type: external procurement)

Planned order Material

100-130

Plant

1000

Order quantity

80 pc

01.12.2002

08.12.2002

Purchase requisition Plant

1000

Source of Supply

Plant 1000

Supplier

Material 100-130 80 pc

10. 12. 2002

Convert

Purchase order Plant

1000

Source of Supply

L1000 C.E.B. Berlin

Material 100-130 80 pc

10. 12. 2002

 SAP AG 2004

For externally procured materials, planning of procurement can take place by means of planned orders or purchase requisitions. If planned orders are created at first, they have to be converted into purchase requisitions. Planning is also directly possible with scheduling agreement releases. In purchasing, purchase requisitions are converted into purchase orders. No later than this step should a source of supply (a supplier) assigned to purchase orders .

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Summary of Planning Process and Levels Planning Steps

OK?

SOP OK?

MPS OK?

MRP OK?

Profitability analysis z Revenue plans z Sales plans (quantities)

Region 1

Region 2

Sales and Operations Planning z Sales plan z Production plan

Product group

Master Production Scheduling z Demand program z Adjusted master plan

Product 1

Product 2

Assembly 1

Assembly 2

Part 1

Part 2

Material Requirements Planning z Dependent requirements z Planned production z Procurement plan

Feedback/Replanning

CO/PA

Planning Levels

 SAP AG 2004

Each step in the production planning process corresponds to a different material planning level. Each planning level provides input to the next level.

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Material Planning: Topic Summary

You are now able to: z Explain the importance of planning strategies on business processes z Explain the difference between Materials Requirements Planning and Consumption Based Planning procedures z Describe and perform the steps in the Material Planning process z Identify the integration points with Materials Management and Sales Order Management

 SAP AG 2004

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Material Planning: Unit Objectives

You are now able to: z Identify the organizational levels and master data use by material planning. z Explain the difference between Material Requirements Planning and Consumption Based Planning z Identify the integration points with Materials Management and Sales Order Management

 SAP AG 2004

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Exercises Unit: Material Planning Topic: Master Data At the conclusion of this exercise, you will be able to: • Describe the organizational levels and views of the material master • Display the material master • Display a single-level bill of material • Display a multi-level bill of material Material master records contain default information about a company’s products. Bills of materials define a product’s structure. As a project team member, you need to understand the structure and function of material master records and bills of materials. 1-1

First, display the basic data view of material R-F1##. 1-1-1 Enter the material number. Select Basic Data 1 in the dialog box. Fill in the table below with the values you see on the Basic Data 1 tab. Description Base unit of measure Net weight Unit of weight 1-1-2

1-2

What is the material type? __________

Display other views of R-F1##. Choose Select view(s) then select MRP 2, Work scheduling, Accounting 1 in the dialog box. 1-2-1 The system asks you to enter organizational level data before proceeding. This screen did not appear when you only wanted to see basic data. Why does it appear now? ______________________________________________________ Enter Plant 1000.

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1-2-2 MRP 2 view. What value is assigned to the procurement type field? __________________ Access field level help for the procurement type field. What is the meaning of procurement type? ______________________________________________________ Close the help window. What are the possible entries for procurement type? __________ 1-2-3 Work scheduling view. What value is assigned to the production scheduler field? __________ What is the total lot size dependent in-house processing time? __________(days) per __________(PC) 1-2-4 Accounting 1 view. What value is assigned to the price control field? __________ What is the moving price? __________ What is the standard price? __________ What is the currency of these prices? __________ Exit the material master record. 1-3

Change the strategy group, in the MRP3 view, of R-F1## and R-F2##, to strategy group 40 Planning with final assembly.

1-4

In the SAP menu open the “Bill of Material” folder. What bill of material categories does the system allow? ____________________

____________________

____________________

____________________

____________________ 1-5

Display the material BOM for R-F1## in Plant 1000, BOM usage 1 (production). 1-5-1 What is the component number of item 0010? ________________________________________________ 1-5-2 What is the component quantity and unit of measure? __________ 1-5-3 Is this component a stock item? __________ 1-5-4 Will this component be valid in the bill on January 1, 2007? __________ 1-5-5 Does a bill of material exist for this component? __________

1-6

Display the material BOM for component R-B1##. 1-6-1 What is the valid from date of this bill of material? __________ 1-6-2 What is the base quantity and unit of measure of this bill of material? ______________________________________________________ 1-6-3 Exit the BOM.

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1-7

Display a multi-level BOM explosion report for pump R-F1##, plant 1000. Use BOM application PP01. Write the component numbers, component quantities and units of measure of the multi-level pump bill of material in the boxes below. This will be useful as a reference in future exercises. 1-7-1 How many single level BOMs are in this structure? __________

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Unit: Material Planning Topic: Material Planning Process At the conclusion of these exercises, you will be able to: • Create a product group • Create a sales plan • Create a production plan • Perform a single-item, multi-level MRP run for our pump. • Review the results of the plan • Enter a customer order for our pump. • Confirm that consumption process takes place

Marketing has supplied you with their six-month sales forecast for the pump product group. You will use the Sales and Operations Planning module to enter the forecast. Then you will create a production plan for R-F1##, which is one of the pumps in the pump product group. In this scenario you will do planning using the make-to-stock strategy Planning with Final Assembly. In this planning strategy sales orders entered consume the forecast. After transferring the planned independent requirements to Demand Management, you will then run MRP. MRP creates the manufacturing plan. To determine if sales orders consume the forecast, you will enter a customer order, for the pump. You will then re-run MRP to see if it adjusts the plan.

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2-1

The pumps are planned using sales and operations planning. Management plans all pumps overall as one product group. The pumps planned are products R-F1## and R-F2##. Plans for this product group are reviewed by middle management, modified as appropriate and then disaggregated to demand programs for the individual pumps. The overall planning structure is detailed in the diagram below.

Product Group GR## All Pumps

Material

Material

R-F1##

R-F2##

Pump

Pump

2-1-1 Create the product group GR## for the pumps. Enter the following data on the Create Product Group: Initial screen Field

Data entry

Product Group

GR##

Description

Group ## Pumps

Plant

1000

Base Unit

PC

Members

Select the “Materials” radio button.

Enter On the Create Product Group: Maintain Members (Materials) screen, enter the material numbers R-F1## and R-F2## in the Member number field, and plant number 1000 in the Plant field. Assign a proportion factor of 60% to R-F1## and 40% to R-F2##. Save

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2-2

Create a sales and production plan for Product Group Gr##. 2-2-1 On the Create Plan: Initial Screen, enter product group GR## and plant 1000, then choose the enter icon. 2-2-2 On the dialog box that appears that results, enter 7## in the version number and “Version 7##” in the version description, and then select the enter icon to get to the Create Rough-Cut Plan screen. 2-2-3 Create a sales plan. Starting with the second month into the future (i.e., if this is September, the second month into the future is November), enter the following information into the sales row of the planning table: Month

Sales value

Month + 2

200

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month +7

175

2-2-4 Due to uncertainty of market demand, management wants to maintain a service level of 3 days inventory supply. To indicate this in your plan, enter 3 into the Target days’ supply field for each month of the plan beginning with the second month in the future. Enter 2-2-5 Create the production plan for product group GR## based on the sales plan and desired target inventory level. Save 2-3

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Disaggregate the production plan for the product group and transfer the product plans for R-F1## and R-F2## to Demand Management for use in detailed production planning.

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2-3-1 Enter the following data on the Transfer Planning Data to Demand Management screen: Field

Value

Product Group

GR##

Plant

1000

Version

7##

Prod. Plan for mat. or PG members as a proportion of PG

Selected

From Date

Today’s date

Invisible Transfer

Not selected

Active Indicator

Selected

2-3-2 Execute the transfer by clicking on the Transfer Now icon. 2-3-3 By deselecting the Invisible Transfer indicator the disaggregation results are presented on another screen allowing the planner to modify the results before saving them manually to demand management. Review the results for R-F1## and then Save. The results for R-F2## are displayed. Save the results for R-F2##. 2-3-4 Display the Stock Requirements list for R-F1##, plant 1000. Examine the results. Are the planned independent requirements covered by planned orders?

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2-4

Run MRP for the complete bill of material for pump R-F1## in plant 1000. Use the following data: Processing key

NETCH

Create purchase req.

2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1

Also Plan Unchanged Components

Deselect

Display results before they are saved

Deselect

Display material list

Deselect

Simulation mode

Deselect

2-4-1 How many materials were planned? __________ 2-4-2 Were planned orders and dependent requirements created? __________ 2-5

Display the MRP list for R-F1##, plant 1000. Examine the results. 2-5-1 Are all the independent requirements covered by planned orders? __________ 2-5-2 What is the number of the first planned order? 2-5-3 Select the Expand header details icon to see further planning information for this material.

2-6

Compare the stock / requirements list to the MRP list. 2-6-1 Do differences exist between the two lists? __________ 2-6-2 Why? ________________________________________

2-7

Display the stock / requirements list for R-B1##, plant 1000. What planned order created the first dependent requirement in the list? Is it the same planned order from exercise 2-5-2? _______________________________

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2-8

You want to determine if sales orders consume demand, therefore, enter a sales order for your pump, R-F1##. On the Create Sales Order: Initial Screen, use the following data: Order type

OR

Sales organization

1000


10

Division

00

On the Create Standard Order: Overview screen, enter the order information: Sold-to party

1000

Ship-to party

1000

PO number

PO-##

Req. deliv. date

Day 15 of Month+2

Material

R-F1##

Order quantity

50

What is the sales order number? __________ 2-9

Display the MRP 3 view of the material master for R-F1## in plant 1000. 2-9-1 What consumption mode is assigned to this item? __________ 2-9-2 What is the backward consumption period? __________ 2-9-3 What is the forward consumption period? __________

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2-10

Display the stock / requirements list for R-F1## in plant 1000. Copy the values from the first five MRP elements of the list (after the Stock line) to the table below.

Date

MRP element

Today

Stock

Recpt / req’d qty

Available quantity 0

Did consumption take place correctly? __________ 2-11

Run MRP again, for the complete bill of material for pump R-F1## in plant 1000. Use the same parameters from exercise 2-4.

2-12

Compare the MRP list (or the stock / requirements list) of R-F1## in plant 1000 to the values you recorded in exercise 2-10. 2-12-1 Has the plan changed? __________ 2-12-2 How? ________________________________________________

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Solutions Unit: Material Planning Topic: Master Data

1-1

First, display the basic data view of material R-F1##. Logistics → Production → Master Data → Material Master → Material → Display → Display Current 1-1-1 Enter the material number. Select Basic Data 1 in the dialog box. Fill in the table below with the values you see on the Basic Data 1 tab. Description

Pump

Base unit of measure

PC (piece(s))

Net weight

250

Unit of weight

KG

1-1-2 What is the material type? Finished Product The material type is displayed in the Title Bar on the screen Select the Back icon to go back to the Initial screen. 1-2

Display other views of R-F1##. Choose Select view(s) then select MRP 2, Work scheduling, Accounting 1 in the dialog box. 1-2-1 The system asks you to enter organizational level data before proceeding. This screen did not appear when you only wanted to see basic data. Why does it appear now? These views are Plant specific; therefore, you must enter a Plant. Enter plant 1000.

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1-2-2 MRP 2 view. What value is assigned to the procurement type field? E (In-house production) Access field level help for the procurement type field. What is the meaning of procurement type? With your cursor placed on the procurement type field, access field level help (F1). The indicator that defines how the material is procured. Close the help window. What are the possible entries for procurement type? With your cursor placed on the procurement type field, access possible entries (F4). E, F, blank, X. 1-2-3 Work scheduling view. What value is assigned to the production scheduler field? 0## What is the total lot size dependent in-house processing time? Setup time .09 days Processing time 20.24 days Interoperation 3.9 day Base Quantity 100 pc Total 24.23 days per 100 pc **results may vary 1-2-4 Accounting 1 view. What value is assigned to the price control field? S (Standard price) What is the moving price? Varies, for example 524.02 per 1 piece What is the standard price? Varies, for example 535.58 per 1 piece What is the currency of these prices? EUR Exit the material master

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1-3

Change the strategy group in the MRP3 view, of R-F1## and R-F2##, to strategy group 40 Planning with final assembly. Logistics → Production → Master Data → Material Master → Material → Change→ Immediately Material R-F1##. Choose Select view(s) then select MRP 3 in the dialog box. Enter plant 1000. In the strategy group field maintain a value of 40 (planning with final assembly). Save the material master record. Perform the same steps for R-F2##.

1-4

In the SAP menu open the “Bill of Material” folder. Logistics → Production → Master Data → Bills of Material → Bill of Material What bill of material categories does the system allow? You should see the bill of material categories the system allows in the form of menu folders. Material BOM Equipment BOM Order BOM

1-5

Document structure Functional location BOM WBS BOM

Display the material BOM for R-F1## in Plant 1000, BOM usage 1 (Production). Logistics → Production → Master Data → Bills of Material→ Bill of Material→ Material BOM → Display 1-5-1 What is the component number of item 0010? R-B1## 1-5-2 What is the component quantity and unit of measure? 1 PC 1-5-3 Is this component a stock item? Yes - ICt (Item category) value is L (stock item) 1-5-4 Will this component be valid in the bill on January 1, 2007? Yes (Valid until December 31, 9999) 1-5-5 Does a bill of material exist for this component? Yes - Asm (Assembly) indicator is checked

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1-6

Display the material BOM for component R-B1##. Logistics → Production → Master Data → Bills of Material→ Bill of Material→ Material BOM → Display Or you could double-click on the assembly indicator check mark on the material item overview screen of R-F1## and select Continue. Choose Header icon. 1-6-1 What is the valid from date of this bill of material? 03/07/2002 1-6-2 What is the base quantity and unit of measure of this bill of material? 1 PC 1-6-3 Exit the BOM.

1-7

Display a multi-level BOM explosion report for pump R-F1##, plant 1000. Use BOM application PP01. Logistics → Production → Master Data → Bills of Material → Reporting → BOM Explosion → Material BOM → Multilevel BOM On the Explode BOM: Multi-Level BOM: Initial Screen enter the following data:

Field

Data entry

Material

R-F1##

Plant

1000

BOM Application

PP01

Select Execute.

Write the component numbers, component quantities and units of measure of the multi-level pump bill of material in the boxes below. This will be useful as a reference in future exercises.

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1-7-1 How many single level BOMs are in this structure? Five

R-F1## 1 PC

R-B1## 1 PC

R-B2## 1 PC

R-B3## 1 PC

R-B4## 1 PC

R-T0##

R-T4##

R-T5##

1 PC

1 PC

1 PC

R-T1##

R-T2##

R-T3##

1 PC

1 PC

8 PC

R-F1## DRW 000

Note: Component R-F1## DRW 000 00 referenced on level 1 is a document (ICt –Item Category = D) not a material. Exit the report.

© SAP AG

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48-5

Unit: Material Planning Topic: Material Planning Process

2-1

The pumps are planned using sales and operations planning. Management plans all pumps overall as one product group. The pumps planned are products R-F1## and R-F2##. Plans for this product group are reviewed by middle management, modified as appropriate and then disaggregated to demand programs for the individual pumps. The overall planning structure is detailed in the diagram below. Product Group GR## All Pumps

Material

Material

R-F1##

R-F2##

Pump

Pump

2-1-2 Create the product group GR## for the pumps. Logistics → Production → SOP → Product Group → Create Enter the following data on the Create Product Group: Initial screen: Field

Data entry

Product Group

GR##

Description

Group ## Pumps

Plant

1000

Base Unit

PC

Members


Enter On the Create Product Group: Maintain Members (Materials) screen, enter the material numbers R-F1## and R-F2## in the Member number field, and plant number 1000 in the Plnt field. Assign a proportion factor of 60% to R-F1## and 40% to R-F2##. Save

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2-2

Create a sales and production plan for Product Group Gr##. Logistics → Production → SOP → Planning → For Product Group → Create 2-2-1 On the Create Plan: Initial Screen, enter product group GR## and plant 1000, then choose the enter icon. 2-2-2 On the dialog box that appears, enter 7## in the version number and “Version 7##” in the version description, and then select the enter icon to get to the Create Rough-Cut Plan screen. 2-2-3 Create a sales plan. Starting with the second month into the future (i.e., if this is September, the second month into the future is November), enter the following information into the sales row of the planning table: Month

Sales value

Month + 2

200

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month + 7

175

2-2-5 Due to uncertainty of market demand, management wants to maintain a service level of 3 days inventory supply. To indicate this in your plan, enter 3 into the Target days’ supply field for each month of the plan beginning with the second month in the future. Enter 2-2-5 Create the production plan for product group GR## based on the sales plan and desired target inventory level. Edit → Create productn plan → Target days’ supply Save 2-3

Disaggregate the production plan for the product group and transfer the product plans for R-F1## and R-F2## to Demand Management for use in detailed production planning. Logistics → Production → SOP → Disaggregation → Transfer Product Group to Planning

© SAP AG

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Value

Product Group

GR##

Plant

1000

Version

7##


Selected

From Date

Today’s date

Invisible Transfer

Not selected

Active Indicator

Selected

2-3-2 Execute the transfer by clicking on the Transfer Now button. You will get a warning message “Planning Version to be Transferred is not the active version” Select enter to clear the warning message and proceed with the data disaggregation and transfer. 2-3-3 By deselecting the Invisible Transfer indicator the disaggregation results are presented on another screen allowing the planner to modify the results before saving them manually to demand management. Review the results for R-F1## and then Save. The results for R-F2## are displayed. Save the results for R-F2##. In reviewing the result of the transfer you will notice the 60% of the product groups production plan has been assigned to product R-F1## and 40% to R-F2##. 2-3-4 Display the Stock Requirements List for R-F1##, plant 1000. Examine the results. Logistics → Production → MRP → Evaluations → Stock/ Requirements List Are the planned independent requirements covered by planned orders? No – because MRP has not been run.

© SAP AG

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2-4

Run MRP for the complete bill of material for pump R-F1## in plant 1000. Logistics → Production → MRP → Planning →Single-Item, Multi-Level Planning Use the following data: Processing key

NETCH


2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1


Deselect


Deselect


Deselect

Simulation mode

Deselect

Choose Enter and confirm your input parameters, then choose Enter again to start MRP. When MRP is finished, a results screen should appear. 2-4-1 How many materials were planned? 10 2-4-2 Were planned orders and dependent requirements created? Yes Exit the results 2-5

Display the MRP list for R-F1##, plant 1000. Examine the results. Logistics → Production → MRP → Evaluations → MRP List 2-5-1 Are all the independent requirements covered by planned orders? Yes 2-5-2 What is the number of the first planned order? Varies for example 31354 2-5-3 Select the Expand header details icon to the left of the material in the header to view further planning information for this material.

© SAP AG

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48-9

2-6

Compare the stock / requirements list to the MRP list. From the MRP list select Goto → Stock/requirements list comparison 2-6-1 Do differences exist between the two lists? No 2-6-2 Why? No planning or execution activity has taken place on this material since the MRP run. Exit the MRP list

2-7

Display the stock / requirements list for R-B1##, plant 1000. What planned order created the first dependent requirement in the list? Logistics → Production → MRP → Evaluations → Stock/Requirements List On the left hand side of the first dependent requirement, select the Details of element icon. Yes, it is the same planned order from exercise 2-5-2.

2-8

You want to determine if sales orders consume demand, therefore, enter a sales order for your pump, R-F1##. Logistics → Sales and Distribution → Sales → Order → Create. On the Create Sales Order: Initial Screen, use the following data: Order type

OR

Sales organization

1000


10

Division

00

Enter

© SAP AG

TERP10

48-10


1000

Ship-to party

1000

PO number

PO-##

Req. deliv. date

Day 15 of Month+2

Material

R-F1##

Order quantity

50

Enter If an information message appears concerning the invoice date choose Enter to acknowledge it. If the Standard Order: Availability Control screen appears, select the Fix qty/date indicator and then select the Complete dlv. button. Save. What is the sales order number? Varies, for example 5431 Look at the bottom of the screen for the sales order number. Exit the screen. 2-9

Display the MRP 3 view of the material master for R-F1## in plant 1000. Logistics → Production → Master Data → Material Master → Material → Display → Display Current 2-9-1 What consumption mode is assigned to this item? 2 (Backward / forward consumption) 2-9-2 What is the backward consumption period? 30 (workdays) 2-9-3 What is the forward consumption period? 30 (workdays) Exit the material master record.

© SAP AG

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2-10

Display the stock / requirements list for R-F1## in plant 1000. Copy the values from the first five MRP elements of the list (after the Stock line) to the table below. Logistics → Production → MRP → Evaluations → Stock/ Requirements List

Date (Example)

MRP element (Example)

Recpt / req’d qty

Available quantity

Today

Stock

July 1

Planned order 31920

136*

136*

July 1

Independent requirement

86 –(*)

50*

July 15

Sales order 5431

50 -

0

Aug 3

Planned order 31921

86 *

86*

Aug 3

Independent requirement

86 – (*)

0

0

(*) Varies depending on SOP plan Did consumption take place correctly? Compare the stock requirements list to the MRP list From the Stock Requirements list select Goto → MRP list comparison. The MRP list Planned Independent Requirements are 50 units higher than the stock requirements list due to the consumption by the sales order. Keep in mind the MRP list shows values as of the last planning run executed (static planning picture) while the stock requirements list presents the current planning situation. Yes, consumption took place correctly. (The planned independent requirement was reduced by 50 pieces). Exit the Stock Requirements List. 2-11

© SAP AG


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2-12

Compare the MRP list (or the stock / requirements list) of R-F1## in plant 1000 to the values you recorded in exercise 2-10. 2-12-1 Has the plan changed? Yes 2-12-2 How? The first planned order’s quantity was reduced by 50 to cover the planned independent requirement. A new planned order, with a quantity of 50, was created to cover the sales order.

© SAP AG

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48-13

Material Planning: Exercises Unit: Material Planning Topic: Master Data At the conclusion of this exercise, you will be able to: • Describe the organizational levels and views of the material master • Display the material master • Display a single-level bill of material • Display a multi-level bill of material Material master records contain default information about a company’s products. Bills of materials define a product’s structure. As a project team member, you need to understand the structure and function of material master records and bills of materials. 1-1

First, display the basic data view of material R-F1##. 1-1-1 Enter the material number. Select Basic Data 1 in the dialog box. Fill in the table below with the values you see on the Basic Data 1 tab. Description Base unit of measure Net weight Unit of weight 1-1-2

1-2

What is the material type? __________

Display other views of R-F1##. Choose Select view(s) then select MRP 2, Work scheduling, Accounting 1 in the dialog box. 1-2-1 The system asks you to enter organizational level data before proceeding. This screen did not appear when you only wanted to see basic data. Why does it appear now? ______________________________________________________ Enter Plant 1000.

© SAP AG

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1-2-2 MRP 2 view. What value is assigned to the procurement type field? __________________ Access field level help for the procurement type field. What is the meaning of procurement type? ______________________________________________________ Close the help window. What are the possible entries for procurement type? __________ 1-2-3 Work scheduling view. What value is assigned to the production scheduler field? __________ What is the total lot size dependent in-house processing time? __________(days) per __________(PC) 1-2-4 Accounting 1 view. What value is assigned to the price control field? __________ What is the moving price? __________ What is the standard price? __________ What is the currency of these prices? __________ Exit the material master record. 1-3

Change the strategy group, in the MRP3 view, of R-F1## and R-F2##, to strategy group 40 Planning with final assembly.

1-4

In the SAP menu open the “Bill of Material” folder. What bill of material categories does the system allow? ____________________

____________________

____________________

____________________

____________________ 1-5

Display the material BOM for R-F1## in Plant 1000, BOM usage 1 (production). 1-5-1 What is the component number of item 0010? ________________________________________________ 1-5-2 What is the component quantity and unit of measure? __________ 1-5-3 Is this component a stock item? __________ 1-5-4 Will this component be valid in the bill on January 1, 2007? __________ 1-5-5 Does a bill of material exist for this component? __________

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1-6

Display the material BOM for component R-B1##. 1-6-1 What is the valid from date of this bill of material? __________ 1-6-2 What is the base quantity and unit of measure of this bill of material? ______________________________________________________ 1-6-3 Exit the BOM.

1-7

Display a multi-level BOM explosion report for pump R-F1##, plant 1000. Use BOM application PP01. Write the component numbers, component quantities and units of measure of the multi-level pump bill of material in the boxes below. This will be useful as a reference in future exercises. 1-7-1 How many single level BOMs are in this structure? __________

© SAP AG

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Unit: Material Planning Topic: Material Planning Process At the conclusion of these exercises, you will be able to: • Create a product group • Create a sales plan • Create a production plan • Perform a single-item, multi-level MRP run for our pump. • Review the results of the plan • Enter a customer order for our pump. • Confirm that consumption process takes place Marketing has supplied you with their six-month sales forecast for the pump product group. You will use the Sales and Operations Planning module to enter the forecast. Then you will create a production plan for R-F1##, which is one of the pumps in the pump product group. In this scenario you will do planning using the make-to-stock strategy Planning with Final Assembly. In this planning strategy sales orders entered consume the forecast. After transferring the planned independent requirements to Demand Management, you will then run MRP. MRP creates the manufacturing plan. To determine if sales orders consume the forecast, you will enter a customer order, for the pump. You will then re-run MRP to see if it adjusts the plan.

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2-1

The pumps are planned using sales and operations planning. Management plans all pumps overall as one product group. The pumps planned are products R-F1## and R-F2##. Plans for this product group are reviewed by middle management, modified as appropriate and then disaggregated to demand programs for the individual pumps. The overall planning structure is detailed in the diagram below.

Product Group GR## All Pumps

Material

Material

R-F1##

R-F2##

Pump

Pump

2-1-3 Create the product group GR## for the pumps. Enter the following data on the Create Product Group: Initial screen Field

Data entry

Product Group

GR##

Description

Group ## Pumps

Plant

1000

Base Unit

PC

Members


Enter On the Create Product Group: Maintain Members (Materials) screen, enter the material numbers R-F1## and R-F2## in the Member number field, and plant number 1000 in the Plant field. Assign a proportion factor of 60% to R-F1## and 40% to R-F2##. Save

© SAP AG

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2-2

Create a sales and production plan for Product Group Gr##. 2-2-1 On the Create Plan: Initial Screen, enter product group GR## and plant 1000, then choose the enter icon. 2-2-2 On the dialog box that appears that results, enter 7## in the version number and “Version 7##” in the version description, and then select the enter icon to get to the Create Rough-Cut Plan screen. 2-2-3 Create a sales plan. Starting with the second month into the future (i.e., if this is September, the second month into the future is November), enter the following information into the sales row of the planning table: Month

Sales value

Month + 2

200

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month +7

175

2-2-6 Due to uncertainty of market demand, management wants to maintain a service level of 3 days inventory supply. To indicate this in your plan, enter 3 into the Target days’ supply field for each month of the plan beginning with the second month in the future. Enter 2-2-5 Create the production plan for product group GR## based on the sales plan and desired target inventory level. Save 2-3

© SAP AG

Disaggregate the production plan for the product group and transfer the product plans for R-F1## and R-F2## to Demand Management for use in detailed production planning.

TERP10

49-6


Value

Product Group

GR##

Plant

1000

Version

7##


Selected

From Date

Today’s date

Invisible Transfer

Not selected

Active Indicator

Selected

2-3-4 Execute the transfer by clicking on the Transfer Now button. 2-3-5 By deselecting the Invisible Transfer indicator the disaggregation results are presented on another screen allowing the planner to modify the results before saving them manually to demand management. Review the results for R-F1## and then Save. The results for R-F2## are displayed. Save the results for R-F2##. 2-3-4 Display the Stock Requirements list for R-F1##, plant 1000. Examine the results. Are the planned independent requirements covered by planned orders?

© SAP AG

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2-4


NETCH


2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1


Deselect


Deselect


Deselect

Simulation mode

Deselect

2-4-1 How many materials were planned? __________ 2-4-2 Were planned orders and dependent requirements created? __________ 2-5

Display the MRP list for R-F1##, plant 1000. Examine the results. 2-5-1 Are all the independent requirements covered by planned orders? __________ 2-5-2 What is the number of the first planned order? 2-5-3 Select the Expand header details icon to see further planning information for this material.

2-6

Compare the stock / requirements list to the MRP list. 2-6-1 Do differences exist between the two lists? __________ 2-6-2 Why? ________________________________________

2-7

Display the stock / requirements list for R-B1##, plant 1000. What planned order created the first dependent requirement in the list? Is it the same planned order from exercise 2-5-2? _______________________________

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2-8

You want to determine if sales orders consume demand, therefore, enter a sales order for your pump, R-F1##. On the Create Sales Order: Initial Screen, use the following data: Order type

OR

Sales organization

1000


10

Division

00


1000

Ship-to party

1000

PO number

PO-##

Req. deliv. date

Day 15 of Month+3

Material

R-F1##

Order quantity

50

What is the sales order number? __________ 2-9

Display the MRP 3 view of the material master for R-F1## in plant 1000. 2-9-1 What consumption mode is assigned to this item? __________ 2-9-2 What is the backward consumption period? __________ 2-9-3 What is the forward consumption period? __________

2-10

Display the stock / requirements list for R-F1## in plant 1000. Did consumption take place correctly? __________

2-11


2-12

Compare the MRP list (or the stock / requirements list) of R-F1## in plant 1000 to the values you recorded in exercise 2-10. 2-12-1 Has the plan changed? __________ 2-12-2 How? ________________________________________________

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Material Planning: Solutions Unit: Material Planning Topic: Master Data

1-1

First, display the basic data view of material R-F1##. Logistics → Production → Master Data → Material Master → Material → Display → Display Current 1-1-1 Enter the material number. Select Basic Data 1 in the dialog box. Fill in the table below with the values you see on the Basic Data 1 tab. Description

Pump

Base unit of measure

PC (piece(s))

Net weight

250

Unit of weight

KG

1-1-2 What is the material type? Finished Product The material type is displayed in the Title Bar on the screen Select the Back icon to go back to the Initial screen. 1-2

Display other views of R-F1##. Choose Select view(s) then select MRP 2, Work scheduling, Accounting 1 in the dialog box. 1-2-1 The system asks you to enter organizational level data before proceeding. This screen did not appear when you only wanted to see basic data. Why does it appear now? These views are Plant specific; therefore, you must enter a Plant. Enter plant 1000.

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1-2-2 MRP 2 view. What value is assigned to the procurement type field? E (In-house production) Access field level help for the procurement type field. What is the meaning of procurement type? With your cursor placed on the procurement type field, access field level help (F1). The indicator that defines how the material is procured. Close the help window. What are the possible entries for procurement type? With your cursor placed on the procurement type field, access possible entries (F4). E, F, blank, X. 1-2-3 Work scheduling view. What value is assigned to the production scheduler field? 0## What is the total lot size dependent in-house processing time? Setup time .09 days Processing time 20.24 days Interoperation 3.9 day Base Quantity 100 pc Total 24.23 days per 100 pc **results may vary 1-2-4 Accounting 1 view. What value is assigned to the price control field? S (Standard price) What is the moving price? Varies, for example 524.02 per 1 piece What is the standard price? Varies, for example 535.58 per 1 piece What is the currency of these prices? EUR Exit the material master

© SAP AG

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1-3

Change the strategy group in the MRP3 view, of R-F1## and R-F2##, to strategy group 40 Planning with final assembly. Logistics → Production → Master Data → Material Master → Material → Change→ Immediately Material R-F1##. Choose Select view(s) then select MRP 3 in the dialog box. Enter plant 1000. In the strategy group field maintain a value of 40 (planning with final assembly). Save the material master record.

1-4

In the SAP menu open the “Bill of Material” folder. Logistics → Production → Master Data → Bills of Material → Bill of Material What bill of material categories does the system allow? You should see the bill of material categories the system allows in the form of menu folders. Material BOM Equipment BOM Order BOM

1-5

Document structure Functional location BOM WBS BOM

Display the material BOM for R-F1## in Plant 1000, BOM usage 1 (Production). Logistics → Production → Master Data → Bills of Material→ Bill of Material→ Material BOM → Display 1-5-1 What is the component number of item 0010? R-B1## 1-5-2 What is the component quantity and unit of measure? 1 PC 1-5-3 Is this component a stock item? Yes - ICt (Item category) value is L (stock item) 1-5-4 Will this component be valid in the bill on January 1, 2007? Yes (Valid until December 31, 9999) 1-5-5 Does a bill of material exist for this component? Yes - Asm (Assembly) indicator is checked

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1-6

Display the material BOM for component R-B1##. Logistics → Production → Master Data → Bills of Material→ Bill of Material→ Material BOM → Display Or you could double-click on the assembly indicator check mark on the material item overview screen of R-F1## and select Continue. Choose Header icon. 1-6-1 What is the valid from date of this bill of material? 03/07/2002 1-6-2 What is the base quantity and unit of measure of this bill of material? 1 PC 1-6-3 Exit the BOM.

1-7

Display a multi-level BOM explosion report for pump R-F1##, plant 1000. Use BOM application PP01. Logistics → Production → Master Data → Bills of Material → Reporting → BOM Explosion → Material BOM → Multilevel BOM On the Explode BOM: Multi-Level BOM: Initial Screen enter the following data:

Field

Data entry

Material

R-F1##

Plant

1000

BOM Application

PP01

Select Execute.

Write the component numbers, component quantities and units of measure of the multi-level pump bill of material in the boxes below. This will be useful as a reference in future exercises.

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1-7-1 How many single level BOMs are in this structure? Five

R-F1## 1 PC

R-B1## 1 PC

R-B2## 1 PC

R-B3## 1 PC

R-B4## 1 PC

R-T0##

R-T4##

R-T5##

1 PC

1 PC

1 PC

R-T1##

R-T2##

R-T3##

1 PC

1 PC

8 PC

R-F1## DRW 000

Note: Component R-F1## DRW 000 00 referenced on level 1 is a document (ICt –Item Category = D) not a material. Exit the report.

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2-1

The pumps are planned using sales and operations planning. Management plans all pumps overall as one product group. The pumps planned are products R-F1## and R-F2##. Plans for this product group are reviewed by middle management, modified as appropriate and then disaggregated to demand programs for the individual pumps. The overall planning structure is detailed in the diagram below. Product Group GR## All Pumps

Material

Material

R-F1##

R-F2##

Pump

Pump

2-1-4 Create the product group GR## for the pumps. Logistics → Production → SOP → Product Group → Create Enter the following data on the Create Product Group: Initial screen: Field

Data entry

Product Group

GR##

Description

Group ## Pumps

Plant

1000

Base Unit

PC

Members


Enter On the Create Product Group: Maintain Members (Materials) screen, enter the material numbers R-F1## and R-F2## in the Member number field, and plant number 1000 in the Plnt field. Assign a proportion factor of 60% to R-F1## and 40% to R-F2##. Save

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2-2

Create a sales and production plan for Product Group Gr##. Logistics → Production → SOP → Planning → For Product Group → Create 2-2-1 On the Create Plan: Initial Screen, enter product group GR## and plant 1000, then choose the enter icon. 2-2-2 On the dialog box that appears, enter 7## in the version number and “Version 7##” in the version description, and then select the enter icon to get to the Create Rough-Cut Plan screen. 2-2-3 Create a sales plan. Starting with the second month into the future (i.e., if this is September, the second month into the future is November), enter the following information into the sales row of the planning table: Month

Sales value

Month + 2

200

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month + 7

175

2-2-7 Due to uncertainty of market demand, management wants to maintain a service level of 3 days inventory supply. To indicate this in your plan, enter 3 into the Target days’ supply field for each month of the plan beginning with the second month in the future. Enter 2-2-5 Create the production plan for product group GR## based on the sales plan and desired target inventory level. Edit → Create productn plan → Target days’ supply Save 2-3

Disaggregate the production plan for the product group and transfer the product plans for R-F1## and R-F2## to Demand Management for use in detailed production planning. Logistics → Production → SOP → Disaggregation → Transfer Product Group to Planning

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Value

Product Group

GR##

Plant

1000

Version

7##


Selected

From Date

Today’s date

Invisible Transfer

Not selected

Active Indicator

Selected

2-3-4 Execute the transfer by clicking on the Transfer Now button. You will get a warning message “Planning Version to be Transferred is not the active version” Select enter to clear the warning message and proceed with the data disaggregation and transfer. 2-3-5 By deselecting the Invisible Transfer indicator the disaggregation results are presented on another screen allowing the planner to modify the results before saving them manually to demand management. Review the results for R-F1## and then Save. The results for R-F2## are displayed. Save the results for R-F2##. In reviewing the result of the transfer you will notice the 60% of the product groups production plan has been assigned to product R-F1## and 40% to RF2##. 2-3-4 Display the Stock Requirements List for R-F1##, plant 1000. Examine the results. Logistics → Production → MRP → Evaluations → Stock/ Requirements List Are the planned independent requirements covered by planned orders? No – because MRP has not been run.

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2-5


NETCH


2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1


Deselect


Deselect


Deselect

Simulation mode

Deselect

Choose Enter and confirm your input parameters, then choose Enter again to start MRP. When MRP is finished, a results screen should appear. 2-4-1 How many materials were planned? 10 2-4-2 Were planned orders and dependent requirements created? Yes Exit the results 2-5

Display the MRP list for R-F1##, plant 1000. Examine the results. Logistics → Production → MRP → Evaluations → MRP List 2-5-1 Are all the independent requirements covered by planned orders? Yes 2-5-2 What is the number of the first planned order? Varies for example 31354 2-5-3 Select the Expand header details icon to the left of the material in the header to view further planning information for this material.

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2-6

Compare the stock / requirements list to the MRP list. From the MRP list select Goto → Stock/requirements list comparison 2-6-1 Do differences exist between the two lists? No 2-6-2 Why? No planning or execution activity has taken place on this material since the MRP run. Exit the MRP list

2-7

Display the stock / requirements list for R-B1##, plant 1000. What planned order created the first dependent requirement in the list? Logistics → Production → MRP → Evaluations → Stock/Requirements List On the left hand side of the first dependent requirement, select the Details of element icon. Yes, it is the same planned order from exercise 2-5-2.

2-8

You want to determine if sales orders consume demand, therefore, enter a sales order for your pump, R-F1##. Logistics → Sales and Distribution → Sales → Order → Create. On the Create Sales Order: Initial Screen, use the following data: Order type

OR

Sales organization

1000


10

Division

00

Enter On the Create Standard Order: Overview screen, enter the order information:

© SAP AG

Sold-to party

1000

Ship-to party

1000

PO number

PO-##

Req. deliv. date

Day 15 of Month+3

Material

R-F1##

Order quantity

50 TERP10

50-10

Enter If an information message appears concerning the invoice date choose Enter to acknowledge it. If the Standard Order: Availability Control screen appears, select the Fix qty/date indicator and then select the Complete dlv. button. Save. What is the sales order number? Varies, for example 10197 Look at the bottom of the screen for the sales order number. Exit the screen. 2-9

Display the MRP 3 view of the material master for R-F1## in plant 1000. Logistics → Production → Master Data → Material Master → Material → Display → Display Current 2-9-1 What consumption mode is assigned to this item? 2 (Backward / forward consumption) 2-9-2 What is the backward consumption period? 30 (workdays) 2-9-3 What is the forward consumption period? 30 (workdays) Exit the material master record.

2-10

Display the stock / requirements list for R-F1## in plant 1000. Logistics → Production → MRP → Evaluations → Stock/ Requirements List Did consumption take place correctly? Compare the stock requirements list to the MRP list From the Stock Requirements list select Goto → MRP list comparison. The MRP list Planned Independent Requirements are 50 units higher than the stock requirements list due to the consumption by the sales order. Keep in mind the MRP list shows values as of the last planning run executed (static planning picture) while the stock requirements list presents the current planning situation. Yes, consumption took place correctly. (The planned independent requirement, for month + 3 was reduced by 50 pieces). Exit the Stock Requirements List.

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2-11


2-12

Compare the MRP list (or the stock / requirements list) of R-F1## in plant 1000 to the values you recorded in exercise 2-10. 2-12-1 Has the plan changed? Yes 2-12-2 How? The first planned order’s quantity, for month + 3, was reduced by 50 to cover the planned independent requirement. A new planned order, with a quantity of 50, was created to cover the sales order.

© SAP AG

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Material Planning: Test Your Knowledge 1.

Determine whether this statement is true or false. The consumption-based planning procedures are generally only based on the previous consumptions of the material

2.

Fill in the blanks to complete the sentence. A product group helps in the planning process by grouping products with

3.

The consumption mode defines how the customer order is assigned to the planned independent requirement. List the four modes in which consumption can be carried out. _________________________________________________________

4.

Determine whether this statement is true or false. Basic data in the material master is applicable to the entire company and is stored at the plant level.

5.

What are the options for executing a MRP run? _________________________________________________________

6.

What is the difference between the make-to-stock planning strategy 10 and the planning with final assembly strategy 40?

7.

Determine whether this statement is true or false. During a MRP run, the quantity of a planned order is determined by the cost of the material.

8.

© SAP AG

What is the difference between a regenerative MRP run and a net change MRP run?

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Material Planning: Answers 9.

Determine whether this statement is true or false. The consumption-based planning procedures are generally only based on the previous consumptions of the material Answer: True As opposed to MRP, consumption-based planning procedures are only based on material consumption. External requirements such as sales orders, planned independent requirements, and reservations, are generally not relevant to planning.

10.

Fill in the blanks to complete the sentence. A product group helps in the planning process by grouping products with Answer: similar characteristics The product group groups together products with similar characteristics.

11.

The consumption mode defines how the customer order is assigned to the planned independent requirement. List the four modes in which consumption can be carried out. Answer: Backward consumption, Forward consumption, Backward/Forward consumption, and Forward/Backward consumption Backward consumption The customer requirement consumes the planned independent requirement that lies closest to it in the past. If the quantity cannot be completely covered by the planned independent requirement, then the remainder is assigned to the next one further in the past. This continues until the entire quantity is consumed, or the backward consumption period is reached. Forward consumption The customer requirement consumes the planned independent requirement that lies closest to it in the future. If the quantity cannot be completely covered by the planned independent requirement, then the remainder is assigned to the next one further in the future. This continues until the entire quantity is consumed, or the forward consumption period is reached. Backward/Forward consumption Backward consumption logic is used first. If the quantity cannot be consumed, then forward consumption logic is used. Forward/Backward consumption Forward consumption logic is used first. If the quantity cannot be consumed, then backward consumption logic is used.

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12.

Determine whether this statement is true or false. Basic data in the material master is applicable to the entire company and is stored at the plant level. Answer: False Basic data in the material master is applicable to the entire company, but is stored at the client level. Basic data includes the material number, the material group, the unit of measure, and conversion factors for alternative units of measure.

13.

What are the options for executing a MRP run? Answer: Single-item planning (single-level, multi-level, or interactive) Total planning online Total planning in the background

14.

What is the difference between the make-to-stock planning strategy 10 and the planning with final assembly strategy 40? Answer: In make-to-stock planning strategy 10, planning is based only upon planned independent requirements. Sales orders are ignored. In planning with final assembly strategy 40, however, planning is based upon the greater of planned independent requirements or sales orders.

15.

Determine whether this statement is true or false. During a MRP run, the quantity of a planned order is determined by the cost of the material. Answer: False The quantity of a planned order is determined by the lot size key defined in the material master record.

16.

What is the difference between a regenerative MRP run and a net change MRP run? Answer: In a regenerative planning run, all materials are planned, whereas in a net change planning run, only those materials that have undergone a change relevant to MRP are planned.

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Manufacturing Execution

Contents: z Organizational Levels z Master Data z Manufacturing Execution

 SAP AG 2004

© SAP AG

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Manufacturing Execution: Unit Objectives

At the conclusion of this unit, you will be able to: z Describe the different manufacturing processes of discrete, repetitive, and process manufacturing z Identify the organizational levels used by manufacturing execution z Understand the master data used by manufacturing execution z Perform manufacturing execution activities z Identify the integration points with Materials Management, Financial Accounting, Controlling, and Sales and Distribution z Review production performance using information systems and cost management reports  SAP AG 2004

© SAP AG

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Manufacturing Execution: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

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Manufacturing Execution: Business Scenario

z In your enterprise, Marketing creates sales forecasts for products or product groups. Material Planners, then create a material plan based upon these sales plans. The output of manufacturing planning is the input of manufacturing execution. Manufacturing produces the finished products and subassemblies based upon the manufacturing plan. As a project team member, you need to understand the manufacturing execution process.

 SAP AG 2004

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Organizational Levels and Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the organizational levels used in the Manufacturing Execution z List the master data used by Manufacturing Execution

 SAP AG 2004

© SAP AG

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mySAP ERP Operations: Manufacturing – Production Types (1) Make-to-order prod. Lot Lot

z Order-controlled production with production order

Lot

Work center

Process manufacturing

z Order-controlled production with process order

Resource

Repetitive manufacturing

z Period and quantity-oriented production z Not order-related

Production line

 SAP AG 2004

Depending on the manufacturing process, product complexity, stability of production and further criteria, a manufacturing company has various requirements with regard to shop floor control. For this reason, mySAP ERP Operations supports a variety of production types.

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mySAP ERP Operations: Manufacturing – Production Types (2) Project-oriented production

z Project-oriented production with production lots

Sales order

Production lot 07/15

08/20

Kanban

l ful

l ful

em pty

full

z Replenishment-controlled using stock transfer, external procurement, in-house production via self-controlled control cycle

Kanban

 SAP AG 2004

© SAP AG

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Organizational Levels in Manufacturing The SAP manufacturing execution business process uses the following organizational levels:

z Client

z Company Code

z Plant

z Storage location  SAP AG 2004

Organizational Elements are structures that represent the legal and/or organizational views of an enterprise. You can design your company structure based on your business processes. The manufacturing planning and execution process uses the following organizational elements: y Client – all manufacturing organizational elements exist within a client. y Company code - represents an independent accounting unit. Balance sheets and Profit & Loss Statements, required by law, are created at the company code level. y Plant - an organizational element within a company. A plant produces goods, renders services, or makes goods available for distribution. A plant can be a manufacturing facility or a warehouse distribution center. y Storage location – an organizational element within a plant. A storage location identifies the general area in the plant where material is stored. Plants can have multiple storage locations.

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Master Data for Manufacturing Execution (1) Master data for material (product and components)

Material

BOM

BOM

Master data for work center/resource (standard value key, available capacity, formulas, activity types)

Work Center/Resource

Task Lists

PRTs

Material or order BOM

Task List

Operations, standard values, control key, trigger points Master data for PRT (material, equipment, document, misc.)

 SAP AG 2004

The material to be produced must have the procurement type in-house production (X,E). The BOMs are single-level BOMs. A special selection procedure chooses the valid BOM. Task lists can be routings, rate routings, or master recipes. Work centers or resources are assigned in the routing of the operations. Production resources/tools are assigned in the routing of the operations.

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Master Data for Manufacturing Execution (2) Production Version

Master data for production versions (task lists and BOMs)

Batch

Unique specifications for a Material

 SAP AG 2004

Production versions contain data relevant to all manufacturing environments. A batch is a quantity of material produced during a given production run.

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Material Master: Primary Views

Basic Data

Purchasing

MRP

Sales

Stocks in plant/ storage location

Work scheduling

St

t

A B


Material Master

Quality management

Storage

Forecasting


Classification

 SAP AG 2004

The material master represents the central source for releasing material-specific data. It is used by all of the SAP Logistics components. The stored data can be used by all areas, such as purchasing, inventory management, materials planning, invoice verification, and so on. The MRP (Planning) and Work Scheduling (Execution) views must be maintained for manufacturing. Basic Data, Accounting, Quality Management, Forecasting, Purchasing, and Classification data is used by various manufacturing planning and execution processes.

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Bills of Material (BOM) Pump P-100

BOM PUMP 0010

Material

P-100

Plant

1000

Usage

0020

Base quantity

Pump

1 Production 1 pc

Item 0030

0040

0010

100-100

Casing

1 pc

0020

100-200

Fly wheel

1 pc

0030

100-300

Hollow shaft

1 pc

0040

100-400

Electronic turbo-drive

1 pc

0050

100-130

Hexagon head screw

8 pc

z Bills of material are single-level z Items of a bill of material can themselves contain a further bill of material  SAP AG 2004

The BOM contains the assemblies or components, that are to be included in the production of a material. SAP BOMs can be transferred to SAP APO in the form of production process models (PPMs). BOMs are used in Material Requirements Planning, production, procurement and for product costing. A BOM consists of a BOM header and the BOM items. The base qauntity in the BOM header specifies to which amount of the finished product the item quantities refer. Bills of material are single-level. An item of a BOM can itself also contain components. In this way, multilevel production is described using the single-level BOMs of the finished product and those of the assemblies and where required, using the BOMs of the assemblies of the assemblies and so on. A BOM can also contain documents or text items in addition to stock items that are required for the finished product.

© SAP AG

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Bills of Material Structure BOM Structure BOM PUMP

Header

Material

P-100

z Status

Plant

1000

z Description

Usage Base Quantity

1

z Validity

1 pc

z Lot size area

Item 0010

100-100

1 pc

Items

0020

100-200

1 pc

z Item category

0030

100-300

1 pc

z Descriptions

0040

100-400

1 pc

z Quantities

0050

100-130

8 pc

z Control data

for example, Stock item Non-stock item Variable-size Item Document item

 SAP AG 2004

The settings that apply for the whole BOM can be found in the BOM header. BOM usage determines the business applications for which a BOM can be used. The status of the BOM controls whether the BOM is active for particular applications (MRP, for example). Multiple BOMs, which consist of multiple alternative BOMs, can also exist in addition to simple BOMs. The different alternative BOMs can then be valid for each of the different lot-size areas, for example. Components necessary for the production of the finished product are entered as items of the BOM. The item category specifies what kind of item you are dealing with: Stock items are executed in the warehouse and are used in production. In contrast, non-stock items are directly assigned to a manufacturing order (and not via the warehouse). Variable-size items contain variable-size data (a steel sheet with a certain surface area, for example) and finally, document items contain a supplementary document that describes production (a kind of design and construction diagram). Individual items themselves can also bear a multitude of further settings, which then only refer to the respective item.

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Work Center (Resource) Data Basic data

Capacities

Name and description Person responsible Task list usage Basic data General data Standard value key

Available capacity Formula key

Default values

Scheduling

Control key Standard text key Wage data

Scheduling basis Formula key

Cost center

HR assignment

Cost center Activity types Formula key

People Positions Qualifications

 SAP AG 2004

Resource-related data is maintained on several screens. The graphic above shows some of the most important resource data. On the Basic Data screen, you define a person or group of persons responsible for the maintenance of the master data of this resource. By defining the task list usage, you also specify the task list types (such as routing, rate routing, master recipe, equipment task list, or inspection plans) in which the resource can be used and whether the resource can be used in orders. By entering a standard value key, a resource is assigned standard values for operations in routings, rate routings, master recipes or production/process orders to be executed at this resource. A standard value is a planned value used to carry out an operation, such as the execution time. Standard values are used in costing, scheduling, and capacity requirements planning in order to calculate costs, execution times, and capacity requirements. You can enter default values for the operation to be executed at a resource. When you maintain the operations in the routing, rate routing, master recipe or production/process order, the system copies or references this information. By assigning a cost center to a resource, you link the resource to cost accounting and can now carry out product and order costing. You can define the specific output of a resource, by assigning activity types assigned to this cost center, to the resource. Available capacities of resources are the basis for scheduling process orders. They are also required for capacity requirements planning and shop floor control. In order to calculate the execution of an operation during process order scheduling, the available capacity of exactly one of several possible resource capacities is defined as the basis for scheduling. To calculate costs, execution times, and capacity requirements of phases carried out at a resource, a suitable formula key is entered in the corresponding screens.

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Routings Production of Pump P-100 Routing PUMP Material

P-100

Pump

Task list group

50000222

Group counter

01

Pump (standard process) Plant Work Operatn. center

Work center

Work center

Work center

Work center

Work center

1310

1320

1906

1904

1905

1000 Times

Description

0010

1310

Staging according to pick list

5 min. fixed

0020

1320

Press flywheel in casing

10 min. per 1 pc.

0030

1906

Paint casing

15 min. per 1 pc.

0040

1904

Mount shaft in casing

20 min. per 1 pc.

0050

1905

Final assembly pump

10 min. per 1 pc.

 SAP AG 2004

Routings contain the steps that are necessary for production, that is, the corresponding operations, their sequence and the work centers in which these operations are to be executed. SAP R/3 routings can be transferred to SAP APO in the form of production process models (PPMs). An SAP R/3 routing can be defined using the routing group and the group counter. Moreover, the routing contains reference to the material whose production it describes. A routing can contain parallel or alternative sequences in addition to the standard sequence. Alongside the standard values, the routing also contains the time elements that are relevant for scheduling operations. Therefore you need to make sure that each operation in the routing can contain its own base quantity, to which these time elements can refer.

© SAP AG

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Routings and Work Centers Scheduling via Routing and Work Center Routing PUMP Operation 30

Paint Casing Work center 1906

Setup

Machine HR Variable1

...

Cap.

Schedul. formula

Standard value

001

Scheduling basis

002 Operation standard values implemented in the scheduling formulas of the work center result in:

5 min. 1. Setup 15 min.

z Fixed time elements (independent of lot size) z Variable time elements (dependent on lot size)

2. Processing 3. Tear down

 SAP AG 2004

A work center is assigned to an operation. Using its standard value key, the work center specifies which time elements (standard values) can be taken into consideration during planning (for example, setup time, machine time, personnel time). The scheduling formulas stored in the work center define the duration from the allowed time elements in the routing. Setup, processing and tear down of an operation are each described using a corresponding formula. The steps for which a formula is stored are executed (for example, tear down may not be necessary). If several capacities are stored in a work center, the scheduling basis is used to determine which of these capacities is relevant for scheduling.

© SAP AG

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Routings and Bills of Material Component Assignment in Routing Material master PUMP Production version 0001 Routing Op. 10 Op. 20

z Procurement and consumption of components occur at the beginning of the processes to which they are assigned Manufacturing order PUMP

BOM Mat. PUMP Mat. A

Op. 10

Mat. B

Op. 30

Mat. C

Mat. A

Op. 20

Op. 30

Mat. B Mat. C

Component assignment in routing

Time

 SAP AG 2004

Production is described via a routing and a BOM. For this reason, BOM components can be assigned to a certain operation. The procurement of these components is then planned at the beginning of the particular operation. Component assignment is dealt with in the routing. BOM components that are not explicitly assigned are considered as being assigned to the first operation. In addition to BOM components, production resources/tools can also be assigned in the routing. Production resources/tools are operating facilities that are not location-bound, but that are necessary for production, such as a measuring instrument or a support.

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Production Versions

Material master record Production version 1 Production version 2 Routing

z Receiving storage location (assembly) z Proposed issue storage location (components) Describes the production procedure

 SAP AG 2004

The production version contains data relevant to all manufacturing environments. This following data is included in a production version: y The fields "Valid from" and Valid to" define the period of validity of the production version. y The "To location" is the proposed receiving storage location. y The fields "BOM alternative" and "BOM usage" define which BOM is to be used in manufacturing. y The task list fields for detailed, rate-based and rough-cut planning. Usually, you enter a group and a group counter in the rate-based planning fields. The values entered are used for scheduling and capacity planning. y The fields "From lot size" and "To lot size", define the area of validity for this version. y The field, "production line" defines the work center (production line) for assigning production quantities in the repetitive planning table. In repetitive manufacturing (in the planning table), the system only displays the capacity requirements for this work center. To be able to carry out capacity planning, this production line must exist in the routing. The creation of a production version is mandatory for repetitive manufactured products. Production versions are optional for discrete and process manufactured products.

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Material and Batch Batch z Partial quantity of a material that is managed separately from other quantities of the

same material in stock. z A quantity of a material produced during a specific production run, which therefore

represents a non-reproducible, homogeneous unit with unique specifications. Values:

Material Vanilla ice cream x Batch mgmt reqmt

Batch C1

Acidity: Total solids: Freezing point:

Batch C2

7 - 9 pH 35 - 45 % (-18o) - (-14 o)C

Batch B3

For process order 60114



Specifications:

Specifications:

Specifications:

Acidity: Total solids: Freezing point :

7 pH 36% -18oC

Acidity: Total solids: Freezing point :

9 pH 38% -19oC

Acidity: Total solids: Freezing point:

8 pH 34% -17oC

 SAP AG 2004

In the SAP System, batch master records always depend on their corresponding material master records. Batches are created for a material. In general, the data of a material master is valid for all batches assigned to it. In contrast, a batch master record contains data that uniquely identifies a batch and characterizes it as a non-reproducible unit. The characteristic batch specifications are assigned using characteristics from the classification system in the material master and are inherited by the corresponding batch master records. If a material is to be produced and managed in batches, the batch management requirement indicator must be set in the material master record. A batch master record is usually created by the system in the background for certain business operations (such as goods receipt). Users can also create batch master records directly in master data maintenance.

© SAP AG

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Master Data: Topic Summary

You are now able to: z Describe the organizational levels used in the Manufacturing Execution z List the master data used by Manufacturing Execution

 SAP AG 2004

© SAP AG

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Manufacturing Execution – Discrete: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the basic steps used in producing a product with production orders z Create a production order, process inventory transactions, and report production confirmations z Describe the process of order settlement z Identify the integration points with Materials Management, Financial Accounting, Controlling, and Sales and Distribution z Review production performance using information systems and cost management reports Note: See the Appendix for examples of Repetitive (Orderless) or Process Order Production Execution  SAP AG 2004

This topic covers the basics of manufacturing products using production orders.

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Application Areas for Production Orders Typical industries

PRODUCT COMPLEXITY

Machinery, automobile, engineering, consumer goods, construction, wood products, electronics, aerospace

Special design

Make-toorder

Assembly/ assemble from catalog

Production by lot size

Periodoriented

Mass production

PRODUCT STABILITY  SAP AG 2004

Production orders are used in a variety of industries. Production orders can be used in a number of production types. These production types are mostly dependent on the product stability, product complexity and production process used.

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Sales

Demand program

Plnd ind. reqmts

Sales orders

MRP

Planned orders

Costing

Material forecast

Make-to-order prod.

Stock B A C D E

Production orders Order execution

Delivery to stock Order settlement Archiving Integration with QM

Inventory mgmt

Capacity Requirements Planning

Application-Wide Processes

Integration with PDC

 SAP AG 2004

Production order management is a central part of a complex process chain starting with an independent requirement (planned or customer requirement) and ending with the goods issue of a finished product. Production order management controls the whole process of in-house production of products and is integrated in the functions of capacity requirements planning, costing and inventory management. Furthermore there are links or interfaces to quality management as well as external systems. Production order management uses the following system elements: ALE, workflow, Customizing, text processing, factory calendar, classification, communication, and graphics.

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Production Order Processing Archiving/ deleting

Order request 1

16

Order settlement

Order creation 2

15 14

Variance calculation Goods receipt (1) WIP determination

Order header

3

Operations

13

Availability checks (1) 4

Material components

12

5

Production Tools Costs

11

•Plan •Target •Actual

6

100 20 50

Confirmation (1)

7 10

Upload from PCD system

8 9

Machine reservation Order release (1) Download to PDC system Order print (1)

Material staging

Material withdrawal posting (1)

 SAP AG 2004

The production order goes through a number of individual activities. Many of these activities can run automatically or in the background so that manual processing of orders is minimized. WIP determination, variance calculation, and settlement are generally periodic work for Cost Object Controlling, which are usually processed in the background. A number of settings available in Customizing allow you to successfully perform each step in order processing. (1) These functions can be automated.

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Elements of a Production Order Order header ● Order number ● Plant ● Production scheduler Operation sequences ● Standard sequence ● Other sequences Operations ● Work center ● Control key ● Standard values

Capacity splits ● Individual machine ● Individual person

Settlement rule ● Settlement profile ● Settlement receiver

Costs ● Planned ● Actual

Document link ● Doc. number ● Doc. type

Material components ● Material number ● Quantity ● Requirements date PRTs ● PRT number ● PRT category ● Number of PRTs Trigger points ● Functions Confirmations ● Quantities ● Times

Order-related COC

 SAP AG 2004

The order structure represented can be enhanced by certain elements. At least one operation is required. If necessary, the system creates one automatically. You have the choice of whether to assign material components, production resources/tools and trigger points to the operation. You can create several (parallel) operation sequences. You can make a selection from several alternative sequences. Suboperations are permitted within an operation. Costs are determined at operation level, submitted at order header level and a settlement rule is created for the orders only for order-related COC. You can link production orders to documents in the Document Management System (DMS)

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Order Creation Options Create without routing and BOM

Create with routing and BOM Plan

Order

Order

Material BOM Create with routing Plan

Order Create with planned order Planned order Order Plan

 SAP AG 2004

Operations, material components and PRTs are usually taken from the routing and the BOM. You can enter data manually. When a planned order is converted, the BOM is not reread. If not otherwise specified in the routing, the components of the BOM are assigned to the first operation.

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Order Release Functions Order header Operations

Order creation

Material components Production Tools Costs


100 20 50

Scheduling, Machine, Reservation

Availability check (Material, Capacity, PRT)

Order release

Print document

Material withdrawals

Processing

Confirmation

Goods receipts

Settlement

 SAP AG 2004

The order release is the basis for the processes that follow the production order (printing order documents, material withdrawal, and so on). Production orders are managed via status. When an order is released, a status is set accordingly. An availability check can be executed automatically. You can release an individual operation, a whole order or several orders together. A function is also available for the mass release of operations or orders (see the section "Mass Processing").

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Availability Checks (Material, Capacity, PRT) Order header Operations

Warehouse 1

1

Material components Production Tools Costs


100 20 50

Req. quantity/date

Inspection results

Checking control for production orders

Time 1

Order creation

Time 2

Change

Release

Warehouse 2

Confirmed quantity or capacity Missing part record (index) Status FMAT, FKAP, FFHM (missing part, capacity, ...)

Processing

Confirmation

Goods receipt

 SAP AG 2004

Production orders can be checked individually or with mass processing at different times, manually or automatically. Check instructions control the availability check. Inspection results y Assignment of confirmed quantity (Partial quantities can be confirmed) y Material shortage status y Missing part record

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Production Order: Goods Issue Posting Reservation

Stock quantity Consumption stat. ...

Point of consumption: Order Cost center

G/L accounts Goods Issue G/L accounts: Stock account Consumption acc. ...

Goods issue slip

Material document

Acctg document

Cost acctg document

 SAP AG 2004

The goods issue posting (GI) is executed for a consumption of a material component for a production order. The following functions are executed when a goods issue is posted. y Storage location-related update of stock and consumption fields y Reduction of reservations (for planned withdrawal) y Determination of actual costs (evaluation) and update of order y Generation of material documents, accounting documents and cost accounting documents y The material document describes the goods movement from the materials management (stock) point of view. y The accounting document describes the goods movement from the financial accounting point of view. y The cost accounting documents serve various cost analysis purposes. y When you display the material document, you can branch to the other documents. y A goods issue document can be printed. The GI posting is controlled via a movement type (261), to which each posting refers. This can take place manually or automatically.

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Confirmation Procedures Order-related confirmations

Operation-related confirmations

Confirmations for production order

Time ticket /confirmation slip confirmation

Time event confirmation

z

Start setup

z

Finish setup

z

Start processing

z

Finish processing

Collective/quick entry

Milestone confirmation

Progress confirmation

 SAP AG 2004

There are different confirmation procedures. Each procedure realizes different requirements that a company may have. Depending on the application, one or more procedure may be used. For the most part, the two main types are operation-related and order-related confirmations.

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Production Order: Goods Receipt Posting Reservation

Stock quantity Consumption stat. ...

Trans. requirement

G/L accounts

Goods receipt slip

Goods Receipt G/L accounts: Stock account Consumption acc. ...

Messages

Material document

Acctg document

Cost acctg document

 SAP AG 2004

The goods receipt posting (GR) realizes the stock receipt of a product produced using a production order. The following functions are executed when a goods receipt is posted. y Generation of material documents, accounting documents and cost accounting documents y The material document describes the goods movement from the materials management (stock) point of view. y The accounting document describes the goods movement from the financial accounting point of view. y The cost accounting documents serve various cost analysis purposes. y When you display the material document, you can branch to the other documents. y A goods receipt document can be printed. y Update of the delivered quantity in an order y Evaluation of the receipt y Credit to order y Update of plant activity The GR posting is controlled via a movement type (101), to which each posting refers. This can take place manually or automatically.

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Information Systems for Order Management Info. systems

Basis (1)

Order information system

Multi-level order overview for sales orders

Missing parts - information system

Orders

(1)

Order structure and operations

(1)

Missing part record (index record)

Controlling reports

CO object of order

Business Information Warehouse mySAP BI (BW)

BW InfoCubes

Production information system PPIS as part of R/3 LIS (logistics controlling system)

R/3 LIS Library

 SAP AG 2004

There are several information systems for production orders. They differ in the way they use the order database (directly or indirectly) as well as in their results. Systems marked with (1) are profile-controlled. You set up the profiles in Customizing under Production Control -> Information Systems. If the systems are used for list creation in individual production orders, you can control the profile for each order type in the order type-dependent parameters (T399X). From the systems mentioned above, you can display capacity evaluations, batch where-used lists, and other lists.

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Cost Debit/Credit (Order-Related COC) Order debit z z z z z

Material costs Production costs External activity Process costs Overhead costs (material)

Material withdrawal

Production order M E V X G

Processing

1000 100-100 1421 4230 1310 External processing 300900 Surcharge, raw material

12,000 25,000 8,000 12,000 8,500

Goods receipt

Confirmation

Order settlement

Archiving/ deleting

Credit production order WE valuation control

Settlement profile z

Material stock account (quantity * standard/price it. valuation variant) Plant activity account (quantity * price it. valuation variant)

z

Actual costs at time of settlement

z

z

z z

Settlement receiver Distribution rule Settlement parameter Settlement account (acc. to allocation structure) Plant activity account Difference account

 SAP AG 2004

The manner in which a production order is credited and debited depends on the variant of cost object controlling (COC) selected in Controlling. Both order-related and product-related execution is possible. Order settlement credits the order. Settlement is usually periodic. It is controlled via a settlement profile. It makes sense to use order-related COC for the following: y Flexible production environment y Flexible product range y Cost management of individual production lots y If cost controlling is required for each order y High setup costs y Manufacture of co-products For in-house production of materials, it is generally best to use standard price control. For more information about cost object controlling, see the courses AC510 or AC515.

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Period-End Closing: Settlement Production Order Period Accounting Revenues – Sales deductions – Total costs incl. Variances +/-Stock - WIP Changes

Material: Pump COCOPC Quantity produced: 10 pcs. Actual Costs Actual Costs 2,400,Stock Change -2,000,Variances 400,-

= Profit in period

BY COMPANY

Cost-of-Sales Accounting

BY PROFIT CENTER

SETTLEMENT

Revenues – Sales deductions – Cost of goods manufactured (1st and 2nd contribution margin) – Variances = Profit in period

BY COMPANY

BY PROFIT SEGMENT

Postings to Financial & Management Accounting  SAP AG 2004

Settlement makes a Financial Posting only for the work-in-process balance. Settlement makes a Financial and CO posting for the variances. The order/cost collector controlling object is debited/credited for the variance to bring its balance to zero (if appropriate).

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Manufacturing Execution: Topic Summary

You are now able to: z Describe the basic steps used in producing a product with production orders z Create a production order, process inventory transactions, and report production confirmations z Describe the process of order settlement z Identify the integration points with Materials Management, Financial Accounting, Controlling, and Sales and Distribution z Review production performance using information systems and cost management reports

 SAP AG 2004

© SAP AG

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Manufacturing Execution: Unit Summary

You are now able to: z Describe the different manufacturing processes of discrete, repetitive, and process manufacturing z Identify the organizational levels used by manufacturing execution z Understand the master data used by manufacturing execution z Perform manufacturing execution activities z Identify the integration points with Materials Management, Financial Accounting, Controlling, and Sales and Distribution z Review production performance using information systems and cost management reports

 SAP AG 2004

© SAP AG

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Manufacturing Execution: Exercises Unit: Manufacturing Execution Topic: Organizational Levels and Master Data At the conclusion of this exercise, you will be able to: • Display a work center • Display a routing • Assign a material component to an operation within a routing The individual operations to manufacture a pump take place in many work centers. You will examine the master data of one of these work centers. You will also view the listing of individual operations within a routing. Because material components may be needed throughout the manufacturing process, you will assign a material to an operation. 1-1

Display the basic data view of work center R-M## in Plant 1000. 1-1-1 What are the five work center tabs that are displayed? ____________________

____________________

____________________

____________________

____________________ 1-1-2 Review the information on the Basic data tab. What is the standard value key at this work center? ________________________________ 1-1-3 What are the standard value parameters associated with the standard value key?

1-2

____________________

____________________

____________________

____________________

____________________

____________________

Go to the Costing tab. To which cost center is this work center allocated? _____________________________

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1-3

Select the Capacities tab. What is the capacity category and description assigned to this work center? (Note: more than one capacity category can be assigned to a work center). ____________________ 1-3-1 What factory calendar ID is assigned to this work center (for this capacity category)? ____________________________________ 1-3-2 What time does this work center start work each workday, and what time does it finish work (for this capacity category)? ____________________

1-4

____________________

Change the routing for material R-F1##, plant 1000. 1-4-1 What is the status of this routing? __________ 1-4-2 What are the group and the group counter? __________

__________

1-4-3 For what lot size range is this routing valid? __________ to __________ 1-5

Go to the sequence overview screen. 1-5-1 What sequence(s) are listed? __________

1-6

Select the standard sequence line then go to the operation overview screen by selecting the appropriate icon. Fill in the table below with the values you see on the screen. This will be useful as a reference in future exercises. Operation

© SAP AG

Work Center

Description

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1-7

Select the first operation and find: 1-7-1 What is the base quantity and operation unit of measure of this operation? ______________________________________________________ 1-7-2 What is the standard value and unit of measure for the amount of labor required to make the base quantity? ______________________________________ 1-7-3 Note the work center where this operation is performed. Is the list of standard value parameters displayed on this screen the same as those you noted in exercise 1-1-3? __________

1-8

Go to the component allocation – general screen. Components are assumed to be allocated to the first operation. However, we can allocate them to any operation. 1-8-1 What is the first component on the item overview list? __________ 1-8-2 Select the line of the first component, then select the New assignment button and allocate the component to operation 20 (of sequence 0). 1-8-3 Does the operation number appear in the Operation column? 1-8-4 Why might we want to allocate a component to an operation other than the first operation? _______________________________________________________ 1-8-5 Save your routing

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Unit: Manufacturing Execution Topic: Manufacturing Execution Using Production Orders At the conclusion of these exercises, you will be able to: • Convert a planned order to a production order • Perform material issues and receipts • Confirm labor • Process reports using the Order Information Systems Your company uses material requirements planning to create a manufacturing plan. As the production manager, MRP controller or production scheduler, you therefore create a large number of production orders based on planned orders generated by the automatic material requirements planning run. In this exercise, you will convert planned orders into production orders and familiarize yourself with the order structure. You will also release the order, enter goods issue transactions, and perform order confirmations. To be able to analyze the manufacturing data you will run reports using the Order Information Systems.

Please Note:

If you did not complete the Material Planning exercises from Unit 6, then you must complete exercises 2-1 and 2-2. If you did complete the Material Planning exercises from Unit 6, then begin with exercise 2-3.

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2-1

Create the following planned independent requirements for R-F1##, plant 1000.

Month

2-2

Requirement Value

Month + 2

50

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month + 7

175


NETCH


2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1


Deselect


Deselect


Deselect

Simulation mode

Deselect

2-3

From the stock / requirements list of material R-F1## Plant 1000,, convert the planned order with a quantity of 50 into a production order.

2-4

View the production order for R-F1##. 2-4-1 What is the production order number? ______________ 2-4-2 What is the production order total quantity? __________ 2-4-3 What is the first system status displayed? ____________

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2-5

View the components of the production order. 2-5-1 What is the reservation number of the first component? __________ _____ 2-5-2 What movement type is allowed? __________ 2-5-3 Can we issue this component to this production order now? __________

2-6

View the operations of the order. 2-6-1 What is the standard labor value for operation 10? 2-6-2 Is this the same value that was defined in the routing? Refer to exercise 1-72. 2-6-3 How much labor time is required to complete operation 10? __________

2-7

View the order’s settlement rule. 2-7-1 What is the settlement receiver?

2-8

Release the production order. 2-8-1 What is the first system status displayed? __________ 2-8-2 Can we issue the components to this production order now? __________

2-9

Issue components to the production order. Over issue the first component, R-B1##, Casing by one unit. 2-10-1 Is the movement type the same as the one in exercise 2-5-2? __________

2-10

Perform an order confirmation for the full order quantity.

2-11

Display the production order 2-11-1 What is the put in stock quantity? __________ 2-11-2 What is the confirmed finish date? __________ 2-11-3 Was component R-B1## completely issued? __________ 2-11-4 Was operation 10 confirmed for all 50 pieces? __________

2-12

View the order costs. Do the planned raw materials quantities match the actual raw materials quantities? Why or Why not? _____________________________________________________

2-13

© SAP AG

Run a report that lists all of the production orders for materials R-F100 to R-F120 in Plant 1000. Within the report, remove the fields Entered by and Last changed by. Include the fields Material number and Order quantity. Finally, add a grand total of the order quantities. After making these modifications, you would also like to save the report layout.

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Manufacturing Execution: Solutions Unit: Manufacturing Execution Topic: Organizational Levels and Master Data

1-1

Display the basic data view of work center R-M## in Plant 1000. Logistics → Production → Master Data → Work Centers → Work Center → Display Enter Plant 1000 and work center R-M##. 1-1-1 What are the five work center tabs that are displayed? Basic data Capacities Costing

Default values Scheduling

1-1-2 Review the information on the Basic data tab. What is the standard value key at this work center? SAP2 1-1-3 What are the standard value parameters associated with the standard value key? Setup Labor Standard value 2 1-2

Machine Standard value 1 Standard value 3

Go to the Costing tab. To which cost center is this work center allocated? 4230 (Assembly pumps)

1-3

Select the Capacities tab. What is the capacity category and description assigned to this work center? (Note: more than one capacity category can be assigned to a work center). 002 Labor 1-3-1 What factory calendar ID is assigned to this work center (for this capacity category)? Select the Capacity header icon at the bottom of the screen (or double click on the Capacity category field). 01 (Factory calendar Germany standard)

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1-3-2 What time does this work center start work each workday, and what time does it finish work (for this capacity category)? Start 07:00:00; Finish 15:00:00 Select the Exit icon to leave the Work Center. 1-4

Change the routing for material R-F1##, plant 1000. Logistics → Production → Master Data→Routings → Routings → Standard Routings → Change Enter material R-F1## and plant 1000. Select the Header icon (the Hat icon). 1-4-1 What is the status of this routing? Status = 4 (Released (general)) 1-4-2 What are the group and the group counter? Varies…for example 50000792 / 1 1-4-3 For what lot size range is this routing valid? 1 to 99,999,999 PC

1-5

Go to the sequence overview screen. Choose the Sequence overview icon. 1-5-1 What sequence(s) are listed? Standard Sequence

1-6

© SAP AG

Select the standard sequence line then go to the operation overview screen by selecting the appropriate icon. Fill in the table below with the values you see on the screen. This will be useful as a reference in future exercises.

Operation

Work Center

Description

0010

R-R##

Material Staging

0020

R-V##

Press fly wheel in casing

0030

R-L##

Paint Casing

0040

R-E##

Insert hollow shaft in casing

0050

R-E##

Insert control electronics

0060

R-F##

Final assembly of pump

0070

R-P##

Deliver to stock

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1-7

Select the first operation and find: Details → Operation 1-7-1 What is the base quantity and operation unit of measure of this operation? 1 PC 1-7-2 What is the standard value and unit of measure for the amount of labor required to make the base quantity? 10 MIN (per 1 PC) 1-7-3 Note the work center where this operation is performed. Is the list of standard value parameters displayed on this screen the same as those you noted in exercise 1-1-3 ? Yes

1-8

Go to the component allocation – general screen. Components are assumed to be allocated to the first operation. However, we can allocate them to any operation. Choose Comp Alloc icon. 1-8-1 What is the first component on the item overview list? R-B1## 1-8-2 Select the line of the first component, then select the New assignment button and allocate the component to operation 20 (of sequence 0). 1-8-3 Does the operation number appear in the Operation column? Yes 1-8-4 Why might we want to allocate a component to an operation other than the first operation? The component may be needed at an operation other than the first for scheduling, backflushing, etc. 1-8-5 Save your routing Select the Save icon.

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Please Note:

If you did not complete the Material Planning exercises from Unit 6, then you must complete exercises 2-1 and 2-2. If you did complete the Material Planning exercises from Unit 6, then begin with exercise 2-3.

2-1

Create the following planned independent requirements for R-F1##, plant 1000. Logistics → Production → Production Planning→ Demand Management → Planned Independent Requirements → Create Enter the following data on the Create Planned Independent Requirements: Initial Screen Field

Data entry

Material

R-F1##

Plant

1000

Version

00

From / To

Accept the default dates

Enter On the Plnd ind.reqmts Create: Planning Table screen, enter the following data:

© SAP AG

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Month

Requirement Value

Month + 2

50

Month + 3

150

Month + 4

100

Month + 5

150

Month + 6

200

Month + 7

175

Save 2-2


NETCH


2

Delivery Schedules

3

Create MRP list

1

Planning mode

1

Scheduling

1


Deselect


Deselect


Deselect

Simulation mode

Deselect

Choose Enter and confirm your input parameters, then choose Enter again to start MRP. When MRP is finished, a results screen should appear. Exit the MRP results screen. 2-3

From the stock / requirements list of material R-F1##, Plant 1000, convert the planned order with a quantity of 50 into a production order. Logistics → Production → MRP → Evaluations → Stock/Requirements List Double click on the planned order with a quantity of 50 in the list. Select the Convert Planned Order to Production Order icon. The system will display the production order header. Save.

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2-4

View the production order for R-F1##. First, select the Refresh icon on the stock / requirements list display. The planned order has become a production order. (Note: because the system processes some tasks asynchronously, this may take a few moments). Double-click on the production order line, and then select the Change Element icon. 2-4-1 What is the production order number? Varies, for example 60002045 2-4-2 What is the production order total quantity? 50 pieces 2-4-3 What is the first system status displayed? CRTD (Created)

2-5

View the components of the production order. Select the Component overview icon from the “Production order Change: Header screen”. Select the first component, and then select the Component Detail icon on the bottom of the screen. Review the General data tab and answer the following questions. 2-5-1 What is the reservation number of the first component? Varies, for example 20734 2-5-2 What movement type is allowed? 261 (GI for order) 2-5-3 Can we issue this component to this production order now? Look for the Movement allowed box by scrolling down to the bottom of the General data tab. No (The Movement allowed box is not selected)

2-6

View the operations of the order. Select the Operation Overview icon. 2-6-1 What is the standard labor value for operation 10? Select operation 10, then Operation details icon at bottom of the screen. Select the StandardVals tab. 10 Min 2-6-2 Is this the same value that was defined in the routing? Refer to exercise 1-72. Yes. When a production order is created the default data from a product’s routing is copied to the order. 2-6-3 How much labor time is required to complete operation 10? Select the Qty/Activities tab. 8.333 hours (50 pieces times 10 minutes per piece divided by 60 minutes)

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2-7

View the order’s settlement rule. Select the Order Header icon then Header →Settlement Rule 2-7-1 What is the settlement receiver? R-F1## Select the Back icon to exit the Settlement Rule. Remain in the production order.

2-8

Release the production order. Functions → Release (or the Release icon). 2-8-1 What is the first system status displayed? REL (Released) 2-8-2 Can we issue the components to this production order now? Yes Save the production order. Exit the Stock Requirements List.

2-9

Issue components to the production order. Over issue the first component by one unit. Logistics → Materials management → Inventory management→ Goods Movement → Goods Issue (MIGO) In the Transaction field, which is the first dropdown box, select Goods Issue. In the Reference field, which is the second dropdown box, select Order. In the third field, enter your production order number from exercise 2-4-1. Enter Select the Close Detail Data button to collapse the detail data section. Verify the movement type in the upper right hand corner of the screen. 2-9-1 Is the movement type the same as the one in exercise 2-5-2? Yes Change the quantity of the first component, R-B1##, Casing to 51. Select the OK indicator for all the components. Select the Save or Post icon.

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2-10

Perform an order confirmation for the full order quantity. Logistics → Production → Production Control → Confirmation → Enter → For Order Enter the production order number. This is a final confirmation for the full order quantity. You are confirming the full order quantity. Select the Final conf. icon. Yield to confirm = 50 Select Save. Note the message at the bottom of the screen. A goods movement transaction occurred. This was the goods receipt of the finished pump into stock. The goods receipt took place because this action was specified in the routing.

2-11

Display the production order. Logistics → Production → Production Control → Order → Display Enter the production order number, choose Enter, and then answer the following questions: 2-11-1 What is the delivered quantity? 50 Pieces 2-11-2 What is the confirmed finish date? Today’s date 2-11-3 Was component R-B1## completely issued? From the component overview screen, select component R-B1##, then the Component detail icon Yes (Withdrawal quantity = 51 pieces) 2-11-4 Was operation 10 confirmed for all 50 pieces? __________ From the operation overview screen select operation 10, then the Operation details icon, then the Qty / activities tab Yes (Confirmed yield = 50 pieces)

2-12

View the order costs. Goto → Costs → Analysis. Do the planned raw materials quantities match the actual raw materials quantities? Why or Why not? No, the actual raw material quantity for the Casing is greater by 1 piece. This is because an additional Casing was issued to the production order. Exit the production order.

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2-13

Run a report that lists all of the production orders for materials R-F100 to R-F120 in Plant 1000. Within the report, remove the fields Entered by and Last changed by. Include the fields Material number and Order quantity. Finally, add a grand total of the order quantities. After making these modifications, you would also like to save the report layout. Logistics → Production → Production control → Information System → Order Information System On the Production Order Information System screen, enter the following data: Field

Data entry

List

Order Headers

Profile

Standard Profile

Material From

R-F100

Material To

R-F120

Production Plant

1000

Select the Execute icon. To add and delete fields, select the Layout Settings icon and then Change Layout. In the Change Layout dialog box, under Columns, select Entered by and Last changed by fields. To select both fields at the same time, hold down the Ctrl key. Select the Hide selected fields button. Under Column Set, select the Material Number and Order quantity (GMEIN) fields. Select the Show selected fields button. Select Enter. Within the report drag the Material Number field to the right of Material Description. To add a grand total, first sort the report by order number. Select the Order column, and then select the Sort in ascend. ord icon. Then select the Total order quantity column, by clicking on the column header, and select the Aggregation icon. To save the report layout, select the Layout Settings icon and then Save Layout.

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Enter the following data: Field

Data entry

Save Layout

TERP10-##

Name

Group ## Layout

User Specific

Selected

Exit the report. Rerun the report using the same selection criteria. Within the report, select the Layout Settings icon and then Select Layout. Select your layout. Exit the report.

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Manufacturing Execution: Test Your Knowledge 1.

Determine whether this statement is true or false. The structure of a routing contains operations to be performed.

2.

Why does a production order need to be released?

3.

What do the elements of a production order define? _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________

4.

Determine whether this statement is true or false. Standard operating times for an operation are defined in the work center.

5.

Fill in the blanks to complete the sentence. ______________ is when the actual costs incurred for the order are settled to one or more receivers.

6.

Determine whether this statement is true or false. Order confirmation is used for entering activities carried out within your company for an order.

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Manufacturing Execution: Answers 7.

Determine whether this statement is true or false. The structure of a routing contains operations to be performed. Answer: True Operations to be performed are contained in the routing.

8.

Why does a production order need to be released? Answer: Order release is necessary so that subsequent processes, such as printing the shop floor documents, component withdrawal, and order confirmations may occur.

9.

What do the elements of a production order define? Answer: The elements of a production order define what, when, and how much is produced; on which work center production occurs; and the costs involved in production.

10.

Determine whether this statement is true or false. Standard operating times for an operation are defined in the work center. Answer: False Standard operating times are defined in the routing. The work center, however, controls what parameters, such as setup time, labor, are maintained within the routing.

11.

Fill in the blanks to complete the sentence. ______________ is when the actual costs incurred for the order are settled to one or more receivers. Answer: Order Settlement is when the actual costs incurred for the order are settled to one or more receivers.

12.

Determine whether this statement is true or false. Order confirmations are used for entering activities carried out within your company for an order. Answer: True

Order confirmations are used for entering activities carried out within your company for an order.

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Procurement Cycle

Contents: z Organization levels and master data z Procurement cycle z Reporting

 SAP AG 2004

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Procurement Cycle: Course Overview Diagram TERP10


 SAP AG 2004

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Procurement Cycle: Unit Objectives

At the conclusion of this unit, you will be able to: z Identify the organizational levels and master data that support the procurement process z Perform the procurement cycle for stock and consumable materials including purchase requisitions, purchase orders, goods receipt, invoice receipt, and vendor payment z Identify the integration points with Financials, Production Planning, Plant Maintenance, and Project Systems z Identify the reporting and analysis tools used in Procurement

 SAP AG 2004

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Procurement Cycle: Business Scenario

z In your enterprise employees purchase both stock and non-stock materials. Vendors deliver the materials to your plant locations. Warehouse personnel receive the material using good receipts transactions. Accounts Payable personnel enter the vendor’s invoice which creates a vendor open item. This open item is then closed during payment processing. As a project team member, you will identify the steps in the SAP Procurement cycle.

 SAP AG 2004

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Organization Levels and Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z Identify the organizational levels and master data that support the Procurement Cycle

 SAP AG 2004

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Organizational Elements in Procurement

Client

Company code Plant

Storage location Purchasing organization/ purchasing group  SAP AG 2004

Organizational Elements are structures that represent the legal and/or organizational views of an enterprise. You can design your company structure based on your business processes. The Procurement process uses the following organizational elements: y Company code - represents an independent accounting unit. Balance sheets and Profit & Loss Statements, required by law, are created at the company code level. y Plant - an organizational element within a company. A plant produces goods, renders services, or makes goods available for distribution. A plant can be a manufacturing facility or a warehouse distribution center y Storage location - units that allow the differentiation of material stocks within a plant y Purchasing organization - unit structured to negotiate the general conditions of purchase for one or more plants or companies. Pricing conditions are set at the purchasing organization level. y Purchasing group - key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities. This cannot be assigned to a purchasing organization.

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Organizational Levels in Inventory Management

Client 400

Company code 0001

Company code 0002

Plant 1000

Stor. loc. 0001

Plant 1100

Stor. loc. 0002

Stor. Stor. loc. loc. 002 0001

Plant 2000

Stor. loc. 0002

Stor. loc. 0003

 SAP AG 2004

The client is uniquely defined in the system by a three-digit alphanumeric key. A unique four-digit alphanumeric key in the client defines the organizational levels company code, plant, and storage location. Organizational structures are assigned uniquely. For example, several plants may be affiliated with one company code, but in mySAP ERP, a plant is always assigned to one company code.

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Purchasing Organization/Group

Purchasing Organization

z A purchasing organization is an organizational level that negotiates conditions of purchase with vendors for one or more plants or companies. It is legally responsible for completing purchasing contracts. z A purchasing group is the key for a buyer or group of buyers responsible for certain purchasing activities.

 SAP AG 2004

The purchasing organization is responsible for the enterprise’s purchasing requirements. You can incorporate Purchasing into the company structure by assigning the purchasing organization to company codes and plants. This means that you can determine whether Purchasing is organized centrally or de-centrally in your company. You can distinguish between plant-specific, cross-plant, and cross-company-code Purchasing.

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Plant-Specific Purchasing Organization

Purchasing organization A

Purchasing organization B

Company code

Plant 1000

Plant 1100

 SAP AG 2004

In plant-specific procurement, a purchasing organization is responsible for procuring materials for only one plant.

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Cross-Plant Purchasing Organization

Purchasing organization 1000

Company code

Plant 1000

Plant 1100

 SAP AG 2004

You can set up a cross-plant purchasing organization for each company code. This purchasing organization procures material and services for all plants belonging to the company code.

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Cross-Company-Code Purchasing Organization

Purchasing organization C100

Plant 1000

Plant 2000

Plant 3000

Company code 1000

Company code 2000

Company code 3000

 SAP AG 2004

If you want to organize Purchasing on a cross-company-code basis, you cannot assign a company code to the purchasing organization in Customizing. When you create a purchase order, for example, the system will ask you to enter the company code for which you want to procure the material.

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Material Master Data

Basic Data

Purchasing

MRP

Sales

Stocks in plant/ storage location Account


Material master record

Work scheduling Quality management

Storage

Forecasting


Classification

 SAP AG 2004

The material master record is the main source of material-specific data in an enterprise. It is used by all Logistic modules. The integration of all material data in a single database object prevents the problem of data redundancy. Every area, such as purchasing, inventory management, materials planning, and invoice verification can use the data stored. The material master is subdivided into information grouped by user departments (functions). Each user department has a different View of the material master record and is responsible for maintaining the data to support their function, for example: y Purchasing data for ordering y Inventory management data for posting goods movements and managing physical inventory y Accounting data for material valuation upon goods movements or in invoice verification y Materials planning data for material requirements planning The data maintained within a view may be valid for more than one organizational level

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Vendor Master Data

General data Address, communication, control data Bank information

Company code data Account information Payment transactions Correspondence Withholding tax

Vendor master record

Purchasing organization data Purchasing data Partner roles  SAP AG 2004

The vendor master record contains information about a vendor from a Purchasing and Accounting perspective. Data in the vendor master record is structured by organizational considerations: y General data is valid for the whole corporate group (client). This includes the vendor communication data, for example. y Accounting data is stored at company code level (company) and with the general data. y Purchasing data on the vendor is managed separately for each purchasing organization, for example, payment conditions. General data is also relevant to Purchasing, for example, address data. There are other levels for purchasing data, but which are optional (plant, vendor sub-range). In Accounting, the vendor is regarded as the company’s crediting business partner. The vendor master record is therefore maintained by Accounting and Purchasing. You can use the authorization concept to define how data maintenance should be organized in the vendor master record. Each user department can maintain general data centrally or decentrally, as well as Purchasing and Accounting-specific data. Often, Purchasing also maintains data at corporate group level.

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Partner Roles Order recipient

Invoicing party

Vendor

Forwarder/carrier

Supplier of goods  SAP AG 2004

The vendor can have various functions in its interaction with your company. For example, during the procurement transaction the vendor is the order recipient, then the supplier of goods, the invoicing party, and finally, the payee. By maintaining partner roles in the vendor master record, you can distribute one or more of these roles to different vendor master records.

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Creating a Vendor Master Record with Reference

Reference

Address data

Control data

X Copy

Blank

Control data

 SAP AG 2004

To help you create a vendor master record, you can use an existing vendor as a reference. The system prompts you to maintain the data (for example, address). The control data is adopted from the reference, but you can overwrite it. You can block the vendor master record (for example, for vendors who deliver products of poor quality). Once the blocking indicator has been set, you can no longer place purchase orders with this vendor.

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One-time Vendor

Vendor master record

Account group Onetime

X

Description Language Reconciliation act Currency

Invoice Verification

Purchase order Vendor Address

?

Bank details

?

 SAP AG 2004

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Purchasing Info Records Info record 5300000816

Vendor 1234

Vendor: Material: PurchOrg:

1234 A21 1000

Material A21

Planned deliv. time: 4 days ... Conditions Price/UoM Freight Discount

6 EUR/CS 2% 4%

Last purchase order 4500006398  SAP AG 2004

Purchasing info records contain concise information on a vendor and the material you procure from this vendor. Purchasing info records are an important source of information for buyers, allowing them to find out at any time which vendors offer a particular material or which materials can be procured from a particular vendor. You can store and maintain the following data in info records: y current and future prices and conditions (for example, freight and discounts) y delivery data (for example, planned delivery time and tolerances) y vendor data y Texts When you create purchasing documents (for example, purchase orders or contracts), the system displays data maintained in info records as default values. Purchasing Info records can be referenced in the planning process to predetermine vendor specific information.

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Conditions Quotation

Purchase order

Conditions Key

Description

Amount

PB00

Gross price

10 EUR

FRA1

Freight

5.0%

RA00

Discount from net

8.0%

ZOB1

Abs. customs duty

3 EUR Info record

Outline Agreement

Conditions 400/t Discount 40/t

 SAP AG 2004

Conditions are used in purchase orders to determine price. When you create a purchase order with reference to a contract or purchasing info record, or if certain criteria in extended conditions apply, the system automatically includes the conditions in the purchase order. They therefore influence its effective price. The following types of conditions are used in Purchasing: y Conditions in a contract apply to all contract release orders created with reference to this contract. y Conditions in a purchasing info record apply to all purchase order items that contain the material and vendor contained in the purchasing info record. y Extended conditions are only included in the purchase order if it meets certain criteria. For example, you can use extended conditions to define vendor discounts or include discounts for a material type. Extended conditions are more flexible than conditions in info records or contracts in that you can define which criteria must be met if the conditions are to apply to purchase orders.

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Organization Levels and Master Data: Topic Summary

You are now able to: z Identify the organizational levels and master data that support the procurement process

 SAP AG 2004

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Procurement Cycle: Topic Objectives

At the conclusion of this topic, you will be able to: z Perform the procurement cycle for stock and consumable materials including purchase requisitions, purchase orders, goods receipt, invoice receipt, and vendor payment z Identify the integration points with Financials, Production Planning, Plant Maintenance, and Project Systems

 SAP AG 2004

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Procurement Environment Request Payment processing

Reqmt determination

Invoice verification

Determination of source of supply

Goods receipt

Vendor selection

Purch. Pur. order monitoring order

Order processing

 SAP AG 2004

The external procurement process is structured in the following way: Determination of requirements: The user department responsible can pass a requirement for materials to the Purchasing department manually, via a purchase requisition. If you have set a MRP procedure for a material in the material master, then MRP will automatically generates a purchase requisition. Determination of the source of supply: mySAP ERP supports the buyer responsible in many different ways when determining sources of supply. You can use determination of the source of supply to create requests for quotation (RFQs) and then to enter the quotations. Vendor selection: The system supports you during vendor selection by comparing the prices of the different quotations. By comparing quotations, you can establish, for example, the most favorable vendor. You can send rejection letters automatically. Purchase order processing: When you enter purchase orders, the system helps you with the entries. Purchase order monitoring: The buyer can monitor the processing status of the purchase order at any time online. The buyer can, for example, determine whether goods or an invoice have been received for the corresponding purchase order item. The system also supports dunning procedures. Goods receipt: The system compares the goods receipt quantity with the purchase order quantity. Invoice Verification: Vendor invoices are checked for accuracy of prices and contents. Payment processing: Financial Accounting normally deals with vendor payments.

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Purchase Requisitions Purchasing RFQ manual automatic Purchase requisition SCM (APO)

SRM (EBP) Master data

Outline Agreement

Purchase order

 SAP AG 2004

Purchase requisitions are internal documents you use to request your Purchasing department to procure a particular quantity of a material or a service for a particular date. Purchase requisitions are either created manually by the department responsible or automatically by MRP. When you create a purchase requisition for materials that have a material master record, the R/3 System supports you when you enter data by transferring data in the material master record into the purchase requisition. Purchasing converts the purchase requisition into a request for quotation (RFQ) or purchase order.

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Converting Purchase Requisitions Purchase req.

Purchase order

With reference to template

10

10

20

20

30

30

Purchase req. 10

Purch.Req.

Assign source

10

20

Src of sup. Vendor ABC

30

30

manual

Process assignment

Purchase order 10 20 30

automatic

manual

automatic

 SAP AG 2004

The buyer responsible normally converts the purchase requisitions into purchase orders. You have the following options: If you have not yet entered a valid source of supply for the relevant material-vendor relationship in the system, you can create the purchase order with reference to the purchase requisition. You can make reference to the purchase requisition on the initial screen as well as on the item overview for purchase order entry. Before converting the purchase requisition to a purchase order, the buyer has to define the source of supply. You can enter a valid info record or outline agreement in the purchase requisition. The purchase requisition is then converted into a purchase order manually by the buyer responsible or automatically by the system.

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Consumable Material z Consumable materials are materials or services that are procured directly for an account assignment object. z Examples of consumable materials:

Office supplies: assigned to a cost center

Computer systems: assigned to an asset

z A material master record is not necessary. z In the case of consumable material with a master record:

There is no value-based inventory management Consumption is automatically updated in the material master record

 SAP AG 2004

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Account Assignment Objects A: Asset K: Cost center Purchasing document 10 20

Assignment to

30

Account assignment category

P: Project F: Prod. order C: Sales order . . . . . . .

 SAP AG 2004

Consumable materials debit different account assignment objects depending on the account assignment category specified. The account assignment category determines which category of account assignment is to be debited and which account assignment data you have to prepare.

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Procurement for Consumption Stock material

Consumable material

with mat. master record

Account assignment

without mat. master record

with acct assgt cat.

with mat. master record

Enter account assignment cat.

Account assgt. automatic

Account assgt. manual

Stock account

Consumption acc. cost center, asset ...

Data from material master record

Entry by user necessary

 SAP AG 2004

When procuring consumable materials that do not have a material master record, you have to enter the following, as well as the account assignment category: y short text (description) y material group y order unit When you create a purchase order with account assignment, depending on the account assignment category, you have to enter a cost center or asset number. Depending on the account assignment category, the system can use automatic account determination to suggest a G/L account number for the consumption account. The standard configuration contains the following consumable materials with material master record: - Material Type Non-stock material (NLAG): Quantity and value are not updated - Material Type Non-valuated material (UNBW): Quantity is updated, but value is not. Consumable materials with a material master record must have an account assignment.

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Purchase Order Header data z z

Purchase order

z

Document number Terms of payment Purchase order date

z z z

Vendor Currency ...

10 20 30

Item: 10 Item: 20 Item: 30 z z z

Material number Short text Order quantity

z z z

Delivery date PO price ...

 SAP AG 2004

A purchase order is a formal request to a vendor to supply certain goods or services under the stated conditions. Purchase orders can be created without reference, or with reference to a purchase requisition, a request for quotation or another purchase order. When you enter the purchase order data, the system suggests values to use. For example, the ordering addresses, as well as the terms of payment and freight (Incoterms) are suggested from the vendor master record. If you have maintained a material master for a certain material, the material short text or the material groups, among other things, are suggested for you. If a purchasing info record already exists in the system, a default price is copied to the purchase order. The purchase order is either sent to a vendor or you carry out a stock transport order in another plant belonging to your company or group. With a stock transport order, you can take into account the associated freight costs in the purchase order. Note: You can find more information about stock transport orders in the Materials Management documentation on the topic of Inventory Management: Special stocks and special forms of procurement in Materials Management.

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Purchase Order Processing Purchasing No reference Purchase order Purchase request

Purchase order

Vendor

Quotation Contract Master data

Other plant

 SAP AG 2004

The purchase order is a formal request to a vendor to supply you with goods or services at the conditions stated in the purchase order. In the purchase order, you further define whether the material is delivered for stock or direct consumption (for example, cost center, asset or project). Goods Receipt and Invoice Verification are normally carried out based on the purchase order. You can minimize the work involved in entering data, by creating purchase order items with reference to an existing purchase requisition, RFQ or purchase order. Of course, you can also enter a purchase order without reference to preceding documents in the system. If you do not know the vendor when you create a purchase order, you can use source determination. The system suggests possible vendors to you on the basis of the defined sources of supply (outline agreements, info records, source list entries, quota arrangements). For each purchase order item, you have the option of determining the current processing status. For example, you can determine whether there are goods receipts or incoming invoices for an item. From the purchase order history screen you can display the subsequent documents (material document and invoice document).

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Item Category

Item Categories PReq

Standard RFQ on nt type e t nd pe me n e u D c do the

PO Outline Agreement

B

Limit

K

Consignment

L

Subcontracting

M

Material unknown

S

Third-party

T

Text

U

Stock transfer

W

Material group

D

Services

 SAP AG 2004

The item category defines the process used to procure a material or service. In the standard system, the item categories already defined include: y Standard: You use this item category for materials that are procured externally. y Subcontracting: The finished product is ordered from a vendor. The components that the vendor needs to manufacture the finished product are entered as “material to be provided” items. y Consignment: The vendor makes material available, which you then manage as consignment stock. A liability only arises when material is withdrawn from consignment stock, not when the stock is placed in the consignment stores. y Stock transport orders: The material is transferred from one plant to another. y Third-party order: You order material from a vendor with the instruction that the vendor should deliver the goods direct to a third party (a customer, for example). The vendor sends your company the material invoice. Note: Subcontracting, consignment, stock transfer orders and third-party orders are covered in the Materials Management documentation on Inventory Management: Special Stocks and Special Forms of Procurement in Materials Management.

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Issuing Messages Purchasing doc. Output EDI E-mail

Printer

Printout

SA sched.line

Expediter/ reminder

Fax

Rejection

Order acknowledgement expediter

 SAP AG 2004

You can issue purchase orders, purchase order changes and order acknowledgements as messages. Output can be via a printer, fax machine or EDI, for example. You can set which header texts and item-based texts the system issues. The header text is printed at the start of the purchase order and contains generally applicable information. Item texts describe a purchase order item more precisely. You can also include and issue standard texts. Note: You will find more detailed information about purchasing document output in the Materials Management documentation on Purchasing: Entering Texts, Print Functions and Information Transmission.

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Goods Receipt

Material doc. for GR

Purchase order Deliv. note GR area

Accounting doc.

Ext. vendor or other plant

 SAP AG 2004

Posting a goods receipt to stock with reference to a purchase order has a number of advantages for you, including: y The goods receiving department can check whether the goods delivered are what was actually ordered. y The system suggests data in the purchase order when you enter the goods receipt (for example material ordered, quantity). This makes it easier to enter the goods receipt and check overdeliveries and underdeliveries when goods arrive. y The purchase order is automatically updated with the delivery. The Purchasing department can send a reminder about late deliveries. When a goods receipt to the warehouse is posted, a material document is created that contains information such as the material delivered and the quantity delivered. The storage location in which you place the material into stock in the associated plant is also recorded. In transactions relevant for material valuation, at least one accounting document is created which records the effects the material movement has on the value of the stock.

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Movement Types

Goods receipt into warehouse/stores

101

122 Return delivery to vendor

 SAP AG 2004

The movement type is a three-digit key to differentiate between goods movements in the R/3 System. Examples of these goods movements are goods receipts, goods issues or transfer postings. The movement type takes over important control functions in Inventory Management. It plays a central role in automatic account determination. Together with other influencing factors, the movement type determines, among other things, which stock or consumption accounts are updated in Financial Accounting. The movement type also determines the structure of the screen when you enter documents and the updating of the quantity fields.

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Material and Accounting Documents Material document

Accounting document

Document header

Document header

Material doc. Date Delivery note

Accounting doc. Date Reference Currency

500000757 June 4, 2001 LS-1147

Document items Quantity Material

5000000642 June 4, 2001 LS-1147 EUR

Document items Plant MvT

1000 001 10 L. Paint 002 25 PC Alu. profile 1000

1 2 3

101 101

Account Short text

EUR

300010 191100 ...

75+ 75-

Stock GR/IR account

The material and accounting document for a goods movement are created simultaneously.  SAP AG 2004

The material document consists of a document header and at least one item. The header information includes the posting date and the name of the creator. Which quantity of which material is posted to which storage location of the associated plant is recorded at item level. The accounting document records the effects of material movements on the accounts. The document header contains generally applicable data, such as the document date, posting date, posting period, and document currency. The G/L account numbers and the associated amount posted are recorded at item level. The material and accounting documents are independent documents. You can identify the material document by the material document number and the material document year. The accounting document can be clearly identified by the company code, accounting document number and fiscal year. The company code in which the accounting document is posted is taken from the plant in which the goods movement takes place.

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Effects of a Goods Receipt Purchase Update PO and PO history order

Material master

Update stock and value

Accounting doc. Material doc.

Notification of goods receipt (optional) GR slip Hard copy (optional)

Transfer requirement for warehouse management (if active)

Movement documentation

Entry of goods receipt Account

Warehouse Management

Quality Management

Update stock and consumption accounts

Creation of an inspection lot to trigger a quality inspection

 SAP AG 2004

In addition to the Material (quantity) and Accounting (value) Documents being created, other areas are affected by the Goods Receipt: y Purchasing – the Purchase Order History is updated y Quality Management (if active) – an Inspection Lot is created y Warehouse Management (if active) – a Transfer Requirement is created along with the goods being placed into the warehouse. y Output may be generated, for example, the goods receipt slip or a pallet label.

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Stock Overview Client 400 4600 pieces

Client + Company code

CoCode 2000 2500 pieces

CoCode 1000 2100 pieces

Plant 1000 1200 pieces

Plant 1100 900 pieces

SLoc 0001 300 pieces

SLoc 0002 600 pieces

+ Plant + Storage location

 SAP AG 2004

In the stock overview, you can display material stocks for each organizational level. Quantities posted for a particular stock type are totaled for each organizational unit. You can display the stock overview for batches/valuation type and special stocks (for example, consignment material) as well as for client, company code, plant, and storage location. The stock overview is a static display of stocks. This means that you can only view the current stock situation. You can view firm stock commitments on the stock overview screen. However, you cannot see future planned goods receipts and goods issues in this list. But you can call up additional information functions via the menu bar. There are several display versions for stock overviews, which differ in the way the stock types are listed and in the order of the stock types. In Customizing for Inventory management, the system administrator defines which stocks are displayed in each column and the order in which they are displayed.

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Invoice Processing

Invoice document

Material document Invoice Invoice verification

Accounting document

Purchase order

Master data

 SAP AG 2004

In Materials Management, the procurement process is completed by Invoice Verification. There, invoices and credit memos are entered and checked for accuracy of the contents and prices. However, payment and evaluation of invoices is not part of Invoice Verification; the appropriate information for these tasks is passed on to other departments. Therefore, Invoice Verification creates a link between Materials Management and external or internal accounting. When you enter an invoice with reference to a purchase order, the system suggests data from the purchase order and the goods receipts for the purchase order, for example, vendor, material, quantity still to be invoiced, terms of payment and so on. If there are variances between the purchase order or goods receipt and the invoice, the system warns the user and blocks the invoice for payment, if necessary. Posting the invoice completes the process of Invoice Verification. The purchase order history is updated and Financial Accounting can pay the open invoice item.

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Types of Invoice Verification

Purchase order no. Invoice

Purchase order

Item:

Item: 1

Delivery note number

1

2

2

3

3

?

Bill of lading number

 SAP AG 2004

Invoice items can be posted with reference to a goods receipt, a purchase order or a delivery note. The postings are automatically made to the corresponding G/L accounts. When an invoice is posted, an open item is credited on the vendor account. With purchase-order-based Invoice Verification, you can settle all items, irrespective of whether there have been partial deliveries. With goods-receipt-based Invoice Verification, you use the goods receipts as the basis of the invoice entry. Invoices for quantities greater than the goods receipt quantity cannot be posted. You must set this type of Invoice Verification in the purchase order.

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Effects of Invoice Verification Invoice (for purchase order)

Price Variance

Post

A XX

B XX

When you post an invoice, an accounting document is created. The individual items are posted to the corresponding accounts.

Material master

Purchase order history

Document no. 51000123

z Moving average price z Value

z Goods receipts z Down-payments

z Vendor 100 z GR/IR 100 +

z Invoices

 SAP AG 2004

Invoice receipt creates a liability towards the vendor. Since a provision has already been created for this liability in a GR/IR clearing account at the time of goods receipt, the invoice receipt now clears this. The offsetting entry is made to the vendor account and creates an open item there. y When you post an invoice, an accounting document is created. The individual items are posted to the corresponding accounts. y The provisions in the GR/IR clearing account are reversed. y The invoice document is entered in the purchase order history. y If the invoice price differs from the purchase order price, the stock value and the current moving average price is recalculated and updated in the material master, for a material valuated with moving average price.

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Elements of the Payment Transaction Select payment method and bank Select items for payment Calculate the payment amount, taking account of cash discount periods Cash 10

Vendor 10 10

Post the payment document

Print payment medium

Manual

Automatic

 SAP AG 2004

All payment transactions include the elements shown on the slide. A payment transaction can be carried out either manually via A/P Æ document entry Æ outgoing payments… or automatically by means of the payment program. The standard system contains common payment methods and corresponding forms that have been defined separately for each country.

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‘Classic’ E-Procurement Scenario Employee

Manager z Approve or reject requirement z coverage request

z Browse through online catalogs z Create shopping cart z Place order or save cart z Check status

Vendor

Employee

z Receive purchase order z Confirm goods delivery or service performed z Create invoice

z Receive product z Check invoice

Buying

Execution  SAP AG 2004

Company employees are responsible for the procurement of the goods and services that they need for their work area. This takes the pressure off of the purchasing department, who in turn can concentrate on strategic tasks, such as contractual negotiation. Employees either search in a catalog for a suitable material or service, or enter the requirement directly on the entry screen and transfer this to the shopping cart. Employees can hold the requirements or order them. When an order is placed, the Enterprise Buyer system checks whether the shopping cart or requirement coverage request needs to be approved. If the manager rejects the document, employees receive a work item in their inbox, informing them of the rejection. Employees can then process the requirement coverage request directly from the work item. The vendor receives the purchase order. After the goods are delivered or the service is performed, employees can confirm this. If business partners enter the confirmation, the system starts a workflow and places the confirmation in the employees’ inbox for their approval. Employees check the documents that the business partner created (invoice or confirmation) and release the document. If the document contains errors, employees can also reject it. The system then notifies the vendor or service provider via e-mail.

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Enterprise Buyer Offers More... Analysis

Operational Procurement

Business-warehouse-based enterprise reporting

Complete Purchase orders

Negotiate

Sourcing

Contracts

Operational Purchaser

Strategic Purchaser Process

Process purchase

Contracts

Orders

Process

One-Step Buying

Bid Invitations

over Exchanges

Strategic Procurement

Integration Exchanges

 SAP AG 2004

Operational purchasers are responsible for processing and issuing purchase orders in the Enterprise Buyer system. If the requester creates a shopping cart in which the data is incomplete, for example, the vendor is missing for an item, purchasers receive the incomplete purchase order in their worklist. They can complete the data and send the purchase order to the vendor. Purchasers can define templates for recurring procurement processes that employees can then use when creating shopping carts. Purchasers can also shop on behalf of other users, for managers, for example. Purchasers are also responsible for processing of shopping carts with value limit and for the purchasing data in the business partner master records. Purchasers can only display contracts. Purchasers have reporting tools at their disposal with which they can analyze shopping carts per cost center or product locally. The strategic purchaser is responsible for strategic procurement tasks. Creating public and restricted bid invitations, and comparing received bids belongs to this work area. The strategic purchaser is responsible for the creation of contracts and for the purchasing data in the business partner master records. The strategic purchaser compiles vendor lists. Enterprise Buyer is integrated with the Business Information Warehouse (BW) to provide sophisticated reporting. The Business Information Warehouse is used for both operational and strategic analysis.

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‘Classic’ Scenario R/3-Backend or Non-SAP Backend

Enterprise Buyer

Shopping cart created

Purchase Requisition

Workflow approval

Purchase Order

Confirmation

Goods Receipt

Invoice

Invoice

Global Business Partner

Message to vendor XML, e-mail, fax

Product Master

 SAP AG 2004

You implement Enterprise Buyer and one or more Backend systems (SAP or Non-SAP). All Materials Management is mapped in the ERP system. All materials management documents (such as purchase orders, goods receipts, service entry sheets, and invoices) exist in the Backend system. When the shopping cart is ordered, a workflow is triggered that checks whether approval is necessary. y If it is required, a work item is sent to the Inbox of the relevant approver. y If it is not required, the necessary purchase requisitions, purchase orders or reservations are created for the shopping cart. Which documents are created, and in which Backend system, depends on the information in the shopping cart and on the settings in Customizing for Enterprise Buyer.

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Materials Management Integration

SAP Materials Management Financial Accounting


Manufacturing



Production Planning Plant Maintenance

 SAP AG 2004

Integration in Financial Accounting Purchasing maintains data on the vendors that are defined in the system jointly with Finance. Information on each vendor is stored in a vendor master record that contains both accounting and procurement information. The vendor master record represents the creditor account in Finance. Integration in Sales and Distribution 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. As soon as you enter a sales order, you can initiate a dynamic availability check of on hand stock. Integration in Production Planning Materials Management is closely linked to Production Planning through inventory needs. Inventory management is responsible for staging of components required for production. Integration in Plant Maintenance Materials Management and Plant Maintenance are linked by Bills of Materials. It is possible to post a good receipt with reference to an equipment BOM. It is also possible to withdraw part for maintenance orders. Serial numbers are activated in Materials Management but used within the Plant Maintenance system. Integration in Logistics The inventory management system can be extended by the Warehouse Management System (WMS), which manages storage bins in complex warehouse structures. While Inventory Management manages the stock quantity and value, WMS handles and monitors storage.

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Procurement Cycle: Topic Summary

You are now able to: z Perform the procurement cycle for stock and consumable materials including purchase requisitions, purchase orders, goods receipt, invoice receipt, and vendor payment z Identify the integration points with Financials, Production Planning, Plant Maintenance, and Project Systems

 SAP AG 2004

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Reporting: Topic Objectives

At the conclusion of this topic, you will be able to: z Identify the reporting and analysis tools used in Procurement

 SAP AG 2004

© SAP AG

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Standard Reporting

Purchase order GR doc Invoice doc.

Document entry

Document database List

Master data

Material, vendor, info records,…

Standard reports

 SAP AG 2004

In Purchasing, you enter a variety of documents. The System updates these documents and stores them in database tables. You can use Standard Analysis to analyze the information contained in the documents. As the employee responsible in Purchasing, you want to obtain an overview of your vendors and purchasing organizations. For example, you want know: y which purchase orders were effected at a particular vendor for a particular period y the number of purchase orders for which you have already received goods y whether a vendor delivered the complete quantity or only a partial quantity y whether a vendor keeps to his or her delivery dates y whether a goods receipt and invoice receipt are correct y the average value of each purchase order for a purchasing organization or group You can also carry out analyses for master data, as well as for documents. For example, you can output a list of all purchasing info records for a material or vendor, or you can obtain an overview of the material master records in your enterprise, based on particular criteria. The analyses in the system provide you with a quick and convenient overview, enabling you to act accordingly.

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Reporting in Standard Analyses Functions z z z z z z z

ABC analysis Classification Segmentation Plan/actual comp. Cum. freq curve Correlation Time series

Purchasing Group Analysis Purchasing group Meyer Schmidt

Drilldown by vendor

Vendor Order value Invoice amount Schulz AG 60000 50000 Berger AG 40000 40000

Additional information Master data z Documents z Info jump

Invoice amount 90000 195000

Purchasing group: Meyer Drilldown by period

z

Order value 100000 200000

Purchasing group: Meyer Vendor: Schulz AG Month Order value Invoice amount 02.2001 25000 20000 03.2001 35000 30000

 SAP AG 2004

Standard analyses provide a wide range of functions for creating presentations and analyses for the data basis in the LIS. The data basis for a standard analysis is established when you determine an object to analyze (e.g. purchasing group, vendor, material group, etc.) and make selections. This data is then organized and can be displayed in an initial list and a variety of drill-down lists. Each analysis can be archived. You can use the standard transactions in the application to display the complete master record or document information from the various drill-down levels of the list. A wide range of functions can be used to individually examine the key figures and characteristic values on which the analysis is based from a business perspective. All the functions for statistical analyses are graphically supported.

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Reporting: Topic Summary

You are now able to: z Identify the reporting and analysis tools used in Procurement

 SAP AG 2004

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Procurement Cycle: Unit Summary

You are now able to: z Identify the organizational levels and master data that support the procurement process z Perform the procurement cycle for stock and consumable materials including purchase requisitions, purchase orders, goods receipt, invoice receipt, and vendor payment z Identify the integration points with Financial Accounting, Controlling, Production Planning, Plant Maintenance, and Project Systems z Identify the reporting and analysis tools used in Procurement

 SAP AG 2004

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Procurement: Exercises Unit: Procurement Topic: Organizational Levels in the Procurement Process At the conclusion of this exercise, you will be able to: • List the organizational levels that are relevant to the procurement process. • Explain the relationship between these organizational levels. In our enterprise, the responsibilities of the departments in purchasing, in the warehouse, and Invoice Verification are organized by regional and functional considerations. The project team is testing how it can map this enterprise structure using the relevant organizational levels. 1-1

Questions on Organizational Levels in the Procurement Process 1-1-1 List the organizational levels in that are relevant to the procurement process. ______________________________________________________ ______________________________________________________ 1-1-2 Can a plant belong to more than one company code? ______________________________________________________ 1-1-3 Can you use the same storage location number in more than one plant? ______________________________________________________ ______________________________________________________

1-2 True or False 1-2-1 A purchasing organization can procure material or services for only one plant. ______________________________________________________ 1-2-2 A plant is assigned to exactly one purchasing organization. ______________________________________________________ 1-2-3 A purchasing group is always responsible for only one purchasing organization. ______________________________________________________ 1-2-4 You use mainly plants to map the purchasing structure of your enterprise in the mySAP ERP System. ______________________________________________________ © SAP AG

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Unit: Procurement Cycle Topic: Master Data At the conclusion of this exercise, you will be able to: After completing this topic, you will be able to: • Create a material master record • Create a vendor master record. In our enterprise, material master maintenance is decentralized; i.e. each user department is responsible for creating its own data for a material. The project team is testing how it can manage this using the material master maintenance function. The company has entered a business relationship with a new vendor. To enable you to order from this vendor, you have to create a new vendor master record. 2-1

© SAP AG

Create material master record Create a new material master record for the “Chromolux 2000” headlight, using material number T-RA1##. Assign the headlight to the “mechanical engineering” industry sector and the material type “raw material” [ROH]. As a member of the purchasing department, you are responsible for maintaining the following views of the material master record in your enterprise: • Basic data 1 • Purchasing • Purchase order text • General Plant Data/Storage 1 • Accounting 1 Create the data for the material for the following organizational levels: • Plant: 1000 • Storage location: 0001 When you maintain the data screens, observe the following requirements.

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Basic data 1: Enter “Chromolux 2000” in the material description. The base unit of measure “piece” is used to manage stock of this material. The headlight belongs to material group 003 (Bulbs). The net weight is 3.0 KG. The gross weight of the headlight is 3.5 KG. Purchasing data: Purchasing group 0## normally procures this headlight. Enter the relevant purchasing value key in the field provided to address the requirements below: Urging letters about late goods receipts should be sent after 10, 20, and 30 days. Under or overdeliveries are not accepted. It takes 2 days to process goods receipts for this material. Purchase order text: Enter the purchase order text you wish or adopt the text below: “The delivered material has to fulfill our technical specification MSI TSP no. 73264.” When creating a purchase order, you can define which language you want to use. This is suggested from the vendor master record. The system adopts the material description and the purchase order text from the material master record and prints them on the purchase order document in the language chosen.

Storage 1: The headlight is to be stored in storage location 0001 in storage bin BL-01. Accounting 1: The material is assigned to the valuation class raw materials 1 and is valuated using the moving average price of 80 EUR. Save your entries.

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2-2

Create vendor master record You know the Purchasing and Accounting data for a new vendor. From the perspective of head office, create a vendor master record T-L05B## for the organizational levels company code 1000 and purchasing organization 1000. Assign it to account group LIEF. (Default values for address data) Title Company Name Fast Group## Vehicle parts Search term WB200-## Street 127 West Street Postal code 19116 City Philadelphia Country US Region PA Language EN Accounting Information (Accounting) The reconciliation account in G/L accounting has the description “Trade Payablesdomestic”. Use F4 input help to determine the number of the control account and enter this in the appropriate field. Number of reconciliation account: _________________________________________ Enter A1 in the cash management group field. Payment transactions (Accounting) Check or bank transfer can carry out automatic payment transactions. Purchasing data The purchase order currency used for the vendor is EUR. Purchasing has agreed on different payment conditions from those of Accounting. If we pay the invoice within 14 days, the vendor grants us a discount of 3 %, and if we pay within 30 days, 2 % is deducted. The invoice has to be settled within 45 days. In this case, there is no cash discount. Use F4 input help to determine the relevant payment conditions. (=_______________________________________) The freight and shipping conditions are FOB Philadelphia. Maintain the incoterms accordingly. In the field provided, enter a contact person and telephone number for the vendor’s purchasing department.

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2-3

© SAP AG

Change vendor master record The payment conditions agreed by Purchasing are also valid for accounting transactions. Enter the relevant payment conditions key on the Payment Transactions Accounting screen. You have agreed with vendor T-L05B## that purchase requisitions can automatically be changed into purchase orders. Change the control data on the Purchasing screen of the vendor master record accordingly. Entry in field: __________________________________________________________

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Unit: Procurement Topic: Basics of Stock Material Procurement At the conclusion of this exercise, you will be able to: After completing these exercises you will be able to: • Create a Purchase Requisition for consumable and stock materials. • Create and process a purchase order. • Post a goods receipt for a purchase order. • Explain the document concept at goods receipt. • List the most important effects of a goods receipt for a purchase order. • Use logistics invoice verification to post a vendor invoice and explain the effects on the purchase order. • Post a vendor’s invoice. • Create a manual check to pay the open vendor’s invoice. The company would like to procure the “Chromolux 2000” headlights for the first time for a pilot series. Some of the goods will be consumed upon receipt and some will be posted to stock. Currently, only one vendor can supply the material. The Research & Development department will create the purchase requisition for this new material, separating the stock portion from the consumable portion. The Purchasing department will then convert the requisition into a purchase order. A goods receipt is posted for the headlights that were ordered. The goods delivered will be posted to the plant’s valuated stock material and a portion consumed by a designated cost center.. You enter the vendor invoice for the headlights in invoice verification. The invoiced items are checked against the purchase order and the goods receipt. 3-1 Create Purchase Requisition Create a Purchase Requisition for 100 pieces of material T-RA1##. Your Engineering Dept. wants an additional ten pieces upon the first receipt. These ten pieces should be consumed (expensed) to the appropriate department. The 100 pieces will be received as follows: 90 pieces will be placed into stock. 10 pieces will be expensed to Cost Center 1000. © SAP AG

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3-2

Create purchase order with reference to purchase requisition You decide to purchase the material T-RA1## from vendor T-L05B## for 50.00 EUR each. Create a purchase order with reference to this requisition for purchasing organization 1000 and plant 1000. Purchase order no:

3-3

Display purchase order Display the purchase order and answer the questions below. 3-3-1 Which user created the purchase order? Created by: ____________________________________________ 3-3-2 When was the purchase order created? Created on: _____________________________________________

3-4

Display message Display a printout (message) of the purchase order on your screen. 3-4-1 Where is the purchase order text on the document printout? Header data Item data

[] []

3-4-2 Print the document. 3-5

Determine status of message processing Has the message for your purchase order already been printed? Display the status of the message. Status:

To display the processing status of the message, display the purchase order document again. The header menu contains the entry “Messages.”

3-6

© SAP AG

Change purchase order You have found out that you now need 150 pieces of the material T-RA1## for the pilot series of your new motor bike, instead of the 100 you have ordered. Change the purchase order accordingly (140 to stock & 10 to cost center).

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3-7

Display purchase order Display the purchase order document you have just changed. Where do you find information about the changes you have made to the purchase order? Make a note of the menu path. Menu path: ____________________________________________________________ Determine the purchase order quantity, the delivered quantity, and the quantity still to be delivered for the purchase order item. Ordered:_______________________________________________________________ Delivered: _____________________________________________________________ Still to be delivered: _____________________________________________________

3-8

Display the Stock Overview for a material Prior to the goods receipt, review the storage location stocks of material T-RA1## in storage location 0001 of plant 1000. Unrestricted-use: ________________________________________________________ In quality inspection:_____________________________________________________

3-9

Post goods receipt The total quantity of the material you ordered is delivered. Post the stock material for the purchase order into unrestricted-use stock in storage location 0001 in plant 1000. The consumable material will be consumed upon receipt, requiring no storage location. Make note of the material document number. Material document number: _______________________________________________

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Motolux Ltd. 3 Faraday Park

Delivery note

Waltham, MA 02156 Delivery note number:

471100-##

Waltham, [Current date] IDES New York plant 13 South Street New York, NY 10008

With reference to your purchase order No. 450000####, we deliver the following materials: Item

Qty

UoM

Material number

Description

10

150

PC

T-RA1##

Chromolux 2000

3-10

Display material document Display the material document for the goods receipt you have just posted. 3-10-1 Branch from the material document to the accounting document. Which stock account was debited because of the goods receipt posting? Account number: ________________________________________________ With what value is the stock account posted? Amount: ______________________________________________________ Which account is offset for the stock posting? Account number: ________________________________________________ 3-10-2 Exit the Accounting Document and close the List of Accounting Documents dialog box. From the material document, display the Stock Overview Report to determine the change in inventory. What is the quantity in Unrestricted Use? Unrestricted-use: _______________________________________________

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3-10-3 View the purchase order history from within the material document. Is the material document for the goods receipt listed in the purchase order history? ______________________________________________________ 3-11

Enter vendor invoice The vendor sends you the following invoice for your purchase order. Use logistics invoice verification to enter this. Make sure you use the correct tax code when entering the invoice. Post the invoice document and make a note of the document number. Invoice document number: _____________________

Motolux Ltd. 3 Faraday Park Waltham, MA 02156

Invoice

Invoice number: IDES New York plant 13 South Street New York, NY 10008

100350-##

Waltham, [current date]

With reference to your purchase order no. 450000####, we are invoicing you for the following items: Item

Qty

Material number Description

Price per unit

10

150 PCs

T-RA1##

50.00 EUR 7,500.00 EUR

Chromolux 2000

plus 16 % tax

Total value

1,200.00 EUR 8,700.00 EUR

The agreed terms of payment apply

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3-12

Display invoice verification document Display the document created in invoice verification. 3-12-1 Branch to the financial accounting document. Is the document number of the accounting document identical to that of the invoice verification document? Give reasons for your answer: ______________________________________________________ ______________________________________________________ ______________________________________________________ To which account are vendor liabilities posted? Account number: _________________________________________________ Amount: ______________________________________________________ Have the provisions on the GR/IR account, which resulted from the goods receipt, been correctly cleared as a result of the invoice receipt? To which account is the input tax posted? Account no: __________________________________________________ Amount: ______________________________________________________ 3-12-2 Display the Purchase Order from the invoice verification document. In what way has the purchase order history changed as a result of the invoice receipt? ______________________________________________________

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3-13

Post a manual outgoing payment with check printing The vendor requires payment immediately. Instead of waiting for the weekly payment processing job, you decide to issue a manual check. Post a manual outgoing payment with simultaneous check printing. The payment is to be made via house bank 1000. Enter LP01 as the printer. Calculate the payment amount. Use payment method C (pre-numbered checks) and check lot 0001. Write down the number of the payment document. __________________________________________________________

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Unit: Procurement Topic: Reporting At the conclusion of this exercise, you will be able to: • Carry out a purchasing group analysis in the LIS.

The management board often requests purchasing analyses in order to plan for Purchasing. The project team wants to check the system’s ability to react quickly and appropriately to these requirements. IDES wants to have an overview of purchasing transactions at all times. To do this, it requires analyses of total purchase order value and purchase order quantity compared with goods receipt quantity and quantity settled. As a member of the procurement team, you will use reporting and analysis in the Logistics Information System to translate these requirements.

4-1

Analyze purchasing values for purchasing groups You want to use the Purchasing Information System to determine the scope of procurement of purchasing groups 001 to 018 for purchasing organization 1000. Select the purchasing values for the last three months.

4-2

Change characteristic display You want to display the key for the characteristic, as well as the name of the purchasing group. Choose the relevant characteristic display.

4-3

Add key figures You want to obtain an overview of the number of purchase order items and the number of deliveries. Add these two key figures to the standard analysis. Arrange the key figure “purchase orders” before the purchase order value and the key figure “deliveries” before the invoice value. Make a note of the total purchase order value and the total number of purchase order items for your purchasing group (0##). PO value: ______________________________________________________ Purchase orders: ______________________________________________________ What amount has already been settled? Invoice amount: ______________________________________________________

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Display vendors for purchasing group With which vendors have you effected purchase orders for purchasing group 0##? Make a note of the number of vendors and the total purchase order value. Number: ______________________________________________________ PO value: ______________________________________________________ 4-5

Determine top 5 purchasing groups Which purchasing groups had the five highest purchase order values during the analysis period? Make a note of the total purchase order value of the five top purchasing groups. PO value: ______________________________________________________

4-6

Perform ABC analysis Determine the most important vendors in terms of purchase order value for purchasing organization 1000 and purchasing groups 001 to 018. To do this, perform an ABC analysis for the value key “purchase order value.” Choose the percentage total of the purchase order value. Segment A is 70 %, segment B is 20 %, and segment C is 10 %. Study the complete list for the ABC analysis of purchase order value. Which vendor has the highest purchase order value? Vendor: ______________________________________________________ Before you perform the ABC analysis, make sure you are in the initial list. From the initial list, you then switch the drill-down to the vendor. View → Switch drill-down... [X] Vendor

4-7

© SAP AG

Display selection log To interpret the result of your analysis correctly, it is important that you know the selection criteria used in the analysis. You should therefore look at the selection log for purchasing group analysis. What is the key and description of the info structure for this analysis? Info structure: __________________________________________________________

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Procurement: Solutions Unit: Procurement Topic: Organizational Levels in the Procurement Process 1-1

Questions on Organizational Levels in the Procurement Process 1-1-1 List the organizational levels in that are relevant to the procurement process. Client, company code, plant, storage location, and purchasing organization. 1-1-2 Can a plant belong to more than one company code? No, a plant is always assigned to only one company code. 1-1-3 Can you use the same storage location number in more than one plant?

Yes, despite having identical storage location numbers or names in the plants concerned, storage locations are completely independent organizational units with separate inventory management. 1-2 True or False 1-2-1 A purchasing organization can procure material or services for only one plant. False 1-2-2 A plant is assigned to exactly one purchasing organization. False 1-2-3 A purchasing group is always responsible for only one purchasing organization. False 1-2-4 You use mainly plants to map the purchasing structure of your enterprise in the mySAP ERP System. False

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Unit: Procurement Topic: Master Data

2-1

Create material master record Create a new material master record for the headlight “Chromolux 2000”, using material number T-RA1##. Logistics → Materials Management → Material master Material → Create [general] → Immediately (Initial screen) Material T-RA1## Industry sector M Material type ROH (View selection) [X] Basic data 1 [X] Purchasing [X] Purchase order text [X] General Plant Data/Storage 1 (Organizational levels) Plant 1000 Storage location 0001 (Basic data 1) Description Chromolux 2000 Base unit of measure PC Material group 003 Gross weight 3.5 Weight Unit KG Net weight 3 Select Enter to proceed to next selected screen for entry (Purchasing) Purchasing group 0## Purchasing value key 1 GR processing time 2 Review Warning Message and Select Enter to clear warning and proceed to next selected screen for entry

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(Purchase order text) Language Long text

EN Own entry or: “The delivered material has to fulfill our technical specifications MSI TSP no. 73264.” Click in the item description field and Select Enter to proceed to next selected screen for entry. Note: If your cursor is not in the description field, you will not automatically proceed to the next view.

(Storage 1) Storage bin BL-01 Select Enter to proceed to next selected screen for entry (Accounting 1)

2-2

Valuation Class

3000 Raw Materials 1

Price Control

V

Moving Price Save Material Master

80

Create vendor master record You know the Purchasing and Accounting data for a new vendor. From the perspective of head office, create a vendor master record T-L05B## for the organizational levels company code 1000 and purchasing organization 1000. Assign it to account group LIEF. Logistics → Materials Management → Purchasing Master data → Vendor → Central → Create

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(Initial screen) Vendor T-L05B## Company code 1000 Purchasing 1000 organization Account group LIEF (Address) Maintain the address data according to the exercise requirements or enter the address data you want. Title Company Name Fast Group## Vehicle parts Search term WB200-## Street 127 West Street Postal code 19116 City Philadelphia Country US Region PA Language EN Hit enter or select Next Screen icon (Control Screen) No Data Entry - Hit enter or select Next Screen icon (Payment Transactions Screen) No Data Entry - Hit enter or select Next Screen icon (Accounting Information: Accounting) Reconciliation account 160000 Cash Mgmnt group A1 Hit enter or select Next Screen icon (Payment transactions: Accounting) Payment methods SU (Select S and U from Payment Methods List) Hit enter or select Next Screen icon (Correspondence: Accounting) No Data Entry - Hit enter or select Next Screen icon (Purchasing data) PO currency EUR Terms of Payment ZB00 Incoterms FOB Philadelphia Salesperson Brenda Mansfield (default) Phone no. 610/592-8055 (default) Hit enter or select Next Screen icon(Partner Function) No Data Entry - Hit enter or select Next Screen icon Save Vendor Master © SAP AG

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2-3

Change vendor master record The payment conditions agreed by Purchasing are also valid for accounting transactions. Enter the relevant payment conditions key on the Payment Transactions Accounting screen. You have arranged with vendor T-L05B## that purchase requisitions can automatically be changed into purchase orders. Change the control data on the Purchasing screen of the vendor master record accordingly. Logistics → Materials Management → Purchasing Master data → Vendor → Central → Change (Initial) Vendor T-L05B## Company code 1000 Purch. Organization 1000 [X] Payment transactions (company code data) [X] Purchasing data (Payment transactions: Accounting) Payment terms ZB00 (Purchasing data) [X] Save Vendor Master

© SAP AG

Automatic purchase order

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Unit: Procurement Topic: Basics of Stock Material Procurement

3-1

Create Purchase Requisition Create a Purchase Requisition for 100 pieces of material T-RA1##. The 100 pieces will be received as follows: 90 pieces will be placed into stock. 10 pieces will be expensed to Cost Center 1000. Logistics → Materials Management → Purchasing Purchase Requisition → Create The first time you access the Purchase Requisition Creation function the Enjoy SAP: Purchase Requisition Help will be displayed. Select the Close pushbutton to turn this informational display off. (Initial screen) Order type NB Purchase Requisition (Header data) No Data Entry (Item overview) Item 10 Account Assignment Leave blank Category Material T-RA1## Quantity 90 Delivery date Current date + 1 month Plant 1000 Item 20 Account Assignment K Cost Center Category Material T-RA1## Quantity 10 Delivery date Current date + 1 month Plant 1000 (Item detail ) for item 20, charged to cost center G/L Account no. 400000 ( default, do not change ) Cost Center 1000 Save the Purchase Requisition

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3-2

Create purchase order with reference to purchase requisition You decide to buy the material T-RA1## from vendor T-L05B## for 50.00 EUR each. Create a purchase order with reference to the requisition purchasing organization 1000 and plant 1000. Logistics → Materials Management → Purchasing → Purchase order → Create → Vendor/Supplying Plant known (Initial screen) The first time you access the Purchase Order Creation function the Enjoy SAP: Purchase Order Help will be displayed. Select the Close pushbutton to turn this informational display off. In order to create your purchase order by copying an existing requisition the user will have to do a lookup from a user-defined screen variant. The steps to this process are: a) Select Document Overview On pushbutton b) Choose the Selection Variant List icon c) Choose Purchase Requisitions d) Enter the following values: Plant

1000

Material

T-RA1##

Document type

NB (purchase requisition)

e) Select Enter and then Execute the query lookup f) The purchase requisition number created in exercises step 4-1 will be displayed in the Document Overview Section. g) Select the requisition number created in exercise step 4-1. h) Click on the Adopt icon in the Document Overview. The requisition data is copied to the Purchase Order fields on the right side of the screen. i) Now enter the required Purchasing data: Vendor Purchasing Org. Net Price

T-L05B## 1000 50

j) Click on the Document Overview Off pushbutton to display only the purchase order data k) Save the Purchase Order and record the number assigned by the system in the exercise section of this step.

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3-3

Display purchase order Display the purchase order and answer the following questions. Logistics → Materials Management → Purchasing → Purchase order → Display To display your purchase order: a) Select the Document Overview On pushbutton b) Choose the Selction Variant List icon c) Choose My Purchase Orders d) Double Click on the Purchase Order Number displayed. The purchase order fields on the right side of the screen are populated with the selected purchase order’s data. e) Select the Document Overview Off pushbutton 3-3-1 Which user created the purchase order? Look at the Title Bar of the Screen to determine the user. 3-3-2 When was the purchase order created? Look at the Document Date next to the vendor name.

3-4

Display message Display a printout (message) of the purchase order on your screen. Logistics → Materials Management → Purchasing → Purchase order → Messages → Print/transmit Purchasing document

[Document number from previous exercise]

Program → Execute (Or [Execute] symbol) Output Device

LP01

Select Print Pushbutton.

[X]

[Purchase order]

Goto → Display message (Or [Display message] pushbutton)

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3-4-1 Where is the purchase order text on the document printout? Header data Item data

[] [X]

3-4-2 Print the document. From the display of the printout, return to the Message Output screen. Select the purchase order number from this exercise. Edit → Output message (Or [Output message] symbol) Output Device

LP01

Select Print Pushbutton.

3-5

Determine status of message processing Has the message for your purchase order already been printed? Display the status of the message. Logistics → Materials Management → Purchasing → Purchase order → Display (Initial screen) Purchase order PO number from the exercise 3-2 (Item overview) Goto → Messages The green light indicates that the message has been successfully processed.

3-6

Change purchase order You have found out that you now need an additional 150 pieces of the material TRA1## for the pilot series of your new motor bike, instead of the 100 you have ordered. Change your purchase order accordingly (140 to stock & 10 to cost center). Logistics → Materials Management → Purchasing → Purchase order → Change Enter the purchase order number from previous exercise and make the quantity changes indicated above and in the quantity column. Save the Purchase Order

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3-7

Display purchase order Display the purchase order document you have just changed. Logistics → Materials Management → Purchasing → Purchase order → Display Where do you find information about the changes you have made to the purchase order? Make a note of the menu path. Environment → Item Changes Now determine the purchase order quantity, the delivered quantity, and the quantity still to be delivered for the purchase order items In the Items Detail section select the Delivery Schedule tab to display the delivery information for each product.

Scheduled Quantity Delivered Open Quantity

Item 10 140 0 140

Item 20 10 0 10

Total 150 0 150

. 3-8

Display storage location stocks for a material Prior to the goods receipt, review the storage location stocks of material T-RA1## in storage location 0001 of plant 1000. Logistics → Materials Management → Inventory Management → Environment → Stock → Stock Overview On the Stock Overview: Company Code/Plant/Storage Location/Batch screen, enter the following data: Material Plant Select the Execute icon. Unrestricted-use: 0 In quality inspection: 0

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3-9

Post goods receipt The total quantity of the material you ordered is delivered. Post the goods receipt for the purchase order into unrestricted-use stock in storage location 0001 in plant 1000. Observe the requirements on the delivery note and make a note of the material document number. Logistics → Materials Management → Inventory Management Goods movement → Goods receipt → For Purchase Order → GR for Purchase Order (MIGO) Top of Screen:

A01 Goods Receipt R01 Purchase Order Enter your PO# from Exercise 3-2

Select Enter. The materials from the purchase order are copied to the screen. Close the Detail Data Section by selecting the Close Detail Data icon. In the Header Data Section, enter the following data: Document date Posting date Delivery note

Current date Current date 471100-##

In the Line item section, select the OK indicator for both lines. Enter Storage Location 0001. Post the total suggested quantity. Record the material document assigned by the system. Remain in the Goods Receipt transaction for the following exercise. 3-10

Display material document Display the material document for the goods receipt you have just posted. At the top of the Goods Receipt transaction, change the transaction from Goods Receipt to Display. The material document that you just created should default. Select Enter. 3-10-1 Branch from the material document to the accounting document. Select the Doc. info tab and then the FI Documents button. Double click on the Accounting document. Which stock account was debited because of the goods receipt posting? Account number: 400000 Inventory, raw materials 1 With what value is the goods receipt valuated? Amount: 7,000.00 EUR Which account is offset for the stock posting?

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Account number: 191100 GR/IR clearing (external) 3-10-2 Exit the Accounting Document and close the List of Accounting Documents dialog box. From the material document, display the Stock Overview Report to determine the change in inventory. What is the quantity in Unrestricted Use? Select the Open Detail Data button. Select the Where tab. In the Where tab, select the Stock Overview icon (mountain and sun). Unrestricted-use: 140 Exit the Stock Overview report to return to the Material Document Display.. 3-10-3 View the purchase order history from within the material document. Is the material document for the goods receipt listed in the purchase order history? Select the Purchase Order Data tab. Select the History icon (scroll) Yes the material document is listed in the Purchase Order History. 3-11

Enter vendor invoice The vendor sends you the following invoice for your purchase order. Use Logistics Invoice Verification to enter this. Post the invoice document and make a note of the document number. Logistics → Materials Management → Logistics invoice verification → Document entry → Enter invoice (Initial screen) Document date Current date Posting date Current date Reference 100350-## Amount 8,700 Tax amount 1,200 Tax code (field to the VN – 16% Domestic input tax right of tax amount) On the PO Reference Tab enter the following data: Reference Document Category Purchase Order/Scheduling Agreement Purchasing doc. (the field to the PO number from exercise 3-2 right of reference document category) Select Enter. Verify that your document is in balance. Select the Save icon to record the invoice verification document Remain in the transaction for the next exercise.

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3-12

Display invoice verification document Display the document created by invoice verification. Within the Enter Incoming Invoice: Company Code 1000 transaction, select Invoice document → Display 3-12-1 Branch to the financial accounting document. Select the Follow-on documents button Double click on Accounting document Is the document number of the accounting document identical to that of the invoice verification document? The document numbers are not identical. Part of the reason Logistics Invoice Verification was developed was to separate Material Management and Financial Accounting into separate systems. This means that the invoice document is entered and checked in Invoice Verification and the information relevant to Financial Accounting is transferred to a follow-on document with a different document number. To which account are vendor liabilities posted? Account number: T-L05B## Amount: 8,250.00 EUR Have the provisions on the GR/IR account, which resulted from the goods receipt, been correctly cleared as a result of the invoice receipt? Yes, there were no price or quantity variances between the vendor invoice and the purchase order or goods receipt quantity. This means that the provisions on the GR/IR account, resulting from the goods receipt, were completely written off. To which account is the input tax posted? Account number: 154000 Amount: 100 EUR Exit the Accounting document and close the Lists of Documents in Accounting dialog box. Remain in the Display Invoice Document transaction. 3-12-3 Display the Purchase Order from the invoice verification document. Double click on the PO number in the line item detail. Select the Purchase order history tab. In what way has the purchase order history changed as a result of the invoice receipt? The invoice receipt document is listed in the purchase order history along with the goods receipt document.

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3-14

Post a manual outgoing payment with check printing The vendor requires payment immediately. Instead of waiting for the weekly payment processing job, you decide to issue a manual check. 3-14-1 Post a manual outgoing payment with simultaneous check printing. Accounting → Financial Accounting → Accounts Payable → Document entry → Outgoing payment → Post + print forms On the Payment with Printout: Header Data screen enter the following data: Field Name Company Code Payment method House Bank Check lot number Printer for forms Print Immediately

Value 1000 C 1000 0001 LP01 Selected

b) Choose the Enter payments button. Enter the following values: Field Name Amount Vendor

Value 8,700 T-L05B##

c) Choose Process open items. d) The open item for your vendor is listed. e) Choose Post. Write down the number of the payment document. _____________

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Unit: Procurement Topic: Reporting

4-1

Analyze purchasing values for purchasing groups You want to use the Purchasing Information System to determine the scope of procurement of purchasing groups 001 to 018 for purchasing organization 1000. Select the purchasing values for the last three months. Info systems → Logistics → Purchasing → Purchasing group → Purchasing values (Selection screen) Purch. organization Purchasing group Month

4-2

1000 001 [Curr. Month – 2]

018 [Curr. month]

Change characteristic display You want to display the key for the characteristic, as well as the name of the purchasing group. Choose the relevant characteristic. Settings → Char. display → Key and description

4-3

Add key figures You want to obtain an overview of the number of purchase order items and the number of deliveries. Add these two key figures to the standard analysis. Edit → Choose key figures Select the key figures “Purchase orders” and “Deliveries” and press the [Choose] pushbutton. Arrange the key figure “purchase orders” before the order value and the key figure “deliveries” before the invoice value. 1. Select the key figure that is to be moved in the Selection Criteria column. 2. Place the cursor on the key figure description that the moved key figure should precede. 3. Press the [Move] pushbutton. 4. Select Continue icon to display the additional key figures.

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4-4

Display vendors for purchasing group With which vendors have you effected purchase orders for purchasing group 0##? Make a note of the number of vendors and the total purchase order value. Place the cursor on purchasing group 0## in the characteristics column. Double click to go to the display of all vendors for your purchasing group in the standard drill-down of characteristics.

4-5

Determine top 5 purchasing groups Which purchasing groups had the five highest purchase order values during the analysis period? Make a note of the total purchase order value of these top five groups. Select Back to return to Purchasing Group View of report. Place the cursor in the “PO value” column in the initial list of the purchasing group analysis. View → Top N... (Top N) Number

4-6

5

Perform ABC analysis Determine the most important vendors in terms of purchase order value for purchasing organization 1000 and purchasing groups 001 to 018. To do this, perform an ABC analysis for the value key “purchase order value.” Choose the percentage total of the purchase order value. Segment A is 70 %, segment B is 20 %, and segment C is 10 %. Study the complete list for the ABC analysis of purchase order value. Which vendor has the highest purchase order value? Display initial list: View → Basic list Place the cursor in the “Order value” column. Edit → ABC analysis... (Choose strategy) (z)

Total Order value (%)

(Strategy Parameter) Segment A Segment B Segment C

70 % 20 % 10 %

Look at the complete list for ABC analysis at purchase order value. In the display of business graphics, press the “Total list” pushbutton. This contains the information you require.

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4-7

Display selection log To interpret the result of your analysis correctly, it is important that you know the selection criteria used in the analysis. You should therefore look at the selection log for purchasing group analysis. What is the key and description of the info structure for this analysis? To display the selection log, you have to exit ABC analysis and return to the basic list. View → Basic list Extras → Selection log Info structure: S011 – Purchasing groups

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Procurement: Test Your Knowledge 1.

When you create a master record for a vendor, you must enter all relevant data for purchasing and accounting in one single step? Determine whether this statement is true or false.

2.

A plant can be assigned to several company codes? Determine whether this statement is true or false.

3.

You cannot enter a goods movement in SAP R/3 without specifying a ________________. Fill in the blank to complete the sentence.

4.

What are the effects of the entry of a goods receipt against a purchase order in the SAP R/3 ? Choose the correct answer(s). A The purchase order is deleted B An accounting document can be generated C A material document is generated for each item D The PO history is updated for each item of the purchase order E A material document is generated F A credit memo is automatically generated for the vendor for the amount of the delivery value

5.

A purchase organization must always be assigned to a company code. Determine whether this statement is true or false.

6.

© SAP AG

Client, _______, and _______ are examples of organizational levels that play a role in the maintenance of material master records. Fill in the blank to complete the sentence.

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Procurement: Answers 7.

When you create a master record for a vendor, you must enter all relevant data for purchasing and accounting in one single step? Determine whether this statement is true or false. Answer: False SAP R/3 also affords the possibility of a decentralized maintenance of a vendor master record. The purchasing and accounting views can be maintained separately.

8.

A plant can be assigned to several company codes? Determine whether this statement is true or false. Answer: False A plant can be assigned to only one company code.

9.

You cannot enter a goods movement in SAP R/3 without specifying a ________________. Fill in the blank to complete the sentence. Answer: movement type The movement type determines the kind of goods movement. It is also an important factor influencing the stock or consumption posting made in accounting.

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10.

What are the effects of the entry of a goods receipt against a purchase order in the SAP R/3 ? Choose the correct answer(s). A The purchase order is deleted B An accounting document can be generated C A material document is generated for each item D The PO history is updated for each item of the purchase order E A material document is generated F A credit memo is automatically generated for the vendor for the amount of the delivery value Answer: B, D, E One material document and one accounting document are generated per goods receipt. The PO history for a PO item is updated when a goods receipt is entered with reference to this item. It is also updated when you enter a return delivery or a reversal for this PO item.

11.

A purchase organization must always be assigned to a company code. Determine whether this statement is true or false. Answer: False The assignment of a purchasing organization to a company code is optional.

12.

Client, _______, and _______ are examples of organizational levels that play a role in the maintenance of material master records. Fill in the blank to complete the sentence. Answer: plant and storage location Data at the client level: General data that applies to the entire enterprise. Data at the plant level: All data that is valid for a plant Data at the storage location level: All the data that is valid for a certain storage location.

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Inventory and Warehouse Management

Contents: z Special Features of Goods Receipts z Stock Transfers and Transfer Postings z Storage Functions z Physical Inventory Procedures

 SAP AG 2004

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9-1

Inventory and Warehouse Management: Unit Objectives

At the conclusion of this unit, you will be able to: z Enter a goods receipt into blocked stock and quality inspection z Explain the difference between stock transfers and transfer postings z Describe physical inventory procedures

 SAP AG 2004

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9-2

Inventory and Warehouse Management: Course Overview Diagram TERP10

Course Overview ERP Basics ERP SAP NetWeaver Business Warehouse Sales Order Management Material Planning Manufacturing Execution Procurement Cycle Inventory Management Lifecycle Data Management Program and Project Management Enterprise Asset Management Human Capital Management Financial Accounting Management Accounting Strategic Enterprise Management

 SAP AG 2004

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Inventory and Warehouse Management : Business Scenario

z In your enterprise, you can post goods receipts to different stock types, based upon the material. You can then enter transfer postings to move the material between the stock types. In some instances, you may transfer material between two plants. Your enterprise also carries out physical inventories of its warehouse stocks. As a project team member, you need to familiarize yourself with these different inventory and warehouse procedures.

 SAP AG 2005

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9-4

Special Features of Goods Receipts: Topic Objectives

At the conclusion of this topic, you will be able to: z Enter a goods receipt into blocked stock and quality inspection

 SAP AG 2005

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9-5

Goods Movements

Vendor

Plant 1

Plant 2

Storage loc. 1

Storage loc. 2

Unrestricteduse stock

Production

Stock in quality inspection

Blocked stock

Storage loc. 3

Production

Customer

 SAP AG 2005

A goods receipt is a goods movement in which the receipt of goods from both an external vendor and from production is posted. A goods receipt leads to an increase of warehouse stock. A goods issue is a goods movement in which a material withdrawal, goods issue, material consumption, or goods shipment is posted to a customer. A goods issue leads to a decrease of warehouse stock. A stock transfer is removal of materials from a particular storage location an placement into another storage location. Stock transfers can take place both within the same plant an between two plants. A transfer posting results in a change in the stock ID number or the stock category of a material. Transfer postings need not involve an actual (physical) goods movement. Whereas with stock transfers there is always a physical movement of goods.

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Goods Receipt Overview Plant 1 Storage loc. 1

PO


Vendor

with reference


Order Blocked stock

Production

 SAP AG 2005

Goods movements include both external and internal movements. In general, a transaction that causes a stock change is marked as a goods movement. You can distinguish between goods receipts, goods issues, stock transfers, and transfer postings. A goods receipt (GR) is a goods movement in which the receipt of goods from both an external vendor and from production is posted. A goods receipt leads to an increase of warehouse stock. A goods issue (GI) is a goods movement in which a material withdrawal, goods issue, material consumption, or goods shipment is posted to a customer. A goods issue leads to a decrease of warehouse stock. A stock transfer is removal of materials from a particular storage location and placement into another storage location. Stock transfers can take place both within the same plant and between two plants. A transfer posting is a super ordinate term for stock transfers and changes the stock identification or qualification of a material, regardless of whether the posting is linked to a physical movement or not. Examples of a transfer posting include the release of the stock for quality inspection, the transfer posting from material to material, or the transfer of consignment material.

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Goods Receipt to GR Blocked Stock Plant 1 Storage loc. 1

PO


Vendor

GR blocked stock

MvT 105 release


MvT 103 Blocked stock

Conditional acceptance (non-valuated)

 SAP AG 2005

If you wish to accept goods from a vendor conditionally (because a certificate is missing, for example), you initially post the goods to the goods receipt blocked stock (GR blocked stock) upon receipt, using movement type 103. The quantity posted to GR blocked stock does not yet form part of your regular inventory. It is merely recorded in the PO history. The material document generated at the time of the goods receipt serves merely as a record of the receipt of the goods. Since GR blocked stock is not valuated, no accounting document is generated at the time of the goods receipt. The valuated stock is not changed as a result of a receipt to GR blocked stock. Furthermore, you should note that although GR blocked stock is updated in the PO history, the open PO quantity is not reduced as a result. You can display GR blocked stock from two views: y Stock overview for the material (at plant level) y PO history for the purchase order item When the conditions for the acceptance of the delivery have been fulfilled, you transfer the material to unrestricted-use stock, stock in quality inspection, or blocked stock. The valuation and updating of the stock data does not take place until the material is released using movement type 105. If the conditions for release are not satisfied, it is possible to return the goods to the vendor.

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Goods Receipt into Stock in Quality Inspection Material master

Purchasing

Work scheduling

Post to QI stock

Reference document

Goods receipt

QI stock

Purchase Order

Order

Stock type

Stock type

Quality inspection

Quality inspection

Where Movement type 101

Stock type

Quality inspection

 SAP AG 2005

You enter goods receipts against production and purchase orders with movement type 101. For a goods receipt into the warehouse, you can decide on the basis of the stock type whether the receipt is to be booked into unrestricted-use stock, stock in quality inspection, or blocked stock. If the goods receipt into stock in quality inspection is to be preplanned, you have a number of options: y If the material is generally subject to a quality check prior to use, set the - Post to inspection stock indicator in Purchasing or Work Scheduling Data - in the material master record. The stock type Quality Inspection is then - adopted in the purchase or production order. y If you wish to make the material subject to a quality check in exceptional cases only, enter the stock type Stock in Quality Inspection only in the relevant document (purchase or production order). An example from - purchasing would be a case where material is procured from a new vendor and the quality of the vendor’s goods needs to be checked in every case. Hint: You will find the stock type for the PO item in the item details on the Delivery tab page. In the production order, you will find the stock type on the Goods Receipt tab page. When you post a receipt into the warehouse, the quantity and value of the stock is increased irrespective of the stock type (except for material types without value updating).

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Special Features of Goods Receipts: Topic Summary

You are now able to: z Enter a goods receipt into blocked stock and quality inspection

 SAP AG 2005

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9-10

Stock Transfers and Transfer Postings: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the difference between stock transfers and transfer postings

 SAP AG 2005

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Transfer Posting/Physical Stock Transfer

Transfer posting

Stock to stock

z Change to stock type, material number or batch number

Material to material

z Additional physical material movement possible

Consignment to warehouse

Stock transfer

Stor. loc to stor. loc

z Physical material movement

Plant to plant

z One- and two-step procedures possible

Company code to company code

 SAP AG 2005

In the case of transfer postings, the key aspect is a change in the stock ID number or the stock category of a material. Transfer postings need not involve an actual (physical) goods movement. In the case of stock transfers, on the other hand, there is always a physical movement of goods. y Examples of transfer postings: - Stock to stock (for example, in quality inspection to unrestricted-use) or - material to material y Examples of (physical) stock transfers: - Storage location to storage location - plant to plant As you can see from the examples, transfer postings and physical stock transfers can take place at different organizational levels. If stock is transferred between two storage locations within a plant, we speak of a storage-location-to-storage-location stock transfer. If stock is transferred between two plants and the plants belong to the same company code, we speak of a plant-to-plant stock transfer. If the plants are assigned to different company codes, we speak of a company-code-tocompany-code stock transfer.

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Stock-to-Stock Transfer Posting Plant 1 Storage location 1

343

Unrestricted-use stock 322

321

Stock in quality inspection 350

349

Blocked stock

344

 SAP AG 2005

There are three stock types in inventory management that indicate the usability of a material: unrestricted-use, in quality inspection, and blocked.If the usability of a material changes, you must make transfer postings between the different stock types. With this type of transfer posting, you can also enter a physical goods movement to a different storage location. However, it is only possible to enter a movement within one plant, not between several plants. Examples: Material is posted to stock in quality inspection at the time of a goods receipt against a purchase or production order. Following quality inspection, the quantity is posted to unrestricted-use stock. Hint: If inspection processing in the quality management system is active, you cannot post any issues from stock in quality inspection within Inventory Management. Such movements can only be carried out within the framework of inspection processing. Due to a damaged water pipe in a warehouse, a certain material can no longer be used and is transferred to blocked stock.

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One- Step and Two- Step Stock Transfer Procedures Issuing organizational level

Receiving organizational level

Step 1: Remove fr. Storage

In stock transfer 2nd step: Place in stor.

Stock

Step 1: Remove fr. Storage + Step 2: Place in storage

Stock

 SAP AG 2005

A stock transfer/transfer posting consists of a goods issue from the issuing point and a goods receipt at the receiving point. The goods issue and goods receipt can be entered with a single posting for all transfer postings/stock transfers. For some stock transfers, you have the additional option of entering the goods issue and goods receipt in two separate steps and thus in two separate postings. In the case of storage-location-tostorage-location and plant-to-plant stock transfers, a distinction is made between the one-step procedure and the two-step procedure. The one-step procedure has the advantage that you enter a single transaction in the system. On the other hand, using the two-step procedure enables you to monitor stocks that you are in the process of transferring from one place to another. Once you have posted the goods issue from the issuing point, the stock is regarded as in transfer at the receiving point, and is treated as such in the system. Hint: In the case of stock transfers between plants, the two-step procedure is necessary if users have authorizations only for their own plant in each case. Hint: At the time of physical inventory, you should not have any stocks in transfer because you cannot inventory such stocks.

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Storage Location to Storage Location: One- Step Plant 1 Storage loc. 1

Storage loc. 2


311 321



323 349


Blocked stock

325

Blocked stock

 SAP AG 2005

A stock transfer from one storage location to another is carried out within a plant. You can post a storage-location-to-storage-location stock transfer using the one-step procedure for all stock types. In the process, a material document is generated, containing two material document items for each item you entered: y One item for the removal of the material from storage (goods issue) at the issuing storage location y One item for the placement of the material in storage (goods receipt) at the receiving storage location An accounting document is not generated for this stock transfer because the transferred material is managed in the same plant, and therefore has the same posting data. Hint: In the case of a storage-location-to-storage-location stock transfer, an accounting document is generated if the material is split-valuated and the valuation type changes in the course of the transfer.

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Storage Location to Storage Location: Two-Step Plant 1 Storage location 1

Storage location 2 313

Stock in transfer

315



 SAP AG 2005

Using the two-step procedure, you can only transfer material from unrestricted-use stock at the issuing location to unrestricted-use stock at the receiving storage location. After the stock removal posting, the quantity is booked out of the issuing storage location. At the receiving storage location, the quantity is already included in the stock for that location, not as unrestricted-use stock, however, but as stock in transfer. The quantity is not available for unrestricted use at plant level either. When the goods are received at the receiving storage location, the quantity is transferred from stock in transfer to unrestricted-use stock. In the course of a stock transfer from storage location to storage location using the two-step procedure, two material documents are generated: one at the time of goods issue (in this case referred to as removal from storage), and a second at the time of goods receipt (in this case referred to as putaway or placement in storage). Valuation does not take place in the case of the two-step procedure.

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Cross-Plant Stock Transfer Company code A

Company code B

Plant 1

Plant 1 Valuation

Valuation

Possible procedures: z One-step procedure

Plant 2

z Two-step procedure z Stock transport order (with/without delivery)

 SAP AG 2004

In the case of a plant-to-plant stock transfer, the plants between which material is transferred can belong either to the same company code or to different ones. As a general rule, cross-plant stock transfers can only be booked out of unrestricted-use stock. In contrast to a storage-location-to-storage-location stock transfer, a plant-to-plant transfer affects Financial Accounting and Material Requirements Planning. y Financial Accounting (only if the two plants are assigned to different valuation areas): - A cross-plant stock transfer leads to a value update in the stock accounts. An accounting document is generated parallel to the material document for the stock transfer. The stock transfer is valuated at the valuation price of the material in the issuing plant. - In the case of a cross-company-code stock transfer, two accounting documents are created at the time of posting: one for each company code. - The offsetting entry to the stock posting is then made to a company-code clearing account. Hint: If the stock transfer is entered in two separate steps, valuation always takes place at the time of the first step.

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Plant to Plant: One-Step/Two-Step Procedures Plant 1

Plant 2


Stock in transfer

305 Storage location


301


 SAP AG 2005

In the case of the one-step procedure, the goods issue and goods receipt are posted in a single material document. In the case of the two-step procedure, when removing the material from storage, you must specify the receiving plant, in addition to the material and the issuing organizational levels. This is necessary because valuation of the stock transfer takes place when the material is removed from storage and posted to stock in transfer at the receiving plant.

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Stock Transport Order Issuing Plant

Receiving Plant

Storage location

Stock Transp. Order

1

Storage location


3 2

Stock in transit

351

unrestr.-use stock

101

stock in quality insp. blocked stock

 SAP AG 2005

A stock transfer using a stock transport order has the following advantages compared with a stock transfer without a stock transport order: y The stock transport order is integrated within MRP; purchase requisitions generated by MRP can be converted into stock transport orders. y The receipt can be planned at the receiving plant. y You can enter delivery costs and a forwarder/carrier in the stock transport order. y The goods receipt can be posted directly to consumption. y In the case of a goods receipt into the warehouse, you can also post the material to stock in quality inspection or to blocked stock. y The entire process (goods issue and goods receipt) can be monitored via the PO history.

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Stock Transfers and Transfer Postings: Topic Summary

You are now able to: z Explain the difference between stock transfers and transfer postings

 SAP AG 2005

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9-20

Storage Functions: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain storage functions

 SAP AG 2004

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TERP10

9-21

Sampling Material SP- 01 Total stock: 100 pc Total value: 1.000,MA price: 10,-

Material Doc Sample SP- 01

5 pc

Plant 1

Material SP- 01 Total stock: Total value: MA price:

95 pc 950,10,-

Postings

Storage location

Stock account

unrestr.-use stock

333

GI 50

stock in quality insp.

331

Work from quality control

blocked stock

335

GI 50

 SAP AG 2005

A sample is entered in the same way as a goods issue without reference. In the standard system, the following movement types are defined for a withdrawal for sampling: y 331: Withdrawal for sampling from stock in quality inspection y 333: Withdrawal for sampling from unrestricted-use stock y 335: Withdrawal for sampling from blocked stock

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TERP10

9-22

Scrapping Material SP- 01 Total stock: Total value: S price:

100 pc 200,2,-

Material Doc Scrapping SP- 02 10 pc

Plant 1

Material SP- 01 Total stock: Total value: S price:

90 pc 180,2,-

Postings

Storage location

Stock account

unrestr.-use stock

551

GI 20

stock in quality insp.

553

Work from quality control

blocked stock

555

GI 20

 SAP AG 2005

In the standard system, the following movement types have been defined for scrapping: y . 551: Withdrawal for scrapping from unrestricted-use stock y . 553: Withdrawal for scrapping from stock in quality inspection y . 555: Withdrawal for scrapping from blocked stock Scrapping causes a reduction in the associated stock. The value of the scrapped material is booked out of the stock account to a scrap account.

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TERP10

9-23

Negative Stock Physical goods receipt Physical stock

8:00

1.000 PC

Book inventory

100 PC

- 300 PC

Physical stock

700 PC

- 300 PC

Book inventory

- 200 PC

Physical stock

700 PC

Book inventory

700 PC

+ 900 PC

Physical goods issue + posting

11:00 Posting of goods receipt

16:00

+ 900 PC

 SAP AG 2005

A negative stock occurs when you post a goods issue (GI) with a quantity that is larger than the book quantity. Negative stock balances may be required if, for organizational reasons, you enter goods issues before the corresponding goods receipts, and the material is already physically located in the warehouse. Negative stocks always indicate that physical movements have to be entered in the system at a later stage. Example: According to the book inventory, you have 100 pieces of a material in storage location 0001 of plant 1000. In actual fact, 900 pieces have already entered the warehouse and a physical stock of 1000 pieces is therefore available. This goods receipt has not yet been entered in the system due to time reasons. 300 pieces of the material are urgently required for production and withdrawn from the warehouse. This goods issue is immediately entered in the system. You therefore have a book inventory of -200 pieces, despite a physical stock of 700 pieces. The goods receipt of 900 pieces is later posted. The book inventory and physical stock match again. See above figure as reference. So that you can work with negative stock in SAP R/3, you have to specifically allow this in Customizing for the affected material. Negative stock is possible for unrestricted-use and blocked stock and for the following special stocktypes: y Vendor consignment (K) y Stock of material provided to vendor (O) y Consignment stock at customer (W) y Salesorderstock(E) y Projectstock(Q) y Returnable packaging with customer (V) y Returnable transport packaging (M) Caution: If you work with negative stock balances, you have to ensure that you do not have negative stocks on the balance sheet key date or when you carry out a physical inventory.

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TERP10

9-24

Return Delivery Plant 2 GR for purchase order MvT 103 Non-valuated Purchase Order

GR blocked stock

Return delivery with MvT 124

Storage location 1 Vendor

GR for purchase order MvT 101 Valuated Return delivery with MvT 122

 SAP AG 2005

If you have made a conditional acceptance of the goods and have posted the goods receipt with movement type (MvT) 103 in the GR blocked stock, use movement type 124 for the return delivery. As a non-valuated goods receipt is concerned in this case, the return delivery is also non-valuated. If, however, you have increased your own valuated stock in the goods receipt by posting with movement type 101 then the return delivery is posted with movement type 122. This means that the return delivery reduces the stock on both a quantity and value basis. If you enter a return delivery, you can refer to the material document of the goods receipt or purchase order. You also have the option of using the functions of the Shipping (LE-SHP) component when posting a return delivery; for example, you can use picking and packing. You will therefore have detailed shipping documents and delivery notes. You can use return deliveries via Shipping for standard purchase orders, purchase orders with account assignment and material number, and purchase orders with special stocks.

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TERP10

9-25

Shelf Life Customizing: Check

Application

Shelf Life Expiration Dates

Material master S-01

Plant Plant

BBD/ProdDt.

1000 1100

Gen. Plant data/ Storage

Optional

Remaining shelf life

30 d

+

1200 ... Movement type MvT ... Check SLExpDate 101 102

1

105

1

...

Purchase Order : No check 1: Enter and check 2: Enter only 3: No check at GI

S- 01

100 pc

Required

Remaining shelf life 30 d

 SAP AG 2005

When you receive goods from a vendor, the system may check the minimum shelf life of the goods during the goods receipt. You can therefore ensure that goods are only placed in storage if their shelf life corresponds with your requirements. To check the minimum shelf life in the goods receipt for the purchase order, the following prerequisites must be met: y The shelf life expiration date check must be activated for the plant and the movement type. y In the purchase order item, make sure the remaining shelf life is maintained (item detail Delivery tab page). You can enter a default value for the remaining shelf life in the material master record (General plant data/storage). Hint: The minimum remaining shelf life value is the number of days that a material has to be usable for the system to accept the goods receipt.

© SAP AG

TERP10

9-26

Under and Over Delivery

PO quantity 100 pieces Underdelivery tolerance 80

Underdelivery warning message

90

Overdelivery tolerance 100

No messages if variances

110

120

Overdelivery error message

 SAP AG 2005

Under Deliveries are generally allowed. The system interprets and accepts the Under Delivery as a partial delivery. If you check the entries before posting the goods receipt, the system refers to the under delivery by warning message. In the order item, you can also enter a percentage value for under delivery tolerance. If the total of previously delivered and currently entered quantities lies within the under delivery tolerance, the system does not issue a warning message. If the total is under the tolerance, the system then creates a warning message during a check. Over deliveries to a purchase order item are only allowed if this is determined in the order item. You have the option of setting the indicator for unlimited Over delivery in the purchase order item or specifying a percentage Over delivery tolerance. If the total of previously delivered and currently entered quantities lies within the over delivery tolerance, the system does not issue a message. If the total is over the tolerance, then the system issues an error message. If the same under and over delivery tolerances are always valid for one material, you can define them in the material master record as default values for purchasing. The tolerances are determined by the purchasing value key that can be specified in the purchasing data of the material master record.

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TERP10

9-27

Warehouse and Storage Functions: Topic Summary

You are now able to: z Explain warehouse and storage functions

 SAP AG 2005

© SAP AG

TERP10

9-28

Physical Inventory Procedures: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe physical inventory procedures

 SAP AG 2005

© SAP AG

TERP10

9-29

Physical Inventory Reasons

Inventoried stock management units

Material requirements planning:

Material

Correction of incorrect stock quantities

Plant, storage location Stock type

Accounting: Batch

Determination of material stocks for current assets

Special stock

 SAP AG 2005

The physical inventory is carried out on the basis of stock management units. A stock management unit is a non-divisible part of a stock of materials for which a separate book inventory exists. A stock management unit is uniquely defined by: y Material y Plant storage location y Stock type y Batch y Special stock Each stock management unit of a material is counted separately, and the inventory differences are posted per stock management unit. For example, you must record the quantities of unrestricted-use stock, stock in quality inspection, and blocked stock of a material at a storage location of a plant separately in each case.

© SAP AG

TERP10

9-30

Physical Inventory Process Phases

1

2

3

Inventory Create phys. doc. inventory docs

Print physical inv. lists

Enter count

Stock count

Analyze differences

Post differences

Material Accounting doc.doc.

 SAP AG 2005

The physical inventory process comprises three phases: 1. Creation of physical inventory documents 2. Entry of count 3. Posting of inventory difference In the first phase, you create the physical inventory (PI) documents. SAP R/3 provides several procedures for the mass-generation of PI documents. After selecting the stocks to be counted and creating the PI documents, you print out the documents in order to start the counting process. In the second phase, you enter the count results in the system. The system then determines the inventory differences. If some of the results seem doubtful, you can arrange for a recount of the stock management units affected. In this case, further PI documents are generated. In the third phase, you post the inventory differences that have been identified. In the process, the stock quantity and stock value are updated and the stock accounts are updated in accounting.

© SAP AG

TERP10

9-31

Physical Inventory Document Header Plant Storage location Special stock Inventory number Grouping

Item

Planned count date Count date, posting date,... Count status, posting status, Deletion status

Items

Overview/Details

1st item 2nd item ...

Material Quantity Batch Stock type Alternative unit of measure Item deleted Status

 SAP AG 2005

A physical inventory document contains data that includes: y The plant and storage location in which counting is to take place y The date on which the count is to take place (planned count date) y The materials to be counted y The batches that are to be counted (in the case of material subject to a batch management requirement) y The partial stock that is to be counted (in the case of split valuation) y The stock types to be counted y The status of the item y The status of the PI document You create PI documents per plant and storage location. If you wish to inventory special stocks, you create PI documents per plant, storage location, special stock, and vendor or customer or project (depending on the special stock). You can specify the storage bin or the material group as further grouping values. The items of a PI document are then all assigned to a material group or a storage bin in addition to the above-mentioned groupings When creating a PI document, you can specify a physical inventory number in the document header (this number should not be confused with the number of the PI document). The physical inventory number facilitates selection of the PI documents to be processed during entry of the count data, posting of differences, and in evaluations. You have a free choice of physical inventory numbers. For example, you may wish to use the ID of the count group, the processor, or the department, or the month and/or date of the physical inventory for this purpose. The status of an item indicates whether or not the item has been processed, counted, posted, or recounted. You can display an overview of the status of the items in the document statistics. You can use the status of a PI document item as a selection criterion in searches for physical inventory documents.

© SAP AG

TERP10

9-32

You can make the following changes to a PI document: y In the document header - . Change the planned count date - . Set or unset the posting block - . Freeze book inventory - . Create or change the physical inventory number y In a not-yet-counted item - . Change the stock type - . Change the count unit of measure - . Set the deletion indicator Enter new items (as long as no count has yet been entered) Delete the document

© SAP AG

TERP10

9-33

Blocking Goods Movements Stock 250 100

250

250

Posting block

GR 27.09.

28.09.

29.09.

325

370

75 GR

45 GR

30.09.

31.09.

Count 255 entered in evening; Posting block set in the evening

Book inventory 250 copied to inventory document + posting block removed

Difference posted

 SAP AG 2005

You can block all goods movements relating to a stock management unit for the purposes of a physical inventory. The system blocks all the stock management units of the relevant PI document by means of the Posting Block indicator in the PI document header. In the Storage Location view of the material master record, the Physical Inventory Block indicator shows the value X (material blocked for movements due to physical inventory). If it is not possible to block the goods movement for organizational reasons, you can freeze the book inventory in the PI document at the time of the count. To do so, you set the Freeze Book Inventory indicator in the PI document. This prevents goods movements from changing the book inventory figure that is relevant to the inventory-taking process.

© SAP AG

TERP10

9-34

Freezing Book Inventory Stock 250

190

265

215

260

After the count

100 75

-60 GR

-50 GR

GI

45 GR

29.09.

30.09.

31.09.

GI

27.09.

28.09.

Book inventory fixed in morning (250) and 255 counted

Count entered in evening (255) and difference (255-250) posted

 SAP AG 2005

If it is not possible to block the goods movement for organizational reasons, then you can freeze the book inventory in the PI document at the time of the count. To freeze book inventory, in the PI document header, set the Freeze Book Inventory indicator. This prevents foods movements from changing the book inventory figure that is relevant to the inventorytaking process.

© SAP AG

TERP10

9-35

Entering Physical Inventory Count Recount item

Create inv. document

Enter count

Not Processed

Counted

Status

Difference list

Post differences

Posted

Recounted

 SAP AG 2005

For the physical inventory count, you must print out the PI document and forward it to the persons responsible for the count. You can enter the stock figures in the system with and without reference to a PI document. When entering the physical inventory count, you can enter a percentage variance of the count quantity from the book inventory, above which the system issues a warning message. You can enter items counted as zero stock using the zero count facility. Here, all not-yet-processed document items are set to zero stock. Hint: Using the zero stock count and the variance warning can cause the system to issue an undesirably large number of warning messages. In the PI document, the count status of the item is set to Counted and the count date is updated in the document header. When the entered data is saved, the system determines the book inventory in the system. The difference between the count result and this book inventory is the inventory difference. You can analyze this difference via the list of differences. The list of differences contains the following information on each item: y Quantity counted y Book inventory y Difference quantity y Difference amount You can perform the following functions with the list of differences: y Enter, change, display count y Post difference y Display or change document y Recount document or item

© SAP AG

TERP10

9-36

Posting of Inventory Differences

Inventory tolerance group: maximum postable amount at user

Difference list

Material document

Post differences Accounting document

 SAP AG 2005

You can post the inventory differences either via the list of differences or via separate transactions. When an inventory difference is posted, the system creates a material document that corrects the stock figures, and an accounting document recording the necessary account movements. Note: You can specify a reason for the inventory difference discovered for each item. For example, you can record that a certain difference is due to theft. If a document exceeds the document tolerance defined for the user group, a user who is assigned to this physical inventory tolerance group may not post an inventory difference for this document. If the total value of the document lies below the document tolerance, but certain items exceed the maximum amount per item, the user may not post the differences for these items. He or she can process the other items. The system fixes the posting period of the accounting document automatically when the first count is entered for the physical inventory document. The inventory difference must therefore either be posted in the same period or, if back posting to the previous period is allowed, in the following period. The fiscal year is set as a result of specification of the planned count date when the PI document is created. All further postings for this document must be made in this fiscal year or in the first period of the following year if back posting is allowed.

© SAP AG

TERP10

9-37

Combining Physical Inventory Steps 1

Create phys. inventory doc.

2

Enter count

3

Post differences

3

Post differences

Enter count 2→1 Phys. inv. doc. created

1

Create phys. inventory doc.

Enter count

2+3

Enter count

2+3 →1

Post difference Post difference Phys. inventory doc. created

 SAP AG 2005

In every physical inventory, you go through three basic phases: y 1. Create physical inventory documents y 2. Enter count y 3. Post inventory difference In SAP R/3, you have the option of combining individual phases and performing them in a single step. The following options are available if you wish to combine steps in the physical inventory: Enter count without physical inventory document (1 and 2) When a count is entered without a document, the system automatically creates a PI document when you save. You post the difference with reference to this PI document. Enter count and post physical inventory difference (2 and 3) The count results are entered for an already existing PI document and the inventory differences are immediately posted when these results are saved. Enter count without PI document and post inventory difference (1, 2, and 3) All three phases are carried out in one step. The count results are entered. When they are posted, the system generates a PI document and posts the inventory difference.

© SAP AG

TERP10

9-38

Physical Inventory Procedures: Topic Summary

You are now able to: z Describe physical inventory procedures

 SAP AG 2005

© SAP AG

TERP10

9-39

Inventory and Warehouse Management: Unit Summary

You are now able to: z Enter a goods receipt into blocked stock and quality inspection z Explain the difference between stock transfers and transfer postings z Explain warehouse and storage functions z Describe physical inventory procedures

 SAP AG 2005

© SAP AG

TERP10

9-40

Inventory and Warehouse Management: Exercises Unit: Inventory and Warehouse Management Topic: Special Features of Good Receipts At the conclusion of this exercise, you will be able to: • Enter a goods receipt into GR blocked stock and quality inspection As senior store person you record incoming deliveries of ordered materials. You book deliveries that are clearly defective into GR blocked stock. Some materials need to be inspected by the quality department before they can be put into unrestricted use. Therefore, you need to understand how to enter goods receipts into GR blocked stock and into quality inspection stock types.

1-1

Materials T-M510A## and T-M510B## on PO 4151-02## have been exposed to moisture during transportation. You cannot immediately decide whether the materials have been damaged as a result. Therefore, you will record a conditional acceptance of the materials (movement type 103). Subsequent close inspection reveals that material T-M510A## did not suffer any damage as a result of getting soaked. Release the relevant GR blocked stock and book the material into unrestricted-use stock. 1-1-1 Enter the receipt of materials T-M510A## and T-M510B## only against purchase order 4151-02## into GR blocked stock. 1-1-2 Record the amount of inventory in GR blocked stock. Amount in GR blocked stock: 1-1-3 Release GR blocked stock of material T-M510A##. Post this receipt to unrestricted-use stock at storage location 0001. 1-1-4 Record the amount of inventory in GR blocked stock and in unrestricted use for material T-M510A##, Plant 1000. Amount in GR blocked stock: Amount in Unrestricted-use:

© SAP AG

TERP10

9-41

1-2

Enter a goods receipt against a purchase order. Selected materials are booked into quality inspection (QI stock) at the time of goods receipt. 1-2-1. Enter the receipt of 100 pc of material T-M510C## (gaskets) with reference to purchase order 4151-02##. The materials T-M510A## and T-M510B## have already been received in the prior exercise. Check that the delivery of material T-M510C## is booked into quality inspection. 1-2-2 Display the stock overview from within the material document and record the stock in quality inspection of material T-M510C##. Amount in Quality Inspection:

© SAP AG

TERP10

9-42

Unit: Inventory and Warehouse Management Topic: Stock Transfer and Transfer Posting At the conclusion of this exercise, you will be able to: • Enter a transfer posting. • Enter a stock transfer using the two-step procedure. In your enterprise, after materials that are received into quality inspection are inspected and approved, are then transferred to unrestricted use. You need to understand how to enter a transfer posting to reflect this change in material status. Also, in your enterprise, for direct factory sales, materials must be transferred from a central storage location to the factory outlet storage location. Therefore, you will use a stock transfer posting using the two-step procedure.

2-1

In exercise 1-2, you posted a goods receipt of material T-M510C## into quality inspection. The material has been inspected and approved. 2-1-1 Review the Stock Overview Report and record the amount of inventory in Quality Inspection and in Unrestricted-use for material T-M510C## at plant 1000, storage location 0001. Amount in Quality Inspection: Amount in Unrestricted-use: 2-1-2 Enter a transfer posting for all 100 pieces from quality inspection at plant 1000 storage location 0001 into unrestricted use at plant 1000 storage location 0001. 2-1-3 Display the Stock Overview Report, from the material document, and record the amount of inventory in Quality Inspection and Unrestricted-use. Amount in Quality Inspection: Amount in Unrestricted-use:

2-2

Transfer material T-M510A## from the central storage location 0001 of plant 1200 to storage location 0120 for direct factory sales. Use the two-step procedure. 2-2-1 Remove 10 pc of material T-M510A## from storage at plant 1200 storage location 0001, and transfer them to storage location 0120 (direct factory sales). Record the material document number. Material Document

© SAP AG

TERP10

9-43

2-2-2 Record stock in transfer at plant 1200, storage location 0120. Stock in Transfer: 2-2-3 Enter the placement into storage of the 10 pc of each of T-M510A## as a stock putaway for a material document. 2-2-4 Verify that the stock in transfer of material T-M510A## at plant 1200, storage location 0120 has been completely cancelled out as a result of the putaway. Stock in Transfer

© SAP AG

TERP10

9-44

Unit: Inventory and Warehouse Management Topic: Physical Inventory At the conclusion of this exercise, you will be able to: • Create physical inventory documents

• Enter the results of physical inventory counts • Post inventory differences You wish to carry out periodic physical inventories in your enterprise. Goods movements are to be blocked during the physical inventory. 3-1

Carry out a physical inventory of material T-INV1## in plant 1000, storage location 0001. 3-1-1 Create physical inventory documents for plant 1000. The count is to take place in two days. Assign GR## as the physical inventory group number. Enter the count data for all three stock types for material T-INV1## at storage location 0001. Make a note of the PI document. 3-1-2 Set the posting block for the physical inventory document. 3-1-3 Enter the physical inventory count provided below: Material

Stock type

Stock

T-INV1##

1

490

T-INV1##

2

10

T-INV1##

4

0

3-1-4 Display the differences in the list of differences. Post the physical inventory difference. 3-1-5 Display the physical inventory statistics of the PI document. Make note of the count: Open_________________ Counted_______________ Cleared________________ Recounted_____________ Deleted_______________

© SAP AG

TERP10

9-45

Inventory and Warehouse Management: Solutions Unit: Inventory and Warehouse Management Topic: Special Features of Good Receipts

1-1

Materials T-M510A## and T-M510B## on PO 4151-02## have been exposed to moisture during transportation. You cannot immediately decide whether the materials have been damaged as a result. Therefore, you will record a conditional acceptance of the materials (movement type 103). Subsequent close inspection reveals that material T-M510A## did not suffer any damage as a result of getting soaked. Release the relevant GR blocked stock and book the material into unrestricted-use stock. 1-1-1 Enter the receipt of materials T-M510A## and T-M510B## only against purchase order 4151-02## into GR blocked stock. Logistics →Materials Management →Inventory Management Goods Movement →Goods Movement (MIGO) a) Choose transaction Goods Receipt and reference Purchase Order. Caution: The lines of the material document are created with the movement type set in the default values. Always enter the desired movement type first, followed by the number of the reference document. b) Enter Movement type 103 and confirm your entry with Enter. Acknowledge the Change to Default Values dialog box, by selecting continue. c) Enter the purchase order number 4151-02## and choose Execute. d) Set the Item OK indicator for the line items for materials T-M510A## and T-M510B## only. e) Choose Post. f) Remain in the MIGO transaction for the next exercise. Record the amount of inventory in GR blocked stock. a) In the MIGO transaction, choose transaction Display and reference Material Document. The material document that you just created defaults. b) Choose Execute c) Choose the Where tab and select the Stock overview icon. Navigate to GR blocked stock using the Right columns button. Amount in GR blocked stock 100 d) Exit the Stock Overview Report. Remain in the MIGO transaction for the next exercise.

© SAP AG

TERP10

9-46

1-1-3 Release GR blocked stock of material T-M510A##. Post this receipt to unrestricted-use stock at storage location 0001. a) Choose transaction Release GR blocked stock and reference Material Document. The material document that you created in exercise 1-1-1 defaults. b) Choose Execute. c) Set the Item OK indicator for item 1, enter Storage Location 0001 if necessary, and choose Post. Remain in the MIGO transaction for the next exercise. 1-1-4 Record the amount of inventory in GR blocked stock and in unrestricted use for material T-M510A##, Plant 1000. a) Choose transaction Display and reference Material Document. The material document that you just created defaults. b) Choose Execute. c) Choose the Where tab and select the Stock overview icon. Navigate to GR blocked stock using the Right columns button. Amount in GR blocked stock:0 Amount in Unrestricted-use: 850 d) Exit the Stock Overview Report. Exit the MIGO transaction. 1-2

Enter a goods receipt against a purchase order. Selected materials are booked into quality inspection (QI stock) at the time of goods receipt. 1-2-1 Enter the receipt of 100 pc of material T-M510C## (gaskets) with reference to purchase order 4151-02##. The materials T-M510A## and T-M510B## have already been received in the prior exercise. Check that the delivery of material T-M510C## is booked into quality inspection. Logistics→ Materials Management →Inventory Management →Goods Movement → Goods Movement (MIGO) a) Choose transaction Goods Receipt and reference Purchase Order. b) Change the movement type to 101. Acknowledge the Change to Default Values dialog box, by selecting continue. c) Enter the purchase order number 4151-02## and choose Execute. d) Set the Item OK indicator for item 1. e) Confirm the Quality Inspection stock type for the delivered item on the Where tab page. f) Choose Post. Remain in the MIGO transaction for the next exercise.

© SAP AG

TERP10

9-47

1-2-2 Display the stock overview from within the material document and record the stock in quality inspection of material T-M510C##. a) Choose transaction Display and reference Material Document. The material document that you just created defaults. b) Choose Execute. c) Choose the Where tab page and select the Stock overview icon. Amount in Quality Inspection: 100 d) Exit the Stock Overview Report. Exit the MIGO transaction.

© SAP AG

TERP10

9-48

Unit: Inventory and Warehouse Management Topic: Stock Transfer and Transfer Posting

2-1

In exercise 1-2, you posted a goods receipt of material T-M510C## into quality inspection. The material has been inspected and approved. Enter a transfer posting for all 100 pieces from quality inspection at plant 1000 storage location 0001 into unrestricted use at plant 1000 storage location 0001. 2-1-1 Review the Stock Overview Report and record the amount of inventory in Quality Inspection and in Unrestricted-use for material T-M510C## at plant 1000, storage location 0001. Logistics→ Materials Management →Inventory Management→ Environment → Stock → Stock Overview Enter the following data: Material : T-M510C## Plant : 1000 Storage location: 0001 Select Execute Amount in Quality Inspection: 100 Amount in Unrestricted-use: 0 2-1-2 Enter a transfer posting for all 100 pieces from quality inspection at plant 1000 storage location 0001 into unrestricted use at plant 1000 storage location 0001. Logistics→ Materials Management →Inventory Management →Goods Movement → Goods Movement (MIGO) a) Choose transaction Transfer Posting and reference Others. b) Verify that the movement type is 321. Change it if necessary. c) Enter the following data: Material = T-M510C## Plant = 1000 Stor. Loc = 0001 Destination Stor. Loc = 0001 Unit of Entry = 100 Enter d) Verify the Item OK indicator is set. e) Choose Post. Remain in the MIGO transaction for the next exercise.

© SAP AG

TERP10

9-49

2-1-3 Display the Stock Overview Report, from the material document, and record the amount of inventory in Quality Inspection and Unrestricted-use. a) Choose transaction Display and reference Material Document. The material document that you just created defaults. b) Choose Execute On the Transfer tab select the Stock overview icon. Amount in Quality Inspection: 0 Amount in Unrestricted-use: 100 d) Exit the Stock Overview Report and exit the MIGO transaction. 2-2

Transfer material T-M510A## from the central storage location 0001 of plant 1200 to storage location 0120 for direct factory sales. Use the two-step procedure. 2-2-1 Remove 10 pc of material T-M510A## from storage at plant 1200 storage location 0001, and transfer them to storage location 0120 (direct factory sales). Record the material document number. Logistics→ Materials Management →Inventory Management →Goods Movement → Goods Movement (MIGO) a) Choose transaction Remove from Storage and reference Others. b) Enter movement type 313 (Transfer Posting Storage Location to Storage Location). Acknowledge the Change to Default Values dialog box, by selecting continue. c) Enter the following data on the Transfer Posting tab page: Material T-M510A## Plant 1200 (From) Storage Location 0001 Dest Storage Location 0120 Unit of Entry 10 Enter d) Verify that the Item OK indicator is set. e) Choose Post. Remain in the MIGO transaction for the next exercise. f) Record the Material Document number. Material Document

© SAP AG

TERP10

9-50

2-2-2 Record stock in transfer at plant 1200, storage location 0120. a) Choose transaction Display and reference Material Document. The material document that you just created defaults. b) Choose Execute. c) On the Transfer tab select the Stock overview icon. d) Position the cursor on the line storage location 0120 and choose Choose. The storage-location-related stock in transfer is described as Transfer (SLoc). Stock in Transfer: 10 e) Exit the Stock Overview report. Remain in the MIGO transaction for the next exercise. 2-2-3 Enter the placement into storage of the 10 pc of each of T-M510A## as a stock putaway for a material document. a) Choose Place in Storage and reference Material Document. b) Enter the number of the material document from the removal from storage exercise 2-2-1. Hint: You can use the search function: Find Material Document. Entermovement type 313 and the user name SCM510-## as selection values. c) Choose Execute. d) Set the Item OK indicator. e) Select Post. 2-2-4 Verify that the stock in transfer of material T-M510A## at plant 1200, storage location 0120 has been completely cancelled out as a result of the putaway. a) Choose transaction Display and reference Material Document. b) Choose Execute. c) On the Where tab page, choose the Stock Overview icon. d) Position the cursor on the line storage location 0120 and choose Choose. The storage-location-related stock in transfer is described as Transfer (SLoc). Stock in Transfer 0 e) Exit the Stock Overview Report and the MIGO transaction.

© SAP AG

TERP10

9-51

Unit: Inventory and Warehouse Management Topic: Physical Inventory

3-1

Carry out a physical inventory of material T-INV1## in plant 1000, storage location 0001. 3-1-1 Create physical inventory documents for plant 1000. The count is to take place in two days. Assign GR## as the physical inventory group number.Enter the count data for all three stock types for material T-INV1## at storage location 0001. Make a note of the PI document. Logistics →Materials Management →Physical Inventory → Phys. Inventory Doc. →Create a) Enter the Planned count date , Plant 1000, Storage Location 0001, and Phys. Inventory Number GR##. b) Choose Enter. c) Enter Material Number T-INV1## and Stock Type 1. d) Enter Material Number T-INV1## and Stock Type 2. e) Enter Material Number T-INV1## and Stock Type 4. f) Select Post. g) Record the PI Document number. PI Document Number 3-1-2 Set the posting block for the physical inventory document. Logistics →Materials Management →Physical Inventory → Phys. Inventory Doc. →Change a) Enter the PI document number from exercise 3-1-1 and choose Header. b) Set the Posting Block indicator. c) Choose Post.

© SAP AG

TERP10

9-52

3-1-3 Enter the physical inventory count provided below: Material

Stock type

Stock

T-INV1##

1

490

T-INV1##

2

10

T-INV1##

4

0

Logistics →Materials Management →Physical Inventory → Inventory Count →Enter a) Enter the physical inventory document number, from exercise 3-1-1 and choose Enter. b) Enter the count result. Set the Zero Count indicator for the third item. c) Choose Post. 3-1-4 Display the differences in the list of differences. Post the physical inventory difference. Logistics →Materials Management →Physical Inventory → Difference → Difference List b) In the selection criteria, only enter the number of the PI document created in exercise 3-1-2. c) Choose Execute. d) Select all items. e) Choose Post Difference. f) On the Post Inv. differences: Initial Screen, select Post. g) Exit the List of Inventory Differences. 3-1-5 Display the physical inventory statistics of the PI document. Make note of the count: Logistics →Materials Management →Physical Inventory → Phys. Inventory Doc. →Display a) Enter the physical inventory document number, from exercise 3-1-1 and choose Overview. b) Choose Statistics.

© SAP AG

Open

0

Counted

3

Cleared

3

Recounted

0

Deleted

0

TERP10

9-53

Lifecycle Data Management

Contents: z Product Lifecycle Management Overview z Product Structure Browser z Engineering Workbench z Classification z Variant Configuration z Document Management System z Engineering Change Management

 SAP AG 2004

© SAP AG

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10-1

Lifecycle Data Management: Unit Objectives

At the conclusion of this unit, you will be able to: z Explain how Lifecycle Data Management integrates with the business processes within the mySAP ERP solution z Explain the purpose of Product Structure Browser and Engineering Workbench z Describe the functions of the Classification system z Explain Variant Configuration z Gain a basic understanding of the Document Management System z Explain the Engineering Change Management Process

 SAP AG 2004

© SAP AG

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Lifecycle Data Management: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

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Lifecycle Data Management: Business Scenario

z In your enterprise, you use the various life cycle data management tools that enable collaborative engineering and product development. Therefore, you need to understand the function of the supporting tools provided in mySAP ERP.

 SAP AG 2004

© SAP AG

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Product Lifecycle Management

Engineering

Service

Sales & Production

Customer Relationship Management Supply Chain Management Product Lifecycle Management Initial product idea

Start of production

End of Discontinuation production of product

 SAP AG 2004

You can manage all product and project data using mySAP Product Lifecycle Management. Any user can call this data at any point from the start of planning to the discontinuation of the product. The mySAP Product Lifecycle Management solution can be used in tight integration with mySAP Customer Relationship Management, and mySAP Supply Chain Management.

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Components of Life-Cycle Data Management Document management z Secure storage areas, versioning, status management, and engineering change management z Object links to other R/3 objects

Product structure management z Management of materials, documents, bills of material, routings, classes, and so on z Management using product structure browser, engineering workbench, and replication workbench

Integration z Integration of most CAx solutions using the PLM interface

Engineering change and configuration management z Changes to R/3 objects with different validities z Documentation of the configuration and distribution to other systems using replication

 SAP AG 2004

In the engineering environment, most products are first created with a CAD system. This data can be transferred to the connected Enterprise system by using the PLM interface. This product data is then managed, using document management. This enables the storage of originals in SAP secure storage areas, or links to other objects. The product structure browser is the central navigation tool for product data. At a glance you can see all product-relevant information, such as the material master, bills of material, routings, and documents. Engineering change management lets you make changes dependent on date, serial number, or custom effectivities. The product data can be recorded in configuration management and transferred to other systems by using replication. This allows you to run a separate system for the engineering process, in addition to the production system.

© SAP AG

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Product Structure Browser System

Help

Product Structure; Validity date 21.12.2001 Choose

Manage

Product structure P-100 Revision levels Docum ent DRW P-100 000 00 DRW P-100 000 00 DRW P-100 000 02

Equipm ent Serial nos Change num ber CNG CNG CNG CNG CNG

01 02 03 04 05

Classification 001 100 002 100 IDE IDES

Save

Descript.

Viewer

Tools

Nav igation Options

Pum p PRECISION 100

Draw ing for pump Draw ing for pump Draw ing for pump

Change Change Change Change Change

01 02 03 04 05

Material class 1 Material class 2 IDES class

BOMs P-100 1000 1

Items

0010 L 100-100 0020 L 100-200 0030 L 100-300 0040 L 100-400 0050 L 100-500 0060 L 100-600 0070 R 100-700 0080 D DRW P-100 000 00 0090 D DRW P-100 000 01

Standard pumps P-100 Casing C Flyw heel GG Shaft Cov er C Bearing Support Metal St37 Draw ing for pump Draw ing for pump

Variants Change num bers

 SAP AG 2004

The graphical Product Structure Browser is the central navigation and information tool in mySAP Life-Cycle Data Management. It displays in tree-structure form all objects that belong to each other functionally, such as materials, BOMs, documents, classes, characteristics, or routings. You can call and change each of the objects from the browser. If you refresh the browser you can immediately see the changes. Using filters, you can limit the detail data displayed according to the processing situation. The Enterprise Application Integration (EAI) Viewer lets you display originals directly in the browser.

© SAP AG

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Engineering Workbench

Worklist Routing

BOM

Operation 10

Item 10

Operation 20

Item 20

Operation 30

Item 30

 SAP AG 2004

The Engineering Workbench (EWB) is used as a maintenance environment for product structures and can be used to do more than simply create BOMs and routings. You can maintain both BOMs and routings in the EWB. You can define a worklist for the Engineering Workbench. This contains selected objects that are to be processed in the Engineering Workbench. The objects are copied from the database into the worklist. Save the worlist after processing the objects, such as creation of new objects in the database, and modifying or deleting the existing objects.

© SAP AG

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Engineering Workbench: Simultaneous Processing

Worklist 1

Worklist 2 Routing

BOM

Operation 10

Item 10

Operation 20

Item 20

Operation 30

Item 30

 SAP AG 2004

Another advantage of using the Engineering Workbench is the lock logic on individual data; in the EWB the complete task list or BOM does not need to be locked for processing. Any item from any BOMs can be processed by different users at the same time. If you want to edit an item that is being processed by someone else, the Engineering Workbench gives you information on how to contact that person. The person responsible can release the item or operation without stopping processing on other objects.

© SAP AG

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Classification

??

Where on earth... ????

 SAP AG 2004

Classification supports the end-user when searching for objects. There is less emphasis on entering an exact object number, and more on entering object attributes and specifications. For example, you can search for a pump according to the lift of a pump, or power. You can search for objects that correspond exactly to your search criteria, or for similar ones that lie between limits that you define.

© SAP AG

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Finding a Material

BOM maintenance

"I need a paint in my bill of material."

List of classes Selection

Item 10,100-100 Matchcode K Item 20 ???

Pumps Paints Computer

Assignment BOM maintenance Item 10 100-100 Item 20 100-806 .....

List of Materials

Paint: Characteristics

Material Color Gloss

Casing color:

Blue

100-805 blue

w/o gloss

Gloss yes/no

...

100-806 blue

gloss

 SAP AG 2004

You require a material master as a new component for the BOM. As materials are classified in an enterprise, you first search according to the relevant classes where the materials are classified. You select a relevant class and display the characteristics of the classes. The characteristics are assigned, and the search is started. You receive a list of materials, which has the characteristics values that were entered in the selection criteria. Finally, a material is copied to the BOM.

© SAP AG

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Classification System: Functions Characteristics

Power Thread type Length Gloss: Yes/no Weight Casing color ...

Class

Classification

Class color

Assignment

Casing color Gloss: Yes/no

Object: Class:

100-806 (mat.) Color

Value assignment Casing color: Gloss:

Blue Yes

Object search z Find class z Find objects in a class

 SAP AG 2004

This function is only available if the proper preparation has been completed beforehand. The person responsible has to consider which attributes (characteristics) properly describe their product. Then they create these characteristics with specific characteristic values. Rather than being directly assigned to the object (such as the material), the characteristics are instead assigned to a class. Relevant objects are assigned to the classes. A document could be included in another class as a material master. The following steps are carried out in the framework of classification: 1. Create characteristics and allowed values 2. Maintain classes and assign the relevant characteristics to classes 3. Create an object (such as a material), and assign the class 4. Find object

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Assignment and Value Assignment Classification = assignment + assigned values

Color 100-806

Assignment

Color class Casing color Gloss: Y/N

Assignment

Classification

Assignment Casing color: Blue Gloss: Y/N Y

 SAP AG 2004

Classification means the assignment of objects to a class, and the assignment of the characteristics in the class. This classification can either take place directly in the object or in the relevant transactions in classification.

© SAP AG

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Variant Configuration: Overview

Variant-rich products

 SAP AG 2004

Variant-rich products have a vast selection of combinations of individual product features. For this reason, variant configuration is used in the SAP R/3 Enterprise.

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Variant Configuration for a Pump

Pump type Medium z Oil z Water

z Plunger z Rotary z Wing

Drive type z Manual z Electric

Connection z z z z

Pump lift

Right-angled flange Round flange (2 holes) Round flange (4 holes) Other

z 2 -20 m

Color z Blue z Black z Red

Circulation Rotation

z Open z Closed

z Left z Right z Either

 SAP AG 2004

Complex products are reflected in complex configuration tasks in sales and production. However, a company that sells or manufactures products, with variants, must perform these configuration tasks quickly and accurately. A product that is to be manufactured in multiple variants is reffered to as a configurable material. The configurable material covers all possible features of the product, and therefore it is not a finished product. In the SAP R/3 Enterprise, characteristics are used to describe the features of configurable products.

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Configurable Master Data Master data

Dependencies

Configured BOMs Configured routing

Dependencies

Dynamic BOM/Order BOM

Super BOM

Dependencies

Copy of task list Dynamic operation sequence

Super task list  SAP AG 2004

The BOM of the configurable material contains all components that could possibly be required to produce a variant of the material. You use dependencies to configure the BOM, in other words, to select the components that are required for the specific variant. The BOM is exploded according to the characteristic values assigned. If the configuration profile contains the appropriate settings, you can make manual changes to the BOM for a sales order, for example, you can delete or insert components. Save the BOM as an order BOM for the sales order. The task list or routing of a configurable material contains all operations that could possibly be required to produce a variant of the material. You use dependencies to select the operations that are required for a specific variant. You can explode the tasklist according to the assigned characteristic values.

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Document Management External NC program

Contracts

SAP system

Document info record

Computer creates originals

Material Equipment BOM

 SAP AG 2004

The Document Managment System allows the integration of external files into mySAP ERP. You can choose the format of the external files. As the required object you use a document info record, which controls the process steps for the originals. The document info record can be linked to other objects, in order to make the original information available to these objects. The originals can be stored in different secure storage areas, and displayed and processed directly from the document info record. Access is controlled using the authorization concept. A document is an information carrier with specific information on it that is determined for either the person responsible or for the exchange of information between systems (DIN definition). The document is made up of a document info record and the original that belongs to it. The original can be in paper format, folders, or even electronic files.

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Document Info Record z Functions

Version management Status management

Document info record

Classification Secure storage areas

z Integration in R/3

Object links

z Interfaces to external systems

PLM interface and ArchiveLink interface

z Display and processing of originals

ECL viewer and Microsoft Office integration

z Easy DMS interface

 SAP AG 2004

Document info records allow you to manage original application files and control the process flow. You can link a document info record to other objects, such as materials or equipment. The document info record is also distinguished by versioning or classification. The "actual" information is contained in the assigned original application files. These originals can also be stored in a secure storage area if required, and displayed or edited directly when processing the document info record. You can use the ECL viewer, or Microsoft Office integration. Third-party CAD systems are connected to mySAP ERP using the PLM interface, and third-party archiving systems are connected by using the ArchiveLink interface. The Easy DMS interface gives the end user an easy way to handle document management. This is a tool for creating and changing documents without specialist knowledge and without an SAP GUI.

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Document to Object Links SAP objects Material Equipment Functional location Purchase requisition Document WBS element PRT QM info record Purchase order Change number Network operation Production order Customer Sales document item And so on ...

 SAP AG 2004

If you wish to make information in the form of originals available to other objects, then object links are created between the document info record and these objects. You can link specifications, documentation or screen information to a document info record, and use the object link to a material master to make it available. The originals can be displayed on the page linked to the object, without having to display the document info record. The object links can also be maintained from either the object side or the document side.

© SAP AG

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Storage Areas for Originals Working area for originals

Secure storage area for originals Knowledge Provider controls: SAP database Storage (check in)

Display, edit

Display Edit Print

HTTP content server

Check in Details

Create Open

Delete

 SAP AG 2004

You can “check in“ originals from the work area, and into the secure storage area. Here they are controlled by the R/3 Enterprise; you can only use them again if you have the correct authorization. This protects them from unwanted reviewing. You control the storage of the originals with Knowledge Provider (KPro). You can connect HTTP content servers or SAP databases to the KPro.

© SAP AG

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Why Make Changes with Engineering Change Management?

Changes that belong together are grouped in a change number Monitoring and documentation of changes Saving multiple change statuses for an object Planning and realization of a specific effectivity Integration in the logistics process chain

 SAP AG 2004

You can use ECM to group together changes for different objects that are affected by one change. ECM is a central logistical function for master data changes. These changes are monitored, and, as necessary, documented completely. You can use ECM to store objects, such as BOMs and routings more than once. This means that the objects can be stored with all relevant change status as they occur. The definition of effectivity in the change master record or in the ECO makes changes effective when this effectivity is made active. An effectivity can be a point in time. The changes take effect automatically at the pre-defined effectivity in the areas of the logistics process chain, for example, sales orders, MRP, and shop floor and production control, when the release key is set for these areas.

© SAP AG

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A Material Change and its Consequences

Change the shaft Change BOM

Change routing

BOM

Routing

Change Number N-1

...

Change document

 SAP AG 2004

Changing a material can have many consequences within a company. This change also affects the data in mySAP ERP. A material change, as well as affecting the material master record, can also affect bills of material, routings, and documents. You can bring these objects together by Engineering Change Management (ECM). If you need to change a shaft, there is a material master record for this, which is used in a BOM and is linked to a document info record by an object link. The product changes can be carried out with either a change master record or an Engineering Change Request (ECR) and Engineering Change Order (ECO).

© SAP AG

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Linked Objects Material masters

Routings z Routing z Reference operation set z (Reference) rate routing z Inspection plan z Equipment task list z Master recipe z Task list

Bills of material

Change Number

z Classes z Characteristics z Classification

z Material BOM z Document structure z Equipment BOM z Functional Location BOM z Sales order BOM

Documents

z Configuration profile z Dependencies

 SAP AG 2004

You can use ECM to make changes to many mySAP PLM Life-Cycle Data Management objects. Therefore, you can create a change definition, which is valid for all BOMs and routing, or determine BOM and routing types through a specification. This is how you can change a material BOM with a relevant change number, without affecting the document structure.

© SAP AG

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Structure of a Change Number

Object management records

Change header z Reason for change

Material:

P-100

z Validity

BOM:

P-100, 1000, 1

z Status

Routing:

N, 50000002

Object types

Accompanying documents

z Material z Bill of Material

Classification

z Task List Alternative dates

z (and so on)

 SAP AG 2004

In the change header of the change number you enter general data on the change. These include a short change description, the validity, and the status. You determine which objects can be changed with the change number and how by selecting the object types. The object management records specify the actual objects to be changed. Here you can specify, for example, exactly which BOM is changed and with which usage. You can assign accompanying documents in the form of document info records to the change number. You can use classification to search for change numbers. Alternative dates allow you to control the valid-from date for individual objects more precisely.

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Assignment of Object Management Records Object management rec.

Change Number

Object: Material P-100

Header Object type: Material Object: Material P-100

Object management rec.

Object type: Bill of material

Object: BOM

Object: BOM P-100, 1000, 1

P-100, 1000, 1

Object type: ... Object: ...

 SAP AG 2004

The user uses the object types to define whether a bill of material or a routing can be changed. Then the object management records specify which bill of material, or which routing, is to be changed. This gives you precise control over an object change.

© SAP AG

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Comparison of Change Master Record and ECR/ECO

Change master record Object mgmt rec. Enter objects

ECR/ECO ECR Enter objects

Material P-100 BOM: P-100

Object mgmt rec. Material P-100 BOM: P-100 Change type: 002

Change Master Record

Status change Object mgmt rec. Process objects

ECO Process objects

Material P-100 BOM: P-100

Object mgmt rec. Material P-100 BOM: P-100 Change type: 002

 SAP AG 2004

In the header of the change master record, the user enters general information, such as the reason for the change or the validity. The user enters the objects that are to be changed or gets the system to generate them. Then the user changes the objects. In the header of the ECR, the user enters general information, such as the reason for the change or the validity. The user then enters the objects that are to be changed, depending on status. The user cannot change objects until the ECR has been converted to an engineering change order (ECO). This conversion is dependent on status. The ECR/ECO, unlike the change master record, has a status network that enables change processes to be requested, checked, and released. A workflow management system can coordinate the flow of all kinds of information throughout the various activities. A workflow gets the right work to the right person at the right time.

© SAP AG

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Order Change Management

Production order created and partially confirmed

z Provision of a systemsupported tool for the controlled, automated change of production orders that are already used in production

Create change master record for master data changes Make changes to master data

z Triggered by sales order changes, or master data changes z Engineering or technology changes are required

Release the change Select objects affected by the changes Determine and check the eligibility of the changes Make the changes to the production order

 SAP AG 2004

At times, sales orders or projects need to be changed even if they are already scheduled in production and converted into production orders, In this situation, you can use Order Change Management (OCM) in the SAP R/3 Enterprise. It enables the early conversion of product structures through requirements planning in production structures and the possibility of changing data up to the very last possible moment. Partially confirmed production orders can also be changed. The changes can either be changed because of a customer requirement or an engineering change by means of a change request.

© SAP AG

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Lifecycle Data Management: Unit Summary

You are now able to: z Explain how Lifecycle Data Management integrates with the business processes within the mySAP ERP solution. z Explain the purpose of Product Structure Browser and Engineering Workbench. z Describe the functions of the Classification system. z Explain Variant Configuration. z Gain a basic understanding of the Document Management System. z Explain the Engineering Change Management Process.

 SAP AG 2004

© SAP AG

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Lifecycle Data Management: Exercises Unit: Lifecycle Data Management

At the conclusion of this exercise, you will be able to: • Create a material master record • Assign a class to a material master record • Create a document info record and assign it to a material master record • Use the Product Structure Browser You want to be able to search for a material based upon its properties. The properties of a product are store as characteristics and characteristic values. The characteristics are assigned to a class which is assigned to the material master records. You also want to manage original application files centrally. To do this you use the document management system. Finally, you want an overview of your product in the product structure browser. 1-1

Create a finished product, T-F6##, in plant 1000. 1-1-1 Create a finished product in plant 1000 with the following data: Material: T-F6## Industry Sector: Mechanical Engineering Material Type: Finished product Create the following views for your material master record: Classification Basic data 1 Material description: Base Unit of Measure: Classification view: Class type: Class:

Basic data 1

Pump T-F6## PC 001 Leave blank

Double click on Material class type 001 in the dialog box. Do not make any entries on the following detail screen, because classification will be done later on. Save your material master record

© SAP AG

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1-2

Classify the material master record. 1-2-1 Classify material T-F6## by assigning it to class 100 Pumps. Assign values to the characteristics and make a note of the values. Assign values to the characteristics and make a note of the values. Pump lift:

___________________

Pump capacity:

___________________

Save your material master record 1-3

Perform a search for a material using the classification system. 1-3-1 Use the Find Objects in Classes report. . Search with the following class: Class: 100 Class Type: 001 As a result of your search, you will see the pumps that match the characteristic values that you entered.

1-4

In this task you will create a document info record. You will use an available document info record and its originals as a template. 1-4-1 Create a document info record with the following data: Document:

T-F6##

Document Type:

DRM

Document Part:

000

Document Version:

00

Template: Document:

T-D01

Document Part:

000

Document Version:

00

In the field for document data, enter the following: •

Description:

Pump T-F6##

•

Lab/Office:

KB1

Save your document info record

When you save the document info record or confirm an entry by using the enter key, a dialog box asks for a log field entry. The log field is maintained depending on the status. © SAP AG

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Enter the following in the log field for status "Work Request" (WR): Document Created 1-5

Display your document info record. 1-5-1 After creating the document info record and making the first entries, display your original application files, and determine whether changes to the original application files are necessary. To do this display the following document info record and its original application files: Document:

T-F6##

Document Type:

DRM

Document Part:

000

Document Version:

00

Double-click or choose the display icon, to display the original application files. You can also display the original by choosing Display from the mouse menu. 1-6 Finally, link your material master record to a document info record. 1-6-1 Change material master record T-F6##, and enter the following in the additional data: Basic data 1 Document Type: DRM Document: T-F6## Document Part: 000 Document Version: 00 Choose the display icon (spectacles) to display the original application files. Another dialog box appears where you can select the original application files.

Save your material master record

© SAP AG

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1-7

Next, you use the product structure browser to get an overview of the product structure. 1-7-1 On the initial screen of the product structure browser, enter your material: Material: T-F6## Display the documents and classifications for your material. Since the document has several original application files, you can also display these from the browser. Exit the browser

© SAP AG

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Lifecycle Data Management: Solutions Unit: Lifecycle Data Management

1-1

Create a finished product, T-F6##, in plant 1000. 1-1-1 Create a finished product in plant 1000 with the following data: Logistics→ Materials Management → Material Master → Material → Create (General) → Immediately Material: T-F6## Industry Sector: Mechanical Engineering Material Type: Finished product Select Enter. Create the following views for your material master record: Basic data 1 Classification Enter the following data on the Basic data 1 view: Field

Data entry

Material description

Pump T-F6##

Base Unit of Measure Select Enter

PC

Double click on Material class type 001 in the dialog box. Do not make any entries on the following detail screen, because classification will be done later on. Select the Save icon to save your material master record.

© SAP AG

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1-2

Classify the material master record. 1-2-1 Classify material T-F6## by assigning it to class 100 Pumps. Assign values to the characteristics and make a note of the values. Logistics→ Materials Management → Material Master → Material → Change → Immediately Material: T-F6## Select Enter Select the Classification view Classification view: Class Type: Class:

001 (Material class)

100 Pumps (complete)

You have already entered the class type.

Select Enter Using the drop down, assign values to the characteristics and make a note of the values. Pump lift:

___________________

Pump capacity:

___________________

Select the Save icon to save your material master record. 1-3

Perform a search for a material using the classification system. Cross-Application Components→ Classification System → Find → Find Objects in Classes Use the matchcode search "Materials for class” for the material. On the Find Objects in Classes screen enter the following values: Class: 100 Class Type: 001 Select Enter Enter the characteristic values that you assigned to the characteristics when you classified your material in exercise 1-2-1. Select the Find in initial class button. As a result of your search, you will see the pumps that match the characteristic values that you entered. Exit the search result.

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1-4

In this task you will create a document info record. You will use an available document info record and its originals as a template. 1-4-1 Create a document info record with the following data: Logistics → Central Functions → Document Management → Document → Create On the Create Document: Initial Screen, enter the following data: Field

Data entry

Document

T-F6##

Document Type

DRM

Document Part

000

Document Version

00

In the Template section: Field

Data entry

Document

T-D01

Document Part

000

Document Version

00

Enter In the field for document data, enter the following: •

Description:

Pump T-F6##

•

Lab/Office:

KB1

Select the Save icon. When you save the document info record or confirm an entry by using the enter key, a dialog box asks for a log field entry. The log field is maintained depending on the status.

Enter the following in the log field for status "Work Request" (WR): Document Created

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1-5

Display your document info record. 1-5-1 After creating the document info record and making the first entries, display your original application files, and determine whether changes to the original application files are necessary. Logistics → Central Functions → Document Management → Document → Display On the Display Document: Initial Screen, enter the following data: Field

Data entry

Document

T-F6##

Document Type

DRM

Document Part

000

Document Version

00

Enter Double-click or choose the display icon, to display the original application files. You can also display the original by choosing Display from the mouse menu. Exit the document info record. 1-6

Finally, link your material master record to a document info record. 1-6-1 Change material master record T-F6##, and enter the following in the additional data: Logistics→ Materials Management → Material Master → Material → Change → Immediately Enter Material T-F6## Enter Select the Basic data 1 view. Enter Choose the Additional data button Select the Document data tab Enter the following data: Document Type: DRM Document: T-F6## Document Part: 000 Document Version: 00

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Choose the display icon (spectacles) to display the original application files. Another dialog box appears where you can select the original application files.

Save your material master record 1-4

Next, you use the product structure browser to get an overview of the product structure. Cross-Application Components → Engineering Change Management → Environment → Product Structure 1-4-1 On the initial screen of the product structure browser, enter your material: Material: T-F6## Display the documents and classifications for your material. Since the document has several original application files, you can also display these from the browser. In the tree-structure, expand the Documents and Classification nodes. To view the documents, select the eyeglass icon in the original column. To view the characteristics and characteristic values, select the puzzle piece icon in the values column. Exit the browser

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Lifecycle Data Management: Test Your Knowledge 1.

Determine whether this statement is true or false. Document management allows the integration of external files into your Enterprise system.

2.

Fill in the blanks to complete the sentence. Characteristics are assigned to a ________ which is assigned to an ________.

3.

List some of the benefits of using engineering change management.

__________________________________________________________ 4.

What is the tool that displays in tree-structure form all objects that belong to each other functionally, such as materials, BOMs, documents, classes, characteristics, or routings. _________________________________________________________

5.

Determine whether this statement is true or false. Within Engineering Workbench the complete task list or BOM is locked for processing.

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Lifecycle Data Management: Answers 6.

Determine whether this statement is true or false. Document management allows the integration of external files into your Enterprise system. Answer: True, document management allows the integration of external files into your Enterprise system.

7.

Fill in the blanks to complete the sentence. Characteristics are assigned to a ________ which is assigned to ________. Answer: Characteristics are assigned to a class which is assigned to an object.

8.

List some of the benefits of using engineering change management. Answer: 1. You can group together changes for different objects that are affected by one change 2. Allows you to make changes dependent on date, serial number, or custom effectivities. 3. You can store objects (for example BOMs, routings) more than once base upon relevant change statuses. 4. It is a central logistical function for master data changes.

9.

What is the tool that displays in tree-structure form all objects that belong to each other functionally, such as materials, BOMs, documents, classes, characteristics, or routings. Answer: Product structure browser is the tool that displays in tree-structure form all objects that belong to each other functionally.

10.

Determine whether this statement is true or false. Within Engineering Workbench the complete task list or BOM is locked for processing. Answer: False. Engineering Workbench allows the user to lock individual items, such as an operation, within a task list.

© SAP AG

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10-39

Project Management

Contents: z Project Structures z Project Planning z Project Budgeting z Project Execution z Period-End Closing

 SAP AG 2004

© SAP AG

TERP10

11-1

Project Management: Unit Objectives

At the conclusion of this unit, you will be able to: z Describe the basic data used in a project. z Explain the project planning, budgeting, execution, and period-end closing steps in project management. z Identify the integration points with Financials, Materials Management, Production Planning, and Sales Order Management.

 SAP AG 2004

© SAP AG

TERP10

11-2

Project Management: Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

TERP10

11-3

Project Management: Business Scenario

z In your enterprise, different departments create projects to organize and monitor project related activities and to plan and control project costs. As a project team member, you need to understand project structures and the processes of managing a project.

 SAP AG 2004

© SAP AG

TERP10

11-4

Project Characteristics

Hierarchy of Project Parts

SD

Resources

Purchasing

CrossDepartmental

Budget

Profitability

Dates

Accounting

Planning & Control Costs/Revenues

Production

Payments

Complexity, Uniqueness

 SAP AG 2004

Projects are tasks with particular characteristics: They are usually complex, unique, and involve a high degree of risk. They have precise targets that are agreed on between the contractor and the sold-to party. They are limited in duration and are cost and capacity intensive. Several departments are involved in a project. They are subject to specific quality requirements. They are of mostly strategic significance for the business carrying them out. Projects are usually an integral part of a business's commercial processes. Before you can control all the tasks that occur as part of project execution, you need a project-specific organizational form that should be in a position central to the user departments involved.

© SAP AG

TERP10

11-5

Project System Master Data WBS Elements

Activities

Resp.-Oriented Org.

Process-Oriented Org. 1: N

WBS Element and Activity Assignments

 SAP AG 2004

A work breakdown structure (WBS) is a model of a project, and shows the project activities to be fulfilled in hierarchical form. It forms the operative basis for planning costs, revenues, and payments, as well as for scheduling, and budgeting. Activities are used to show the flow of a project or of activities involved in a project. The individual tasks are linked to each other, and grouped together to form what are known as networks. Activities form the operative basis for planning and controlling dates, costs, and resources (personnel, machinery, Production resources and tools (PRTs), and materials). When activities are assigned to WBS elements, the dates and costs defined in the individual activities are totaled up (aggregated) at the WBS level and can be evaluated. Activity funds already assigned are checked against the budgets of the WBS elements.

© SAP AG

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11-6

Phases in a Project Status/ Phase

Concept

Rough-Cut Planning

Detailed Planning

Approval

Costs

WBS

----------------

Budget

Per.-End Closing

Execution Commitment Costs Revenues

Settlement

Release

Network Prod. Order

Final Confirmation

Time Invoice

SD Document

Quotation

Order

Billing Doc.

 SAP AG 2004

The project itself comprises several phases. A high degree of precision is required when planning and coordinating large and complex projects. When planning the flow of a project, you will schedule deadlines and dates, make resources available, and assign budgets. The Project System gives you the support you need in all project phases.

© SAP AG

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11-7

Project Structures: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the basic functions associated with work breakdown structures. z Explain the purpose of networks and activities. z Describe the use for mass change.

 SAP AG 2004

© SAP AG

TERP10

11-8

Work Breakdown Structures: Structure Project Definition WBS Elements

E-99## E-99## Elevator E-99##-1 Engineering

E-99##-1-1 Electrical

E-99##-1-2 Mechanical

E-99##-2 Procurement

E-99##-2-1 Motor

E-99##-3 Assembly

E-99##-2-2 Cabin

E-99##-4 Acceptance

E-99##-2-3 Equipment

Work Brkdwn Struct.

 SAP AG 2004

The project definition contains data used for the entire project (start and finish dates, organizational data and planning parameters, for example). It contains default values that can be passed on to the WBS elements. The controlling area is unique for the entire project. It is specified at the beginning of the project creation process. You define organizational units such as company code, business area, profit center, and plant for each WBS element. A WBS is a model of a project, and shows the project activities to be carried out as a hierarchical structure. The various work packages in the project are described in individual WBS elements. You can further divide these elements at various levels until you reach the level of detail you require. The WBS elements are the objects that are actually used for planning and updating actual data. Since the work breakdown structure is structured hierarchically, the data can be summarized and displayed for the corresponding higher-level WBS elements. You can use the Project Builder or the project planning board to create and change the work breakdown structure. You can edit projects in tabular or graphical mode.

© SAP AG

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11-9

Work Breakdown Structures: Functions Dates

Costs/Revenues

z Basic Dates z Scheduled Dates z Actual 0 1 /0 1 Dates

1

z Planned Costs/ Revenues z Actual Costs/ Revenues

z Original Budget z Budget Updates z Budget Releases z Availability Control

Payment Data z Payment Planning (Debit-Side/Credit-Side) z Actual Data Updates

Budget

Commitment Periodic Processing z Overheads, Process Costs z Interest Calc. z Results Analysis z Settlement

z Purchase Requisition z Purchase Pur c Order Ordehase r

 SAP AG 2004

The WBS forms the basis for all subsequent planning tasks in the project. The emphasis is placed on planning, analysis, description, control, and monitoring of costs, basic dates, and the budget. Costs, dates, and payments are often planned using activities, which are assigned to WBS elements.

© SAP AG

TERP10

11-10

Project Builder

Current Project

Overviews for Selected Object

Selected Object

Detail Screen for Selected Object Worklist and Templates

 SAP AG 2004

You can use the Project Builder to maintain any object in the Project System, except for the assignment of production resources and tools (PRT).

© SAP AG

TERP10

11-11

Work Breakdown Structures: Operative Indicators Invo ice

Operative Indicators Invo ice

Acc. Assgmt Element

Planning Element

Billing Element

Project Managers, Partners

Cost Center Responsible

Profit Center Business Area Company Code

 SAP AG 2004

You use operative indicators to define the characteristics of a WBS element, and to specify what tasks the WBS element will assume during project execution: WBS elements for which you want to plan costs are flagged as planning elements. WBS elements to which you want to post actual costs are flagged as account assignment elements. WBS elements where you want to plan or post revenues are flagged as billing elements. You can assign profit centers, business areas, responsible persons, partners (internal and external), and cost centers responsible for the project to WBS elements. These assignments are used mainly for reporting purposes (see unit about Reporting). Example 1: Summarizing a large number of projects by business area and persons responsible. Example 2: Analyzing the project key figures of a large number of projects in your cost center hierarchy or profit center hierarchy. You can generate cost-center-based rules for costs projects. You can use R/3 Partner Processing to assign customers, vendors, personnel numbers, system users, work centers, shipping points, HR organizational units, and other objects to WBS elements. When you do, the system conducts checks against existing R/3 master data. You can specify in the system that E-mail should be sent to the person responsible for the project if the budget is exceeded. When documents are assigned, the business area and profit center are derived from the corresponding WBS element. This information can be used later for reporting by business area or in profit center accounting. Each WBS element is assigned its own company code. Since different company codes can be assigned to the various WBS elements in a project, this means that it is possible to process projects across companies.

© SAP AG

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11-12

Work Breakdown Structures: Maintenance Options Manual

1

Hierarchy Graphic

2

Display Area

Project Builder

Copy

3

Navigation Area

Insertion Area

Incorporate

4

= Standard Structure = Operative Structure

 SAP AG 2004

You can use the Project Builder to create and change WBS elements. You can do this on detail screens or in the list of WBS elements. You can use the hierarchy graphic to change WBS elements (by double-clicking). You can also create new WBS elements, and insert these in the hierarchy (connect mode). You can also use existing project structures or standard projects as templates to copy from. When you create a new WBS, you can use an existing WBS, a section of the project hierarchy, or a standard WBS as a template to copy from. You can also incorporate WBS elements from other projects or from a standard WBS in an existing WBS (3, 4).

© SAP AG

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11-13

WBS Hierarchy Graphic

Display Area

Navigation Area

Insertion Area WBS Element No. Description Bill

Create WBS Element Change WBS Element (Detail Screen) Connect (Define Hierarchy)

Plan

Acct

Collapse Subtree Expand Subtree Full View

 SAP AG 2004

You can edit the structure of the WBS in the hierarchy graphic. For example, you can create new WBS elements or cut and paste subtrees from the hierarchy. You can call up the hierarchy graphic from various Project System transactions (from the Project Builder, for example, from cost planning, scheduling, budget management, or the information system).

© SAP AG

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11-14

Activities and Networks: Structures T-200## Turbine

Activity List for WBS Element (or Network)

T-200##0.1 Engineering 1000 1100 1200 1300 1400 1500

90xxxx

T-200##.2 Planning

T-200##0.3 Purchasing

2000

T-200##0.4 Production

3000 3100

4000

T-200##0.5 Assembly 5000 6000

Activities

2000

3100

3000

1200

Network

1300 1000

Relationships

4000

5000

6000

1100 1400

1500

 SAP AG 2004

The activities in a project describe the various steps and work involved in the project. In the Project Builder, you create activities for WBS elements. This means that the activities are assigned to the WBS elements in question. It also means that the planned and actual data for the activities (dates, costs, and payment data) can be aggregated at the WBS element level. Activities are linked to each other by means of relationships – this results in a causal and chronological activity sequence. At the same time, they also form a quantity structure for planning: Dates (occurs automatically via scheduling) Costs (occurs automatically via costing) Resources (internal activities and external activities) Material requirements (using the assigned components) The Project System has the following activity categories: Internal processing for capacities to be staged in your own company External processing for tasks to be assigned externally Services for procuring external services Cost activities for planning additional primary costs

© SAP AG

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11-15

Activities and Networks: Functions Internal Activity z Work z Dates, Capacities z Costs Milestones

External Activity/Service

z Billing Dates Based on Billing Milestones (Invoice/Down Pymnt)

z Dates z Costs, Commitments z Payments

Costs Activity z Dates z Costs z Payments

Materials

Periodic Processing

z Purch. Parts/Assemblies z Costs, Commitments z Dates z Payments

z Process Costs z Overheads z Settlement  SAP AG 2004

You use the activities in the network to plan the labor, capacities, materials, tools, and services you need to carry out various tasks in your project.

© SAP AG

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11-16

Activities: Maintenance Options Manual

1

Ntwk Structure Graphic

2

Display Area

Project Builder Copy

Navigation Area

Insertion Area

3

Copy Project (incl. Activities)

5

= Standard Structure = Operative Structure

Incorporate

4

 SAP AG 2004

In addition to maintaining data manually and maintaining data in the network graphic (1, 2), you can also use existing operative structures or standard structures as templates. When you create activities, you can use a standard network or an existing network as a template (3). You can also incorporate standard networks in an existing network (4). Using the Project Builder or the project planning board, you can copy a standard project or existing operative project (including all of its activities) to a new project structure (5).

© SAP AG

TERP10

11-17

Network Structure Graphic

Activity Number Description Activity Dates

Duration of Activity

Display Area 3100

PS01

40 days

Procurement of Parts

09/14/99 09/21/00

5 0

Relationship

11/02/00 11/09/00

Control Key

Navigation Area

Activity Float

Insertion Area PS 01

Create Activity Change Activity (Detail Screen) Connect (Create Relationships)

PS 02

PS 03

Schedule Align Structure Full View

 SAP AG 2004

All of the functions you need to create a network are available in the network graphic (the functions for inserting activities or relationships, for example). You can access the network graphic from various functions in the Project System (the Project Builder, project planning board, or the information system, for example). Cycle analysis is a function that you can only perform in the network graphic. A cycle is a closed sequence of relationships and activities (closed means that, when you start out from one activity, you end up back at the same activity, by way of relationships). If the activity-relationship-activity path is cyclical, you will not be able to schedule the network. Cycle analysis is a tool that enables you to detect cyclical relationships, and correct them.

© SAP AG

TERP10

11-18

PS Texts, Documents, Milestones: Assignments

T-200## Turbine

Documents for Activities or WBS Elements

……

T-200##.1 T-200##.2 Engineering Planning 1000 1100 1200 1300 1400 1500

2000

T-200##.3 T-200##.4 Purchasing Production 3000 3100

PS Texts for Activities or WBS Elements

..

T-200##.5 Assembly

4000

5000 6000

Milestones for Activities or WBS Elements  SAP AG 2004

PS texts are user-definable texts that are managed in a PS text catalog. The texts are classified into different text types. You can assign PS texts to one or more WBS elements or activities. You can enter PS texts in mySAP ERP SAPscript or in Microsoft Word. The files in question are stored in the mySAP ERP database. You can use the mySAP ERP Document Management System in the Project System to assign document info records to WBS elements and activities. In the Document Management System (DMS), you can assign original (external) documents in various formats (Excel, Word, PPT, BMP, TIF, CAD formats, and so on) to an (mySAP ERPinternal) document info record. In the Project Information System, you can display the document info records and the corresponding original documents online. You can also display the original documents using the Internet. You can assign milestones to activities and WBS elements. Milestones have a range of applications. They can be used for milestone billing in SD, for example, or to start workflow tasks.

© SAP AG

TERP10

11-19

Mass Change Changeable Objects: z Project Definitions z WBS Elements z Networks z Activities z Relationships

Mass Change Cannot be Undone!

 SAP AG 2004

You can use the mass change function to make cross-project changes to fields pertaining to project definitions, WBS elements, networks, activities, and relationships. You can test the extent of your changes before you actually make a mass change. The same authorization objects as for individual changes are used for mass changes. As of Release 4.6, you can change numeric field using formulas instead of setting fixed values. To this end, the system includes a formula line (for simple syntax) and an ABAP Editor for complex operations. Examples: Work is to be doubled for all the activities selected; formula << 2 * X >> Work is to be doubled for all activities, but only up to a maximum of 320 hours; complex operation using ABAP code Remember that, if you make a mass change, this might mean that a large number of objects will be changed simultaneously. In many cases, you cannot undo the changes made. For this reason, always be particularly careful when you use this transaction.

© SAP AG

TERP10

11-20

Project Structures: Topic Summary

You are now able to: z Describe the basic functions associated with work breakdown structures. z Explain the purpose of networks and activities. z Describe the use for mass change.

Topic Summary

 SAP AG 2004

© SAP AG

TERP10

11-21

Project Planning: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the basic functions associated with project planning board. z Explain the purpose of planning WBS dates and scheduling. z Define the types of resource planning and their integration implications. z Describe different types of project cost and revenue planning and their integration implications.

 SAP AG 2004

© SAP AG

TERP10

11-22

Project Planning Overview Project Structures

Dates

1

Costs, Revenues

Payments

Materials

Resources

 SAP AG 2004

A project is subject to a range of factors: Dates: Will the project be completed in time? Resources: Are the available resources adequate? Costs: What will the project cost? Payments: When will incoming payments be received and outgoing payments made? Result: What is the relationship between costs and revenues? When are costs incurred, and when is revenue received?

© SAP AG

TERP10

11-23

Project Planning Board: Objects WBS Elements

Activities

Documents

Relationships

PS Texts

Materials

…… .. Basic Dates

Milestones

1  SAP AG 2004

The project planning board is a graphical interface you can use to create and edit all the data for a project: Project definition, WBS elements, activities, relationships, milestones, documents, and PS text Planning dates and resources (labor, external processing) Cost planning using activities The project planning board is based on an interactive SAP Gantt chart. Important navigation options are available in the project planning board: When you double-click certain points in the project planning board, you go directly to detail screens, where you can change the field selection or the time settings. When you press the right-hand mouse button, all the functions available to you at this point are displayed (Important: the options available will depend on exactly where you have positioned your cursor). When you select Select all and Show all dependent objects, all the objects in the project planning board are displayed.

© SAP AG

TERP10

11-24

Project Planning Board: Integration Dates Capacity Overview

Hierarchy Graphic

Cost/Revenue Overview

xx xx xxx xx xxxx xxxx xx x

xxx

xxx

xxxxx

Ntwk Structure Graphic

t

Materials Overview

Maint. Orders

PM

 SAP AG 2004

In addition to the Scheduling Overview, you can also display the following project overviews: Capacity Overview - The system displays the work centers (and the capacity load utilization) for the activities selected. Green bars show that capacity is still available, red bars mean that the available capacity has been exceeded. Materials Overview - The system displays the material components (and the corresponding requirements dates) assigned to the activities selected. Cost/Revenue Overview - The system displays the development of costs/revenues for the WBS element or activity selected. As of Release 4.6, you can display the PM orders assigned to an activity in a separate chart. From the project planning board (and the Project Builder), you can call up the hierarchy graphic for WBS elements or the network graphic for activities, and work interactively there.

© SAP AG

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11-25

Basic Dates for WBS Elements

Project Planning Board WBS

Basic Dates in Project Definition E-99##

E-99## E-99##-1 E-99##-1

E-99##-2

E-99##-1 Actual Dates E-99##-2 E-99##-2 Actual Dates

 SAP AG 2004

You can plan dates for individual WBS elements as well as you can enter outline dates for your project in the project definition. In rough-cut planning, you specify dates for WBS elements that are binding for more detailed planning. You can then use this rough-cut plan as the basis for more detailed planning or scheduling using networks. You can use several functions in date planning to compare, reconcile, or calculate dates at a later point in time.

© SAP AG

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Resource Planning 2000

3100

3000

1200 1300

1000

4000

1100 1400

Vendor

5000 Cap. Load Utilization

1500

Work Center

Pu r c Or d hase er

Workforce Planning

Externally Processed Activity Service Activity

Internally Processed Activity

 SAP AG 2004

You use activities in a network to plan the resources required for a project. The Project System draws a distinction between the following resources: An internally processed activity determines the output to be provided by machines or personnel in order to complete the activity. You can evaluate the capacities of the various work centers involved, reschedule these capacities as necessary, and distribute work among employees. You use an externally processed activity to specify the necessary services to be provided by other companies in order to complete the activity. External processing is carried out via the purchasing department. Service activities are also used to procure services externally. The difference between service activities and externally processed activities is that, if you use service activities, you can draw up service specifications and set value limits for any unplanned services. The Purchasing Department carries out service processing (including entry and acceptance of services performed).

© SAP AG

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11-27

Internal Processing Work Performed In-House

1200

Cap. Reqmnts Planned Dates Planned Costs

Work: 500 hrs Work Center: 2700

Capacity Load Reduction, Actual Dates, Actual Costs Scheduling Data

Available Capacity

1

Cost Center Data

Confirmation Assignment to Persons

Capacity Analysis

Capacity Leveling

Work Distrib. Among Workforce

 SAP AG 2004

You must enter work data for an activity so that the system can plan capacities for a project and calculate costs for activities. You need to specify the amount of work involved and the work center that is to perform the work. Work is the output to be provided by machines or personnel in order to complete an activity. A work center is the place where an activity is carried out or work output is produced. Work centers contain data for costing activities. Work centers also contain the scheduling and capacity data necessary for scheduling and capacity planning. You can determine work center capacities for the activities. If necessary, you can use the project planning board or the capacity planning tables to level capacities. You can also distribute the work among employees (workforce planning). Generally speaking, when you confirm activities, you consume (reduce) capacity requirements, and enter actual dates and actual costs.

© SAP AG

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11-28

External Processing Work Performed by a Third Party (Vendor)

1400 Description


Material Group Purchasing Group


Quantity and Unit

Bid Invitation

Goods Receipt

Vendor

Quotation Entry

PO Monitoring

Purc Orde hase r

Vendor Selection PO Processing

 SAP AG 2004

You can create activities and activity elements as externally processed activities or external elements in a network (if, for example, you commission an engineering office to design a machine). When you create such an activity, a purchase requisition is also created, and processed further in Purchasing. You can access data from purchasing for external processing (a purchasing info record, for example, which contains prices and delivery times for external processing). A service activity triggers a similar purchasing process, but can also contain a hierarchy of planned services to be purchased, and value limits for unplanned services. The goods receipt for services involves two steps: Entry of services performed Acceptance of services performed. You use the control key to determine whether an activity is externally processed.

© SAP AG

TERP10

11-29

Materials in Projects PS

SD

MM Purc h a s Orde e r

SD

Production Order

PP

 SAP AG 2004

Materials establish the link between the Project System and Sales and Distribution (SD), Materials Management (MM), and Production Planning and Control (PP).

© SAP AG

TERP10

11-30

Planned Costs in Projects (1) Overall Planning (Hierarch. Planning) Cost Planning Using Activities/Network Costing

Cost Element Planning

600,000 400,000

200,000

400000 150000 415000 75000 E

10h Activity 1421

F K

10h Vendor 1000 $5000 ce 466000

400000 180000 415000 80000

Unit Costing

Σ Easy Cost Planning

Projects and Orders

Σ

I/0099

PP

PM/CS

CO

 SAP AG 2004

You can plan project costs in two different ways: Manual cost planning in WBS Cost planning using activities (network costing) Manual planning in the WBS involves: Overall planning, the most basic form, where you enter costs for each WBS element. You can break down your figures by fiscal year if you want. Detailed planning of primary costs and activity inputs. This type of planning is cost-element-based and period-based. Unit costing, where you use a profile to enter quantities (materials, internal activities, external services, variable items, and so on) for each WBS element. This type of planning is cost-elementbased. Easy Cost Planning from Release 4.6C. As the name suggests, Easy Cost Planning is an easy-to-use option for planning costs by cost element, using a quantity structure. You can then use Execution Services to enter commitments and actual data relating to the planned costs. In addition to manual planning in the WBS, you also have the option of creating activities for WBS elements, and using these activities to plan costs. This method has the following advantages: The resulting plan can be copied to new projects. If parts of the project are shifted, cost planning is shifted automatically along with the activities. Planning using network activities is by cost element and period.

© SAP AG

TERP10

11-31

Planned Costs in Projects – Easy Cost Planning

 SAP AG 2004

From Release 4.6C, we offer Easy Cost Planning, an easy-to-use tool for planning costs in WBS elements. You access Easy Cost Planning for projects from the Project Builder. Choose a WBS element from the structure tree. Costing items are created for this WBS element. Cost planning using Easy Cost Planning is by cost element. You can use planning templates to enter costing items. In the process, characteristics (such as work in hours) are valued. The characteristic values from the planning template are linked with quantities, values, or actions in the costing items (in the example above, with the quantity for an internal activity). Once you have adopted the values, the costing items appear under the relevant WBS elements in the structure tree. Easy Cost Planning can act as a simple preliminary costing for projects. The costs so planned are broken down later – for example, by a quantity structure of networks/activities. You can also use Easy Cost Planning to create plan data for the project execution phase. In this case, you later use Execution Services to enter commitments and actual data relating to the planned costs. Use Customizing to define the CO versions you want available in Easy Cost Planning.

© SAP AG

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Planned Costs in Networks

Material Components

External Processing

Services

Internal Processing

Primary Costs

Int. Element Ext. Element Cost Element

Planned Costs (Example Without Overheads) Valuation

Cost Element

Description

Value

100 h * 150 10 pc * 800 60 h * 300 9000

612000 400000 415000 466000

Internal Proc. Material External Proc. Transport

15,000.00 8,000.00 18,000.00 9,000.00

Σ

50,000.00

 SAP AG 2004

When you plan dates and resources for network activities, the system determines the corresponding planned costs automatically. Planned costs are determined for the following objects: Activity inputs for internally-processed activities Primary costs for externally-processed activities and services Primary costs for general costs activities Primary costs for material components Activity elements are costed as if they were activities.

© SAP AG

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Planned Revenue – Methods SD Doc. Assigned SD

F

Revenues Billing Plan for WBS Elements Bill i n Plan g

F

Manual Planning Time 01 02 03 04 05 06

F

2001 2000 Overall E-1399 E-1399-1 E-1399-1-1 E-1399-1-2 E-1399-2 ....

Bill i n Plan g

PLAN.

SD

TOT.

DOC.

... ... ... ...

 SAP AG 2004

You can plan revenues in your project in the following ways: Manual revenue planning (structure-oriented, or on the basis of revenue elements). The latter of the two is cost-element-based and period-based. Revenue planning using PS billing plans. This type of planning is revenue-element-based and period-based. Revenue planning using SD documents (sales order items or even quotation items). This type of planning is revenue-element-based and period-based.

© SAP AG

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11-34

Project Planning: Topic Summary

You are now able to: z Describe the basic functions associated with project planning board. z Explain the purpose of planning WBS dates and scheduling. z Define the types of resource planning and their integration implications. z Describe different types of project cost and revenue planning and their integration implications.

 SAP AG 2004

© SAP AG

TERP10

11-35

Project Budgeting: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the differences between planning and budgeting. z Explain the function of budget availability control.

 SAP AG 2004

© SAP AG

TERP10

11-36

Cost Planning and Budgeting

Requested Budget

Cost Planning Overall Plan Value Bottom-Up Extrapolation

Approved Budget 2004

Budgeting

2003 Overall E-1399 E-1399-1 E-1399-1-1 E-1399-1-2 E-1399-2 ....

O R I G I N A L

P L A N. T O T A L

D I S T R I B.

... ... ... ...

Budget

Top-Down Distribution

 SAP AG 2004

While you must estimate your project costs as accurately as possible during project cost planning, it is in the approval phase that funds are actually allocated in the form of a budget. The budget differs from the cost plan in that it is binding. It is the device by which management approves the anticipated development of project costs over a given period of time.

© SAP AG

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Availability Control +

Er

Wa r

ro

nin

g

120,000 30,000

80,000 100,000

Bu Ex dget ce ed ed Person Responsible

Actual Costs 30,000

250,000

r

Inbox

-

Budget Assigned

50,000

Commitment (Purchase Order, Purchase Req., Funds Reservation) 50,000

!

50,000

Orders 50,000 PP

PM

CO PS

 SAP AG 2004

When a project is being executed, various centers call on the available funds. Commitments are created and actual costs are incurred. Together with the costs of apportioned orders, both these forms of fund commitments result in what are referred to as assigned funds. The funds overview can be regarded as a passive availability control. However, the Project System also provides an active availability control. The corresponding assigned funds are calculated, and checked against the budget. The assigned funds can be found in the budget-bearing WBS element and in the lower-level assignable WBS elements. If certain tolerance thresholds are breached (shortfall in budget, budget exceeded), this can trigger various system reactions (a warning, for example, or an error message). In Customizing for the tolerance limits, you can specify which reaction should be triggered and when. Once activated, availability control is run for each subsequent posting in the project. During the availability control: The budget-bearing WBS elements (called controlling elements) are determined. The corresponding assigned funds are determined. The assigned funds are checked against the budgets of the controlling elements. The assigned funds can be found in the budget-bearing WBS element itself, and in the lower-level assignable WBS elements (account assignment elements).

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Project Budgeting: Topic Summary

You are now able to: z Explain the differences between planning and budgeting. z Explain the function of budget availability control.

 SAP AG 2004

© SAP AG

TERP10

11-39

Project Execution: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the functions involved with posting to projects and their integration implications. z Describe different methods of posting labor to a project. z Define the integration between projects and materials management from a purchasing process.

 SAP AG 2004

© SAP AG

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11-40

Aspects of Project Execution Costs, Revenues

1 Dates

Payment Data

Resources

Availability Control

Integration MM PP

SD PM

PS

FI

CO AM

HR

 SAP AG 2004

You must release the project (or the work packages in question) before you can enter actual data. Actual data is posted to the project by business transactions from various components of the SAP mySAP ERP System. These components include: Materials Management (MM): Purchasing: purchase order, goods receipt for materials and services Inventory Management: goods issue for reservations Sales and Distribution (SD): billing of the sales order Production Planning (PP): confirmation of assigned production orders Plant Maintenance (PM): confirmation of assigned PM orders Controlling (CO): internal activity allocation, assigned CO orders Financial Accounting (FI): down payments, payments Asset Management (AM): settlement to assets Human Resources (HR): entry of work for persons, and posting as activity confirmation Note: You can use the Cross-Application Time Sheet (CATS) even if you have not implemented the HR component.

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Confirmation Options

PDC

Indiv. Confirmation

External System

2000

3100

PDC Confirmation

3000

1200

Offline Solutions

1000

1300

1

1400

MM

1500

Confirmation from Info System, Conf. Workflow

Internet

CO

CS PM CATS HR

-

4000 5000 6000

1100

lm Pa ilot P Open PS CATS Notebook

Collective Confirmation

PS

Time Sheet

Internet Confirmation (Indiv./Collective, CATS)

 SAP AG 2004

Confirmations document the processing status of activities and activity elements in a network, and enable you to make forecasts as to how the project will progress. Various business transactions are carried out automatically by means of confirmations. These include posting actual costs, actual dates, actual labor (work), and, if applicable, changing the activity status. You can create confirmations in the following ways: Individually for each network, activity, activity element, or individual capacity As a collective confirmation Using the structure information system (by selecting activities, and accessing individual or collective confirmation). From the information system, you can send a confirmation workflow to another user, or to an organizational unit. Using the Cross-Application Time Sheet (CATS) Via the Internet (by creating an individual confirmation, or entering time data in the Time Sheet) Using Palm Pilot and the open PS interface Via the PDC interface

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Cross Application Time Sheet (CATS)

MM

Working Hours

CO

CS CATS PM HR

PS

Transfer HR

PS Attendance/ Absence Types

CO

Confirmation PM of Activities

Internal Cost Allocation

MM Services

CS

 SAP AG 2004

CATS is an integrated function for entering actual time data important in HR, PS, PM, CS, CO, and Materials Management-Services (MM-SRV). You can determine the layouts yourself, using data entry profiles. Report programs pass on the released (and, if necessary, approved) data to the various applications. The actual time data may be important for various applications simultaneously. In this case, the data is transferred to the applications in question. You can enter activities in the time sheet via the Internet. Notes on PP production orders: You cannot use CATS to enter confirmations for production orders because production confirmations deal primarily with yields and scrap quantities. However, you can use CATS to enter hours and assign them to the production order as receiver object (using the Order field). When transferred to CO, the hours so entered are posted as an internal activity allocation in the production order.

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Integration: Purchasing Process

Activities Ext. Processing Services Material Component Create and Assign Manually

Purchase Requisition (PO Commitment) Invoice Verification (Act. Costs)

Bid Invitation

Goods Receipt* (Act. Costs)

Quotation Entry Vendor Selection

* In service processing, entry and acceptance of services is performed instead of goods receipt.

Order Monitoring PO Processing (PO Commit.)

 SAP AG 2004

The network generates purchase requisitions for external processing activities, service activities and materials that are procured directly. These purchase requisitions are passed on to the purchasing department, where they are processed further. The purchasing process involves issuing a request for quotation to vendors (if applicable), entering these quotations in the system, selecting vendors, converting the purchase requisitions into purchase orders, and monitoring the orders until the goods and invoices are received. A service activity triggers a similar purchasing process, but can also contain a hierarchy of planned services to be purchased, and value limits for unplanned services. The goods receipt for services involves two steps: entering services performed, and accepting them. The purchase requisition results in purchase requisition commitments for the account assignment object (activity or WBS element). When the purchase requisition is converted into a purchase order, this results in purchase order commitments for the account assignment object (this is a different value type than purchase requisition commitments). Depending on the account assignment category of the purchase order, actual costs are posted upon goods receipt or invoice receipt (valuated, nonvaluated goods receipt). Based on the account assignment, they are passed on to the network activity or WBS element. As an alternative to having the network generate purchase requisitions automatically, you can also create purchase requisitions and purchase orders manually, and assign them to WBS elements.

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Project Execution: Topic Summary

You are now able to: z Explain the functions involved with posting to projects and their integration implications. z Describe different methods of posting labor to a project. z Define the integration between projects and materials management from a purchasing process.

 SAP AG 2004

© SAP AG

TERP10

11-45

Period-End Closing: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the functions of project period-end closing and their integration implications. z Explain the scenarios involved in settling projects from an integration perspective.

 SAP AG 2004

© SAP AG

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Period-End Closing: Processes Template Allocation

Settlement

COABC

Process Template Pr. Object Cat. (Process)

Incoming Orders Inc.Orders

Order Change

Qty

S

S_EINK

P

P_LAGER Form_1

Overhead Rates

Orders on Hand New Partial Order Invoice

Final Invoice

Results Analysis

SchedMan

Project Interest Calc.

F F

Cost Forecast Costs

Progress Analysis

Time

1

2

3

4

5

6

 SAP AG 2004

Period-end closing is the framework for carrying out period-related commercial transactions. You use it to ensure that all the data belonging to a period is determined and that data is available for enterprise controlling purposes. Period-end closing procedures are performed periodically in the background, usually once every period. The procedures are generally carried out for the previous month at the start of the next month. As of Release 4.6, you can use the Schedule Manager to help you carry out period-end closing. The Schedule Manager supports workflows for FI, CO, PS, and so on.

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Settlement Scenarios Sales Project: Settlement of Billing Element to Profitability Segment

Investment Project: Settlement to Asset Under Construction or to Asset

AUC

F T-200## N.S. N.S. N.S. N.S. N.S. N.S. N.S.

N.S.

N.S. N.S.

N.S. N.S. N.S.

E-99## N.S. N.S.

N.S.

E-99##-1

N.S. N.S.

E-99##-2

1-1

2-1

1-2

2-2

E-99##-3

E-99##-4

2-3

AUC

= No Settlement = Settlement Rule

Asset under Const. Profitability Segment

 SAP AG 2004

During settlement, costs/revenues are posted to: Financial Accounting (G/L account) Asset Accounting (fixed asset) Cost Accounting/Profitability Analysis (order, cost center, profitability segment) Project System (WBS element, network, activities) You need a settlement rule to carry out settlement. You define the settlement rule in the sender object. The settlement rule contains the distribution rules and the settlement parameters for a sender object. The WBS elements for investment project E-99## are settled to assets under construction (AUC). Rules prescribing settlement to AUC were generated when the WBS elements were released, under the control of the investment profile for the WBS elements. When the project is technically closed, the WBS elements are settled to an asset master record, and the values are transferred from the AUC to the asset. In the case of sales project T-200##, only the billing element is settled. Reason: Results analysis usually takes place at billing element level. The results analysis data contains not only the costs and revenues for the billing elements, but also for all the WBS elements and activities subordinate to the billing elements. This being the case, only the billing element has a settlement rule. All other objects are assigned the settlement profile - Do not settle.

© SAP AG

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Period-End Closing: Topic Summary

You are now able to: z Describe the functions of project period-end closing and their integration implications. z Explain the scenarios involved in settling projects from an integration perspective.

 SAP AG 2004

© SAP AG

TERP10

11-49

Project Management: Unit Summary

You are now able to: z Describe the basic data used in a project. z Explain the project planning, budgeting, execution, and period-end closing steps in project management. z Identify the integration points with Financials, Materials Management, Production Planning, and Sales Order Management.

 SAP AG 2004

© SAP AG

TERP10

11-50

Project Structures: Exercises Unit: Project Structures Topic: Work Breakdown Structures • Project Builder • WBS elements • Activities You use the Project Builder to create a customer project called Turbine and an investment project called Conveyor. The customer project consists of a work breakdown structure and network with activities and the investment project consists of a work breakdown structure. 1-1

In order to create a work breakdown structure, call up the Project Builder.

1-2

Using the Project Builder, create a project called T-200##. Do this by copying standard project T-20001 and its activities. 1-2-1 Enter the following data in the dialog box: Field Name

Values

Project def.

T-200##

Project profile

Turbine model group 1

Template Std proj. def.

T-20001 Leave other fields as they are.

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1-2-2 Enter the following in the basic data for the project definition: Field Name

Values

Description

Turbine GR##

Start

Today’s date

Finish

Today + 1 year Leave other fields as they are

On the left of the structure, you will now see various objects that were copied from the standard project: + Project definition (1st line) + WBS elements + Activities + Milestones The activities are grouped together in networks with the provisional number (example: %00000000001). 1-2-3 Save project T-200##. 1-3

You now want to add more activities to project T-200##. 1-3-1 Change project T-200## by double clicking the appropriate line in the worklist. 1-3-2 Now expand the entire structure. 1-3-3 Drag the line between the Worklist section and the structure tree section down until you can see all the objects in the project. 1-3-4 Create an external processing activity for WBS element T-200##.1 (Engineering and Design). On the detail screen of the activity External, enter the following data: Field Name

Values

Activity

1400

Text

Engineering of rotating blades

Info record

5500000093 Leave other fields as they are

1-3-5 Go to the network graphic, and enter FS relationships. 1000 → 1400 → 4000 Now align the activities. Close the network graphic and return to the Project Builder.

© SAP AG

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1-4

Create your investment project E-99##. 1-4-1 Enter the following data in the project definition: Field Name

Values

Project def.

E-99##

Description (no field name visible)

Conveyor GR##

Project profile

9000 Investment projects

Investment Profile

1000

Enter your project number, description and the project profile, then select enter. 1-4-2 Go to the WBS element overview. Maintain the following data there:

Lev.

WBS Element

Description

PE

1

@

New Conveyor GR##

X

X

1

@1

Engineering and design

X

X

1

@11

Electrical Engineering

X

1

@12


X

1

@13

Structural Engineering

X

1

@2

Procurement

1

@21

Procure Conveyor system

X

1

@22

Procure Equipment

X

X

Acct asst

X

Confirm your entries. The structure tree on the left now shows the various objects you have created: •

Project definition (first line)

•

WBS elements

1-4-3 Change the order in which Identification and Name in the structure tree so that the project number appears far left. 1-4-4 Save your project.

© SAP AG

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- Exercises Unit: Project Planning Topic: Planning Basic Dates for WBS Elements • Scheduling • WBS date planning

In your turbine project, planned dates are determined automatically when you schedule the activities. The durations of the various activities, and the relationships between activities, play a particularly important role in scheduling. The activity dates determined are aggregated, and are displayed for the WBS elements. You can also extrapolate the activity dates in the project hierarchy. 2-1

In session 1, use the planning board to change your turbine project.

Activity dates have already been determined for the turbine project. This occurred during network scheduling. The system has been set up in such a way that scheduling occurs automatically when you save. 2-1-1 Now display the milestones defined for your project. 2-1-2 Consider the scheduling-relevant data in activity 1000 (Engineer. of drawing/calculation/design). On this detailed screen, look at the fields, Normal duration, Factory calendar, and Work center, and look at the control key. All these fields play a role in scheduling. The activity is expected to last 25 days. Change the duration of the activity.

© SAP AG

Field Name

Values

Duration

25 (days)

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Choose the Dates tab page. In the lower part of this screen, you can see the earliest and latest dates defined for the activity (as a result of scheduling). In the upper part of the screen, you can define constraints, and in this way fix dates for activities. Now go back to the overview screen of the project planning board. 2-1-3 The change you have made will also affect the dates defined for subsequent activities. Determine these dates by rescheduling. When you do this, the dates for all activities are redetermined. The system also extrapolates activity dates for the assigned WBS elements – as the scheduled dates of the WBS elements. These dates can also be extrapolated further to determine the duration of the entire project. 2-1-4 Extrapolate the scheduled dates of the WBS elements right up to the level 1 WBS element (T-200##).

Note that you can set up your system so that dates are scheduled and extrapolated automatically when you save. 2-1-5 Save your date planning.

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Optioanal Exercises Unit: Project Planning Topic: Material Requirements Planning (MRP) In your turbine project, you also plan material requirements. The engineering and design department uses CAD systems to map the product structure in the form of bills of material (BOMs). You activate procurement of the material by assigning material components to network activities. These assignments are made automatically by means of the BOM/PS interface. 3-1

Transferring BOMs: In session 1, assign BOM components to the activities of your project T-200##. 3-1-1 Enter the following data on the initial screen: Field Name

Values

Project definition

T-200##

Profile

1300

Material

T-20000

Plant

1300

BOM usage

3

3-1-2 Transfer the bill of materials.

In the results overview, you will see the components of the (multilevel) BOM that were assigned to the activities in your project because they had the same reference points. The components are assigned when you save your data. There are two other ways of assigning material components to activities: 1. By copying from another project (that is, components have already been assigned to the other project) 2. By assigning components manually using the Project Builder or project planning board

© SAP AG

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3-1-3 Save your bill of materials transfer. 3-1-4 Go back to the project planning board for project T-200##, and check over the material view of your project. Select all objects, and go to the component overview. In the chart, you can see the various components and their requirements dates. By right-clicking, you can display other information on the components (the detail screen, for example, or the GR/GI List). 3-1-5 Go to the detail screen of component T-20210. By choosing the appropriate tab page, display the procurement parameters for the component. On the General Data screen, you can see the reservation number for the component. The Procurement Parameters screen contains important information on quantity and value flows (the account assignment type, special stock indicator, and Consumption indicator, for example). Now go back to the overview screen of the project planning board. Leave the project planning board without saving (no values were changed).

© SAP AG

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Optional Exercises Unit: Project Planning Topic: Cost Planning One type of project cost planning involves using activities and their assignments to WBS elements. This type of cost planning has important advantages over manual cost planning:

4-1

•

It can be copied to other projects and stored in standard networks.

•

It is easy to shift in time, if, for example, you need to postpone project work packages, all costs are shifted with the new scheduling.

•

Scheduling, capacity requirements planning and procurement is triggered by activities (integration of planning).

Now that the turbine project cost planning is complete, use the Cost Element/Activity Inputs transaction to plan costs for your Conveyor project. 4-1-1 In session 1, call up the cost element planning to plan project costs using plan version 0. 4-1-2 Plan costs for WBS Elements

WBS Element

Cost Element

E-99##-1

417000 Purchased Services

E-99##-2

Distribution Key

30,000

2

130,000

2

415000 External Procurement

© SAP AG

Total Plan Costs

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Optioanal Exercises Unit: Project Execution Topic: Confirmation of Activities You use the project planning board to confirm activities in your turbine project. The confirmation transaction is used to enter both actual dates and actual costs for the activities. You can use the project structure to evaluate both types of information in aggregated form. Once again, the project in question must be released before you can enter actual data. 5-1

Create confirmations for your turbine project (T-200##). 5-1-1 In session 1, change customer project T-200## using the project planning board. 5-1-2 Select all objects and change their status to Released. 5-1-3 Now select activities 1000 and 1100. Create confirmations for these activities. On the detail screen of the confirmation, enter the following data: Field Name

Values

Act.start

Same as scheduled earliest start date

Actual finish

Seven days later than scheduled earliest finish date

Actual work

Slightly more than the work planned Leave other fields as they are

Use the pushbutton to proceed to the next activity (1100) and enter data in the same way as for activity 1000. 5-1-4 Also select the actual set of dates so that you can check over the confirmation dates of both activities. 5-1-5 Save your data. Then go back to the main SAP menu.

© SAP AG

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Optional Exercises Unit: Project Execution Topic: Purchasing Process (***Instructor Only***) In this exercise, the external activities and material components required for the project are purchased from vendors. As trainer, you will adopt the roles of the MRP and purchasing departments. You will also post the goods receipt for the purchase order. To make matters simpler, we will assume that all goods to be procured externally will be procured from one vendor. Furthermore, you will not issue a request for quotation. 6-1

Instructor only: Carry out an MRP planning run for materials in plant 1300. Do all this work online. 6-1-1 Enter the following data in the initial screen: Field Name

Values

Plant

1300

Processing key

NETCH

Create purchase requisition

1

(!!)

Leave other fields as they are 6-1-2 Start the planning run. Then go back to the main SAP menu. 6-2

Instructor only: Assign the purchase requisitions of the course participants' turbine projects to vendor 1000. 6-2-1 Do this by calling up the report called Purchase Requisitions for Project in the information system. 6-2-2 Specify that the purchase requisitions should be assigned automatically to vendors using existing purchasing info records.

Although it is not absolutely necessary, you can manually assign any unassigned purchase requisitions to vendor 1000, purchasing organization 1000 (by choosing Assign Manually). Save the assignments and go back to the main SAP menu.

© SAP AG

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6-2-3 In Purchasing, create a purchase order for vendor 1000. Use the purchase requisition assignment list you created to do this. Enter the following data on the initial screen: Field Name

Values

Purchasing organization

1000

Vendor

1000

Plant

1300

WBS Element

from to

T-20001 T-20099 Leave other fields as they are

Edit the assignments to vendor 1000. Enter a purchase order of the type NB. In the Create Purchase Order screen, first close the notes in the middle part of the screen. Widen the left hand part of the screen, the document overview, so that you can see the open purchase requisitions. Then open up the item overview. With the shift key pressed down, select all the purchase requisition items and copy them to the purchase order. Save the purchase order. Make a note of the purchase order number:

____________________

Go back to the main SAP menu. 6-2-4 Now enter a goods receipt for the purchase order. First, check the default value settings you have made. Make any necessary changes. The following data should be entered in the detail screen: Field Name

Values

Stor.location

0001

In plant

1300

Propose the OK function in future

X

Propose all items

X

Save these settings

© SAP AG

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6-2-5 In the screen for purchase order goods receipts, enter your purchase order number. Confirm your entries. Goods receipt

Purc.order

Purchase order number you made a note of earlier

6-2-6 Post goods receipt. Then go back to the main SAP menu.

© SAP AG

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ClosingOpOptional Exercises Unit:

Period-End Closing

Topic: Overheads, Results Analysis, Settlement •

Overhead

•

Results Analysis

•

Settlement

Procedures that are performed periodically (for example, results analysis or settlement) are performed on a fiscal year period basis, (usually at the start of a period and for the preceding period). For your customer project, you will execute period end closing using individual processing for each task. These tasks will include overhead calculation, results analysis, and settlement.

7-1

Assigning the Results Analysis Key and executing Results Analysis. In the following, determine the results analysis keys that are assigned to the billing WBS elements of project T-200##. A results analysis key is required for the calculation of results. 7-1-1 Access the project builder for your project T-200##. 7-1-2 Results Analysis: Carry out results analysis for the current period for project T-200##. From the period end closing, access results analysis using individual processing for project T-200##. Enter the following data in the initial screen: Field Name

Values

WBS Element.

T-200##

Calculation to month

Current period

Year

Current year

Results analysis version

0

Manual Processing Only

No

Full log

Yes

Execute the report. © SAP AG

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Review the list of results analysis values for your project.

Results analysis key 130001 and results analysis version 0 stipulate revenue-proportional results analysis in the IDES system. Cost of sales (COS) is calculated for the project. The system uses this figure to calculate reserves for unrealized costs or work in process (WIP). If the proportional revenue (POC actual revenue: planned revenue) determines calculated COS greater than actual COS, then reserves are created for the unrealized costs. This prevents the profit from being overstated in the fiscal period. If the proportional revenue determines calculated COS less than the actual COS, then balances are created for the inventory from which revenue can be generated. 7-1-3 Access the logs to obtain additional information regarding the results analysis calculation, such as the POC, and the configuration for results analysis key 130001. Save your results. 7-2

Generate the settlement rule for your turbine project and execute settlement. 7-2-1 Generate the settlement rule for your project T-200##.

© SAP AG

Field Name

Values

Project

T-200##

With hierarchy

Yes

Period

Current period

Fiscal Year

Current year

Test Run

No

Detail Lists

Yes

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7-2-2 Carry out project settlement for your turbine project using the individual processing transaction within the period end closing menu. Enter the following data in the initial screen: Field Name

Values

Project Definition

T-200##

With hierarchy

Yes

With orders

Yes

Settlement Period

Current period

Fiscal Year

Current year

Processing Type

Automatic

Test Rum

No

Detail list

Yes

Check trans. Data

No

Execute the report. Display the settled amounts by selecting Detail lists. From the display, you can select the Receiver, Sender or Accounting documents for review. There are two views of the detail list, Accrual Data for FI, and List of Settled Values. Exit the detail list and return to the main SAP menu.

© SAP AG

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Solutions Unit: Project Structures Topic: Work Breakdown Structures

1-1

In order to create a work breakdown structure, call up the Project Builder. SAP Easy Access menu Accounting or Logistics → Project System → Project → Project Builder (Select Project Builder by double-clicking.) Confirm the Project Builder options by selecting Enter. Set the Preview last project indicator in the Project Builder: User-Specific Options dialog box. Confirm your entries by choosing Enter.

© SAP AG

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1-2

Using the Project Builder, create a project called T-200##. Do this by copying standard project T-20001 and its activities. Project → New → Copy project 1-2-1 Enter the following data in the dialog box: Field Name

Values

Project def.

T-200##

Project profile

2001 Turbine model group 1

Template Std proj. def.

T-20001 Leave other fields as they are.

Choose Continue. If prompted, choose Continue to confirm start date message. 1-2-2 Enter the following in the basic data for the project definition: Field Name

Values

Description

Turbine GR##

Start

Today’s date

Finish

Today + 1 year Leave other fields as they are

On the left of the structure, you will now see various objects that were copied from the standard project: + Project definition (1st line) + WBS elements + Activities + Milestones The activities are grouped together in networks with the provisional number (example: %00000000001). 1-2-3 Save project T-200##. Choose Save. 1-3

You now want to add more activities to project T-200##. 1-3-1 Change project T-200## by double clicking the appropriate line in the worklist. Double-click the line containing T-200## in the worklist. 1-3-2 Now expand the entire structure. Choose Expand all.

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1-3-3 Drag the line between the Worklist section and the structure tree section down until you can see all the objects in the project. Drag down dividing line between Structure and Worklist. Some of the engineering work for the turbine is to be outsourced to an engineering company. 1-3-4 Create an external processing activity for WBS element T-200##.1 (Engineering and Design). Place your cursor on WBS element T-200##.1. In the Template section, click Individual Objects, click Activity, double click External processing. On the detail screen of the activity External, enter the following data: Field Name

Values

Activity

1400

Text

Engineering of rotating blades

Info record

5500000093 Leave other fields as they are

Press Enter, and confirm that purchasing data should be read from the purchasing info record. Choose Enter. Choose Continue. 1-3-5 Go to the network graphic, and enter FS relationships. 1000 → 1400 → 4000 Choose Network graphic. Choose Complete view. Choose Connect. In each case, drag the (pencil-shaped) cursor from the end of the preceding activity to the beginning of the succeeding activity 1000 → 1400 → 4000 Now align the activities. Choose Adjust. Confirm the dialog box that appears. Close the network graphic and return to the Project Builder. Choose Back. Select Yes to Save Node Item. Choose Save.

© SAP AG

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1-4

Create your investment project E-99##. Choose Project → New → Project 1-4-1 Enter the following data in the project definition: Field Name

Values

Project def.

E-99##

Description (no field name visible)

Conveyor GR##

Project profile

9000 Investment projects

Investment Profile

1000

Enter your project number, description and the project profile, then select enter. 1-4-2 Go to the WBS element overview. Maintain the following data there: Choose WBS Element Overview. Enter your data. (In order to set the operative indicators, scroll to the right in the table.) Lev.

WBS Element

Description

PE

1

@

New Conveyor GR##

X

X

1

@1

Engineering and design

X

X

1

@11

Electrical Engineering

X

1

@12


X

1

@13

Structural Engineering

X

1

@2

Procurement

1

@21

Procure Conveyor system

X

1

@22

Procure Equipment

X

X

Acct asst

X

Confirm your entries. Choose Enter. The structure tree on the left now shows the various objects you have created:

© SAP AG

•

Project definition (first line)

•

WBS elements

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1-4-3 Change the order in which Identification and Name in the structure tree so that the project number appears far left. Right-click on the structure tree header – Product Structure:Description and choose Display sequence → Identification – Name Enter a project start date using today’s date and a project end date of 9 nine months in the future. Select the project definition in your structure. On the basic data tab enter your project start date and end date. 1-4-4 Save your project. Choose Save.

© SAP AG

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- Solutions Unit: Project Planning Topic: Planning Basic Dates for WBS Elements • Scheduling • WBS date planning

In your turbine project, planned dates are determined automatically when you schedule the activities. The durations of the various activities, and the relationships between activities, play a particularly important role in scheduling. The activity dates determined are aggregated, and are displayed for the WBS elements. You can also extrapolate the activity dates in the project hierarchy. 2-1

In session 1, use the planning board to change your turbine project. Project System menu Project → Project Planning Board → Change Project Double-click Project T-200## in the worklist. Activity dates have already been determined for the turbine project. This occurred during network scheduling. The system has been set up in such a way that scheduling occurs automatically when you save. 2-1-1 Now display the milestones defined for your project. Choose Select all. Choose Show all dependent objects.

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2-1-2 Consider the scheduling-relevant data in activity 1000 (Engineer of drawing/calculation/design). Expand the ID column to see the full field. Go to the detail screen by double-clicking. Double-click activity 1000 On this detailed screen, look at the fields, Normal duration, Factory calendar, and Work center, and look at the control key. All these fields play a role in scheduling. The activity is expected to last 25 days. Change the duration of the activity. Field Name

Values

Duration

25 (days)

Choose the Dates tab page. Select Dates tab page In the lower part of this screen, you can see the earliest and latest dates defined for the activity (as a result of scheduling). In the upper part of the screen, you can define constraints, and in this way fix dates for activities. Now go back to the overview screen of the project planning board. Choose Back. 2-1-3 The change you have made will also affect the dates defined for subsequent activities. Determine these dates by rescheduling. Choose Select all. Choose Schedule. When you do this, the dates for all activities are redetermined. The system also extrapolates activity dates for the assigned WBS elements – as the scheduled dates of the WBS elements. These dates can also be extrapolated further to determine the duration of the entire project. 2-1-4 Extrapolate the scheduled dates of the WBS elements right up to the level 1 WBS element (T-200##). Select Level 1 - WBS element T-200## Edit → Reconcile/Dates → Extrapolate Dates

Note that you can set up your system so that dates are scheduled and extrapolated automatically when you save. 2-1-5 Save your date planning. Choose Save. Select Yes to save User Specific Options. © SAP AG

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Optional Solutions Unit: Project Planning Topic: Material Requirements Planning (MRP) In your turbine project, you also plan material requirements. The engineering and design department uses CAD systems to map the product structure in the form of bills of material (BOMs). You activate procurement of the material by assigning material components to network activities. These assignments are made automatically by means of the BOM/PS interface. 3-1

Transferring BOMs: In session 1, assign BOM components to the activities of your project T-200##. Project System menu Material → Planning → Bill of materials transfer (double-click) 3-1-1 Enter the following data on the initial screen: Field Name

Values

Project definition

T-200##

Profile

1300

Material

T-20000

Plant

1300

BOM usage

3

3-1-2 Transfer the bill of materials. Choose Execute. In the results overview, you will see the components of the (multilevel) BOM that were assigned to the activities in your project because they had the same reference points. The components are assigned when you save your data. There are two other ways of assigning material components to activities: 3. By copying from another project (that is, components have already been assigned to the other project) 4. By assigning components manually using the Project Builder or project planning board

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3-1-3 Save your bill of materials transfer. Choose Save. 3-1-4 Go back to the project planning board for project T-200##, and check over the material view of your project. Project System menu Project → Project Planning Board → Change Project Double-click line T-200## in the worklist Select all objects, and go to the component overview. Choose Select all. Choose Component Overview. In the chart, you can see the various components and their requirements dates. By right-clicking, you can display other information on the components (the detail screen, for example, or the GR/GI List). 3-1-5 Go to the detail screen of component T-20210. Use your right mouse button or double-click component T-20210 By choosing the appropriate tab page, display the procurement parameters for the component. Choose the Proc. param tab page On the General Data screen, you can see the reservation number for the component. The Procurement Parameters screen contains important information on quantity and value flows (the account assignment type, special stock indicator, and Consumption indicator, for example). Now go back to the overview screen of the project planning board. Leave the project planning board without saving (no values were changed). Choose Back twice

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Optional Solutions Unit: Project Planning Topic: Cost Planning One type of project cost planning involves using activities and their assignments to WBS elements. This type of cost planning has important advantages over manual cost planning:

4-1

•

It can be copied to other projects and stored in standard networks.

•

It is easy to shift in time, if, for example, you need to postpone project work packages, all costs are shifted with the new scheduling.

•

Scheduling, capacity requirements planning and procurement is triggered by activities (integration of planning).

Now that the turbine project cost planning is complete, use the Cost Element/Activity Inputs transaction to plan costs for your Conveyor project. 4-1-1 In session 1, call up the cost element planning to plan project costs using plan version 0. Project System menu Financials → Planning → Costs in WBS Select “Set Planner Profile” Choose planner profile “SAPALL” 4-1-2 Plan costs for WBS Elements Project System menu Financials → Planning → Costs in WBS → Costs and Activity Inputs → Change Enter the following data in the planning screen: Plan Version

0

From Period

1

To Period

12

Fiscal Year

Current Fiscal Year

Enter WBS Element E-99##-1 to E-99##-2 to plan costs for all WBS elements. Enter cost elements 415000 to 420000 Choose Form-based Select the Overview Screen Plan the following values against the appropriate WBS element.

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WBS Element

Cost Element

E-99##-1

417000 Purchased Services

E-99##-2

Total Plan Costs

Distribution Key

30,000

2

130,000

2

415000 External Procurement

At the top of the screen is you planning input values for the periods and year that you are planning. The first WBS element is also above the entry screen for plan values. Enter the appropriate value for the first WBS element then choose “Next Combination” to plan values on subsequent WBS elements. Note: You will have to press “Next Combination” more than once to get to the next WBS element that has a planning operative indicator. Select OK to any information messages. Choose Post to save cost element planning

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Optional Solutions Unit: Project Execution Topic: Confirmation of Activities You use the project planning board to confirm activities in your turbine project. The confirmation transaction is used to enter both actual dates and actual costs for the activities. You can use the project structure to evaluate both types of information in aggregated form. Once again, the project in question must be released before you can enter actual data. 5-1

Create confirmations for your turbine project (T-200##). 5-1-1 In session 1, change customer project T-200## using the project planning board. Project System menu Project → Project Planning Board → Change Project Double-click the line containing T-200## in the worklist. 5-1-2 Select all objects and change their status to Released. Choose Select all. Edit → Status → Release Reverse all selections. Choose Deselect all. 5-1-3 Now select activities 1000 and 1100. Create confirmations for these activities. Holding the Control key (Ctrl) down, select activities 1000 and 1100. Then choose Confirm activity. On the detail screen of the confirmation, enter the following data: Field Name

Values

Act.start

Same as scheduled earliest start date

Actual finish

Seven days later than scheduled earliest finish date

Actual work

Slightly more than the work planned Leave other fields as they are

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Use the pushbutton to proceed to the next activity (1100) and enter data in the same way as for activity 1000. Choose Next activity. Enter actual data for activity 1100 (as for activity 1000 above). Choose Back. 5-1-4 Also select the actual set of dates so that you can check over the confirmation dates of both activities. Choose Set of dates/view. Also select the Actual dates option in the dialog box. Choose Copy. 5-1-5 Save your data. Then go back to the main SAP menu. Choose Save. Choose Back.

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Optional Solutions Unit: Project Execution Topic: Purchasing Process (***Instructor Only***) In this exercise, the external activities and material components required for the project are purchased from vendors. As trainer, you will adopt the roles of the MRP and purchasing departments. You will also post the goods receipt for the purchase order. To make matters simpler, we will assume that all goods to be procured externally will be procured from one vendor. Furthermore, you will not issue a request for quotation. 6-1

Instructor only: Carry out an MRP planning run for materials in plant 1300. Do all this work online. SAP menu: Logistics → Production → MRP → Planning → Total Planning → Online 6-1-1 Enter the following data in the initial screen: Field Name

Values

Plant

1300

Processing key

NETCH

Create purchase requisition

1

(!!)

Leave other fields as they are 6-1-2 Start the planning run. Then go back to the main SAP menu. Choose Enter three times Choose Back twice 6-2

Instructor only: Assign the purchase requisitions of the course participants' turbine projects to vendor 1000. 6-2-1 Do this by calling up the report called Purchase Requisitions for Project in the information system. Project System menu: Information System → Material → Purchase Requisitions → For Project Select all the turbine projects of your course attendees, and execute the report. Choose Execute.

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6-2-2 Specify that the purchase requisitions should be assigned automatically to vendors using existing purchasing info records. Edit → Select → Select all Choose Assign automatically. If necessary, choose purchasing info record 5500000093

Although it is not absolutely necessary, you can manually assign any unassigned purchase requisitions to vendor 1000, purchasing organization 1000 (by choosing Assign Manually). Save the assignments and go back to the main SAP menu. Choose Save – Change Requisitions. Choose Back twice. 6-2-3 In Purchasing, create a purchase order for vendor 1000. Use the purchase requisition assignment list you created to do this. Main SAP menu: Logistics → Materials Management → Purchasing → Purchase Order → Create → Via Requisition Assignment List Enter the following data on the initial screen: Field Name

Values

Purchasing organization

1000

Vendor

1000

Plant

1300

WBS Element

from to

T-20001 T-20099 Leave other fields as they are

Choose Execute. Edit the assignments to vendor 1000. Enter a purchase order of the type NB. Position your cursor on the line 1000 NB 1000. Choose Process assignment. Accept data in popup, choose Continue. If prompted, choose New Purchase Order. In the Create Purchase Order screen, first close the notes in the middle part of the screen. Choose Close. Widen the left hand part of the screen, the document overview, so that you can see the open purchase requisitions. Then open up the item overview.

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Drag the dividing line for the left side of the screen to the right. Open up the item overview. With the shift key pressed down, select all the purchase requisition items and copy them to the purchase order. Position the cursor on the first purchase requisition. Press the shift key. Keeping the shift key down, move the cursor to the last purchase requisition, thereby selecting the whole block. Choose Adopt. Confirm any warnings Save the purchase order. Make a note of the purchase order number:

____________________

Go back to the main SAP menu. Choose Save. Then choose Back twice. 6-2-4 Now enter a goods receipt for the purchase order. SAP Easy Access menu Logistics → Materials Management → Inventory Management → Goods Movement → Goods Receipt → For Purchase Order → GR for Purchase Order (MIGO) First, check the default value settings you have made. Make any necessary changes. Settings → Default Values The following data should be entered in the detail screen: Field Name

Values

Stor.location

0001

In plant

1300

Propose the OK function in future

X

Propose all items

X

Save these settings Choose Adopt. Confirm the dialog box that appears

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6-2-5 In the screen for purchase order goods receipts, enter your purchase order number. Confirm your entries. Goods receipt

Purc.order

Purchase order number you made a note of earlier

Choose Execute. 6-2-6 Post goods receipt. Choose Post. Confirm any warnings Then go back to the main SAP menu. Choose Back

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Closing Optional Solutions Unit:

Period-End Closing

Topic: Overheads, Results Analysis, Settlement •

Overhead

•

Results Analysis

•

Settlement

Procedures that are performed periodically (for example, results analysis or settlement) are performed on a fiscal year period basis, (usually at the start of a period and for the preceding period). For your customer project, you will execute period end closing using individual processing for each task. These tasks will include overhead calculation, results analysis, and settlement.

7-1

Assigning the Results Analysis Key and executing Results Analysis. In the following, determine the results analysis keys that are assigned to the billing WBS elements of project T-200##. A results analysis key is required for the calculation of results. 7-1-1 Access the project builder for your project T-200##. Project Systems menu: Basic data → Project Builder Select project T-200##. Branch to the detail screen for billing elements T-200##. Choose the Control tab page. Double click WBS element. Choose Control tab page. Assign the results analysis key 130001 to the WBS element T-200##. No other WBS elements are assigned RA keys. Choose Save.

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7-1-2 Results Analysis: Carry out results analysis for the current period for project T-200##. From the period end closing, access results analysis using individual processing for project T-200##. Project System menu: Financials → Period-End Closing → Results analysis → Proceed → Individual processing Enter the following data in the initial screen: Field Name

Values

WBS Element.

T-200##

Calculation to month

Current period

Year

Current year

Results analysis version

0

Manual Processing Only

No

Full log

Yes

Execute the report. Choose Execute. Review the list of results analysis values for your project.

Results analysis key 130001 and results analysis version 0 stipulate revenue-proportional results analysis in the IDES system. Cost of sales (COS) is calculated for the project. The system uses this figure to calculate reserves for unrealized costs or work in process (WIP). If the proportional revenue (POC actual revenue: planned revenue) determines calculated COS greater than actual COS, then reserves are created for the unrealized costs. This prevents the profit from being overstated in the fiscal period. If the proportional revenue determines calculated COS less than the actual COS, then balances are created for the inventory from which revenue can be generated. 7-1-3 Access the logs to obtain additional information regarding the results analysis calculation, such as the POC, and the configuration for results analysis key 130001. Logs → Explanation Facility Save your results. Choose Save.

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7-2

Generate the settlement rule for your turbine project and execute settlement. 7-2-1 Generate the settlement rule for your project T-200##. Project Systems menu: Financials → Period-End Closing → Single Functions → Settlement Rule → Individual Processing Field Name

Values

Project

T-200##

With hierarchy

Yes

Period

Current period

Fiscal Year

Current year

Test Run

No

Detail Lists

Yes

Choose Back twice. 7-2-2 Carry out project settlement for your turbine project using the individual processing transaction within the period end closing menu. Project System menu: Financials →Period-End Closing → Single Functions → Settlement → Individual processing

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Enter the following data in the initial screen: Field Name

Values

Project Definition

T-200##

With hierarchy

Yes

With orders

Yes

Settlement Period

Current period

Fiscal Year

Current year

Processing Type

Automatic

Test Rum

No

Detail list

Yes

Check trans. Data

No

Execute the report. Choose Execute. Display the settled amounts by selecting Detail lists. From the display, you can select the Receiver, Sender or Accounting documents for review. There are two views of the detail list, Accrual Data for FI, and List of Settled Values. Exit the detail list and return to the main SAP menu. Choose Exit.

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Project Structures: Test Your Knowledge 1.

Projects are tasks with particular characteristics. List six characteristics of projects.

2.

Fill in the blank to complete the sentence. A _____________________________________________ is a model of a project, and shows the project activities to be fulfilled in hierarchical form. It shows the operative basis for planning costs, revenues, and payments, as well as for scheduling and budgeting.

3.

Fill in the blank to complete the sentence. The ________________________ in a project describe the various steps and work involved in the projects.

4.

Activities are linked to each other by means of relationships. This results in a causal and chronological activity sequence. List the different type of activities used in Project System. _________________________________________________________ _________________________________________________________ _________________________________________________________

5.

Determine whether this statement is true or false. Open PS offers the following options: (1) create projects in Microsoft Project and transfer them to SAP Project System; (2) create projects in SAP Project System and transfer them to Microsoft Project; (3) change projects and transfer them in both directions.

6.

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What are six typical areas of focus for project planning?

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7.

Describe the purpose of the network scheduling type.

8.

Determine whether this statement is true or false. An externally processed activity determines the output to be provided by machines or personnel in order to complete the activity. _______________

9.

Describe the function provided by the work center.

10.

List the three modules integrated tightly to Project System with respect to materials?

11.

Fill in the blank to complete the sentence. By assigning materials to activities, you can plan the necessary material requirements for a project. The system differentiates __________ items and ________________ items.

12.

Determine whether this statement is true or false. You can plan revenue just one way in your project.

13.

Fill in the blank to complete the sentence. ___________________, ________________, and ___________________ are different types of budget updates.

14.

Determine whether this statement is true or false. Actual data is posted to the project by business transactions from only one other component of SAP.

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15.

Fill in the blank to complete the sentence. ___________________, __________________, ___________________, ___________________, __________________, ___________________, ___________________, and __________________ are examples of period-end transactions run for a project.

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Project Structures: Answers 1.

Projects are tasks with particular characteristics. List six characteristics of projects. Answer: Projects (1) are usually complex, unique, and involve a high degree of risk, (2) have precise targets that are agreed on between the contractor and sold-to party, (3) are limited in duration and are cost and capacity intensive, (4) can be cross-departmental, (5) are subject to specific quality requirements, and (6) are of mostly strategic significance to the business carrying them out.

2.

Fill in the blank to complete the sentence. A _____________________________________________ is a model of a project, and shows the project activities to be fulfilled in hierarchical form. It shows the operative basis for planning costs, revenues, and payments, as well as for scheduling and budgeting. Answer: Work breakdown structure (WBS)

3.

Fill in the blank to complete the sentence. The ________________________ in a project describe the various steps and work involved in the projects. Answer: Activities

4.

Activities are linked to each other by means of relationships. This results in a causal and chronological activity sequence. List the different type of activities used in Project System. Answer: Internal processing (for capacities to be staged in your own company), external processing (for tasks to be assigned externally), services (for procuring external services), and cost activities (for planning additional primary costs).

5.

Determine whether this statement is true or false. Open PS offers the following options: (1) create projects in Microsoft Project and transfer them to SAP Project System; (2) create projects in SAP Project System and transfer them to Microsoft Project; (3) change projects and transfer them in both directions. Answer: True

6.

What are six typical areas of focus for project planning? Answer: The typical areas of focus for project planning are (1) project structures, (2) dates, (3) payments, (4) resources, (5) materials, and (6) costs/revenues.

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7.

Describe the purpose of the network scheduling type. Answer: Networks in the Project System are always scheduled forward and backward. The scheduling type determines the direction in which you start to schedule. The system determines the earliest dates of the activities by means of forward scheduling, and the latest dates by means of backward scheduling.

8.

Determine whether this statement is true or false. An externally processed activity determines the output to be provided by machines or personnel in order to complete the activity. Answer: False An internally processed activity determines the output to be provided by machines or personnel in order to complete the activity.

9.

Describe the function provided by the work center. Answer: You must enter work data for an activity so that the system can plan capacities for a project and calculate costs for activities. You need to specify the amount of work involved and the work center that is to perform the work. As such, the work center is the place where an activity is carried out or work output is produced.

10.

List the three modules integrated tightly to Project System with respect to materials? Answer: Materials establish the link between the Project System and (1) Sales and Distribution, (2) Material Management, and (3) Production Planning.

11.

Fill in the blank to complete the sentence. By assigning materials to activities, you can plan the necessary material requirements for a project. The system differentiates __________ items and ________________ items. Answer: Stock and non-stock Stock items are entered for materials that are kept in stock (warehouse, sales order, or project stock). Reservations are created for stock items. Non-stock items are used for components that are not procured by way of warehouse stock, project stock, or sales order stock, but are procured directly by a network activity instead. Purchase requisitions are created for these components and passed directly to Purchasing.

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12.

Determine whether this statement is true or false. You can plan revenue just one way in your project. Answer: False You can plan revenues in your project (1) manually (structure-oriented or on the basis of revenue elements), (2) using PS billing plans, and (3) using sales documents (sales order items or even quotation items)

13.

Fill in the blank to complete the sentence. ___________________, ________________, and ___________________ are different types of budget updates. Answer: Supplements, returns, and transfers are different types of budget updates.

14.

Determine whether this statement is true or false. Actual data is posted to the project by business transactions from only one other component of SAP. Answer: False Actual data is posted to the project by business transactions from various SAP components including: (1) Materials Management (purchase order, goods receipt for materials and services), (2) Inventory Management (goods issues), (3) Sales and Distribution (billing of the sales order), (4) Production Planning (confirmation of assigned production orders), (5) Plant Maintenance (confirmation of assigned PM orders), (6) Controlling (internal activity allocation, assigned CO orders), (7) Financial Accounting (down payments, payments, journal entries), (8) Asset Management (settlement to assets), and (9) Human Resources (entry of work for persons, posting of activity confirmation).

15.

Fill in the blank to complete the sentence. ___________________, __________________, ___________________, ___________________, __________________, ___________________, ___________________, and __________________ are examples of period-end transactions run for a project. Answer: Template allocations, overheads, interest calculation, cost forecast, progress analysis, results analysis, incoming orders, and settlement are all examples of period-end transactions run for a project.

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Enterprise Asset Management

Contents: z Enterprise Asset Management Organizational Levels z Technical Objects z Breakdown Maintenance Process z Reporting and Analysis

 SAP AG 2004

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Enterprise Asset Management: Unit Objectives

At the conclusion of this unit, you will be able to: z List the organizational levels in Enterprise Asset Management z Define the technical objects used in the Enterprise Asset Management z Perform the Corrective Maintenance process z Identify the reporting and analysis tools used in Enterprise Asset Management z Identify the integration points with other mySAP ERP processes

 SAP AG 2004

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Enterprise Asset Management: Course Overview Diagram

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 SAP AG 2004

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Enterprise Asset Management: Business Scenario

z In your enterprise, when a piece of equipment malfunctions, you create a maintenance order to plan and monitor the repair activities, and to plan and control the repair costs. As a project team member, you need to identify technical objects used in plant maintenance and also the breakdown maintenance cycle.

 SAP AG 2004

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Enterprise Asset Management Organizational Structures: Topic Objectives

At the conclusion of this topic, you will be able to: z List the organizational levels used in Enterprise Asset Management z Define the various organizational units in a Plant and Cross-plant Maintenance system z Define maintenance work centers and their role and functions in Enterprise Asset Management

 SAP AG 2004

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Organizational Levels General Organizational Units in Logistics Client

Company code Plant

Location-Based Organizational Units Maintenance plant Location

for example: site, building

Maintenance Work Centers

for example: mechanics

Planning-Based Organizational Units Maintenance planning plant Maintenance planner groups

for example: foreman, work scheduling

 SAP AG 2004

The organizational structure in Enterprise Asset Management is as follows: The client is the highest-level element of all the organizational units. It corresponds, for example, to a corporate group with several subsidiaries. Within a client, the system always accesses the same database. The subsidiaries with their own financial statements and balance sheets are defined as company codes. Within Logistics, the plant is one of the most important organizational units. It usually represents a production unit of a company. The plant, at which the operational systems of a company are installed, is called the maintenance plant. If the maintenance work is planned at this plant, the maintenance plant is also the maintenance planning plant (planning plant for short). Locations subdivide a maintenance plant according to locational criteria, for example, site, building, coordinates. A maintenance plant can also be subdivided into plant sections based on responsibility for production. The person responsible for the plant section is the contact person who coordinates production and maintenance (plant engineer). The units of capacity in Plant Maintenance are managed as maintenance work centers. Maintenance work centers are assigned to the respective maintenance plant as workshops. A maintenance planning plant is the organizational unit in which maintenance requirements are planned. These requirements can either come from your own plant or from another maintenance plant assigned to this maintenance planning plant. The planners within a maintenance planning plant are defined by maintenance planner groups.

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Cross-Plant Maintenance Plant 1200

Plant 1300

Maintenance requirement


Workshops

Plant 1000 Planning of maintenance requirements

Warehouse


Workshops

…..

Material

 SAP AG 2004

Plant-specific planning: Maintenance plant = planning plant. In most organizational structures, the maintenance requirement is planned in the same plant where it occurs, the maintenance orders are executed by workshops from the same plant, and the spare parts are stored in the same plant (for example: plant 1000). Cross-plant planning: Multiple maintenance plants are assigned to a planning plant. In one plant (for example, plant 1200) there is a need for maintenance, as a technical system there requires maintenance (= maintenance plant). All further functions (maintenance planning, order execution, spare parts storage) are, however, the responsibility of another plant. Other constellations are also conceivable: The planning of a plant's requirements (for example, plant 1300) as well as the spare parts procurement take place in another plant (plant 1000). However, the tasks are performed by workshops available locally.

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Maintenance Work Centers

Maintenance Work Centers For example: Welding Metalworking Mechanics

 SAP AG 2004

A work center is an organizational unit within an operational system. A work center can be one of the following: y Machine y Group of machines y Person y Group of people In Plant Maintenance, work centers are used as: y Main work center in the master record for the equipment or functional location y Main work center in a maintenance item y Main work center in the task list header y Performing work center in the operations for a task list y Main work center in the order header y Performing work center in the operations for an order Work centers belong to the master data and provide the capacity required to perform a task.

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Work Center: Main Functions Work Work center center 10

11

Default values for task lists and orders

Costing data

Scheduling data and available capacity

Task list/order

Costing

Lead time scheduling Capacity planning

2724,00 1200,00 124,00 4048,00

 SAP AG 2004

The Work Center has several functions as follows: Costing: You can use costing to determine the costs of an internal activity by a product unit. Its goal is to assign to the various cost objects the costs that were incurred by them. If the work center is used in an operation, the link to the cost center provides activity types for valuating the operation. Scheduling: You can use scheduling to determine the dates when operations should be performed. For this, the time required for the operations must be calculated and compared with the time available in the work center. The standard values and quantities in the operations are used as the basis for this calculation. During scheduling, the start and end dates for the operations are calculated from this data using formulas, which have been entered for scheduling in the work centers. Capacity planning: In capacity planning, the capacity requirements for the operations in the orders are determined and compared with the available capacity defined in the work center. During capacity planning, you can use work center hierarchies to aggregate (at higher-level work centers) the available capacity and capacity requirements of lower-level work centers.

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Enterprise Asset Management Organizational Structures: Topic Summary

You are now able to: z List the organizational levels used in Enterprise Asset Management z Define the various organizational units in a Plant and Cross-plant Maintenance system z Define maintenance work centers and their role and functions in Enterprise Asset Management

 SAP AG 2004

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Technical Objects: Topic objectives

At the conclusion of this topic, you will be able to: z Define Functional Locations z Identify functional location using structure indicator z Define Equipment z Identify the application of Bills of Material in Plant Maintenance

 SAP AG 2004

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Functional Location Functional location = multi-level, hierarchical structure, organized according to ...

Spatial

Technical

Functional

Criteria  SAP AG 2004

Functional locations are hierarchically ordered structures that represent a technical system, building, or part thereof. You can structure the functional location according to spatial (for example, building 1, building 2), technical (for example, press, press frame, press hydraulics), or functional, that is, process-oriented criteria (for example, polymerization, condensation). The aim of creating a functional location is to structure a technical system or building into units that are relevant for Plant Maintenance.

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Criteria for Functional Locations

For what purpose is a functional location created? z Execution of maintenance tasks z Recording of maintenance tasks z Data collection over long periods of time. z Cost monitoring by area z What affect do the usage conditions have on the likelihood of damage to the installed aggregates?

 SAP AG 2004

You should use functional locations to structure your systems if: y You want to represent the structures of the technical systems in your company according to functional criteria. y Maintenance tasks have to be performed for individual areas in the structure of your technical system and this work must or should be recorded. y Technical data for certain parts of your technical system has to be stored and evaluated over a long period of time. y The costs of maintenance tasks have to be monitored for certain parts of your technical system. y You want to analyze what effects the usage conditions have on the the likelihood of damage to the installed equipment.

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Structure Indicator

Coding template

AN-ANN-N-X-X

Hierarchy levels

1 2 3 4 5 6

Location number

A1 A1-B A1-B02 A1-B02- 9 A1-B02- 9-C A1-B02- 9-C- 1

A=Alpha N=Numeric X=Alphanumeric

System Area Sub-area Function Sub-function Item

 SAP AG 2004

The identification for functional locations is created using the structure indicator. The structure indicator consists of two input fields: Coding template and Hierarchy levels The coding template is used to control which characters may be used for identification ,letters, numbers, or both, and how these characters are grouped together or split. The hierarchy levels are used to define which level ends at which character and how many hierarchy levels the structure may contain. A functional location can be identified using a maximum of 40 characters, which equals the maximum length of the coding template.

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Master Record for Functional Location

Functional location master record

Equipment usage Classification

General

Documents/technical drawings

Location Multilingual texts

Organization

Address/partner

Structure

Meas. points/counters Permits

 SAP AG 2004

The master record for the functional location uses the following views: y General: Class, object type, reference data, manufacturer data and so on. y Location: Location data, address. y Organisation: Account assignment (for example, company code, cost center), responsibilities (for example, maintenance planning plant). y Structure: For example, structure indicator, higher-level functional location, equipment. Additional data or links in the master record for the functional location can also be activated as tab pages or called up using pushbuttons (see figure).

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Automatic Assignment Upon Creation C1 Clarification plant

Existing functional locations

C1-M Mechanical cleaning C1-M01 Sand trap

New functional locations

C1-B Biological cleaning C1-M02 Oil/fat trap

C1-M01-2 Ventilator

C1-M02-2 Ventilator

C1-B01 Pump plant

C1-B02 Filtering station

C1-B01-1 Pump 1

C1-B02-2 Filter cell

 SAP AG 2004

The structure of the functional location is based on the structure indicator. If you create a new functional location (for example, C1-M01-2), the system checks whether a hierarchy with this structure indicator already exists and whether the new identification is suitable for the existing hierarchy. If this is the case, when the new functional location is created, it is included in the existing structure.

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Equipment Individual physical object to be maintained as an autonomous unit z Means of production z Means of transport z Test equipment z Production resources/tools

Equipment

z Customer devices z Buildings, property z Systems, system parts z Vehicles

 SAP AG 2004

A piece of equipment is an individual physical object that is to be maintained as an autonomous unit. Pieces of equipment usually represent single objects (for example, pumps, motors, vehicles), for which maintenance tasks should be performed and recorded. Equipment can be installed at functional locations. A piece of equipment can be linked with a material (if there is inventory management, in the sense of Materials Management, for the object).

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Criteria for Equipment Master Record

For what purpose is a piece of equipment created? z Management of individual data z Recording of maintenance tasks z Object-based recording of costs z Evaluation of technical data z Recording of usage times

 SAP AG 2004

You should always create an equipment master record for a technical object if: y You need to manage individual data for the object. y Breakdown, prepared or preventive maintenance tasks are required for an object and must be recorded. y Technical data for this object must be collected and evaluated over long periods of time . y The costs of maintenance tasks for this object are to be monitored. y You need to record the usage time of this object at functional locations.

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Equipment Master Record Equipment master record

Equipment usage Classification

General Documents/technical drawings

Location

Multilingual texts

Organization

Address/partner Meas. points/counters

Structure Permits Internal Note

 SAP AG 2004

The equipment master record uses the following views in the standard system: y General: Class, object type, reference data, manufacturer data and so on. y Location: Location data, address. y Organisation: Account assignment (for example, company code, cost center), responsibilities (for example, maintenance planning plant). y Structure: For example, structure indicator, higher-level functional location, equipment. Additional data or links in the master record for the equipment can also be activated as tab pages or called up using pushbuttons (see figure). You can use the time-based data to monitor a piece of equipment dynamically, that is, track changes to the equipment over a specific period of time. If your system is customized accordingly, it automatically creates a new time segment whenever certain changes are made in the master record. The time segment describes the equipment usage.

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Bills of Material in Plant Maintenance Structuring of object

Spare parts planning in order Maintenance bill of material

Technical object

Spare parts planning in task list

 SAP AG 2004

The maintenance bill of material differs from other BOMs in that it only contains items relevant to Plant Maintenance. Additionally, the bill of material has three important functions: y Structuring of the object- the structure of an object should be displayed as clearly as possible from a maintenance viewpoint. y Spare parts planning in the order- If a technical object uses a bill of material, you can use this simply during the planning or a maintenance order to plan spare parts. y Spare parts planning in the task list- Spare parts can be planned in the task list based on a bill of material. There are three categories of maintenance bill of material: y Material BOM y Equipment BOM y Functional location BOM

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Bills of Material: Example of Material BOM Material M-1521 Object master record, Structure view Material BOM 10 Casing type A

100-100 1

PC

20 Compressor

100-200 1

PC

30 Seal

100-300 4

PC

40 Spool

100-400 1

PC

50 Screw

100-500 9

PC

60 Spacer

100-600 5

PC

70 Shaft type A

100-700 1

PC

80 Locking pin

100-800 2

PC

90 Valve

100-900 1

PC

Construction type field

Material BOM as maintenance bill of material

 SAP AG 2004

Material BOMs are always used in Plant Maintenance if a number of similarly constructed objects have to be maintained. The aim is not to create a bill of material for each technical object but to create just one bill of material and then assign this to the technical objects. This avoids the use of redundant bills of material. A material BOM is a bill of material that is first created for a material independently of a technical object. To do this, you must: y Create a material y Create a material BOM for the material The bill of material can then be assigned to one or more technical objects (equipment or functional location). You can make the assignment(s) in the respective technical object master record using the Structure view. The number of the corresponding material is entered in the Construction type field(see figure).

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Technical Objects: Topic Summary

You are now able to: z Define Functional Locations z Identify functional location using structure indicator z Define Equipment z Identify the application of Bills of Material in Plant Maintenance

 SAP AG 2004

© SAP AG

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Corrective Maintenance Process: Topic objectives

At the conclusion of this topic, you will be able to: z Identify and perform the phases of the Corrective Maintenance process z Identify the integrations points with other mySAP ERP modules

 SAP AG 2004

© SAP AG

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Corrective Maintenance: Process Corrective Maintenance

1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion

Internal-/External Service/Material z Technical object z Description

z Date z Malfunction

z Work to be performed z Material z Int./ext. resources z Tools z Order release z Printout

Maintenance planner

z Capacity leveling z Availability check

z Planned/unplanned mat. withdrawal

Technician/ Storeperson

z Time conf. z Order settlement z Tech. completion z Tech. confirmation

Maintenance supervisor

History Material usage, orders, notifications, PMIS, usage list  SAP AG 2004

The corrective maintenance process involves the following steps - notification, planning, scheduling, execution, and completion. y Step 1: Notification:- Malfunctions and other requirements are detailed in the notification and entered in the system. You can use the notification list to find and process notifications. y Step 2: Planning:- In the planning, orders are created for the requirements outlined in the notification. The order contains the tasks to be performed, together with the materials and tools required. y Step 3: Scheduling:- In the control step the order undergoes checks (for example, material availability check, capacity requirement check) which are important for the subsequent release. If no serious problems arise (for example, spare part not available for required date), then the order is put into process and - usually in the same step - the shop papers are printed. y Step 4: Execution:- In this step the task is performed on site. The required materials are withdrawn from storage with reference to the order. Unplanned withdrawals of material (that is, withdrawals that have not been reserved through the order) are also possible. y Step 5: Completion:- The completion phase is composed of the partial steps of time confirmation (enter the actual times worked), technical completion (completing the results), and technical completion. The Controlling department can settle the order at the same time.

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Cycle for Corrective Maintenance Corrective Maintenance

1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion



Production worker Maintenance planner



z Planned/unplanned mat. withdr. z External procurement z Time conf. z Tech. completion z Tech. confirmation


The starting point for corrective maintenance (step 1) is the notification of damage, a malfunction, or some other request (for example, a request for modification work). The notification usually refers to a technical object and contains a description of the malfunction or requirements. In addition, data can be entered in a notification to build up the history (for example, damage, causes and so on). A maintenance task, which is very frequently processed using a maintenance order, is introduced owing to the request or malfunction. A notification does not necessitate the creation of an order in every case.

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Maintenance Notification: Structure Notification

z Date/time/reported by z Description z Maintenance object: - Functional Location - Equipment - Assembly - Material serial number z Location data z Breakdown/availability z Damage location z Damage z Cause of damage

Notification Text items Activities

z Activity z Execution factors

Tasks

z Dates z Task description

 SAP AG 2004

Each maintenance notification contains header data. Header data is information used to identify and manage the maintenance notification. This data is valid for the complete maintenance notification. You enter and maintain data in a notification item to determine a problem, damage, or the activity executed in greater detail. A notification can contain several items. Activities document the work performed for a notification. They are particularly important for inspections, because they prove that certain tasks have been performed. The task data describes activities that should still be performed, and which may have only arisen after the maintenance task was executed (for example, creating a report). However, in some cases, you can also use tasks for planning purposes (for example, if order processing is not active). In this case, you can plan to use different people to process the notification, and monitor the execution of activities for specific periods of time. Note, however, that no cost monitoring, material planning or capacity requirements planning is possible for this type of processing.

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Objects in Maintenance Notification

Material with serial number Assembly

Equipment Functional location

... or no object  SAP AG 2004

All the types of maintenance notification mentioned can be entered for both a functional location and a piece of equipment, in each case with or without assembly, or for a material with serial number. The hierarchy for these objects corresponds to the sequence specified. In other words, if you enter a maintenance notification for an assembly on a piece of equipment, which is assigned to a functional location, the system transfers all the relevant data for the piece of equipment and the functional location. However, you can also enter these maintenance notifications without specifying an object number. This is the case, for example, if a malfunction report refers to an object that is not managed in the system under a number, or if a maintenance request refers to a new object to be provided for an investment program. A view for the reference object can be chosen for an individual notification or for a notification type as follows: y Functional location + Equipment + Assembly (standard setting) y Functional location + Equipment + Assembly, for functional locations with exactly one piece of equipment installed, the equipment is set automatically. y Functional location y Equipment (with or without assembly) y Material number + Serial number (with or without equipment number) y Without reference object

© SAP AG

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1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion




Production worker Maintenance pl. Maintenance planner




In step 2, the order is created and planned from the notification. Typical planning tasks include creating operations, reserving spare parts, or planning usage times.

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Creation of Maintenance Orders Direct creation of order Creation of order based on notification

Maintenance order/notification

Maintenance notification

Maintenance order


Combination of maintenance notifications for maintenance order


Maintenance order


Entry of order with subsequent activity report

Maintenance order


Automatic generation of maintenance order from maintenance item

Maintenance item

Maintenance order

 SAP AG 2004

1. Case: The maintenance order is created directly (for example, breakdown order) 2. Case: The maintenance notification is not entered centrally. The maintenance order is created for the maintenance notification by the person responsible. 3. Case: In a maintenance order, several maintenance notifications are combined into one or more objects 4. Case: An activity report for an existing maintenance order is entered subsequently as a technical confirmation 5. Case: A maintenance order is automatically generated from a maintenance item by the maintenance plan

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Elements of Maintenance Order Order header

For example: Order type, dates, plant, main object, priority, description

Object list

Equipment (assembly), functional locations, Maintenance notifications

Operation

For example: work center, control key, description Standard time, activity type, salary details

Material list

For example: Material, qty, storage loctn

Production resources/tools Settlement rule Costs (estimated/ planned/actual)

 SAP AG 2004

The header data is information that serves to identify and manage the maintenance order. It is valid for the whole maintenance order - for example, the number, description and type of order, scheduled dates for order execution, priority of tasks, creator, last person who changed the order and so on. The object list contains the objects to be processed (functional locations, equipment, assemblies, serial numbers) and is implemented if the same activity must be performed at multiple objects of the same type. The order operation describes the tasks that should be performed for the maintenance order and who performs them with what guidelines. The material list (component list) contains spare parts, which are required and used when the maintenance order is executed. Production resources/tools (for example, tools, protective clothing, trucks) are required to execute the maintenance order, but are not used up. The data in the settlement rule provides information on who should bear the costs. It is proposed from the master record for the reference object and can be changed when the first settlement rule is maintained for the order. The costs view tells you how much the estimated-, plan-, and actual costs are in the value categories for this order. There is a technical view and a controlling view available.

© SAP AG

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Maintenance Order: Object List

Object list 901760 Order 901760

M-1000-N001 M-1000-N002 Equipment or Functional Locations or Notifications

 SAP AG 2004

The object list is an integral part of the maintenance order. This is used to compile multiple notifications and also to assign several technical objects to the order. Even if no reference object has been specified for the maintenance order on the header data screen, you can assign technical objects and/or maintenance notifications to the maintenance order in the object list. If notifications are assigned to the order using the object list, the first notification in the order header appears in the 'Notification' field. The first notification is indicated as the header notification. Both the header notification and the other notifications in the object list can be separated from the order again. The object list does not "control" the order - no adjustment of work to be performed, update of history or cost distribution will take place. You can use customer exit IWO10027 to distribute the order costs proportionately to the objects in the object list. Customer exits are dealt with in the following BC425 course.

© SAP AG

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Stock Material – Process Flow Component assignment

Material reservation Availability check

Order release

Printing Automatic availability check Goods issue

 SAP AG 2004

You can plan materials, which are required to execute the task, for each operation in the maintenance order. The materials can be bill of material components for the reference object or freely assigned materials. The materials that you plan for the maintenance order will be reserved in the warehouse, if they are kept in stock. You can set the reservation time in your system using the Customizing function. In Customizing, it is decided for each order type, whether the system should make the material reservation effective or generate the purchase requisition immediately or only when the order is released. An availability check can be called up when components are assigned in the order. An automatic availability check is performed when the order is released. The order can also be released if there is no availability. A material provision list and material withdrawal slips can be printed together with the order papers. Planned goods issues are entered with reference to the reservation (reservation number), unplanned goods issues with reference to the order number. The goods issues entered appear in the document flow of the order.

© SAP AG

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Non-Stock Material – Process Flow Component Assignment Purchase application Purchase order Order Release Goods receipt Invoice receipt  SAP AG 2004

When components are assigned in the order, additional purchase information can be entered. Depending on the order type, the purchase requisitions are generated either when the order is saved or released. In purchasing, purchase orders are generated from purchase requisitions. The purchase order items are assigned to the maintenance order. Goods receipts are entered with reference to the purchase order after the order has been put in process. The account assignment of the purchase order to the order instigates the posting to the order. When goods receipts are entered, the maintenance order is debited with the purchase order value. When the invoice is received, any invoice differences are automatically credited to, or debited from the maintenance order. The goods receipts entered appear in the document flow of the order.

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Material Through Internet Catalog z Direct Catalog Access z Catalog access through EBP

 SAP AG 2004

The material planning in the maintenance order can be based on internet catalogs, as well as on direct material assignment and the use of BOMs. From the order you can access an external catalog directly (R/3 Enterprise) or you can connect to the catalog through the Enterprise Buyer Professional (EBP) component Supplier Relationship Management (SRM).

© SAP AG

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Direct Catalog Access

External catalog

R/3 Order 4711 Operation 10 Operation 20

Order 4711 Operation 10 Pump P1000 Cog Gx01 Operation 20 Panel 10-10

To the catalog

1 2 Components transfer

3

Pump P1000 Cog Gx01 Panel 10-10


 SAP AG 2004

© SAP AG

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Catalog access through EBP

R/3 Order 4711 Operation 10 Operation 20


External catalog

EBP Order select

1

Components transfer

5

Order 4711 Operation 10 Operation 20


To the catalog

2

From Shopping cart

4

3 Pump P1000 Cog Gx01 Panel 10-10


 SAP AG 2004

A prerequisite for this process is that the EBP system's Customizing must be set up on the back-end system (R/3). EBP and the back-end system are linked to each other. A possible process could be as follows: y Maintenance order is created in the backend system. y EBP system is started through the URL (http://...). y Component planning is started and the system looks for the order. y An operation is selected. y Components are sought in and selected from a catalog defined in the EBP. y The component list is transferred to the EBP where it is completed or changed. y The component list is then transferred to the back-end system. y The component list is copied and added to the operation (usually as a non-stock item). y When you save or release the order, a purchase requisition application is generated. You can find further information on this topic in the PLM315 and SRM210 courses.

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Cost Analysis in Maintenance Order By value category

By cost element Plan

Plan Actual Internal service

403000 Spare parts

External service Warehouse issue

415000 External material

Other

615000 Labor hours

Actual

Maintenance order

Operation 10 Operation 20 Operation 30 ...

 SAP AG 2004

You can display the expected costs in two ways: y At cost element level (Controlling view) y At value category level (Maintenance view) In Customizing, cost elements are assigned to value categories.

© SAP AG

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1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion



Production worker Maintenance pl.

z Work to be performed z Material z Int./ext. resources z Tools

Maintenance planner

z Order release z Printout





Cycle for Corrective Maintenance has several steps. Here we are considering step 3 i.e. Scheduling. In this step the order is subjected to various checks: The material availability and the capacities required are checked and the required shop papers are printed.

© SAP AG

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Order release

Effects of order release: z Reservation effective, can be withdrawn z Papers can be printed z Confirmation possible z Goods movement possible

 SAP AG 2004

When you release a maintenance order, the system checks the availability of material, production resources/tools, and the necessary permits. At the time of release (at the latest), material reservations become relevant for materials planning, materials can be withdrawn, and purchase requisitions generated. You can only perform the following activities after you have released the order: y Print shop papers y Withdraw material y Post goods receipts y Enter time confirmations y Complete task You can release a maintenance order immediately after it has been created. This option is available for maintenance orders created automatically by the system (for example, orders from maintenance plans). To enable these orders to be released upon creation, the indicator Release immediately must be set for the required order types by the system administration in Customizing.

© SAP AG

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Maintenance Order: Print Maintenance order

Fax transfer

Material withdrawal slip Job ticket Control ticket

Confirmation slip

Pick list Object list

Time ticket

 SAP AG 2004

Job ticket: The job ticket is a document which gives the person executing the maintenance work a complete overview of the order. If your system is connected to the Document Management System (DMS), you can also print graphics (for example, engineering/design drawings of the technical system concerned) on the job ticket. Operation control ticket: Shows the maintenance engineer responsible a complete overview of the maintenance order. It also contains information about permits. Material pick list: Shows the warehouse clerk which materials have been planned for each operation in this order. Object list: Shows an overview of the objects (technical objects, notifications) involved in the order. Time ticket: Contains the standard time and duration, and is only printed for operations with the corresponding control key. For each manual worker involved on the order, time tickets are printed in the numbers specified for each operation. The worker enters the time required to execute the operation on the time ticket. Confirmation slip: Used by workers as an entry sheet for their work times. Material withdrawal slip: Authorizes the person executing the maintenance work to take the materials required for the order from the warehouse. One material withdrawal slip is printed for each material component.

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1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion





Maintenance planner




z Planned/unplanned mat. withdr. z External procurement

Technician, Sen. store person

z Time conf. z Tech. completion z Tech. confirmation


The execution phase i.e. step 4 of the cycle for Corrective Maintenance involves the withdrawal of spare parts from the warehouse and the actual execution of the order.

© SAP AG

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Material Withdrawal

Pick list Planned Material Withdrawal Unplanned Material Withdrawal

Maintenance Order ___________________ ___________________ ___________________ ___________________

 SAP AG 2004

Manual workers withdraw materials from the warehouse to perform maintenance tasks. There are two types of withdrawal: y Planned withdrawal of stock material y Unplanned withdrawal of stock material Materials can also be procured externally. The goods movements for a maintenance order are displayed in the document flow of the order. The Material Where-Used List (IW13) lets you check which withdrawals for a material were planned and which were unplanned.

© SAP AG

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1

Notification

2

Planning

3

Scheduling

4

Execution

5

Completion





Maintenance planner




z Planned/unplanned mat. withdr. z External procurement

Technician, Sen. store person

z Time conf. Technician, Maintez Tech. completion z Tech. confirmation nance supervisor


Here we are considering the final step in the cycle for Corrective Maintenance i.e. Completion. After the work has been completed, the actual time required is confirmed. The technical findings (damage, cause of damage, repairs performed, and so on) and the effects of the damage on the asset's condition are recorded in the technical confirmation. The technical confirmation indicates that the order is finished for Plant Maintenance. The business completion performed by Controlling takes place after the order has been settled (also by Controlling), and marks the final completion of the order. Settlement and business completion are dealt with in the PLM316 course.

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Order Confirmation: Times/Activities Times z z z z

Individual entry Collective entry Overall Completion Confirmation Time sheet (CATS)

Activities z Activity reports z Overall Completion Confirmation z Confirmation texts

Measurements/counter readings

 SAP AG 2004

There are three different ways to confirm the time required for work on a maintenance order: y Individual entry of times for each order operation y Collective entry by direct entry or using an operation list y Overall completion confirmation: Times, activities, measurement values, and so on, on a collective screen y Entry using the cross-application time sheet (CATS) Once completion confirmations for operations/sub-operations in a maintenance order have been entered, the system automatically assigns the status PCNF (Partially confirmed) to these operations/sub-operations, if no setting has been made in Customizing that a final completion confirmation should be proposed automatically. As soon as all the operations/sub-operations in a maintenance order have been completely confirmed, the order itself is assigned the status CNF (Finally confirmed). There is always a risk of completion confirmations being assigned to the wrong operations/suboperations or entered with the wrong data. The system therefore allows you to reverse completion confirmations if required. The activities performed are entered as maintenance notifications with notification type "Activity report" and assigned to the corresponding order. Alternatively, confirmation texts can be entered with confirmations of time. However, these are not as easy to structure and analyze as activity reports. Measurement readings are entered as measurement documents for the reference object.

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Overall Completion Confirmation

Completion confirmation Order 901760 Operation 10

2h

Operation 20

3h

Time

Material 100-501

2 Pc

100-605

2 Pc

Measurement documents Measuring point Counter 932

43110.1 bar

& activities, tasks, and services

5834 L

 SAP AG 2004

The overall completion confirmation enables you to confirm not only working times, but all the relevant details for an order on a single screen, configured to suit your individual requirements. Time confirmations and technical confirmations can therefore be processed in the same way.

© SAP AG

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Maintenance Order: Technical Completion

Order 901760 z Limited ability to change order z Status 'Technically completed' z Create settlement rule z Deletion flag for purchase requisitions z Close open reservations z Close open capacities

 SAP AG 2004

The maintenance order obtains the status TECO (Technically completed). In other words, the maintenance work required for this order has been completed. The maintenance order can then only be changed online as follows: y It can be locked or unlocked. y The deletion flag can be set. However, the order can still receive costs, for example, invoice receipts for materials delivered and consumed, or from delayed time confirmations. If you have not maintained a settlement rule for the maintenance order, it is created automatically by the system. If this is not possible owing to missing data, the system directs you to where the settlement rule can be maintained. All the purchase requisitions for which there are no purchase orders that still exist for the maintenance order are marked with a deletion flag. All open reservations and capacities that still exist for the maintenance order are closed. A reference date and time must be entered for the technical completion. This depends on what periods are assigned to the order in the Plant Maintenance Information System (PMIS). However, the reference date has no influence on the determination of the location- and account assignment data. This is determined from and set to the day's date when the order is created. If, for example, the cost center of the equipment changes during the order processing, you can - if necessary- use the Update Reference Object Data function (right mouse button) to update the order. The order data and the data from maintenance notifications and usage histories are available in the maintenance history and can be used for the evaluation of past work and the planning of new work.

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Reverse Technical Completion

Order 901760 z Order becomes modifiable again z Status REL (Released) is set z Location and account assignment data are re-copied from the object

TECO

z Open purchase requisitions are recompiled z Open reservations are recompiled z Open capacities are recompiled

 SAP AG 2004

You can reverse the status TECO (technically completed) if required. The order is given the status that it had before the technical completion, in other words, capacity requirements and reservations are restructured and the deletion indicator is reset again for unconverted purchase requisitions.

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Document Flow All document types created for the maintenance order can be displayed: z Notification z Completion confirmation z Goods movement z Purchase requisition z Purchase order

Maintenance order

 SAP AG 2004

© SAP AG

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Action Log

Who changed what and when?

Maintenance order

Causes of damage


Texts

Purchasing data

Account assignment data

Malfunction data Technical objects Dates

Address

Priorities

Sales data

Damage

 SAP AG 2004

Changes to notifications, orders, equipment, and functional locations are displayed in chronological order in an action log. This enables you to track who has changed the data or status of which fields and when. To use this function, the creation of change documents for the respective objects must be activated.

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Plant Maintenance Integration Production Materials Management

Joint Venture


Project Management

Plant Maintenance Financial Accounting

HR System

Investment Management

Funds Management

Asset Accounting

Real Estate Management

 SAP AG 2004

The component, SAP PM Plant Maintenance, as part of Product Lifecycle Management has manifold integration aspects. Information on the integration aspects can be found in the following courses:y Materials Management y Controlling y Financial Accounting - In this course, relevant information can be found in:- Asset Accounting in Course PLM305 - Production and HR System in Course PLM315 - Investment and Project Management in Course PLM316 - Real Estate Management in Course AC290 - Funds Management in Course IPS910 y Joint Venture is part of the Industry Solution IS-Oil and must be installed separately. Integration with the standard system is planned. You can find information about these components in SAPNet.

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Corrective Maintenance Process: Topic Summary

You are now able to: z Identify and perform the phases of the Corrective Maintenance process z Identify the integrations points with other mySAP ERP processes

 SAP AG 2004

© SAP AG

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Reporting and Analysis: Topic objectives

At the conclusion of this topic, you will be able to: z Understand the tools involved in analyzing maintenance history z Process reports using the Plant Maintenance Information System

 SAP AG 2004

© SAP AG

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Maintenance History Completed Notifications

Completed Orders

Damage

Object

Description Damage objects Down Times Activities

Tasks

Work __________ ____________________ ____________________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Lists

center Scheduling of work Material usage Costs by class

 SAP AG 2004

Analyses in maintenance processing are based on completed notifications or orders and historical orders. Completed notifications and orders: You can use completed notifications and orders for mediumterm evaluations. A notification is transferred to the notification history when completed, whereas an order is transferred to the section for completed orders. The data for completed notifications and orders can be analyzed in full. Evaluations can be performed in the corresponding list editing function, where the status Completed must be set each time. Historical orders are generated when completed orders are archived and they form the basis for long-term analyses. They are transferred to the order history. Historical orders contain the most important order data in condensed form.You can perform analyses in the list editing function for the orders, where the status Historical must be set.

© SAP AG

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Material Usage Example: Use of material 100-100 from 01/01/01 to 01/01/02 Material Order

Notification

Equipment

Work ctr

100-200 901021

1000253

MECHMNT

2

901021

1000255

MECHMNT

1

901118 901234

1000056

901256

100-200 904051

1000083

Funct. location

Reserved Unit

Reserv. reference

Unit

PC

2

PC

PC

1

PC

1000255

MECHMNT

2

PC

2

PC

1000253

MECHMNT

1

PC

1

PC

1000255

MECHMNT

2

PC

2

PC

1000258

MECHMNT

18

PC

18

PC

18

PC

18

PC

 SAP AG 2004

You can use the "Material where-used list" function to verify the use of materials in maintenance orders within a specific period of time. Orders can be chosen according to different selection criteria, for example, by order number, order type, equipment and so on. The material where-used list also indicates which materials were planned withdrawals, for example, with reference to a reservation, and which were unplanned (without reference to a reservation).

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Standard Analysis Options

Additional information Equipment master record Order

Drill-down by planner group

Planning-related analysis Planning plant 1000 90 68,000

Functions z ABC analysis z Classification

Planning plant: 1000 Planner Order Order group number costs Drill52 26,000 down by 010 020 38 42,000 period

z Dual classification z Planned/actual z comparison z Cumulative frequency curve z Correlation

Planning plant: 1000 Planning group: 010 Month Order Order number costs 02/2002 28 14,000 12,000 03/2002 24

 SAP AG 2004

Standard analyses provide many functions that enable you to find specific information for detailed evaluations. The information structures provide the database for standard analyses. y You can specify the range of data to be evaluated. y You can define the key figures or choose them online during the analysis itself. The drill-down function allows you to vary the detail of information. y You can specify the sequence in which levels of information are displayed or you can follow the standard drill-down sequence. y Different functions are available at each level, for example, cumulative frequency curves, ABC analyses, correlation, classification, dual classification, and ranking lists. y All the results can also be displayed graphically. You can save the data selected for standard analysis as a selection version. y Selection versions also enable you to define the way you view the data. y You can select data in the background at any time. You can access summary information in the information structure and branch to the display of master data and movement data.

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Reports and Analysis: Topic Summary

You are now able to: z Understand the tools involved in analyzing maintenance history z Process reports using the Plant Maintenance Information System

 SAP AG 2004

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Enterprise Asset Management: Unit Summary

You are now able to: z List the organizational structures in Enterprise Asset Management z Define the technical objects used in the Enterprise Asset Management z Perform the Corrective Maintenance process z Identify the reporting and analysis tools used in Enterprise Asset Management z Identify the integration points with other mySAP ERP modules

 SAP AG 2004

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Enterprise Asset Maintenance: Exercises Unit: Enterprise Asset Maintenance Topic: Technical Objects At the conclusion of this exercise, you will be able to: • Display the structure of functional locations • Display an equipment master record The functional location is used to map an enterprise’s complex technical systems such as welding, engine assembly, and vehicle assembly. The representation is based on a hierarchy of functional locations, which is defined using a structure indicator. An equipment master is maintained by an enterprise in order to maintain transactional data for its individual business objects, such as pumps, motors, and welding machines. As a project team member, you need to understand the structure and function of technical objects used in Plant Maintenance. 1-1

Display the Structure of a Functional Location. 1-1-1 Display the structure display of the clarification plant ## and determine the functional location labels of the valves in the pump station of the biological cleaning functional location. Valves in Pump Station for Biological Cleaning:

1-2

Display a Functional Location master record. 1-2-1 Display the functional location ##-B02 and determine the following: Maintenance Plant _____________________________ Cost Center ___________________________________ Main Work Center ______________________________

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1-3

Display the equipment master record for equipment TEQ-##. 1-3-1 What is the Description? 1-3-2 What is the Maintenance Plant? 1-3-3 What is the Cost Center that this piece of equipment is assigned? 1-3-4 What is the Construction Type? 1-3-5 What is the Functional Location

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Unit: Enterprise Asset Maintenance Topic: Corrective Maintenance Process At the conclusion of these exercises, you will be able to: • Create a maintenance notification • Create a maintenance order from a maintenance notification • Release a maintenance order • Perform planned and unplanned material withdrawals • Perform a completion confirmation • Technically complete a maintenance order The first step in the corrective maintenance cycle is to create a notification. The notification contains information about the equipment or functional location as well as the reason for the notification. After you create the notification, you will then convert it into a maintenance order. The order is the most important component in planning maintenance tasks. Operations and spare parts are planned in the order. The order also serves as a cost collector. As the work is done on the order, material needs to be withdrawn from inventory. Material withdrawals can either be planned or unplanned. A planned material withdrawal is when the material is listed on the order. An unplanned material withdrawal is when during the repair process an unexpected piece of material was needed. You will enter both types of material withdrawals. Along with material withdrawals, labor also needs to be charge to the order. Using the completion confirmation transaction you will record the actual labor hours worked for the order. You will also technically complete the order. 2-1

Create a Maintenance Request. 2-1-1 Create a maintenance request for equipment P-1000-N001: a new welded joint is to be made on the casing of the pump motor. Enter a damage description. 2-1-2 Save the maintenance request. Maintenance Notification Number ____________________________

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2-2

Create a Maintenance Order by converting the Maintenance Request 2-2-1 The next step in the corrective maintenance process is to create a maintenance order using order type PM01. Using the notification that you created in the previous exercise, you will convert it to an order within the change notification transaction. Assign the order to work center T-ME## and to business area 1000. Save

2-3

Assign material 100-600, from the BOM to the order. Perform an availability check to verify that the component has sufficient inventory to cover the requirement quantity.

2-4

Save your order. Maintenance Order Number ____________________________

2-5

Display the Planned/actual comparison for your order. 2-5-1 What are the planned costs for cost element 400000? ___________________________________________ 2-5-2 What are the planned costs for cost element 655901? ________________________________________

2-6

Order Release 2-6-1 To be able to post any inventory transactions or completion confirmations, your order’s status must equal released. Release your maintenance order from exercise 2-4.

2-7

Enter a Planned Material Withdrawal 2-7-1 Withdraw the reserved material with reference to your maintenance order from exercise 2-4. What material is withdrawn? ________________________________________________ 2-7-2 Post the goods issue.

2-8

Perform a Completion Confirmation 2-8-1 It took you two hours to fix the pump. You must charge the time to your order using the overall completion confirmation transaction.

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2-9

Technically Complete an Order 2-9-1 The work on the pump is completed, therefore, you need to technically complete the order. 2-9-2 What is the status of the order after the technical completion? _________________________________________________ 2-9-3 What are the consequences of the technical completion of a maintenance order? __________________________________________________ __________________________________________________ __________________________________________________

2-10

View the actual costs of your order for each value category. 2-10-1 Which value categories have actual costs? __________________________________________________ __________________________________________________

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Unit: Enterprise Asset Maintenance Topic: Reporting and Analysis At the conclusion of this exercise, you will be able to: • Process a maintenance order list • Process a material usage report • Perform a location analysis using the Plant Maintenance Information System You want to be able to process evaluations to analyze costs, damage, usage times, etc. , You also want listings of maintenance orders or maintenance notifications. As a project team member, you need to understand the different reporting and analysis tools available in Plant Maintenance. 3-1

Process a standard report that lists all completed maintenance orders for equipment P-1000-N001. 3-1-1 You would like to see planned and actual costs on the report and you would also like the report to be sorted by descending order numbers. 3-1-2 You would like to see the order details for the maintenance order that you created, but you are not sure of the order number. On the List of Orders report, how could you determine which of the orders is the one that you created? ______________________________________________________ 3-1-3 Display the details of your order. Can you make any changes to your maintenance order? Why not? ______________________________________________________

3-2

Perform a location analysis for the current fiscal year for the maintenance plant 1000. 3-2-1 Determine which piece of equipment incurred the greatest overall costs. _____________________________________________________

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Enterprise Asset Maintenance: Solutions Unit: Enterprise Asset Maintenance Topic: Technical Objects

1-1

Display the Structure of a Functional Location. Logistics → Plant Maintenance → Technical Objects → Functional Location → Structural Display Enter the following data on the Functional Location Structure: Selection screen: Field

Data entry

Functional Location

##

Levels below

1

Location Hierarchy

Selected

Expand Assembly Select the Execute icon

Selected

1-1-1 Display the structure display of the clarification plant ## and determine the functional location labels of the valves in the pump station of the biological cleaning functional location. Valves in Pump Station for Biological Cleaning: Expand Biological Cleaning, Pump Station and Pump Sets to determine the Valves used in the Clarification Plant. ##-B01-1A ##-B01-1B ##-B01-2A ##-B01-2B Exit the structure display.

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1-2

Display a Functional Location master record. Logistics → Plant Maintenance → Technical Objects → Functional Location → Display On the Display Functional Location: Initial Screen enter functional location ##B02. 1-2-1 Display the functional location ##-B02 and determine the following: Select the Location tab Maintenance Plant 1000 Select the Organization tab Cost Center 4110 Main Work Center Mechanik Exit the functional location master record.

1-3

Display the equipment master record for equipment TEQ-##. Logistics → Plant Maintenance → Technical Objects → Equipment → Display On the Display Equipment: Initial Screen enter equipment TEQ-##. 1-3-1 What is the Description? Electric Pump 001 1-3-2 What is the Maintenance Plant? Select the Location tab. 1000 1-3-3 What is the Cost Center that this piece of equipment is assigned? Select the Organization tab. 4110 1-3-4 What is the Construction Type? Select the Structure tab. P-1000 1-3-5 What is the Functional Location? ##-B02 Exit the equipment master record.

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Unit: Enterprise Asset Maintenance Topic: Corrective Maintenance Process 2-2

Create a Maintenance Request Logistics → Plant Maintenance → Maintenance Processing → Notification → Create (Special) → Maintenance Request 2-2-1 Create a maintenance request for equipment P-1000-N001: a new welded joint is to be made on the casing of the pump motor. Enter a damage description. Enter the following data on the Create PM Notification: Maintenance request screen: Field Description - (which is to the right of the Notification field) Equipment

Data Entry Weld Joint Fitting - ## P-1000-N001

Select the Enter icon. The functional location and other data from the equipment master record are filled in. 2-2-2 Save the maintenance request. Select the Save icon. Select the Exit icon. When prompted if you want to save your data, select No. Maintenance Notification Number ____________________________

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2-2

Create a Maintenance Order by converting the Maintenance Request Logistics → Plant Maintenance → Maintenance Processing → Notification → Change On the Change PM Notification: Initial screen, your notification number defaults. Select the Enter icon. 2-2-1 The next step in the corrective maintenance process is to create a maintenance order using order type PM01. Using the notification that you created in the previous exercise, you will convert it to an order within the change notification transaction. Assign the order to work center T-ME## and to business area 1000. On the Change PM Notification: Maintenance Request screen, select the Create icon, which is the piece of paper icon to the right of the Order field. In the Create Order dialog box, enter the following data: Field Order type Business area Main work center

Data Entry PM01 1000 T-ME##

Select the Enter icon Remain in the order for the following exercises 2-3

Assign material 100-600, from the BOM. Perform an availability check to verify that the component has sufficient inventory to cover the requirement quantity. Select the Components tab. In the lower portion of the screen, select the List button. Within the structure list, expand P-1000 by selecting the arrow. Click once on 100-600 Support base, then select the Choose (green check) icon. Change the requirement quantity to one. Perform the Availability Check. Select the component’s row and then select the Check material availability icon in the lower portion of the screen. In the Confirmation Proposal screen, verify that the required quantity can be confirmed on the requested date, and then select the Continue button.

2-4

Save your order. Select the Save icon. Maintenance Order Number ____________________________

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2-5

Display the Planned/actual comparison for your order. Logistics → Plant Maintenance → Maintenance Processing → Order → Change On the Change Order: Initial screen, your order number defaults. Select the Enter icon. Within the order, select Extras → Cost reports → Planned/actual comparison Or within the order, select the Costs tab and then select the Report Planned/actual button. 2-5-1 What are the planned costs for cost element 400000? 45.45 answer may vary depending on planning 2-5-2 What are the planned costs for cost element 655901? 9.09 answer may vary depending on planning Exit the report and the maintenance order.

2-6

Order Release Logistics → Plant Maintenance → Maintenance Processing → Order → Change On the Change Order: Initial screen, your order number defaults. Select the Enter icon. 2-6-1 To be able to post any inventory transactions or completion confirmations, your order’s status must equal released. Release your maintenance order from exercise 2-4. Select the Release icon (the green flag icon). Select the Save icon.

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2-7

Enter a Planned Material Withdrawal Logistics → Plant Maintenance → Maintenance Processing → Completion Confirmation → Goods Movement → Goods Movement On the Enter Goods Movement: Initial screen, enter the following data: Field

Data entry

Movement type

261

Plant

1000

Storage Location

0001

Select the To Order button. Enter your order from exercise 2-4. 2-7-1 Withdraw the reserved material with reference to your maintenance order from exercise 2-4. What material is withdrawn? 100-600 2-7-2 Post the goods issue. Select the Save icon. 2-8

Perform a Completion Confirmation Logistics → Plant Maintenance → Maintenance Processing → Completion Confirmation → Entry → Overall Completion Confirmation Select Extras → Settings and choose profile PM0002, save the selection profile. The profile determines the layout of the confirmation screen. On the Overall Completion Confirmation screen, type in your order number, from exercise 2-4 and then select the Enter icon. 2-8-1 It took you two hours to fix the pump. You must charge the time to your order using the overall completion confirmation transaction. You will enter your labor hours in the Time Confirmation section of the screen. You will also indicate that the order is finally confirmed, clear open reservations, and no work is remaining. Field Act. Work F (Final confirmation) C (Clear open reservations) N (No remaining work) Select the Save icon.

© SAP AG

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2-11

Technically Complete an Order Logistics → Plant Maintenance → Maintenance Processing → Order → Change On the Change Order: Initial screen, your order number defaults. Select the Enter icon. 2-9-4 The work on the pump is completed, therefore, you need to technically complete the order as well as the notification. Within the order, select Order → Functions → Complete Complete(technically) In the Complete dialog box, verify that the Complete notifctns indicator is selected. Select the Continue icon. 2-9-5 What is the status of the order after the technical completion? Logistics → Plant Maintenance → Maintenance Processing → Order → Change On the Change Order: Initial screen, your order number defaults. Select the Enter icon. The status of the order is TECO. 2-9-6 What are the consequences of the technical completion of a maintenance order? The order can no longer be changed. Order status equals TECO. Outstanding reservations are cleared. Outstanding capacity loads are removed. Outstanding purchase requisitions are assigned a deletion flag.

2-12

View the actual costs of your order by value category Logistics → Plant Maintenance → Maintenance Processing → Order → Change On the Change Order: Initial screen, your order number defaults. Select the Enter icon Select the Costs tab. 2-10-1 Which value categories have actual costs? Internal Labor Internal Material/Spares Spares (own production) Exit the order.

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Unit: Enterprise Asset Maintenance Topic: Reporting and Analysis 3-3

Process a standard report that lists all completed maintenance orders for equipment P-1000-N001. Logistics → Plant Maintenance → Maintenance Processing → History → Order List → Change On the Change PM Order: Selection of Orders screen, deselect the order status indicators for Outstanding and In Process and select the Completed indicator. Enter equipment P-1000-N001 in the equipment field. Select the Execute icon. 3-1-1 You would like to see planned and actual costs on the report and you would also like the report to be sorted by descending order numbers. Select the Current icon. On the right hand side choose Total planned costs and Total actual costs. (To select both at the same time use the shift key.) Select Show selected fields. Then select the Transfer (green check) icon. To sort the report by descending order numbers, select the Order column then the Sort in Descending Order icon. 3-1-2 You would like to see the order details for the maintenance order that you created, but you are not sure of the order number. On the List of Orders report, how could you determine which of the orders is the one that you created? The fields Entered by or Planner Group could be added to your report. Add Entered by field to your report by selecting the Current icon and then choose Entered by and then Show selected fields. 3-1-3 Display the details of your order. Can you make any changes to your maintenance order? Why not? Double click on your order. No changes can be made because the status of the order is TECO. Exit the report.

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3-4

Perform a location analysis for the current fiscal year for the maintenance plant 1000. Logistics → Plant Maintenance → Information System → Standard Analyses → Location On the Location Analysis: Selection screen, enter 1000 in the Maintenance Plant field. Change the analysis period to the current fiscal year. Select the Execute icon. 3-4-1 Determine which equipment number incurred the greatest overall costs. Select the Switch drilldown button and choose Equipment then the Continue icon. Select the Total act.costs column and choose the Sort in descending order icon. To add the equipment number and the equipment description, choose Settings→ Characteristic display →Key and description. To increase the width of the equipment column, choose Settings→ Column width→ Characteristic → Enter a width of 40 Exit the report. Do not save the analysis.

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Enterprise Asset Maintenance: Test Your Knowledge 1.

Determine whether this statement is true or false. The usage list displays all the pieces of equipment that have been installed in chronological order.

2.

Determine whether this statement is true or false. Equipment is defined as a collection of physical objects that are maintained as individual autonomous units.

3.

Why would you create functional locations to structure your systems? _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________

4.

Determine whether this statement is true or false. In the Corrective Maintenance process, maintenance requirements are collected within notifications and then dealt with during order processing.

5.

Fill in the blanks to complete the sentence. The ______________ displays an overview of the objects involved in the order.

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Enterprise Asset Maintenance: Answers 6.

Determine whether this statement is true or false. The usage list displays all the pieces of equipment that have been installed in chronological order. Answer: True The usage list displays all the pieces of equipment that have been installed in chronological order.

7.

Determine whether this statement is true or false. Equipment is defined as a collection of physical objects that are maintained as individual autonomous units. Answer: False Equipment is defined as an individual physical object that should be maintained as an autonomous unit.

8.

Why would you create functional locations to structure your systems? Answer: Maintenance tasks have to be performed and recorded at this location. Technical data has to be store and evaluated over a long period of time. Effects of the usage conditions on the installed equipment have to be analyzed. Costs of maintenance tasks need to be monitored.

9.

Determine whether this statement is true or false. In the Corrective Maintenance process, maintenance requirements are collected within notifications and then dealt with during order processing. Answer: True In the Corrective Maintenance process, maintenance requirements are collected within notifications and then dealt with during order processing.

10.

Fill in the blanks to complete the sentence. The ______________ displays an overview of the objects involved in the order. Answer: The object list displays an overview of the objects involved in the order.

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Contents: z Organizational Structures z Employee Records z Human Capital Management Processes z Reporting and Analysis

 SAP AG 2004

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Human Capital Management: Unit Objectives

At the conclusion of this unit, you will be able to: z Define organizational structures in Human Capital Management z Manage employee records z Describe basic business processes in the area of Human Capital Management z Identify the integration points with other ERP processes z Explain the reporting and analysis tools in Human Capital Management

 SAP AG 2004

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Human Capital Management: Course Overview Diagram TERP10


 SAP AG 2004

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Human Capital Management: Business Scenario

z In your enterprise, to compete effectively, you need to align all corporate resources, including employees, with business objectives. To do so, you need to transform traditional HR functions into a comprehensive program for Human Capital Management (HCM). As a project team member, you need to understand how to align employee skills, activities, and incentives with business objectives and the strategies to reach them.

 SAP AG 2004

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HCM Structures: Topic Objectives

At the conclusion of this topic, you will be able to: z Define organizational structures in Human Capital Management

 SAP AG 2004

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Organizational, Enterprise, and Personnel Structure Personnel No. 1001 EE Group

1

EE Subgroup DU From

Name

Michaela Maier

Active employee

Pers. area

1300 Frankfurt

Salaried Staff.

Cost Center 2100

01/01/1994

To

31.12.9999

Finance and Admin.

Chng. 01/29/1999

BILLE

Enterprise structure


CoCode

1000 IDES

Leg.person 0001

Pers Area

1300 Frankfurt

Subarea

Cost Ctr

2100

Bus.area

9900 Corporate Other

Payr. area

D2

Central

Personnel structure EE Group

Personnel structure

Organizational structure

1

Active employee

EE Subgroup DU Salaried staff

HR-D: Salaried empl

Contract data Com. employee

Organization plan

Administration

Percentage

100.00

Group

1300

Position

50000076

Functional Specialist

PersAdmin

001

Func.Spec-D

Time

002

Dagmar Krause

003

Oliver Zeuner

Job key

50011880

Administrator

PayrAdmin

Admin.

Supervisor

Org. unit

50000073

Travel expenses (D)

Org.key

1300

Helmuth Hesse

Trav.Exp -D

 SAP AG 2004

A personnel management system enables you to reproduce company hierarchies and the relationships within the hierarchies, and to store and manage employee data. The first step in recording personnel data is to assign the employee within the company structures. The Enterprise Structure hierarchy is a legal and financial structure. Its highest level is a company code, and its subdivisions are personnel areas, and personnel subareas. The Personnel Structure is relational, rather than hierarchical. It forms employee groups by specific status (e.g., active or inactive) and type (e.g., salary or hourly) that are needed for HR administrative purposes. The allocation of employees to the structures in their enterprise is of the utmost importance in Human Capital Management, it is the first step in entering personal data. You assign employees in infotype 0001, Organizational Assignment. In doing this, you include employees in the enterprise, personnel and organizational structures. Information on the organizational assignment of employees is of great importance for authorization checks, for the entry of additional data, and for Time Management and Payroll Accounting. When you enter data for an employee in infotype 0001, Organizational Assignment, the employee is assigned to a company code, a personnel area, and a payroll area. You also assign employees to positions. This results in the employee‘s assignment to an organizational unit, a job, and a cost center.

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Enterprise Structure: Example

ABC International

ABC S.A. Country A

Location A

Location B

Headquarters

ABC AG Country B

Location C

Client

ABC Inc. Country C

Company code

Location D

Personnel area

Production

Personnel subarea

 SAP AG 2004

The enterprise structure for Human Capital Management processes uses the following organizational elements: y Client – all personnel administration organizational elements exist within a client y Company code – represents an independent accounting unit. Balance sheets and Profit & Loss Staements, required by law, are created at the company code level. y Personnel area – is an organizational element area used exclusively in Personnel Administration and is unique within a client. Each personnel area must be assigned to a company code. y Personnel subarea – is also unique to Personnel Administration. Groupings are defined for personnel subareas to specify which entries from subsequent settings can be used for employees assigned to a particular company code or personnel area. These groupings directly or indirectly affect Time Management and Payroll Accounting.

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Personnel Areas A personnel area is a specific entity for personnel administration. It represents a subdivision of the company code. ABC International

Company codes

1000 ABC S.A. Country A

Personnel area

1000 Location A

2000 ABC AG Country B

1300 Location B

3000 Location C

3000 ABC Inc. Country C

3100 Location D

Personnel subareas

 SAP AG 2004

A personnel area is a Personnel Administration-specific unit and is the subunit of the company code. The individual personnel areas in a company code have four-digit alphanumeric identifiers. The personnel areas within a client must be clear. The personnel area has the following functions: It allows you to generate default values for data entry, for example, for the payroll accounting area. It is a selection criterion for reporting. It constitutes a unit in authorization checks.

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Personnel Subareas Personnel subareas are subdivisions of personnel areas. The organization of the most important subareas of personnel administration takes place at this level. ABC International

1000 ABC S.A. Country A

1000 Location A Personnel subareas

2000 ABC AG Country B

1300 Location B

0001 Head office

3000 ABC Inc. Country C

3000 Location C

0002 Production

3100 Location D

0001 Sales

 SAP AG 2004

Personnel subareas represent a further subdivision of the personnel area. The principal organizational aspects of human resources are controlled at this level, namely the pay scale and wage type structures and the planning of work schedules. The personnel subarea is assigned a four-character alphanumeric identifier. The control features are stored according to the country. The main organizational functions of the personnel subarea are as follows: y To specify the country grouping. Master data entry and the setting up and processing of wage types and pay scale groups in payroll depend on the country grouping. The grouping must be unique within a company code. y To assign a legal person which differentiates between companies in legal terms. y To set groupings for Time Management so that work schedules and substitution, absence and leave types can be set up for individual personnel subareas. y To generate a default pay scale type and area for an employee’s basic pay. y To define a public holiday calendar. y To define subarea-specific wage types for each personnel area.

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Personnel Structure

Retirees

Contractors

Active Employees

Hourly

Employee Group

Salaried Employee Subgroup

Weekly

Semi-Monthly

Payroll Area

 SAP AG 2004

The administrative personnel structure for human resources relates primarily to work hours and compensation. It is made up of three elements: employee groups, employee subgroups, and payroll areas. Employee groups represent different types of employees. Typically, they are grouped according to status for administrative purposes. y Employee groups are used to generate default values for payroll accounting area and basic pay, as a selection criterion for reports, and as one unit of the authorization check. Employee subgroups are a finer division of employee groups. y Employee subgroup groupings allow you to define different payroll procedures, as, for example, in how overtime pay is accounted; or to restrict the validity of payscale groups according to collective agreement provisions. y Subgroup groupings can also define the validity of work schedules and various time management elements, such as absence quotas. The payroll areas group employees according to how often they are paid. All employees who are paid at the same time are assigned to the same payroll area. y The payroll area provides the payroll program with the number of employees to be included in a payroll run and the dates of the payroll period.

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Employee Group and Subgroups The employee group subdivides employees into various categories.

Non pay-scale employee

External

Salaried employee

Active

Trainee

Pensioner

Hourly wage earner

Employees are differentiated further within the employee subgroups. Active employees are differentiated according to their status trainee, hourly wage earner or salaried employee, for example.  SAP AG 2004

Employee group is a general division of employees. The employee group defines the relationship between an employee and a company in that the employee makes a certain contribution to the company in terms of work. Active employees, pensioners and early retirees make up the main employee groups in Personnel Administration. The following are the principal functions of the employee group: y Default values can be generated for payroll accounting area and basic pay, for example, according to employee group. y The employee group is used as a selection criterion for reporting. y The employee group is one unit of the authorization check. You can generally use the standard catalog to set up employee groups. It can, however, also be extended to suit individual customer requirements. The employee subgroup is a fine division of employee groups according to the status of employees. Wage earners, salaried employees and non pay scale employees are all examples of subgroups within the employee group ”active”. All control features of the personnel structure are defined at employee subgroup level. The most important features are described below: y The employee subgroup grouping for the Personnel Calculation Rule allows you to define different payroll procedures for different employee subgroups; for example, you can specify whether an employee’s pay should be accounted on an hourly or monthly basis. y The employee subgroup grouping for primary wage types controls the validity of wage types on an employee subgroup level, whereas the grouping for collective agreement provisions restricts the validity of pay scale groups to certain employee groups. y The employee subgroup grouping for the work schedule defines the validity of work schedules, and the attendance or absence quota type the validity of time quotas. y When entering data, you can define default values using the employee subgroup, for example, for the payroll accounting area.

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Payroll Accounting Areas The payroll accounting area represents an organizational unit defined for the purposes of payroll accounting. Acct area x

Jan 1

Feb 1

Pay

Pay

Acct area y

Jan 1 Pay

Payroll on the 28th day of month for current month

Feb 1 Pay

Payroll on Thursday for the following week

 SAP AG 2004

The payroll accounting area is an organizational unit defined for the purposes of payroll accounting. All employees who are accounted together are assigned to the same payroll accounting area. Payroll accounting is generally performed for each payroll accounting area. The payroll accounting area provides the payroll driver with two pieces of information: the number of employees to be accounted and the dates of the payroll period. The number of employees to be accounted is determined using the Organizational Assignment infotype (0001) which stores the payroll accounting area. Infotypes provide a logical grouping of data fields. Note: An employee may only change payroll accounting areas at the end of a period. If an employee changes status from wage earner to salaried employee in the middle of the month, and the payroll accounting area is different for both, you should not enter the new payroll accounting area until the start of the following month.

© SAP AG

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The Organizational Plan

Organizational Unit

Positions are the individual employee assignments in the enterprise. Positions are occupied by persons, objects that hold positions

Position

Organizational units describe the various business units that exist in your enterprise.

Job Jobs are general classifications of tasks that are routinely performed together.

Person  SAP AG 2004

The organizational plan is a comprehensive and dynamic model of the structural and personnel environment in your enterprise, which you can view and evaluate at any time. Organizational units can be loosely defined as functional or regional departments, or more specifically as project groups, depending on the type of organization you have. You must relate organizational units with one another in an organizational plan. The hierarchical interrelationships that exist between the organizational units represents the organizational structure of your enterprise. Organizational units are related to cost centers from Controlling. Each job represents a unique classification of responsibilities in your organization. When you create jobs, you should consider what specific tasks and requirements are associated with the individual jobs. Once you have created a job, you must specify the number of corresponding positions required in the organization.

© SAP AG

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HCM Structures: Topic Summary

You are now able to: z Define organizational structures in Human Capital Management

 SAP AG 2004

© SAP AG

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Employee Records: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe how to manage employee records in Human Capital Management z Identify the use and benefits of Employee Self Service (ESS)

 SAP AG 2004

© SAP AG

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The Employee in the Organization

Organizational Assignment (0001)


Personnel structure Organizational structure

PersNo. Name

4711 Anne Albert

Valid

05/01/2002

-

12/31/.9999

Enterprise structure CoCode

0001

Leg. person 0001

Pers.area

0001

Subarea

0001 New York

Cost ctr

1000

Bus.area

0001 New York

Payr.area

XX HR-´X: Salaried

Personnel structure EE group

Active

1

EESubgroup XX Salaried

Contract

Organizational structure

Administrator

Position

50000836

Group

Percentage

100

Personnel

Job

50000064

Time

Org. unit

50000827

Payroll

Org. key

0001

Supervisor

0001

 SAP AG 2004

The task of a human resource management system is to let you: y Map organizational hierarchies and the relationships between employees in the system y Record and administer employee data efficiently and accurately. When you record employee data, the organizational assignment of the employee in the structure has the highest priority. This is the first step when you create the personal data record for an employee.

© SAP AG

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Infotypes

Organizational Assignment

Basic Pay

10099100

etc.

Personal Data

Addresses

Planned Working Time

Infotypes: logical groupings of data fields  SAP AG 2004

Individual information, such as last name, first name and date of birth, is defined in data fields. Data fields are grouped into data groups or information units according to their content. In Human Resources, these information units are called information types or infotypes for short. HR data is therefore stored in groups that logically belong together according to content. For example, place of residence, street, and house number make up an employee's address and are consequently stored (together with additional data) in the Addresses infotype. Infotypes have names and 4-digit keys. The Addresses infotype, for example, has the key 0006.

© SAP AG

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Initial Entry Screen for Infotype Maintenance HR Master Data

Edit

Goto

Extras

Utilities

Settings

System

Help

Maintain HR Master Data

Basic personal data

Basic contract data

Infotype text

E..

Gross/net payroll

Net payroll

Period Period

Actions Organizational Assignment

Fr. Today

Personal Data

to Current week

Addresses

All

Current month

Bank Details

From today

Last week

Family Member/Dependents

Up to today

Last month

Challenge

Current period

Current year

Internal Medical Service Maternity Protection/Parental Leave

Choose

 SAP AG 2004

Infotypes that are most frequently used are grouped together by subject matter and assigned to static menus. One infotype can be included in more than one menu. Infotypes that are rarely used, on the other hand, might not be included in any menus at all. To access a particular menu, click on the tab page. The green ticks next to the menu list of infotypes indicate that these records already exist for the selected personnel number.

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Subtypes Maintain HR Master Data

Create Family/Related Person Personnel No.

Personnel No.

EE Group

4599200

EE Subgroup Name

Vera Sorokin

EE Group EE Subgroup

1 X0

Active employee

Active employee

X0

Hourly wage ea..

Name

Vera Sorokin

Pers area

CABB

Caliber A

Hourly wager earn.

From

1

Basic personal data

1001

To

31.12.9999

Pers area Family / related person

Basic contract data

Actions Organizational assignment Personal Data Addresses Bank Details

Family member

Child

Last name

Sorokin

Birth name

First name

Initials

Other title

Name format Name prefix

Name prefix Gender

Female

Male

Date of Birth

Family/Related Person Challenge

Birthplace

Internal Medical Service Maternity Protection/Parental Leave Military Service Styp Sty 2 Direct selection 1 2 10 11 12

Infotype 0021 Nationality Subtype 2 2nd/3rd na City of birth

Name Spouse Child Divorced spouse Father Mother

 SAP AG 2004

Subtypes are used to subdivide infotype data records. You may want to subdivide such information to make it easier to manage or because you want to assign different control features - such as time constraints - to the various subtypes of the same infotype. You can also create separate histories for each subtype. Examples: In the Family member subtype in the Family/Related Person (0021) infotype, you can store different family members: y Spouse (subtype 1) y Child (subtype 2) In the Address type subtype in the Addresses (0006) infotype, you can store different types of addresses: y Permanent residence (subtype 1) y Temporary residence (subtype 2) y Home address (subtype 3) The entry screens for the various subtypes may be different. You can assign access authorizations for each subtype.

© SAP AG

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Personnel Actions Planned Working Time

Org. Assignment

Actions

Personalmaß nahmen Personnel ßActions Personalma Personnel number 12345678 Hiring

Sequence of infotypes to show a personnel activity

Org. Wechsel Reassignment

 SAP AG 2004

The personnel actions function groups all of the infotypes together that must be maintained when a particular human resource process is performed, such as when an employee is hired, or when an organizational reassignment occurs. Each personnel action contains the infotypes for which data must be entered for the human resource process in question, and displays them one after the other for you to maintain. This ensures that all of the information relevant to the process is entered in the system. This function also makes it easier for you to enter data, because it prevents you from having to access each individual infotype. After you have saved a record, the system displays a new infotype for you to process. When you perform an action, you may want to skip a particular infotype without entering any data, or even cancel the action. At the end of the sequence, the system returns to the initial screen after saving Personnel actions allow you to store an Actions (0000) infotype for the activity to be performed to log the current personnel action.

© SAP AG

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Personnel File Display all infotypes for a personnel number

Additional infotypes. . .

Org. Assignment

Actions

Personalmaß ßnahmen Personnel File Personalma Personnel number 4711

 SAP AG 2004

The personnel file lists all of the infotypes for which records have been created for a personnel number. The infotypes are displayed in ascending numerical order. If more than one record exists for an infotype, they are displayed one after the other. The system then goes to the next infotype, after which it returns to the initial screen. You can scroll forwards and backwards within the personnel file.

© SAP AG

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Maintaining Employee Data

Change of address

Pay increase

New working time

Change of employee subgroup

New PS group

 SAP AG 2004

Employee data must be kept current. After an employee is hired, circumstances can always arise which make it necessary to enter new data or correct current data. Some examples of this include: y An employee moves, and his or her new address must be stored in the system. This may be done within Personnel Administration infotypes or through Employee Self Service. y An employee gets a pay raise at the start of the year. The new salary must be stored for the relevant date. y An employee changes job within the organization. His or her organizational assignment, working time, and salary also change. Data can be stored for the present, future, or past. When an infotype is updated, the old data is not lost. Instead, it remains in the system so that you can perform historical evaluations. Each infotype record is stored with a specific validity period. This means that the system can contain more than one record of the same infotype at the same time, even if their validity periods coincide. If new information is entered and saved in an infotype, the system checks whether a record already exists for this infotype. If this is the case, the system reacts based on rules, or time constraints set up for that particular infotype or subtype.

© SAP AG

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SAP Employee Self-Service z Intuitive Interface z Personalized z Similar look to

SAP’s other Web products

 SAP AG 2004

SAP ESS consists of many components such as: y SAP Office SAP Employee Self-Service is a set of powerful, yet easy-to-use applications that empower employees to view, create and maintain data in the R/3 system via the intranet/internet. y Who’s Who Employee Directory y Time Management y Expense Reports y Benefits y Personal Information y Training and Event Management y Skills Profile y My ESS - SAP ESS can be used with the Netscape Navigator and MS Internet Explorer, and can be implemented on Windows, Macintosh, and Unix if the appropriate Internet Browser is used. - SAP ESS has an intuitive, user-friendly interface.

© SAP AG

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What is Employee Self-Service? z SAP Employee Self-Service is a set of powerful, yet easy-to-use applications that empower employees to view, create and maintain data in the R/3 system via the intranet. z SAP ESS consists of many components such as:

Office

Time Management

Expense Reports

Benefits

Personal Information

Training and Event Management

Qualifications

Appraisals

 SAP AG 2004

With SAP ESS employees can take responsibility for updating and keeping their own data current. SAP ESS empowers employees to view, create and maintain data any time, anywhere, via web-based technology. SAP ESS has an intuitive, HTML based user interface. SAP ESS is an effective means for providing real-time access and data maintenance capabilities to the source, or owner of the data, and to off-load many of the data entry and related customer service activities that may be typically performed in a company’s human resources, payroll, benefits and travel departments.

© SAP AG

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13-24

Human Resources History Before ESS

With SAP ESS

z Large, routine, and administrative workload in Human Resources departments.

z Employees own data maintenance. z Employees become responsible for part of their personal data.

z Critical Human Resources staff is locked with data entry.

z Information is provided to all

z All business processes take place via paper or informally

z Employees

Many versions of the same data

z Delivery of Human Resources services is bureaucratic

Individual information (Payroll result, time management, travel expenses, qualifications.

„Public“ information (Who‘s who, calendar)

 SAP AG 2004

Prior to ESS, employees often had to call the HR department to access information that they now have at their fingertips. By enabling employees to maintain their own data and to have access to their own information, companies empower them to take responsibility and ownership. The human resources department is freed from many of the data entry and related customer service activities and reduces the costs of paper, postage and data entry time.

© SAP AG

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SAP ESS - The Highlights

SAP ESS Highlights

1.

Extensive functionality beyond basic HR functionality, including travel management and purchasing

2.

Inherent integration between SAP R/3 business scenarios, SAP ESS, and Workflow

3.

ESS functionality that leverages the strengths of underlying SAP infrastructure

4.

Global capabilities

5.

Enabling access from any platform at any time from anywhere

6.

Easy to use

7.

Personalized

 SAP AG 2004

SAP ESS leverages the power of SAP, taking full advantage of inherent workflow, R/3 business logic, security, and audit functionality y SAP ESS utilizes the same database. No dual maintenance or reconciliation is required. SAP ESS inherits mySAP ERP’s international architecture, with its unsurpassed language and currency management capabilities. It takes full advantage of mySAP ERP’s global capabilities, including country localization. SAP ESS can be used with the Netscape Navigator and MS Internet Explorer, and can be implemented on Windows, Macintosh, and Unix if the appropriate Internet Browser is used. SAP ESS has an intuitive, user-friendly interface. No training is required. The SAP ESS main menu can be customized and enhanced. The Internet templates are easily adaptable to match the look and feel of company intranet and corporate identity.

© SAP AG

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SAP ESS Functionality

z Office

z Jobs

z Time Management

z Payment

z Travel Management

z Personal Information

z Benefits

 SAP AG 2004

SAP ESS is now reflected in the role Employee Self-Service. Listed here are some of the examples of ESS functionality that can exist within ESS: y Office - Inbox, Calendar, Who’s Who, Change own data, Internal Service Request, My Assets y Time Management - Time Sheet (CATS), Request and cancel leave / vacation, display leave balances, work schedule, time statement y Travel Management - business trips y Benefits- inquiry, enrollment, spending account claims, retirement plan valuation results, y Jobs- job opportunities, application status y Payment - employment and salary verification, display total compensation statement y Personal Information - addresses, bank information

© SAP AG

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Employee Records: Topic Summary

You are now able to: z Describe how to manage employee records in Human Capital Management z Identify the use and benefits of Employee Self Service (ESS)

 SAP AG 2004

© SAP AG

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HCM Processes: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the basic business processes of Human Capital Management z Discuss the integration points with other mySAP ERP processes

 SAP AG 2004

© SAP AG

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Human Capital Management Processes

Cost Planning & Reporting

Recruitment

Hiring Course Credit

Employee Self-Service Travel Planning

Training & Personnel Development Payroll Administration

Compensation & Benefits

Managing Work Time

 SAP AG 2004

The Human Capital Management Processes include: y Recruitment y Hiring y Training and Personnel Development y Managing Work Time y Compensation and Benefits y Payroll Administration y Travel Planning y Personnel cost planning and Reporting y Employee Self-Services

© SAP AG

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Recruitment: From Vacancy to Hiring an Applicant

? Vacancy

Advertisement

Applicants

Profile match up Position Person

Hired as an employee

What are our requirements? What can the applicant offer?

 SAP AG 2004

The Recruitment component enables you to carry out the entire recruitment procedure, from entering applicant data to filling vacant positions. The SAP system supports personnel requirements, advertising, applicant administration, selection of applicants, and applicant correspondence. Moreover, in cases where you decide to hire the applicant, you can transfer the applicant data from Recruitment to Personnel Administration. Managers can map their decisions about applicants effectively in the Manager's Desktop and save costs in the process. The HR department then takes care of the subsequent administrative tasks involved. External applicants and employees can apply online in the Employment Opportunities Web application, that is in the Employee Self-Service Employment Opportunities.

© SAP AG

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Applicant Activities and Applicant Correspondence Applicant action Applicant Actions Applicant number 4711 Initial entry of basic data Enter additional data ... To be interviewed

Activity

Standard text Invitation to interview

Interview letter

 SAP AG 2004

Recording, logging, and planning activities for an applicant in the selection procedure takes place using applicant activities. An applicant activity is a concrete administrative step that an applicant passes through in the selection procedure, for instance Confirmation of receipt of application, Invitation to interview. You can link applicant activities to standard texts. When you create an activity, the system can output an appropriate standard letter via applicant correspondence. Certain applicant activities are created for applicants automatically by the system when you perform certain applicant actions. For example, if you invite an applicant for an interview, the applicant activity Invitation to Interview is automatically created for the applicant. You can print the invitation letter for the applicant via this activity. In the standard system, standard texts are delivered in Word and SAPscript.

© SAP AG

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Hiring an Applicant Work contract n c ati ratio m e o t Au t gen c tra n co

L. Becker

--------------------Signature

Applicant number 1234

Personnel number 9999

M. Clerc L. Le Becker

L. Becker

Applicant file

Employee file

 SAP AG 2004

If you hire an applicant, you can transfer his or her data to the Personnel Administration component. The applicant's data is transferred directly from the applicant database to the employee database. All the data you have already created in the individual infotypes in Recruitment is copied as default values during the transfer to Personnel Administration. This enables you to reuse, and change, the data created for the applicant for the future employee. This greatly reduces the effort involved in processing. In integrated systems, data transfer takes place either directly in Recruitment or directly in Personnel Administration. You can enter the additional data, such as working time and salary details, later in Personnel Administration. Note: There is an option that enables you to generate work contracts automatically via applicant correspondence for applicants you would like to hire in your company.

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Hiring an Employee

Salary Data

Organizational Assignment

Hiring

etc.

Work schedule Early Normal Late

Personal Data/ Addresses

Shift Data

 SAP AG 2004

The most important aspect of master data administration in a human resources system is the entry of employee data for personnel administration, time recording, and payroll. New employees can also be hired independently of the Recruitment component, by means of a personnel action in Personnel Administration. In such cases, data relevant to the new employee is created.

© SAP AG

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Hiring Action Select personnel action Enter data and save infotype

Org. Assignment

Personal Data

Actions

Personalmaß nahmen Personnel ßActions Personalma Personnel number 12345678 Hiring Org. Wechsel Reassignment

 SAP AG 2004

A range of employee data must be entered into the system when an employee is being hired. You do this by running the personnel action Hiring and enter all the necessary data in the relevant infotype. Once you have entered all the necessary data in an entry screen, you must save your entries. The system displays a new entry screen for processing. If you do not want to record any data here, skip the screen. Note: You can customize personnel actions to suit your requirements in the Implementation Guide (IMG).

© SAP AG

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Personnel Development Qualifications and requirements

Career and Succession Planning

Training & Event Management

 SAP AG 2004

Personnel Development focuses on the value that employees provide to a company. Among other things, it inventories individual skills and matches them to work requirements for: y Recruiting y Career Planning y Succession Planning y Training Personnel Development allows you to maximize the value that your employees provide to the company. You can plan and implement specific training measures to promote skill development so that qualified employees are available. You can also increase job satisfaction by considering suitability and preferences for job assignments. You can assign qualifications to employees and positions, for example. When related with employees, we refer to them as qualifications, when related with positions, we refer to them as requirements. All qualifications (and requirements) are stored centrally in a catalog. Both refer to the same object but from a different perspective. This means that you can compare the qualifications of a person with the requirements defined for a position. You edit the qualifications catalog in Customizing for Personnel Development. You can also make changes in a system that has already gone live by choosing the Current settings menu option.

© SAP AG

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Career and Succession Planning

Career Planning:

?

z Planning an employee's professional career …

Succession Planning:

?

z Looking for suitable candidates to fill vacant posts

 SAP AG 2004

Career and Succession Planning has two goals. First, to encourage the professional development of employees in a company, and second, to ensure that there is always sufficient headcount. Career Planning involves identifying possible career goals for employees, and planning their professional development. Succession Planning involves looking for suitable candidates to fill open posts.

© SAP AG

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Personnel Development and Qualifying Actions Position Person

Person

Position "Administrator" Objective Setting and Appraisals

Position "Department Manager"

Confirmation of participation in MS Word course

Profile match up Development Plans

Knowledge of Microsoft Word required?

Course

 SAP AG 2004

The Personnel Development function can help you maximize the value of your employees for your enterprise. You can plan and implement specific personnel and training measures to promote the professional development of your employees. You can also increase your employees' motivation and job satisfaction by giving consideration to their preferences and suitability for jobs. Personnel Development sets out to ensure that an organization has all the qualifications and skills it needs in all fields. This is achieved by drawing up qualification potentials. Management can determine the personnel development needs in an enterprise by comparing current and future working requirements with existing qualifications and the development preferences of the employees. Users might gear these development measures to producing specific results such as identifying the need to transfer an employee to a specific post (using career and succession planning scenarios). They might also be more general measures geared toward retaining or enhancing existing employee skills and abilities, or ensuring that employees keep pace with technological developments. You can group qualifying actions (such as training courses or job rotation) into development plans (for example, a trainee program for sales staff). Such development plans are referred to as general development plans since they apply to all employees. You can tailor these general plans to suit the needs of individual employees. You can praise employee performance and conduct. You can perform objective setting with SAP R/3 Enterprise. The appraisal results can provide input for planning an employee's further career development.

© SAP AG

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Training and Event Management Position Person

Person

Position “Office Manager"

Profile match up

Qualification deficit?

Confirmation of attendance

Seminar

 SAP AG 2004

Training: Qualifications/ requirements matching is also important in detecting skills gaps among employees, so that development plans can be done efficiently and effectively Example: y A company requires its Customer Service Representatives to be proficient in MS Word. If the employee does not have this skill, she may need to attend a course on MS Word. y The employee can be booked directly into available training sessions y Costs of training can be assigned to the proper budgets Training and Event Management's extensive scope of functions encompass the entire process of planning and administering business events: demand determination and date scheduling, management of business events, resources, and attendees, and fee and cost settlement. The application offers you a comprehensive array of templates to help handle the associated correspondence with attendees and instructors (attendance confirmations, cancellation confirmations and so on). Comprehensive reporting and a sophisticated appraisal system complement the suite of functions. Integration between SAP HR Training and Event Management and multiple other application components enables you to streamline internal processes, and extend and update employees' skills and knowledge. Integration with SAP Knowledge Warehouse, for instance, lets you offer new delivery methods. Employee Self-Services (ESS) and Internet services enable you to save time and money by providing direct access to the core functions of the day-to-day activities (view event catalog,, and book, prebook, or cancel attendance) as Self-Service solutions.

© SAP AG

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Business Event Preparation: Business Event Hierarchy Employees Courses Language Courses French English

Business event groups are purely for structural purposes and can occupy multiple levels in the hierarchy.

English for Beginners Advanced English Business English Technical English

Most of the information relevant to business events is stored with the business event types . They form the basic framework of the business event catalog.

03/09/00 – 06/10/00 Technical English 10/10/00 – 10/11/00 Technical English 03/11/00 – 05/12/00 Technical English 08/01/01 – 09/02/01 Technical English  SAP AG 2004

The business event catalog is presented in a hierarchical form. It is made up of business event groups and event types. A business event group is a grouping together of business event types that share the same characteristics or deal with related subject matter. Business event groups can, in turn, be combined to form higher level business event groups resulting in a hierarchically structured curriculum or catalog. A business event type is a prototype event including all of the general attributes that apply to events of this type. A business event type is not scheduled to take place on a specific date. Business event types are assigned to event groups. Event groups and types form the basic framework of the business event catalog. A business event is a specific occurrence of a business event type on a specific date. A business event (also referred to as a business event date) inherits all of the attributes stored for the event type, and is scheduled to take place on a specific date. You can create business event dates either with or without resources (location, instructor etc.). You book attendees for business events. Note: You create business event dates in the dynamic business event menu.

© SAP AG

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Book Attendance: Overview 1

2

Select business event

3

Select attendee (attendee type + name) or create if necessary

Specify booking priority: ● Normal ● Essential ● Waiting list booking

4

Enter or check information for billing and activity allocation: ● Fee ● Fee assignment Internal activity allocation Billing Free of charge

5 Book attendee

 SAP AG 2004

You can make bookings for individual attendees of the types person, user, external person, applicant, and contact person, and for group attendees of the types company, organizational unit, customer, and interested party. You can assign various booking priorities to the attendees. You use the priority feature to specify whether a booking is essential, normal, or waiting list. Once the optimum number of bookings has been accepted for an event, only bookings with essential priority are accepted. Once the maximum number of bookings has been reached, you can only make waiting list bookings. The following checks are performed for both individual and group attendees: y Existence check y Availability check y Capacity check A number of additional checks are carried out for individual attendees, such as checks for event prerequisites (qualifications and events attended) or checks for bookings for the same event type. When bookings are made, the relevant billing and allocation data is stored or checked in Training and Event Management.

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Employee Self-Service (ESS) in Training and Event Management z Training and Event Management has two Employee SelfService features that complement one another:

Training Center: where employees can view the current event catalog and book themselves for events.

My Bookings: where employees can view their own booking data and, if necessary, rebook or cancel their bookings.

Employees can fill a shopping basket with events and save it for later editing.

z ESS can be used in conjunction with approval workflows especially developed for them

Internet

Company

Intranet User

 SAP AG 2004

Training and Event Management lets you offer self-service access to the most important day-to-day functions of the application. You can offer your employees and other Web users access to these applications via the corporate intranet as Employee Self-Services and as Internet Applications on the Internet. The applications are presented in an intuitive and easy-to-use format. To use the selfservices of Training and Event Management, you must satisfy the following prerequisites: y You must install the Internet Transaction Server (ITS) and a Web Browser. y You must maintain the business event data (event catalog) you want to display on the intranet or Internet. y You must set up ESS users for your employees (using transaction HRUSER) and an R/3 Internet user for Web users (using transaction SU05). ESS Training Center: y Employees can display the company's current business event catalog. You select a subject area on the search screen. The Extended Search function offers additional selection options, such as selection by target group. The hit list of events displays the most important data of the business event. You can click the Internet icons beside event types and event dates to display relevant documents, materials and so on that are linked to them via the Knowledge Link infotype. ESS My Bookings: y This ESS application lets employees display their current booking data for all of their booking operations (bookings, cancellations, or rebookings). From the list display, the employee can rebook or cancel bookings or submit requests to do so via the approval workflows). Employees can fill a shopping basket and save it for later editing. Employees can book or remove events using the shopping basket. You can display detailed information and access a Web Link display for business event locations.

© SAP AG

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Training and Event Management Integration with other mySAP ERP processes Materials Management


Accounting

Personnel Development

Training & Event Management

SAP Knowledge Warehouse

Time Management Organizational Management

R/3 Appointment Calendar

Personnel Administration

 SAP AG 2004

Integration with other application components facilitates direct, efficient data exchange. This data can be further processed in Training and Event Management. Sales and Distribution: Billing of attendance fees, use of attendee types customer and contact person Materials Management: Use of materials from the material master as resources for business events, generation of purchase requisitions and material reservations Personnel Development: Check for and transfer of qualifications, use of appraisal systems from Personnel Development Time Management: Recording and checking of attendance (for internal event attendees and instructors) Organizational Management. Use of organizational units as attendees and organizers of business events Personnel Administration: Use of persons from the HCM Master Data as attendees and instructors R/3 Appointment Calendar: Automatic generation of entries in the R/3 Appointment Calendar for attendance bookings and instructor activity SAP Knowledge Warehouse: Display of information material from the Knowledge Warehouse (training materials, documentation, videos, etc.) in Training and Event Management and its SelfService applications Cost Accounting: Internal activity allocation of attendance fees and instructor costs, cost transfer posting for business event costs

© SAP AG

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Time Management: The Process Ways to Record Working Time

Cross Applications Time Sheet Self-Service Applications

Evaluating Working Time

Use of Working Time

Incentive Wages & Payroll Accounting Time Accounts

Cost Assignment Personnel/Time Administrators

Activity Allocation Time Reporting

Time Recording Terminals

Shift Planning Capacity Planning

 SAP AG 2004

Ways to Record Working Time: Several options are available for recording working times, including a central time sheet(CATS), online menus, integration with automatic time recording systems, and the Employee Self-Service (ESS) application. Evaluating Working Time: SAP Time Management functionality allows you to query on, and display working times flexibly. Time accounts (such as leave, flextime) can be managed manually or automatically. Use of Working Time: Information on working times is used to calculate gross wages in Payroll Accounting. Working times can be used for activity allocation in Controlling. Costs generated by the working times can be assigned according to their source in Controlling. Information from Time Management is used in Logistics to determine employees’ availability for capacity requirements planning. You can determine work requirements for the enterprise and plan employee shifts. You can generate time tickets automatically using postings from Plant Data Collection (PDC).

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Types of Time Data Work schedule Early Normal Late

+ changes to the planned specifications from the work schedules Attendances, such as

Substitutions Changes to planned working time

Seminar

Availability Addition to planned working time

Business trip

Absences, such as

Leave

Illness

 SAP AG 2004

Valuation and remuneration of employee working time is based on time data recording. You record deviations from or exceptions to an employee’s work schedule in the Time Manager’s Workplace. This information is then stored in the appropriate infotypes. Examples of employee time data are hours worked, leave, illness, overtime, substitutions, and business trips.

© SAP AG

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Recording Data in Time Management Internet Workflow

Time Recording Terminals

Employee Self-Service

Time Manager‘s Workplace Fast entry Time Sheet

Time Administrator

 SAP AG 2004

To record employee times in Time Management, such as hours worked, business trips, leave, or changes to planned working time, you can use a variety of systems and methods, such as: y Online entries by time administrators y Separate time recording systems y Cross-Application Time Sheet (CATS) y Employee Self-Service (ESS) applications, such as Internet Application Components (IACs), Workflow forms, or touch screen systems y Customer systems with an interface to the R/3 System Time data, such as those listed above, is stored in infotypes. A personnel or time administrator records this data in various ways: y Time Manager‘s Workplace: administer data for a group of employees y Maintain individual infotypes: record and change data through infotype screens y Fast entry: Records data in one infotype for several employees at the same time.

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What is CATS? A variety of user interfaces CATS classic/CATS regular CATS notebook

Joint data storage & validation logic

CATS

HCM

Financials

Project Mgmt

Manufacturing

z Time quotas z Payroll

z Costs z Invoices

z Costs z Project progress z Deadlines

z External employees’ activities

Target applications  SAP AG 2004

The Cross-Application Time Sheet (CATS) is another form of Employee Self-Service. You can use it to record the actual working times of individual employees. The Cross-Application Time Sheet offers the following advantages: y Cross-application standard screens for entering working times y Ease of use for all users y Default values and data entry templates y Integrated approval process y Support for corrections y SAP enhancements for increased flexibility in the definition of authorization checks, plausibility checks, and default values.

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CATS Business Process nal Optio

Create account assignment z Administrator z Online in SAP system

Record times z Personalized input help z Online and offline checks

Release times z Release times for approval

nal Optio

Approve times z By workflow or report

Follow-on processes z Invoices z Accounting z Payroll

 SAP AG 2004

The process in the Cross-Application Time Sheet consists of the following steps: y Entry of time data in the time sheet y Release of time data y Approval of time data (also using a Workflow) y Transfer of time data to the target application Note: The "release time data" and "approve time data" steps are optional.

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Compensation Process Compensation Plans

What?

Org. Management

Eligibility

Who?

Guidelines

How much?

When?

Budget

Processes

 SAP AG 2004

A Compensation Process is linked to one or more Compensation Plans. For example the compensation process Annual Salary Review could be linked to two compensation plans, Bonus and Merit increase. When you set up a Compensation Plan, you specify y Compensation area, that is, a country grouping y Compensation plan type and category y Guidelines y Whether the plan creates a basic pay, additional payments/deductions, recurring payments or compensation stock options infotype record When you set up a Compensation Process, you specify: y Eligibility rules y Budget type Compensation planning and approval: y Managers can only see their own data y All data can be created in the status “planned” y Planning sheets (data) can be “submitted” for approval y Once approved, the changes relevant for payroll accounting are carried out automatically y Multi-level approval is supported

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Areas of Compensation Management

Job pricing

Budgeting

BU

O

BU

O BU

Compensation administration

BU

O

BU

O

O BU

O

Long-term incentives

 SAP AG 2004

The Compensation Management component controls and manages remuneration policy at an enterprise. It provides a central overview of remuneration policy, and a control mechanism for implementing this policy. It also facilitates compensation planning and budgeting, and decentralized compensation administration. Compensation Management comprises four areas: You can perform job pricing within Compensation Management. You can save the results of external job evaluation systems and salary surveys. Using these results, you can generate pay grade structures to which you can assign jobs and positions at your enterprise. In this way, you can determine the internal value of jobs and positions at your enterprise to ensure that you remain competitive. Budgeting enables you to plan and control expenses for compensation adjustments. You assign budgets to organizational units. Furthermore, you can create budgets centrally and decentrally. You can also roll up budgets using organizational units. You use Compensation administration to distribute salary increases, shares, and so on to employees in accordance with remuneration policy at the enterprise. You can manage long-term incentives (stock options plans).

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Total Compensation Statement An HR administrator can generate and print several Total Compensation Statements which can then be sent to employees.

Employee Self-Service Each employee can display his or her own personal Total Compensation Statement in the Internet.  SAP AG 2004

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Integration of Compensation Management

MDT

Personnel Development Appraisal results

Organizational Management

Payroll

Who?/Who for?

Personnel Administration

z which department z which jobs, positions

What?

Workflow z approval z activation

Compensation Management How? z mass maintenance z individual maintenance

z payments z bonus

Treasury (ALE)

 SAP AG 2004

Compensation Management uses information from various components. Budgets are distributed and compensation managed for organizational units and/or employees. The organizational structure and job/position data are read from the Organizational Management component. Compensation Management reads data on employee payments from the Personnel Administration component. Salary data is changed as a result of compensation administration. Compensation Management can update infotypes 0008 Basic Pay and 0015 Additional Payments (Personnel Administration). Changes to employees' salary data are written to Payroll. Compensation Management can use information stored in the Personnel Development appraisal system to compensate employees on the basis of their appraisal results. The approval and activation procedures for compensation adjustments can be controlled by Workflow. Integration with Treasury simplifies the task of managing long-term incentives. The functions included in the Compensation Management theme category of Manager´s Desktop (MDT) enable line managers to perform tasks related to salaries, such as salary increases and bonus payments.

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Overview of Benefits

Employer (ER)

Benefits Plans

Employees (EE)  SAP AG 2004

In many countries (esp. North America), employees generally participate in benefit plans offered by their employers as part of their compensation package. Companies frequently offer benefits packages at a reduced rate to their employers. As a result, the employee contributes considerably less for these company-based plans, then they would have to pay if they were to enroll privately. Employees enroll themselves in the benefits plans and receive varying benefits, depending on which plans they select. Contributions are paid by either the employer or the employee, or both; again, this varies according to the specific benefits plan. You put group together varying plans for different employees according to several factors. You store restrictions and eligibility for the benefits plans in the IMG. As a result, processing employee benefits is a simple and user-friendly process. There are six international plan categories defined in the system: Health, Insurance, Savings, Stock Purchase, Credit, and Miscellaneous. You can use the Miscellaneous plan category for benefit plans that do not fit neatly into one of the other plan categories, such as fitness programs or company car privileges.

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Payroll Procedure Payroll procedure Master Data Time Data

Remuneration statement

Transfer to Accounting

Payments to various payees

 SAP AG 2004

Broadly speaking, payroll accounting is the calculation of payment for work performed by each employee. More specifically, however, payroll accounting comprises a number of work processes including the generation of payroll results and remuneration statements, bank transfers and check payments. Payroll accounting also includes a number of subsequent activities: y transfer of payroll results to Accounting y various evaluations, such as evaluating the payroll account. y etc. The calculation of payment comprises two main steps: y Calculation of remuneration elements y Statutory and voluntary deductions (country-specific) Both the remuneration elements and the statutory and voluntary deductions consist of individual payments and deductions, which are calculated for an employee during a payroll period. These payments and deductions are included in the payment calculation by means of different wage types. The employee is usually paid by bank transfer or check and the payment amount is printed in a form for the employee. If you want to start payroll from the menu, specify first the country, then call up the control record for the relevant payroll area. Here, you carry out the required steps in preparation for the payroll run.

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Calculation of Remuneration Elements

Basic pay

Gratuities

Sick pay

Remuneration elements

Bonuses for night work

Vacation allowances

Overtime

Bonuses for dirty work

 SAP AG 2004

The remuneration elements for an employee are formed from individual wage and salary types that are used during a payroll period. Payments such as basic pay, various bonuses and gratuities are included in the remuneration calculation. Deductions can be made for items such as a companyowned flat, company-sponsored day care or similar benefits. Different factors determine whether such benefits increase or reduce the taxable income. This is determined by country-specific regulations and, in some countries, the philosophy of the company. An employee's remuneration consists of all wage types calculated for him or her during a payroll period.

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Statutory and Voluntary Deductions

Unemployment insurance

Tax

Remuneration elements

Loans Transfer of remuneration

Pension insurance

 SAP AG 2004

Voluntary and statutory deductions, such as tax and social insurance contributions, are taken from the gross calculation to determine the payment amount. Different gross values, for example, total gross amount, and gross tax amount, are used to calculate the deductions. For this reason, different totals are formed during the payroll run, and these totals are be used for subsequent processing.

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Travel Management: Processes & Functions Travel Planning

Travel Expenses

z Travel request & approval z Booking flights, hotel, rental car, rail ticket online using Employee SelfService

z Enter travel expenses using Employee Self-Service z Credit card clearing &cost distribution

z Travel Policy Management z Negotiated rates and prices

z Workflow z Settlement, payment, taxation z Integration with Financial Accounting, Controlling, Personnel Management

Country versions

z Integration with travel centers and Travel Expenses

z 17 preconfigured country versions with country-specific features z International version, can be customized

Reporting z SAP R/3 Reports & SAP Queries

Mobile Self-Services

z Manager's Desktop z Business Warehouse (BW)

z Mobile Travel Expenses for Laptops (Offline) z Mobile Travel Planning for Handhelds

 SAP AG 2004

The Travel Management module enables you to carry out the complete range of procedures from entering a travel request, and approving it, to posting the actual travel expenses and carrying out possible revisions and retroactive accounting.

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Personal Cost Planning and Simulation: Process and Roles Involved Planning Preparation Board or HR Department

z Definition of rules, guidelines, and scenarios

Data Collection z Employees

Line Manager

z Organizational units, jobs, positions, and customer org. objects

Personnel Cost Planning Specialist

Cost Planning Run z Automated

Detailed Planning Consistency Checks and Release  SAP AG 2004

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Cost Planning Overview – Business Example Pay information z Basic Pay: Recurr. Payments/Deductions z LTIs: Additional Payments z Capital Formation z Payroll Results z Simulated Pay Scale Reclasssification Employee

Detail planning for line managers

Personnel cost plan z Decentralized planning

Position

z Headcount planning included z Different scenarios

Job

Pay information

z Best support for line managers z Integration with subsequent processes

z Planned Compensation z Planning of Personnel Costs

mySAP ERP HCM

SAP BI

mySAP ERP Financials

 SAP AG 2004

The Released Personnel Cost Plan provides data for transfer to mySAP ERP Financials and data for transfer to Compensation Management or Training & Event Management in mySAP ERP Human Capital Management.

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HCM Processes: Topic Summary

You are now able to: z Describe the basic business processes of Human Capital Management z Discuss the integration points with other mySAP ERP processes

 SAP AG 2004

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Reporting and Analysis: Topic Objectives

At the conclusion of this topic, you will be able to: z List options for reporting Human Capital Management information

 SAP AG 2004

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Analytics and Reporting

Lists/statistics

Graphics connection

MS Excel

GRAPHICS 5%

30%

MS Word 45%

20%

File Data changes

File

File

 SAP AG 2004

Reporting plays a central role in Human Capital Management. Personnel administrators are confronted daily with large volumes of data that must be recorded and evaluated. ABAP reports are available for this purpose. The standard system includes a large number of reports to help you meet your reporting requirements. They enable you to define your own search criteria and then create lists of employees and employee data, for example, or perform statistical evaluations. Many reports can be viewed as lists (ALV) or they can be download to a PC application.

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The Information System in HCM HIS

Ad Hoc Query Available fields

Per

Infotype 0000: Actions Mill

Per

PE

Soc

Employment status Infotype 0001: Org. Assignment

Ric

Pfis

Hoc

Mai

Hor

Mill

Smi

Rot

Infotype 0002: Personal Data

Menu Tree

SAP Query

Administration Recruitment

Report Generator

Personnel Development Benefits Compensation Management Personnel Cost Planning

 SAP AG 2004

Ad Hoc Query and SAP Query enable you to create reports. As of 4.6c, Ad Hoc Query is integrated into SAP Query. Although it is called InfoSet Query in other R/3 components, it remains Ad Hoc Query within Human Capital Management. You can access standard reports in the Menu Tree. You can personalize the Menu Tree by hanging queries created in Ad hoc Query and SAP Query in it. In addition to delivering reporting tools for creating reports, SAP also delivers many important standard reports for all applications within SAP. You start the reports from the main Information System within the SAP Easy Access menu or from an information system within a component or one of its sub-components. When accessing the info system for Human Resources, you have the option of starting a standard report or using a tool (Ad Hoc Query, SAP Query, HIS) to create a report. Reports which are created in Ad Hoc Query or SAP Query can be saved and added to the standard report structure. The standard reports can also be modified in customizing. The hierarchical levels required before accessing a particular report vary from component to component. The reports are generally found and executed at the lowest level within the InfoSystem.

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Reporting and Analysis: Topic Summary

You are now able to: z List options for reporting Human Capital Management information

 SAP AG 2004

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Human Capital Management: Unit Summary

You are now able to: z Define organizational structures in Human Capital Management z Manage employee records z Describe basic business processes in the area of Human Capital Management z Identify the integration points with other ERP processes z Explain the reporting and analysis tools in Human Capital Management

 SAP AG 2004

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Human Capital Management: Exercises Unit: Human Capital Management Topic: Organizational Structures At the conclusion of these exercises, you will be able to: •

Set system defaults and parameters relevant to HR.

•

Create a new organizational unit and position.

Due to the growth in your company, new organizational units and positions need to be created.

1-1

Extend the existing organizational plan for your company. 1-1-1 For the date and preview period, enter 01.01.2003 and up to 3 years in the future. 1-1-2 Create the organizational unit ## Purchasing. 1-1-3 Create the position ## Head of Department based on the job ## PoD. Mark this position as Manager of own organizational unit. 1-1-4 Create an additional position ## Administrator based on the job ## Admin

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Unit: Human Capital Management Topic: Employee Records At the conclusion of these exercises, you will be able to: •

Set system defaults and parameters relevant to HR.

•

Review master data for a current employee.

•

Hire a new employee to fill a position.

The HR department regularly reviews data for current employees. In addition, now that a new organizational unit has been setup, HR will be hiring new employees to fill the additional positions

2-1

Before reviewing and changing current data in the system, set your user parameters for country and user group in order for certain settings to default correctly. 2-1-1 Set the following user parameters:

2-2

Parameters MOL UGR

Value 10 10

BEN

10

(Personnel country grouping) (User group (HR master data)) (Benefit area)

Display the personnel data for employee Dave Demmerle, personnel number 100002, to answer the following questions. 2-2-1 In which company structures does Dave Demmerle belong? Company Code: Personnel Area: Personnel Subarea: Employee Group: Employee Sub-group: Payroll Accounting Area: Position: You can display all available tabs at any time by selecting the “Other menu” button to the right of the tabs. When you click on this button, a drop down menu appears listing all available tabs. Clicking the desired menu item switches to that tab’s display. 2-2-2 How many hours does Dave Demmerle work per week? Weekly Working Hours

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2-2-3 What types of leave and how many days may Dave Demmerle take? You can always find an infotype by entering part of its name in the Infotype field and choosing Display. The system then creates a dynamic list of all infotypes that include this search string in their title. If only one infotype matches the search string, it is immediately displayed. You can also enter the exact number of the infotype you require in the Infotype field, assuming that you know it already.

2-2-4 Exit the Employee Record. 2-3

Hire a new employee with personnel number 500102## at the beginning of the current year to fill the administrator position created in the previous exercises.

Remember to Save between each infotype.

2-3-1 Enter the following data for the Create Actions infotype: Field Name Position Personnel area Personnel subarea Employee group Employee subgroup

Input Data Number from exercise 1-1-4 3000 (New York) 0001 (Manhattan) 1 (Active) U4 (Salaried)

2-3-2 Save the data on the Create Organizational Assignment infotype. 2-3-3 Enter the following data for the Create Personal Data infotype: Field Name From Member Last name First name Gender Birth date SSN © SAP AG

Input Data 01/01/YYYY – 12/31/9999 (YYYY = Current year) Spouse Your choice Your choice Your choice 06/25/1970 Your choice TERP10

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2-3-4 Enter the following data for the Create Family Member/Dependents infotype: Field Name From Last name First name Member Gender Birth date SSN

Input Data 01/01/YYYY – 12/31/9999 (YYYY = Current year) Your choice Your choice Spouse Your choice 06/25/1970 Your choice

2-3-5 Enter the following data for the Create Addresses infotype: Field Name Address Type Address Line 1 City State/zip code

Input Data Permanent Residence 321 Broad Street SAPBerg PA/18974

2-3-6 Enter the following data for the Create Withholding Info W4/W5 US infotype: Field Name Filing Status

Input Data Married

Select Save.

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2-3-7 Enter the following data for the Create Basic Pay infotype: Field Name Pay scale type Pay scale area PS Group Level Amount

Input Data 01 (Standard contract) 06 (New York) GRD01 03 2,000

Select Save to continue. 2-3-8 You may skip the Create Adjustment Reasons Communications and Bank Details infotypes by selecting the yellow arrow to the right (next record) button. This will complete the personnel action.

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Unit: Human Capital Management Topic: Human Capital Processes At the conclusion of these exercises, you will be able to: •

Book the new employee for word processing training.

•

Enter and process the new employee’s travel expenses.

•

Enter training attendance/time data for the new employee.

To be competitive and to gain knowledge, employees within your company may attend training classes. Employees may also incur travel costs either by attending training courses or by visiting other company sites. As a project team member, you need to understand the processes of booking attendance in training courses and recording trip costs. 3-1

You want to send employee 500102## to a Communications class. This course is scheduled throughout the current year. It is listed under Management and Leadership Development. 3-1-1 Book employee 500102## in the Communication class. 3-1-2 Before sending employee 50102## to training, verify he/she has travel privileges. This infotype is in the HR Master Data. Does the employee have travel privileges? If not, you will have to create the Travel Privileges infotype.

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3-2

Your employee attended the Communication training course and incurred travel expenses. Enter a travel expense report for employee 500102##. 3-2-1 Enter the trip costs based upon the following receipts: Exp Ty AIRP TELE HTL DINN DINN

Amount 225.00 1.80 400 .00 35.00 32.35

Currncy USD USD USD USD USD

Date MM/01/YYYY MM/01/YYYY MM/02/YYYY MM/01/YYYY MM/02/YYYY

You may have to enter additional data for some entries such as a description and location. Trip Number ___________________________________________ 3-2-2 Simulate the trip costs and record the reimbursement amount for employee 500102##. Reimbursement Amount

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Human Capital Management: Solutions Unit: Human Capital Management Topic: Organizational Structures

1-1

Extend the existing organizational plan for your company. Human Resources → Organizational Management → Organizational Plan → Organization and Staffing → Change 1-1-1 For the date and preview period, enter 01.01.2003 and up to 3 years in the future. Click on the button Date and preview period. In the Start date field, enter 01.01.2003 and in the Time period field, enter 3. Select Execute. 1-1-2 Create the organizational unit ## Purchasing. In the search area, click on the term organizational unit and search for the name Purchasing. Select Find (Enter). In the selection area, select Column and Configuration. Deselect Chief and Check ID. Select Enter. In the selection area, double click on the organizational unit Purchasing with the Organizational ID of 50010673. Choose the button Create and in the popup that appears, double click on the object type Organizational unit. On the Basic data tab page, enter the short description ## Pur and the long text ## Purchasing. Save your entries. 1-1-3 Create the position ## Head of Department based on the job ## PoD. Mark this position as Manager of own organizational unit. In the overview area, select your newly-created organizational unit ## Purchasing and choose the Create button. In the popup that appears, double click on the object type Position. On the Basic data tab page, enter the description ## HoD and the long text ## Head of Department. In the Job field, enter ## HR Mgr or make the selection by using the F4 help. Highlight the box Head of own organizational unit. Save your entries.

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1-1-4 Create an additional position ## Administrator based on the job ## Admin. In the overview area, select your newly-created organizational unit ## Purchasing and choose the Create button. In the popup that appears, double click on the object type Position. On the Basic data tab page, enter the description ## Adm and the long text ## Administrator. In the Job field, enter ## Admin or make the selection by using the F4 help. Highlight the box Head of own organizational unit. Save your entries.

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Unit: Human Capital Management Topic: Employee Records

2-1

Before reviewing and changing current data in the system, set your user parameters for country and user group in order for certain settings to default correctly. 2-1-1 Set the following user parameters: System → User profile → Own data Select the Parameters tab on the Maintenance screen. Make the following entries:

2-2

Parameters MOL UGR

Value 10 10

BEN

10

(Personnel country grouping) (User group (HR master data)) (Benefit area)

Display the personnel data for employee Dave Demmerle, personnel number 100002, to answer the following questions. Human Resources → Personnel Management → Administration HR Master Data → Display On the Display HR Master Data screen, enter the following data: Personnel no: 100002 2-2-1 In which company structures does Dave Demmerle belong? Ensure that the Employee Information tab is selected. Select the box to the left of Organizational Assignment from the list. Select the Display icon and record the following: Company Code: 3000 IDES US Personnel Area: 3500 Philadelphia Personnel Subarea: 0001 Philadelphia Employee Group: 1 Active Employee Sub-group: U1 Hourly rate/labor Payroll Accounting Area: UW US Weekly Position: _50011134 Admin_ Select the Back icon.

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You can display all available tabs at any time by selecting the “Other menu” button to the right of the tabs. When you click on this button, a drop down menu appears listing all available tabs. Clicking the desired menu item switches to that tab’s display. 2-2-2 How many hours does Dave Demmerle work per week? Select the Payroll information tab. Select Planned Working Time. Select the Display icon and record the weeklyworking hours. Weekly working hours :40 Select the Back icon. 2-2-3 What types of leave and how many days may Dave Demmerle take?

You can always find an infotype by entering part of its name in the Infotype field and choosing Display. The system then creates a dynamic list of all infotypes that include this search string in their title. If only one infotype matches the search string, it is immediately displayed. You can also enter the exact number of the infotype you require in the Infotype field, assuming that you know it already. Type leave into the Infotype field. Enter Select the Leave Entitlement infotype. Select the Display icon and record the leave types and days. 28 days of Vacation 10 days of Sick Leave 2-2-4 Exit the Employee Record. Select the Exit icon.

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2-3

Hire a new employee with personnel number 500102## at the beginning of the current year to fill the administrator position created in the previous exercises. Human Resources → Personnel Management → Administration HR Master Data → Personnel Actions Personnel no. Start

500102## 01/01/YYYY (YYYY = Current year)

Select Hire from the list of Personnel Actions. Select the Execute icon. Remember to Save between each infotype.

2-3-1 Enter the following data for the Create Actions infotype: Field Name Position

Personnel area Personnel subarea Employee group Employee subgroup

Input Data Number from exercise 1-4. Enter ## and then select the drop down. Choose ##Administrator 3000 (New York) 0001 (Manhattan) 1 (Active) U4 (Salaried)

Select Save. 2-3-2 Save the data on the Create Organizational Assignment infotype. Select Save

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2-3-3 Enter the following data for the Create Personal Data infotype: Field Name From Last name First name SSN Birth date Gender Marital status

Input Data 01/01/YYYY – 12/31/9999 (YYYY = Current year) Your choice Your choice Your choice 03/22/1967 Your choice Married (Use list of possible entries)

Select Save.

2-3-4 Enter the following data for the Create FamilyMember/Dependents infotype: Field Name

Member Last name First name

Input Data 01/01/YYYY – 12/31/9999 (YYYY = Current year) Spouse Your choice Your choice

Gender Birth date SSN

Your choice 06/25/1970 Your choice

From

Select Save. Choose Enter to confirm message warning “Enter data for payroll past (retroactive accounting.”

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2-3-5 Enter the following data for the Create Addresses infotype: Field Name Address Type Address Line 1 City State/zip code

Input Data Permanent Residence 321 Broad Street SAPBerg PA/18974

Select Save. 2-3-6 Enter the following data for the Create Withholding Info W4/W5 US infotype: Field Name Filing Status

Input Data Married

Select Save. Choose Enter to confirm message warning “Enter data for payroll past (retroactive accounting.” 2-3-7 Enter the following data for the Create Basic Pay infotype: Field Name PS type PS area PS Group Level Amount

Input Data 01 (Standard contract) 06 (New York) GRD01 03 2,500

Select Save. Choose Enter to confirm message warning “Enter data for payroll past (retroactive accounting.” After the save, the system displays a message regarding enrollment. Choose No to cancel. 2-3-9 You may skip the Create Adjustment Reasons Communications and Bank Details infotypes by selecting the yellow arrow to the right (next record) button. This will complete the personnel action.

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Unit: Human Resources Topic: Human Resource Processes

3-1

You want to send employee 500102## to a Communications class. This course is scheduled throughout the current year. It is listed under Management and Leadership Development. 3-1-1 Book employee 500102## in the Communication class. Human Resources → Training and Event Management → Attendance→ Attendance Menu From the Dynamic Attendance Menu screen, expand Management and Leadership Development. Expand the Business Leadership folder. Expand the Communication event and select a class. Note: A green traffic light indicates seats are still available in the class. With the class selected right click your mouse and select Book. In the Book Attendance:Data dialog box enter the following data: Person

500102##

Select the Book Attendance icon at the bottom of the screen. Enter through any Booking Checks messages. Select the Cancel icon to exit the Book Attendance:Data dialog box. On the Dynamic Attendance menu, expand the class, by selecting the arrow, to verify that your employee has been booked in the class. Exit the Dynamic Attendance menu.

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3-1-2 Before sending employee 50102## to training, verify he/she has travel privileges. This infotype is in the HR Master Data. Does the employee have travel privileges? Human Resources → Personnel Management → Administration→ HR Master Data→ Maintain From the Maintain HR Master Data screen, enter the personnel number 500102##. To verify if the employee has travel privileges, type “travel” in the Infotype field and select Enter. The system takes you to the Employee information tab. Review the travel infotypes. The Travel Privileges infotype does not have a green check next to it signifying that an infotype does not exist. Therefore, you need to create the Travel Privileges infotype. Select the Travel Privileges infotype. Select the Create icon. Change the Valid From date to 01/01/YYYY. Accept the default values. Select Save. The employee is now assigned to various reimbursement and expense groups. Select Exit. 3-2

Your employee attended the Communication training course and incurred travel expenses. Enter a travel expense report for employee 500102##. 3-2-1 Enter the trip costs based upon the following receipts: Human Resources → Travel Management Æ Travel Expenses Æ Travel Expense Manager On the Travel Management screen, enter: Personnel No. 500102## Select the Create icon. Verify Trip schema Domestic trip (01) in the Choose Trip Schema dialog box. Select the Enter icon. Enter the following trip data: From: MM/01/YYYY 07:00 (MM = Current month + 1, YYYY = Current year) To: MM/02/YYYY 20:00 (MM = Current month + 1, YYYY = Current year) Reason:

Attend Communication Class

City: Philadelphia

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On the same screen, enter the following expenses and receipt information: Exp Ty AIR TELE DINN HTL

Amount 225.00 1.80 35.00 150.00

Currncy USD USD USD USD

Date MM/01/YYYY MM/01/YYYY MM/01/YYYY MM/01/YYYY

Select Enter. In the dialog box for additional information about the hotel expense, enter the following data: Description: Hotel Location: Philadelphia Confirm all dialog boxes by selecting the Enter icon. Select the Save icon. Trip Number ________________________________________ Remain in the Travel Expense Manager for the next exercise. 3-2-2 Simulate the trip costs and record the reimbursement amount for employee 500102##. From the Travel Expense Manager, select the trip that you just created and select the Results button. Reimbursement Amount: 411.80 Select Exit twice.

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Human Capital Management: Test Your Knowledge 1.

Determine whether this statement is true or false. A job represents a unique classification of responsibilities in your organization and is used in defining positions.

2.

Determine whether this statement is true or false. The employee group is an organizational unit defined for the purposes of payroll accounting.

3.

What are the three structures that you define in Human Capital Management? _________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________

4.

Determine whether this statement is true or false. When an infotype is updated, the old data is lost.

5.

Fill in the blanks to complete the sentence. The steps in Cross-Application Time Sheet process are: , and .

6.

,

,

Fill in the blanks to complete the sentence. The pages of a personnel file that make up an employee’s master data record and that are created via a personnel action are called ____________.

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Human Capital Management: Answers 7.

Determine whether this statement is true or false. A job represents a unique classification of responsibilities in your organization and is used in defining positions. Answer: True – a job represents a unique classification of responsibilities in your organization and is used in defining positions.

8.

Determine whether this statement is true or false. The employee group is an organizational unit defined for the purposes of payroll accounting. Answer: False. The employee group is a general division of employees. The payroll accounting area is used for the purposes of payroll accounting.

9.

What are the three structures that you define in Human Capital Management? Answer: Enterprise, Personnel, and Organizational structures.

10.

Determine whether this statement is true or false. When an infotype is updated, the old data is lost. Answer: False. When an infotype is updated data is not lost. Instead, it remains in the system so that you can perform historical evaluations. Each infotype is stored with a specific validity period.

11.

Fill in the blanks to complete the sentence. The steps in Cross-Application Time Sheet process are: , and .

,

,

Answer: Time Data Entry, Release, Approval, and Transfer 12.

Fill in the blanks to complete the sentence. The pages of a personnel file that make up an employee’s master data record and that are created via a personnel action are called ____________. Answer: Infotypes. Human Capital Management has hundreds of standard infotypes. Custom user-defined infotypes can be created. Infotypes can be created via personnel actions or maintained individually.

© SAP AG

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ERP Financials – Financial Accounting

Contents: z Organizational Structures and Master Data in Accounting z Accounting Transactions in the General Ledger, Accounts Payable and Accounts Receivable z Fixed Asset Accounting z Financial Closing Activities

 SAP AG 2004

© SAP AG

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ERP Financials - Financial Accounting: Unit Objectives

At the conclusion of this unit, you will be able to: z Explain the organizational structures and master data of Financial Accounting z Perform typical accounting transactions in the application components of Financial Accounting z Identify the integration points with Sales and Distribution, Materials Management, and Controlling z Understand Fixed Asset Accounting z Prepare financial reports

 SAP AG 2004

© SAP AG

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Course Overview Diagram TERP10


 SAP AG 2004

© SAP AG

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ERP Financials - Financial Accounting: Business Scenario

z Within the enterprise, exist several companies. Each company has its own complete general ledger to record financial transactions. Each company must also fulfill certain reporting requirements. As a project team member, you need to recognize the functions within the Financial Accounting module.

 SAP AG 2004

© SAP AG

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Organizational Elements: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the functionality of the main structures used in the Financial Accounting processes and their purpose.

 SAP AG 2004

© SAP AG

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Company Code

In an international business, operations are often located across numerous countries. Since most governments and tax authorities require each operating entity to be established as a separate legal entity, a company code is usually defined. Company code

Independent accounting entity

=

 SAP AG 2004

The company code does not usually extend across national boundaries. You should create a company code according to tax law, commercial law, and other financial accounting criteria. Company codes are usually created based on geographic considerations. The company code is the smallest SAP entity that supports a full legal set of books. There must be at least one company code in the production environment for a business to be live. The company code key is a 4 digit alphanumeric field.

© SAP AG

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Business Areas Business areas are used for internal purposes to create balance sheet and profit and loss statements or alternatively can be used to meet external segment reporting requirements. Area of operation

Business area

Machinery

Plant construction

=

Automotive

1000

Machinery

2000

Plant construction

3000

Automotive

 SAP AG 2004

You can set up several business areas to which the system can assign postings made in any company code defined within a client. Business areas may be used to facilitate external segment reporting across company codes, covering the company's main areas of operation (product lines, subsidiaries) where legally required. If no external business segment reporting is legally required, the business area is entirely optional and flexible within the constraints of the business area definition. Business area is a 4 digit alphanumeric field.

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Organizational Structures International Frankfurt, Germany North America

Europe

3000

USA

1000

Germany

4000

Canada

2000

England

6000

Mexico

2100

Portugal

2200

France

2300

Spain

1000 Machinery

2000 Plant constr.

Asia/Australia

5000

Japan

3000 Automotive

 SAP AG 2004

Business areas are generally company-code independent, that is, you can make postings to them from any company code.

© SAP AG

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Organizational Elements: Topic Summary

You are now able to: z Explain the functionality of the main structures used in the Financial Accounting processes and their purpose.

 SAP AG 2004

© SAP AG

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14-9

Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe financial master data and explain the way it is grouped z Explain basic settings

 SAP AG 2004

© SAP AG

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Tasks in Financial Accounting FI GL Reconciliation Accounts

FI AA

FI AR

General Ledger Balance Sheet Assets Account P/L

Reconciliation Accounts

P&L Accounts

Assets

Customer

Banks

Display business transactions Money and value flows Display and valuation of positions Display of profits/losses Parallel accounting principles (US GAAP, IAS, German HGB) Key figure analysis Group consolidation

FI BL

Vendor

FI AP

 SAP AG 2004

The component Financial Accounting (FI) focuses on the General Ledger, the processing of receivables and Asset Accounting. Important tasks of Financial Accounting are the recording of monetary and value flows as well as the evaluation of the inventories. The General Ledger (GL) contains the recording of all accounting-relevant business transactions on to G/L accounts from a business point of view. Every general ledger is structured according to a chart of accounts. The chart of accounts contains, in orderly form, the definitions of all G/L accounts of the General Ledger. These definitions basically include the account number, the G/L account designation and the categorization of the G/L account as an income statement or balance sheet account. For reasons of clarity, the General Ledger often contains only collective postings. In such cases, the posting data is represented in a more differentiated way in so-called subledgers which pass on their data in compressed form to the General Ledger. Reconciliation accounts connect the subledgers to the General ledger in realtime, that means, as soon as a posting is made to a subledger, the posting to the respective reconciliation account in the General Ledger takes place analog to this. The Accounts Payable Accounting (AP) records all business transactions that have to do with the relationships to suppliers. It takes much of its data from Purchasing (MM - Materials Management). The Accounts Receivable Accounting (AR) records all business transactions that have to do with the relationships to customers. It takes much of its data from Sales & Distribution (SD). The Asset Accounting (AA) records all business transactions that have to do with the management of assets. All postings that are executed for the asset (acquisitions, retirments, depreciations, etc) are recorded within the assigned company code. It often happens that asset lists and movements have to be evaluated differently for different purposes, e.g. different valuation approaches should possibly be used for: y the trade balancing of an account according to regional requirements

© SAP AG

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y the financial statement for tax purposes (insofar as another valuation is permitted) y the internal Accounting (Costing) y parallel accounting standards for the group balancing of account (acc. to IAS, US-GAAP, etc.) In order to be able to carry out these different valuation approaches, so-called valuation areas are established in SAP R/3. The Bank Ledger (BL) supports the booking of cash flows. For many companies today, it may be necessary to prepare a balance sheet, not only for the national accounting standards, but also in accordance with other valuation guidelines such as IAS (International Accounting Standards) or US-GAAP (General Accepted Accounting Principles). Reasons for this can be: y Access to international capital markets y Orientation towards foreign shareholders y Global fusions and acquisitions y Increased transparency These parallel accounting standards can be realized using R/3 by managing different valuations on different G/L accounts and these G/L accounts are used in different balance sheet/P&L statement structures. The EC-CS (Enterprise Controlling - Consolidation) forms the group structure using consolidation groups and units for the tasks of Consolidation. Consolidation groups are defined for each hierarchy. They represent levels and consolidation takes place on these. Consolidation groups can be: subgroups (company consolidation), business areas (business area consolidation), profit centers and hierarchy nodes (profit center consolidation). The objects that are to be consolidated hang below the consolidation groups and are called consolidation units. Depending on the consolidation type, these are companies, combinations of companies and business areas or combinations of companies and profit centers.

© SAP AG

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Integration of the G/L Accounts in Financial Accounting Balance Sheet FI AA

Assets

Σ Σ

MM

FI AR Customers SD

Σ

Assets

General Ledger

Liabilities

Assets

Equity capital

Material

Loans

Receivables

Liabilities

Σ Σ

Bank

TR Loans

FI AP Vendors

Σ FI BL

FI GL

MM

Profit and Loss Bank accounts

Expenditure Income

 SAP AG 2004

The General Ledger is managed at company code level and, from this, the balance sheets required by the legislator as well as the P/L statement are compiled. The assets of a company are listed in the balance sheet, divided into Assets (application of funds) and Liabilities (source of funds). In terms of integration, the business transactions that are entered in the subledgers, but also those entered in Materials Management (material stock) or in Treasury flow into the balance sheet in real time. The component "Treasury" (TR) focuses on functions such as payment means, Treasury Management (this includes, for example, financial means, foreign exchange, derivatives and bonds), loans and Market Risk Management. The aim of recording business transactions is to create a Balance Sheet and Profit & Loss Statement in the sense of a report. These reports must be adapted to the specific national requirements. Different Balance Sheet and Profit & Loss structures can be set up in SAP R/3 for the different reporting requirements. In these Balance Sheet and Profit & Loss structures, it is defined exactly which accounts should appear in which balance sheet items. Many Balance Sheet/P&L Structures are already delivered. Financial reports that are required for external Reporting purposes (for example, Balance Sheets and P/L Accounts) are created in FI. These external Reporting requirements, like the different legal requirements of the relevant financial authorities, are provided, as a rule, by general accounting standards such as US-GAAP or IAS. Two procedures can generally be applied for structuring the Profit & Loss statement: y Period Accounting y Cost-of-sales Accounting Both procedures result in the same operating income. Which of these procedures should be used y is either legally prescribed y or can be chosen freely where a legal option exists. In this case, the decision in favour of one of the procedures is made based on an analysis from a business point of view (e.g. international comparability).

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In Period Accounting, the total output of a period is set against the total costs for a period. y The total output of a period is defined here as the sales revenue minus a decrease in the warehouse inventory or plus an increase in the warehouse inventory. y The total costs of the period are structured according to the individual expense type, that means the balances of similar expense accounts can be easily grouped (for example, different accounts for personnel expenses). This structuring clarifies how the expenses are distributed to the different production factors. In Cost-of-sales Accounting, the revenues of a period are set against the cost of sales for a period. y The revenues of the period are determined in exactly the same way as in Period Accounting. The balance sheet changes remain unconsidered. y The cost of sales for the period show the expenses that have been incurred for the realization of the revenue. Here, the expenses are not structured according to expense types, as they are in the Period Accounting, but according to their business origin, such as, for example Manufacture, Distribution, Administration, Research & Development, Production, etc.

© SAP AG

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Charts of Accounts

INT

CAUS

GKR

1000

10000

1000

2000

20000

2000

... and as many additional charts as needed!

 SAP AG 2004

Each general ledger is set up according to a chart of accounts. The chart of accounts contains the definitions of all G/L accounts in an ordered form. The definitions consist mainly of the account number, account name, and the type of G/L account, that is, whether the account is a P&L type account or a balance sheet type account. You can define an unlimited number of charts of accounts in the R/3 System. Many country-specific charts of accounts are included in the standard system.

© SAP AG

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Chart of Accounts Assignment

Chart of accounts

Company code A

Company code B

Company code C

 SAP AG 2004

For each company code, you have to specify one chart of accounts for the general ledger. This chart of accounts is assigned to the company code. A chart of accounts can be used by multiple company codes (see diagram). This means that the general ledgers of these company codes have the identical structure.

© SAP AG

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Account Groups for G/L Accounts Cash accounts

Company codespecific settings

General ledger

Cash Asset Material P&L

Account definition in chart of accounts Account groups

Account 001111

Cash

Liab.

unt Acco p u gro

000000-099999

...

 SAP AG 2004

Account groups classify G/L accounts into user-defined segments They also determine the number range of the accounts that will fall into these user-defined segments. Finally, field status of the company code segment of the master record is determined when creating, changing or displaying the same. The four field statuses of a field can be Suppress, Required, Display, and Optional.

© SAP AG

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G/L Account Master Record Account definition in chart of accounts Account X

PLUS

PLUS Company codespecific settings


CC 1000

CC 3000

Account X in company code 1000

Account X in company code 3000

 SAP AG 2004

There are two segments to the G/L master record. The first, the chart of accounts segment, has high level control features the like description of the account, whether the account is a balance sheet account or a P/L account, the account group (which controls company code segment fields) and the consolidation account number. The second, the company code segment, details how the company code that uses that specific account manages the account. Controls for the following are found in this segment: account control, account management, bank/financial details, joint ventures, interest calculation, and document control

© SAP AG

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Reconciliation Accounts and Sub-Ledgers General ledger Reconciliation accounts for customers, vendors, and assets

aa

bb

Assets

.

.

Contract AR

.

Vendors

Customers

Subsidiary ledgers

Subsd. Ledger Accounts

aa

.

bb

 SAP AG 2004

The reconciliation account ensures real-time integration of a subledger account with the general ledger. The G/L account reconciliation account itself is not designed for direct posting. In this way, the reconciliation between subledger and general ledger is always guaranteed. In the general ledger, postings are limited to reconciliation accounts by the use of account types.

© SAP AG

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14-19

Vendor Master Record Account definition at client level Vendor X General data

PLUS



CC 1000

CC 2000

Vendor X in company code 1000


 SAP AG 2004

Vendor master records contain data that controls how transaction data is posted and processed. This includes all the information about a vendor that is needed to be able to conduct business with them. Vendor specific information such as name and address is stored at the client level. Any company code defined in the client will have access to the vendor general data information. Master data that is needed by a company to define how that particular company code will process transactions with the vendor is stored in company specific records. This technique prevents individual company codes from maintaining data that would be identical in nature.

© SAP AG

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Purchasing Data in the Vendor Master Record Account definition at client level Vendor X General data


Purchasing organizationspecific settings PO 1000

CC 1000


Vendor X in purchasing org. 1000

 SAP AG 2004

The purchasing organizations purchase goods and services from suppliers, who are paid by accounts payable. The various purchasing organizations of the group have to enter data specific to purchasing in the vendor master record before the supplier's master record can be used.

© SAP AG

TERP10

14-21

Customer Master Record Account definition at client level Customer X General data

PLUS



CC 1000

CC 2000

Customer X in company code 1000


 SAP AG 2004

Customer master records contain data that controls how transaction data is posted and processed. This includes all the information about a customer that is needed to be able to conduct business with them. Customer specific information such as name and address is stored at the client level. Any company code defined in the client will have access to the customer general data information. Master data that is needed by a company to define how that particular company code will process transactions with the customer is stored in company specific records. This technique prevents individual company codes from maintaining data that would be identical in nature.

© SAP AG

TERP10

14-22

Sales Area Data in the Customer Master Record Account definition at client level Customer X General data

PLUS


Sales areaspecific settings

CC 1000

Sales area 1000-10-10


Customer X in sales area 1000-10-10

 SAP AG 2004

A sales area (combination of sales organization, distribution channel, and division) must define sales area-specific settings for a customer before it can start doing business with that customer. These could be special conditions and terms of payments that the customer has arranged with the specific sales area.

© SAP AG

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Asset Class Accounts for buildings

Account 001111

1000

unt Acco s s la c

Asset Accounting

000000-099999

1000

Buildings

100000-199999

2000

Machinery

Standard assets

200000-299999

3000

Business equipment

300000-399999

4000

Assets under construction

400000-499999

5000

Low-value assets

500000-599999

...

 SAP AG 2004

The asset class is the main criteria for defining the asset. Each asset has to be assigned to an asset class. In the asset class, you can define certain control parameters and default values for depreciation and other master data. Assets that do not appear in the same line item of the balance sheet (such as buildings and equipment) have to be assigned to different asset classes. Additionally, there is at least one special asset class for assets under construction and one for low-value assets. The asset classes used by IDES for this are: y 4000 For assets under construction y 5000 For low-value assets Note 1: You can also create asset classes for intangible assets and leased assets. There are functions available for processing leases. Note 2: The application component PM (Plant Maintenance) is used for the technical management of assets. The application component TR (Treasury) is used for managing financial assets.

© SAP AG

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Assets in FI Organizational Units

Company code

Asset 1

Asset 2

Asset 3

Business area A

Business area B

Business area C

 SAP AG 2004

Each asset belongs to a company code and business area. All postings made for the asset (acquisitions, retirements, depreciation, etc.) are applied in the assigned company code and business area. Additionally, you can assign the asset to various CO objects (cost center, internal order, activity type) and logistic organizational units (for selection purposes only).

© SAP AG

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Master Data: Topic Summary

You are now able to: z Describe financial master data and explain the way it is grouped z Explain basic settings

 SAP AG 2004

© SAP AG

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14-26

Accounting Transactions in the G/L, A/P, A/R: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain how the Finance Application can meet basic financial processing requirements. z Describe document processing methodology and terminology.

 SAP AG 2004

© SAP AG

TERP10

14-27

Process overview: Purchase to Pay

Purchase to Pay

Order Requirement

Order

Material Supplier Plant Purchasing Org. Purchaser Group

Goods Receipt


Payment

Pay Method Bank

Warehouse Vendor

 SAP AG 2004

One essential business process is the purchase of goods that will be presented here as Purchase to Pay in order to explain the most important transactions in Accounting. From a logistical point of view, requirements planning is carried out first of all. To do this, the responsible department can register a materials requirement manually to Purchasing using an order requirement. If you have ceased a disposition procedure for a material in the material master set, it is possible to have the order requirement automatically created by the R/3 system. The R/3 system supports the purchaser responsible in determining possible supply sources. One option for determining the supply source is to create queries and finally record the offers. Furthermore, you can access orders and conditions which already exist in the system. Selecting a supplier is facilitated by price comparisons of the different offers. Cancellation letters can be dispatched automatically. Purchase order handling: The system provides you with entry tools when creating orders. The required entry data such as supplier, material, plant and other data relevant to the organization of purchasing must be provided. The purchaser can supervise the processing status of the order in the system. He can define, for example, whether a goods receipt or an invoice has been executed for the respective order position. The system also supports dunning. This procedure runs exclusively in MM. No postings take place in FI. When goods are received, the system checks, among other things, the quantity of goods received against the order quantity. A material document is created in MM to update the inventory. At the same time, a document is created in FI with which the evaluated goods are posted to the material stock account or the consumption account (debit) and to a goods receipt / invoice receipt account (credit).

© SAP AG

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After the invoice has been received in the Invoice Verification, the Vendor Invoice is checked as to the correctness of computation and content. All of these purchasing processes are settled in R/3 via Logistics. The vendor invoice is posted in MM and, at the same time, a document is created in FI with which the invoice amount is posted to the goods receipt / invoice receipt account (debit) and the vendor account (credit). The goods receipt / invoice receipt account is used to make sure that a goods receipt is executed for every invoice and vice versa. The Payment Processing usually takes place in Financial Accounting. It is here that decisions are made about the payment process, such as, for example, the payment methods and the bank settlement.

© SAP AG

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Inventory Procurement Process from the Account View Balance Sheet Assets

MM

1.

Goods Receipt to Warehouse GR/IR Allocation

FI GL

Liabilities

Assets

Equity capital

Material

Loans

Bank accounts

3.

Payment Program FI BL

Receivables

Liabilities Bank Allocation

Bank

Incoming Bills FI AP

2. 4. Account Statement

Vendors

 SAP AG 2004

If you follow the individual subprocesses of the general Purchase to Pay procurement, then you will recognize that, due to several sequential postings, ultimately the GR/IR clearing account as well as the bank clearing account are balanced again. Likewise, the liabilities built up in the short term by the payment are balanced again. From the point of view of the balance sheet, procurement into the warehouse is a material stock increase bound to a bank account reduction. External price fluctuations which may arise can be recorded - depending on the price control of the material - as a price difference, therefore in the Profit and Loss Statement.

© SAP AG

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Integration with Materials Management

Goods receipt Purchase order MM Purchase order Order amount

Material Document Goods receipt

Document Line items Material GR/IR

MM

FI

Material stock or consumption 1

GR/IR

Invoice receipt 2

FI No document

Invoice verification documentv

Line items GR/IR Vendor GR/IR Vendor Tax Tax

MM

1

Document

FI

Vendor 2

 SAP AG 2004

The last two steps can be completed in reverse order, depending on the order the goods and the invoice are received. The goods receipt/invoice receipt clearing account ensures that goods were received for each invoice, and vice versa (GR/IR).

© SAP AG

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Elements of the Payment Process Select payment method and bank Select items for payment Calculate the payment amount, taking account of cash discount periods Cash 10

Vendor 10 10

Post the payment document Print payment medium

Manual

Automatic

 SAP AG 2004

The standard system contains common payment methods and corresponding forms that have been defined separately for each country.

© SAP AG

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Overview of the Automatic Payment Program Run date Identification Account C or V Account 10 20 V C or Account ..10C..or 20 V ..10 ..20 .. ..

03.01.XXXX AC200 Document

Status Maintain parameters Parameters have been entered Start proposal run

Line items Document PK …. LinePK items …. Document PK …. LinePK items …. PK …. PK ….

Payment proposal has been created Edit proposal Payment proposal has been edited EDI

Start payment run Posting orders: x generated, x completed Payment run has been carried out

DME

Start printout

 SAP AG 2004

During the payment run, the system does the following: y Posts payment documents y Clears open items y Prepares data for the printing of payment media

© SAP AG

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Process Overview: Order to Cash

Order to Cash Product sale ex stock

Incoming Orders

Transport

Delivery

Billing

Dunning & Payment

Billing

Dunning & Payment

Sale of a service

Incoming Orders

Account assignments from activities

 SAP AG 2004

The sales order is the basis of the sales process. When an order has been settled effectively, all services with regard to the customer run off as an integrated process. In the R/3 module Sales and Distribution (SD), documents that are linked to one another are used and a corresponding Workflow is introduced via these. In SAP R/3, the Sales Organizations are legally responsible for sales. There can be several sales organizations within one company code. Every sales organization can use different distribution channels to sell goods. The combination of a sales organization and a distribution channel is also called a Distribution Chain. The sales order is generated at the level of the distribution chain. The ordered items can apply to different Divisions. After the sales order has been entered, the system carries out an availability check for the desired delivery date. Many different scenarios can be settled via the sales order in SD. Two scenarios which are typical for Accounting are introduced here as an example: The anonymous sale of products ex stock and the made to order production using the generation of a service as an example.

© SAP AG

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Product sale ex stock: Because this sale is no longer a services generation process (the material is lying evaluated in stock), it is settled via a sales order item that - managed via Customizing - is not a cost bearer. This means that costs and revenues are derived automatically from the material production costs or from the SD sales prices. In this case, you do not post individually on each of the sales order items. On the day of shipping, an outbound delivery document is created. The delivery cannot be billed until the goods have been removed from the stock and posted as goods issue. You can create a Transport Order that generates a commissions order. The required goods are removed from the stock and prepared for delivery. The goods to be delivered are posted as Goods Issue. In MM, a goods issue document and an accounting document in FI are created, in order to post the goods issue to the correct general ledger accounts. The last step in the sales and distribution process is Billing. An invoice document is created in SD and a printed invoice is sent to the customer. The R/3 makes it possible to analyze the stock on open items and dun overdue items automatically. In doing this, a dunning level is defined which is higher, the higher the number of days in arrears. On the basis of this dunning level, dunning fees and interest can be calculated and the dunning text that is selected depends on the dunning level. A dunning history is administered via the dunning notice which has been sent. Automatic dunning can be triggered for either only one account (individual dunning) or, the dunning program executes automatic dunning for a limited amount of accounts. The accounts are selected in the dunning run and checked for overdue items. Finally, a check is made whether reminders have to be sent and dunning levels are allocated. All dunning data are saved in one dunning proposal. From the Controlling point of view, billing is the point when the revenue occurs. When Payment has been made by the customer, you receive your money and post the receipt of payment in FI. The documents defined in R/3 make sales order administration easier for you and your customers. Made-to-order production using the creation of a service as an example: Producing a service represents, in contrast to ex stock sales, a direct services generation process that can also be displayed via a sales order item. In order to enable Controlling for this, a corresponding sales order item - controlled via Customizing - opens as a cost bearer. This means that the costs, but later also the revenues, can be posted individually and directly on the SD item. The steps incoming orders, billing, payment and dunning are nearly all identical to the steps in sales ex stock. However, in this services example, transport and delivery do not apply. The cost bearer sales order item can be posted for all transactions of the service generation directly. For example, transactions such as internal activity allocations, external invoices, materials orders or overhead rates can be offset. When the service generation is finished, you can pass on the costs and revenues to the profitability analysis (CO-PA) via the Order Settlement. In addition to these two exemplary sales order items, many other and, to some extent similar order settlements are imaginable. So that you have a better overview, the SAP R/3 system is supplied with different, preconfigured item categories with which you can display the different business processes. The customer can use these as model examples or directly as templates for his own processes. The item category is defined in the system using a four-character key. So that you can already gain an idea of the effect of the item category from the key, SAP uses the key often used in their standard package. The first two characters provide information about the type of sales document for which this item category was originally designed. The last two characters tell you about the use of the item category. For example, FOSG is a forward order with the generation of a service while FOST is a forward order for a standard (stock item).

© SAP AG

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Sales Process & Integration Sales

SD

FI No document

Sales order

Shipping Outbound delivery

Transfer order

Outbound delivery

Picking

Goods issue Goods issue

SD

MM Billing

SD

Document Line items … …

FI

FI

Billing document

Invoice

Line items … …

 SAP AG 2004

On the day of shipping, an outbound delivery document is created. The goods to be delivered are posted as a goods issue. A goods issue document is created in MM, and an accounting document is created in FI so that the goods issue is posted to the correct G/L accounts. The accounting document debits cost of goods sold and credits inventory. The last stage in the sales process is billing. A billing document is created in SD, and a printed invoice is sent to the customer. At the same time, a document is created in FI so that the receivable and revenue can be posted to the correct accounts. The accounting document debits the customer and Credits revenue

© SAP AG

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External Stock Sales Process with Account Determination Balance Sheet Assets

MM

1.

FI GL

Liabilities

Material

Equity capital

Receivables

Loans

Bank

Liabilities

Delivery Stock Change FG (P/L) (settlement/PO)

FI BL (costs/PO)

2. Billing FI AR

P/L

3.

Payment

Expenditure Income

Customers

 SAP AG 2004

In the overview, the external stock sales process creates several central documents from the account point of view. In order to reach a more exact understanding, you first of all have to look at the activity output of the product. An expenditure (for example, costs of the production order), that is paid through bank accounts (compare lesson 'Plan to Product Process') precedes both the external procurement of services and in-house production. In in-house production, a finished inventory was created from the delivery or settlement of the production order. The delivery in the Order to Cash process withdraws from this produced stock, thereby reducing the stock account. Billing creates the income and the corresponding receivables vis-à-vis the customer. The payment settles these receivables, leading to a credit memo on your bank account. In the ideal case, all accounts are settled exactly, except with an adjusted, higher bank balance, because the income is higher than the expenditure, which is also shown in the profit and loss statement by a corresponding profit.

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Incoming Payments in Accounts Receivable Complete payment Minor payment difference (within tolerances)

Greater payment difference (outside tolerances)

Post partial payment

Generate residual item

Customer 8000

5000

Invoice reference to open item

Customer Partial payment

8000

Residual item

3000

8000

 SAP AG 2004

The items are cleared if the customer pays his or her open items to the full amount or with an authorized deduction of cash discount. If a minor payment difference exists, this can be charged off automatically. The maximum amount that constitutes a minor payment difference is defined in tolerance group settings. Any greater payment difference (outside of tolerance) must be dealt with manually. y Partial payment: The item being short-paid does not clear. y Residual item: The open invoice is cleared and a new open item (residual item) in the amount of the payment difference is created.

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Accounting Transactions in the G/L, A/P, A/R: Topic Summary

You are now able to: z Explain how the Finance Application can meet basic financial processing requirements. z Describe document processing methodology and terminology.

 SAP AG 2004

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Fixed Asset Accounting: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the roles of Depreciation Areas in Asset Accounting z Explain asset postings.

 SAP AG 2004

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Asset Transactions Assets

General ledger

Asset

Clearing

100

100

Assets

Vendors

Asset

Vendor

100

z Asset transaction integrated with accounts payable or accounts receivable

100

Assets

Vendors

Asset

Vendor

100

z Asset transaction using (non-integrated) clearing accounts

100

z Asset transaction from MM MM

 SAP AG 2004

Asset transactions (acquisitions, retirements) can be posted in various ways to meet the organizational and business requirements of the company. In FI-AA you can post in the following ways: y Without a vendor or a purchase order; the offsetting entry is made to a G/L clearing account y To a vendor, but without reference to a purchase order y Via materials management using the MM functions (purchase order, goods receipt and invoice receipt)

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Asset Explorer Selection from asset and year

Planned values

Book values

Selection of depreciation area

Depreciation parameters Transactions in fiscal year

Overview: posted/ planned depreciation

Tab  SAP AG 2004

The asset explorer offers a clear overview of the activity for an asset. You can see transactions that have been posted to the asset plus planned and posted depreciation per depreciation area, per period, for each fiscal year. You can drill down to the details of the FI transactions. It is possible to branch to master data, other cost objects, and perform simulations.

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Depreciation Areas

Asset xy in year 2004 Asset value

Depreciation

Remaining value

Book Depreciation

100000

40000

60000

Legal

100000

40000

60000

Cost accounting

100000

10000

90000

Parallel valuation

100000

10000

90000

 SAP AG 2004

Often asset balances and transactions need to be valuated differently for various purposes. To keep more than one valuation basis, depreciation areas are kept in the SAP system. Separate transaction figures are kept in each area: y Per asset and depreciation area & for individual value components such as balances, depreciation, and remaining book value. Various data is stored in the asset master record for depreciation areas, which control the calculation of normal and special depreciation for the special depreciation areas. You can thus use a different depreciation method for general business procedures from the depreciation method required by the tax authorities.

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Depreciation Run FI AA

FI GL

Planned depreciation

Cost accounting Planned depreciation

Parallel depreciation Planned depreciation

Depreciation posting run

Book depreciation Posted depreciation

Depreciation accounts book depreciation

Posted depreciation

Cost accounting depreciation accounts

Posted depreciation

Depreciation accounts e.g. for IAS

 SAP AG 2004

Only after the depreciation posting run has been completed is the depreciation actually posted in asset accounting and in the general ledger. The depreciation is posted to the corresponding depreciation accounts in the general ledger and to the assigned CO cost object assigned to the asset master record. The run can be in direct or batch mode

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Fixed Asset Accounting: Topic Summary

You are now able to: z Maintain an Asset Master Record z Describe the role of an Asset Class z Describe the roles of Depreciation Areas in Asset Accounting z Explain asset postings.

 SAP AG 2004

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Prepare Financial Statements: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the process of preparing financial statements.

 SAP AG 2004

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Preparing Financial Statements Company code financial statements

Financial statement versions CAUS Fin. statement USA GKR Statement Germany INT Financial statement IDES

Business area financial statements

Operating chart of accounts

Country-specific chart of accounts

 SAP AG 2004

To support legal reporting requirements, currently several reports meet country-specific requirements. There is a list of country-specific reports for completing VAT tax forms, support for the consolidated EU report, and other reports for additional legal reporting requirements (such as a report for international trade as required by German law).

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Aspects of Reporting

Company code reporting

Consolidated report (EU)

VAT tax reports

Other legally required reports

 SAP AG 2004

To support legal reporting requirements, currently several reports meet country-specific requirements. There is a list of country-specific reports for completing VAT tax forms, support for the consolidated EU report, and other reports for additional legal reporting requirements (such as a report for international trade as required by German law).

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Balance Sheet and P&L, RFBILA00

Balance sheet

Income Statement

Assets

______________ ______________ ______________

Revenue

Company code

Liabilities

______________ ______________ ______________

Expenses

______________ ______________ ______________

______________ ______________ ______________

Shared equity

Net income

______________ ______________ ______________

______________ ______________ ______________

Financial statements are created using the general ledger of a company code. The following financial statements can be created: z Balance Sheet z Income (Profit & Loss) Statement  SAP AG 2004

SAP delivers a standard Balance Sheet and P/L, which is executed by program RFBILA00. This program includes both parts of the financial statements. Restricting views to one or the other is done by selecting only those accounts that are relevant. This standard report is found both in the application or general information system menu paths.

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Prepare Financial Statements: Topic Summary

You are now able to: z Describe the process of preparing financial statements.

 SAP AG 2004

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ERP Financials – Financial Accounting: Unit Summary

You are now able to: z Explain the organizational structures and master data of Financial Accounting z Perform typical accounting transactions in the application components of Financial Accounting z Identify the integration points with Sales and Distribution, Materials Management, and Controlling z Understand Fixed Asset Accounting z Prepare financial statements

 SAP AG 2004

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Organizational Structures and Master Data in Accounting:

Exercises

Unit: Organizational Structures and Master Data in Accounting Topic: Organizational Structures • Group Company • Company Code • Business Area Before you begin the process of creating G/L accounts, customers, vendors, or assets, or run transactions that affect the master data, the organizational structures must be defined.

1-1

Fill in the blanks or answer the questions below to test your knowledge of R/3 structure. 1-1-1 A ______________ is the legal unit of consolidation to which company codes are assigned. 1-1-2 A ______________ is the smallest organizational unit for which a complete self-contained set of books can be executed. 1-1-3 A ______________ is the organizational entity for which balance sheets as well as profit & loss statements can be executed across company codes covering a company’s main areas of operation.

-

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Exercises Unit: Organizational Structures and Master Data in Accounting Topic: Master Data

-

At the conclusion of these exercises, you will be able to: Maintain financial master data and explain the way it is grouped within mySAP ERP.

IDES International has many subsidiaries around the world, and requires a standardized chart of accounts for reporting. Because IDES has a great deal of master data, it is necessary to group and thereby structure it. Business requirements dictate that certain information be present in master records. The team needs to assure themselves that current master records are grouped in a logical manner. Several new accounts will need to be added to accommodate the new integrated system. The project team must feel comfortable with adding new accounts when the need arises.

2-1

Answer the following questions to gain a better understanding of account groups. 2-1-1 Is it mandatory to have account groups for G/L master data? 2-1-2 What is the purpose of G/L account groups? 2-1-3 Display the following 2 general ledger accounts residing in chart of accounts INT and fill in the requested information. G/L Account No. 113100 Chart of Account INT

G/L Account No. 476000 CC1000

Account Group Account Text

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2-2

In order to gain a better understanding of general ledger master records, answer the following questions or perform requested tasks. 2-2-1 Create a new general ledger account for cash in chart of accounts INT. It will be used for payroll cash. It should be a balance sheet account and should be included in the account group Liquid Funds Accounts. Use account number 1137## for your new account where ## refers to the number of your group. CONS is the group chart of accounts for INT, therefore assign the new account to group account number 110100 in CONS. Note the number of your new general ledger account. 2-2-2 What needs to be done to make this account available for posting? 2-2-3 Create the account for use in company code 1000. Line item display for the new account is required. The sort criteria when displaying the line items should be by document number and fiscal year (sort key 002). Since the account is a bank account we want bank-related fields to display when using this account; therefore, assign the account to field status group G005. Make sure the account is tagged Relevant to cash flow. Do not concern yourself with the rest of the Bank/Financial details for the time being. The account will be managed in EUR, which is the local currency for company code 1000. 2-2-4 Create a new general ledger account for recycling expense in chart of accounts INT. Since it is an expense account, make sure to attach the account to a P&L account statement type. We will be closing out the balance of this account to retained earnings account 900000 at year-end. For organizational purposes attach this account to account group SAKO. Use the account number 4043## for your new account. It will be mapped to the group chart of accounts CONS using account number 312600 (other misc.). Note the number of your new general ledger account. 2-2-5 Make the new recycling account available for use in company code 1000. Line item display for the new account is required. The sort criteria when displaying the line items should be by document number and fiscal year (sort key 002). Since the account is an expense account we want expense type fields to display when processing documents using this account. Therefore assign the account to field status group G033. For cash management purposes assign the account to commitment item 1423. The tax category should be set to input tax, “-”. Flag the field, “Posting without tax allowed”. 2-2-6 The recycling account is being added to support a state mandated recycling effort. Management wants to keep track of the additional costs of the new program. Add informational text to the new account master indicating the purpose of the new recycling account. 2-2-7 What would need to be done to create this account for use in company code 3000? Remember company code 3000 uses chart of accounts CAUS.

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2-3

In order to gain a better understanding of the customer and/or vendor master record(s), answer the following questions or perform requested tasks. 2-3-1 Create a customer, CUST-##, for use in company code 1000. ## refers to your group number in the class. You will be using this customer for testing later in the course. Assign your customer to account group KUNA in order to permit an external number assignment. First fill in the client level data by creating a unique name for your customer. The customer’s address is Haupstrasse 100, Heidelberg, Germany, postal code 68944. This is located in the state of Baden Wuerttemberg. Their VAT registration number is DE188888889. Input your group number, group##, in the search term field. You will always be able to search for customers using this field. Assign your customer the language key your course is being taught in. After client information is complete, continue by creating company specific records for company code 1000. Use reconciliation account 140000 to tie the customer to the general ledger, and payment terms such that purchases will be due immediately (ZB00). The release approval group is used to classify customers and vendors. Assign your customer to release group 0100. This field is located on the accounting information screen of the company code data section. Save the data when all information has been entered. 2-3-2 Since a customer order will typically be placed in the Sales & Distribution module, create the sales views of the master record for your customer. Your customer will be placing orders in sales organization 1000, distribution channel 12 and division 00. There is a similar set up in CUST-99, therefore reference CUST-99 in CC 1000, sales organization 1000, distribution channel 12 and division 00 to simplify your task. Since the annual sales and number of employees is different, you will need to update those fields with information about your customer (be creative). Make sure the Tax Classification is set to 1 indicating the customer is liable for taxes. Tax classification is found at the bottom of the billing screen. Verify that all partner relationships are referencing your own customer. Be sure to save your customer master record once you have finished all entries. 2-3-3 List the business partners for your customer. (Partner functions tab) 2-3-4 What is the sales district of your customer? (Sales tab)

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2-3-5 Create a vendor, VEND-##, for use in company code 1000. ## refers to your group number in the class. You will be using this vendor to test procurement of materials later in the course. Assign the vendor to account group LIEF in order to permit an external number assignment. First fill in the client level data. Create a unique name for your vendor. The vendor’s address is Bahnhofstrasse 29000 in Hockenheim Germany 68766. This is located in the state of Baden Wuerttemberg. Use the region field to record this information. Their VAT registration number is DE177777779. Input your group number, group##, in the search term field. You will always be able to search for vendors using this field. Next assign your vendor the language key that your course is being taught in. After client information is complete, continue by creating company specific records for company code 1000. Use reconciliation account 160000 to tie the vendor to the general ledger, and payment terms ZB00 and payment methods S, C and U. Enter planning group A4 for use in cash management. Save the data when all information has been entered. 2-3-6 Since the purchasing organization will be responsible for handling the initial creation of purchase orders, create the purchasing view of the master record for your vendor by referencing VEND-99, company code 1000, Purchasing Organization 1000. Change the salesperson and phone number to reflect correct information of the new vendor. Create a partner relationship on the partner function screen. The partner function should be VD, and the partner number Vend-##. Save your vendor master record once you have entered and verified all information. 2-4

You will change your previously created customer master information and review results to check the audit trail of any changes made to master data records. 2-4-1 First, there was an error in creating your customer, CUST-##. The correct address should be Haupstrasse 150. Make the necessary change. Second, it has been decided after the original creation of customers that all customers should be set up to record payment history. This will track the amount, number of payments and average days in arrears for customers. Make sure the indicator on the company code portion of the master record complies with the requirement. 2-4-2 Display the changes for CUST-##. What fields have been changed according to the report? 2-4-3 Select the all changes icon. Then double click on the changed fields. What additional details are available?

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Exercises Unit: Accounting Transactions in the GL, AP, and AR Topic: Accounting Transactions in the GL, AP, and AR • Automatic payment processing • Customer invoice

In order to create balance sheets and income statements, individual transactions need to be demonstrated. Run the automatic payment program for payables and post an invoice to your customer.

3-1

Perform the following tasks to gain a better understanding of automatic payment processing. 3-1-1 The vendor master record must be updated to include the valid payment methods for VEND-##. Choose the payment method S for Scheck/Check. The payment method field is located in the automatic payment transactions section of the Company Code Data. Make sure the payment terms for your vendor are ZB01. Save the changes to your master data. 3-1-2 Create an invoice for VEND-## in the amount of 1000. Back date the invoice’s document and posting dates to yesterday’s date. Charge the expense to the office supplies account 476000, cost center 2100. The tax code will be V0. Record your document number. 3-1-3 Execute a payment selection run to pay your vendor for the newly created invoice. 3-1-4 Create the parameters for the selection run, by selecting Parameters from the toolbar. 3-1-5 Schedule your proposal to run by selecting Proposal (have the program start immediately). To monitor the progress of the payment program while it is executing, click on the status icon on the toolbar. When you receive a message that the program is finished, you will be able to proceed with further processing steps.

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3-1-6 Display your proposed run by selecting Edit → Proposal → Display Proposal. 3-1-7 Select the payment run option off the toolbar, again selecting the start immediately option. This will post the document. A document has been created at this point recording your payment transaction. Refresh the status button in the toolbar until you receive the message that posting orders are generated and completed 3-1-8 View the payment transaction by displaying the cleared actives for today for your vendor and record the payment document. 3-1-9 Was your discount taken into account? If so, what account was it charged to? 3-2

Answer the following questions or perform requested tasks to gain a better understanding of daily transactions. 3-2-1 Enter an invoice for your customer, CUST-##, dated 6 months in the past (both document date and posting date) for 50 000 EUR in company code 1000. The credit (PK 50) should be booked to revenue account 800200. Proceed through any tax warnings you might receive. Record your invoice number.

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Exercises Unit: Fixed Asset Accounting Topic: Fixed Asset Master Data and Transactions At the conclusion of these exercises, you will be able to: • Explain how the SAP system can meet basic financial processing requirements of a Fixed Asset environment. • Create and post to an Asset Your first task is to create an asset master record for a new office building in Hamburg. Once the master record is created, you can now post an acquisition posting from your vendor for the cost of the building.

4-1

IDES is to purchase an office building for the plant in Hamburg (1000). Before it can be capitalized, an asset master record has to be created in asset class 1100 (buildings) with the description Office Building Hamburg ##. In Germany, buildings such as this have a useful life of 50 years. 4-1-1 Assign the building to your cost center CC## and business area BA##. Write down the asset number.

4-2

IDES will purchase the office building from a real estate agency, vendor Agency##. This agency has already done business with IDES and thus the vendor master record already exists. The office building is worth 1,000,000 EUR, not including the tax of 10%. 4-2-1 Post the asset acquisition completely; that is, post the acquisition and the amount payable to the vendor in one document. The date of the invoice and posting is today. Input tax of 10% (1I) is in addition to the net amount. Payment terms come from three installment payments. Make certain you use the correct payment terms R001. Use transaction type 100 (external asset acquisition).

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4-2-2 Review the document details. Display the document in the document overview. 4-2-3 Use the asset explorer to check the values of the new asset in depreciation area 01 (book depreciation). Select Depreciation area 01 (book depreciation). What are the planned and posted depreciation values for the current year?

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Exercises Unit: Prepare Financial Statements Topic: Prepare Financial Statements At the conclusion of these exercises, you will be able to: • Describe the process of preparing financial statements

In order to demonstrate the preparation of financial reports, first execute the compact document journal and finally, execute a balance sheet.

5-1

Create the compact document journal to display the documents created up to this point in the class. 5-1-1 Create the compact document journal for company code 1000 and the current week. Fill in your user ID as a dynamic selection.

5-2

When IDES closes its books, it runs financial statements showing an actual/actual comparison for the previous period. 5-2-1 Create financial statements for company code 1000 using an actual/actual comparison for the previous period. Use financial statement version INT. Create the report first for the entire company code and then for your business area BA##.

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Solutions

Unit: Organizational Structures and Master Data in Accounting Topic: Organizational Structures 1-1

Fill in the blanks or answer the questions below to test your knowledge of R/3 structure. 1-1-1 A Group Company is the legal unit of consolidation to which company codes are assigned. 1-1-2 A Company Code is the smallest organizational unit for which a complete self-contained set of books can be executed. 1-1-3 A Business Area is the organizational entity for which balance sheets as well as profit & loss statements can be executed across company codes covering a company’s main areas of operation.

-

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Solutions Unit: Organizational Structures and Master Data in Accounting Topic: Master Data 2-1

Answer the following questions to gain a better understanding of account groups. 2-1-1 Is it mandatory to have account groups for G/L master data? YES 2-1-2 What is the purpose of G/L account groups? Account Groups classify G/L accounts into user defined segments They determine the number range interval the account must be in They determine the status of fields on the screen when creating, changing or displaying master records. A field can be set to Suppressed, Required, Optional, or Displayed. 2-1-3 Display the following 2 general ledger accounts residing in chart of accounts INT and fill in the requested information. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Chart of Accounts

© SAP AG

G/L Account No. 113100 Chart of Account INT

G/L Account No. 476000 Chart of Account INT

Account Group

Liquid Funds Accts

General GL Accts

Account Text

Deutsche Bank

Office Supplies

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2-2

In order to gain a better understanding of general ledger master records, answer the following questions or perform requested tasks. 2-2-1 Create a new general ledger account for cash in chart of accounts INT. It will be used for payroll cash. It should be a balance sheet account and should be included in the account group Liquid Funds Accounts. Use account number 1137## for your new account where ## refers to the number of your group. CONS is the group chart of accounts for INT, therefore assign the new account to group account number 110100 in CONS. Note the number of your new general ledger account. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Chart of Accounts Enter account number 1137## Enter Chart of Accounts INT, then select the create icon (piece of paper) above the tab layout Choose “Cash Liquid Funds Accounts” from the pull down list in the account group field. Note: if you do not see ‘Cash’, then Select Customizing of the Local Layout→ Options → Expert Tab. Select Show keys in all drop down lists and also select Sort items by keys. Select OK. Put a check mark in the Balance Sheet Account field by clicking on it. Enter Short and Long Text of “Payroll Cash”. Enter 110100 for the Group Account Number. Selectthe SAVE icon to save the account in the Chart of Accounts. 2-2-2 What needs to be done to make this account available for posting? Since this account has only been created in the Chart of Accounts, it is not valid for posting in any company code until the company code portion of the G/L account master is created.

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2-2-3 Create the account for use in company code 1000. Line item display for the new account is required. The sort criteria when displaying the line items should be by document number and fiscal year (sort key 002). Since the account is a bank account we want bank-related fields to display when using this account; therefore, assign the account to field status group G005. Make sure the account is tagged Relevant to cash flow. Do not concern yourself with the rest of the Bank/Financial details for the time being. The account will be managed in EUR, which is the local currency for company code 1000. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Company Code Enter account number 1137## Enter company code 1000, then hit the create icon (piece of paper) above the tab layout Select the box for Line Item Display Enter the Sort Key 002. Enter Field Status Group G005 (Create/Bank/Interest tab) Select the box for Relevant to Cash Flow (Create/Bank/Interest tab) Select the SAVE icon to save the account in company code 1000. Proceed by any warning. Note the message provided by R/3 that your account has been created. 2-2-4 Create a new general ledger account for recycling expense in chart of accounts INT. Since it is an expense account, make sure to attach the account to a P&L account statement type. We will be closing out the balance of this account to retained earnings account 900000 at year-end. For organizational purposes attach this account to account group SAKO. Use the account number 4043## for your new account. It will be mapped to the group chart of accounts CONS using account number 312600 (other misc.). Note the number of your new general ledger account. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Chart of Accounts Enter account number 4043## Enter Chart of Accounts INT, then select the create icon (piece of paper above the tab layout) Select the Account Group “SAKO General G/L accounts” from the drop down list in the account group field. Select the P&L statement account type “X INT 9000000” from the drop down list. Enter Functional Area 0400 in the Detailed Control for PL statement accounts field group Enter Short & Long Text of Recycling Expense Enter 312600 for the Group Account Number. Select the SAVE icon to save the account in the Chart of Accounts. © SAP AG

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2-2-5 Make the new recycling account available for use in company code 1000. Line item display for the new account is required. The sort criteria when displaying the line items should be by document number and fiscal year (sort key 002). Since the account is an expense account we want expense type fields to display when processing documents using this account. Therefore assign the account to field status group G033. For cash management purposes assign the account to commitment item 1423. The tax category should be set to input tax, “-”. Flag the field, “Posting without tax allowed”. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Company Code Enter account number 4043## Enter company code 1000, then hit the create icon (piece of paper) above the tab layout Tax Category

“-”

Posting without tax allowed “√ ” Select the box for Line Item Display Enter the Sort Key 002. Enter Field Status Group G033 (Create/Bank/Interest tab) Enter the Commitment item 1423 (Create/Bank/Interest tab) Select SAVE icon to save the account in company code 1000. Note the message provided by R/3 that your account has been created. 2-2-6 The recycling account is being added to support a state mandated recycling effort. Management wants to keep track of the additional costs of the new program. Add informational text to the new account master indicating the purpose of the new recycling account. Accounting → Financial Accounting → General Ledger → Master Records → Individual Processing → In Chart of Accounts Enter account number 4043## Enter Chart of Accounts INT, then hit the change icon (pencil) above the tab layout Select the Information tab Select the Account Assignment Info Line by placing an X in the first box. The language for your message should be EN. If you want other languages, hit the Other Languages icon (second icon to the right of the 1st Line field Enter the text for your account in the space provided. If more room is needed hit the Editor icon to the right of the 1st Line field which will take you to a full screen editor. Make sure to save your work. Hit the green arrow to exit the screen editor. Save the changes made to the account.

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2-2-7 What would need to be done to create this account for use in company code 3000? Remember company code 3000 uses chart of accounts CAUS. Since company code 3000 uses chart of accounts CAUS, the account would need to be created in the chart CAUS as well as in company code 3000. 2-3

In order to gain a better understanding of the customer and/or vendor master record(s), answer the following questions or perform requested tasks. 2-3-1 Create a customer, CUST-##, for use in company code 1000. ## refers to your group number in the class. You will be using this customer for testing later in the course. Assign your customer to account group KUNA in order to permit an external number assignment. First fill in the client level data by creating a unique name for your customer. The customer’s address is Haupstrasse 100, Heidelberg, Germany, postal code 68944. This is located in the state of Baden Wuerttemberg. Their VAT registration number is DE188888889. Input your group number, group##, in the search term field. You will always be able to search for customers using this field. Assign your customer the language key your course is being taught in. After client information is complete, continue by creating company specific records for company code 1000. Use reconciliation account 140000 to tie the customer to the general ledger, and payment terms such that purchases will be due immediately (ZB00). The release approval group is used to classify customers and vendors. Assign your customer to release group 0100. This field is located on the accounting information screen of the company code data section. Save the data when all information has been entered. Accounting → Financial Accounting → Accounts Receivable → Master Records → Create Enter Account Group “KUNA General Customers”, then select Enter to continue to the Address screen. Enter CUST-## in the customer field Enter 1000 for the company code Select Enter to Continue Name - Be creative and enter a unique name Enter Group ## in the search term field Street Address is Haupstrasse 100 Postal Code is 68944 City is Heidelberg Country is DE Region is 08 Enter the language key that equates to the language the course is delivered in. Choose the Control data tab

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Vat registration number is DE188888889 Choose the Company Code data button Enter 140000 in the reconciliation account in the Account Management tab. Then select the Payment transactions tab Enter ZB00 in the payment terms Now SAVE by selecting the diskette icon on the top icon bar 2-3-2 Since a customer order will typically be placed in the Sales & Distribution module, create the sales views of the master record for your customer. Your customer will be placing orders in sales organization 1000, distribution channel 12 and division 00. There is a similar set up in CUST-99, therefore reference CUST-99 in CC 1000, sales organization 1000, distribution channel 12 and division 00 to simplify your task. Since the annual sales and number of employees is different, you will need to update those fields with information about your customer (be creative). Make sure the Tax Classification is set to 1 indicating the customer is liable for taxes. Tax classification is found at the bottom of the billing screen. Verify that all partner relationships are referencing your own customer. Be sure to save your customer master record once you have finished all entries. Accounting → Financial Accounting → Accounts Receivable → Master Records → Maintain Centrally → Create Enter Customer: CUST-## Company Code: 1000 Sales Organization: 1000 Distribution Channel: 12 Division: 00 Enter Reference Data Customer: CUST-99 Company Code: 1000 Sales Organization: 1000 Distribution Channel: 12 Division: 00 Hit enter to proceed to next screens to view the data contained in the Sales & Distribution portion of the Customer Master. Enter 0 in the Tax field on the billing document tab. VAT registration # is DE188888889 (if necessary).

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2-3-3 List the business partners for your customer. (Partner functions tab) SP – Sold to Party

CUST-##

BP – Bill to Party

CUST-##

PY – Payer

CUST-##

SH – Ship to Party

CUST-##

2-3-4 What is the sales district of your customer? (Sales tab) DE0015. SAVE your customer now! 2-3-5 Create a vendor, VEND-##, for use in company code 1000. ## refers to your group number in the class. You will be using this vendor to test procurement of materials later in the course. Assign the vendor to account group LIEF in order to permit an external number assignment. First fill in the client level data. Create a unique name for your vendor. The vendor’s address is Bahnhofstrasse 29000 in Hockenheim Germany 68766. This is located in the state of Baden Wuerttemberg. Use the region field to record this information. Their VAT registration number is DE177777779. Input your group number, group##, in the search term field. You will always be able to search for vendors using this field. Next assign your vendor the language key that your course is being taught in. After client information is complete, continue by creating company specific records for company code 1000. Use reconciliation account 160000 to tie the vendor to the general ledger, and payment terms ZB00 and payment methods S, C and U. Enter planning group A4 for use in cash management. Save the data when all information has been entered.

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Accounting → Financial Accounting → Accounts Payable → Master Record → Create Enter VEND-## in the vendor field Enter 1000 for the company code Enter Account Group LIEF, then hit enter to continue to address screen. Name - Be creative and enter a unique name Enter Group ## in the search term field Street Address is Bahnhofstrasse 29000 Postal code is 68766 City is Hockenheim Country is DE Region is 08 Enter the language key that equates to the language the course is delivered in. Hit enter to proceed to the next screen. Vat registration number is DE177777779, then hit enter twice to continue. Enter 160000 in the reconciliation account and A4 for the cash management group, then hit enter to continue. Enter ZB00 in the payment terms. Enter S, U and C for payment methods then hit enter to proceed. Proceed through the remaining screen and save the data when prompted to do so. 2-3-6 Since the purchasing organization will be responsible for handling the initial creation of purchase orders, create the purchasing view of the master record for your vendor by referencing VEND-99, company code 1000, Purchasing Organization 1000. Change the salesperson and phone number to reflect correct information of the new vendor. Create a partner relationship on the partner function screen. The partner function should be VD, and the partner number Vend-##. Save your vendor master record once you have entered and verified all information.

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Accounting → Financial Accounting → Accounts Payable → Master Records → Maintain Centrally → Create Enter Vendor: VEND-## Company Code: 1000 Purchasing Organization: 1000 Enter Reference Data Vendor: VEND-99 Company Code: 1000 Purchasing Organization: 1000 Hit enter to proceed to next screens to view the data contained in the Partner functions screen of the Vendor Master. The Vendor Partner should be: VD Vendor VEND-##. Be sure to save all your work. 2-4

You will change your previously created customer master information and review results to check the audit trail of any changes made to master data records. 2-4-1 First, there was an error in creating your customer, CUST-##. The correct address should be Haupstrasse 150. Make the necessary change. Second, it has been decided after the original creation of customers that all customers should be set up to record payment history. This will track the amount, number of payments and average days in arrears for customers. Make sure the indicator on the company code portion of the master record complies with the requirement. Accounting → Financial Accounting → Accounts Receivable → Master Records → Change On the Customer Change Initial Screen for Accounting: Enter your customer number, CUST-## Enter company code 1000, and then hit enter to get to the master record Make sure you are on the Address tab The address change will be made on the Address Screen. The Record Payment History change will be made on the Payment Transaction Screen of the company code section (hit the Company code button) of the master record. Save the data by choosing the SAVE icon.

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2-4-2 Display the changes for CUST-##. What fields have been changed according to the report? Accounting → Financial Accounting → Accounts Receivable → Master Records → Display Changes On the Customer Account Changes Initial Screen: Enter your customer number, CUST-## Enter company code 1000, then hit enter to continue. Changed fields: Indicator: Record Payment History Street and House Number 2-4-3 Select the all changes icon. Then double click on the changed fields. What additional details are available? Date, Field, New and Old, Date, Time, User who made the change, Field from/to.

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Solutions Unit: Accounting Transactions in the GL, AP, and AR Topic: Accounting Transactions in the GL, AP, and AR

3-1

Perform the following tasks to gain a better understanding of automatic payment processing. 3-1-1 The vendor master record must be updated to include the valid payment methods for VEND-##. Choose the payment method S for Scheck/Check. The payment method field is located in the automatic payment transactions section of the Company Code Data. Make sure the payment terms for your vendor are ZB01. Save the changes to your master data. Accounting → Financial Accounting → Accounts Payable → Master Records → Change Change Vendor Initial Screen Vendor: VEND-## Company Code: 1000 Address: X (General Data) Payment Transactions: X (Company Code Data) Make sure your vendor address fields are completed, including city and postal code as the check program is looking for this kind of information. Make sure that method S is included in the payment transactions area of the company code data. 3-1-2 Create an invoice for VEND-## in the amount of 1000. Back date the invoice’s document and posting dates to yesterday’s date. Charge the expense to the office supplies account 476000, cost center 2100. The tax code will be V0. Record your document number. Accounting → Financial Accounting → Accounts Payable → Document Entry → Invoice

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Document Header Information: Vendor: Vend-## Post Date and document date: Yesterday’s date Company Code: 1000 Amount: 1000 Tax Code: V0 (zero) Currency: EUR First Line Item G/L acct: 476000 Debit should default to the D/C field Amount: 1000 Cost Center: 2100 Tax Code: should default to V0 from above Post the document by choosing the Post icon or choosing the menu path: Document → Post A unique document number will be assigned. 3-1-3 Execute a payment selection run to pay your vendor for the newly created invoice. Accounting → Financial Accounting → Accounts Payable → Periodic Processing → Payments

Payment processing is one of the periodic processing options within accounts payable. The run date should be today’s date. Type in today’s date. Do not attempt to choose today’s date from the possible entries list. The identification should be GR##. Hit enter to proceed. 3-1-4 Create the parameters for the selection run, by selecting Parameters from the toolbar. The run should include company code 1000, payment method S. The next posting date will be 1 month from today. Only include VEND-##, then save the data. 3-1-6 Schedule your proposal to run by selecting Proposal (have the program start immediately). To monitor the progress of the payment program while it is executing, click on the status icon on the toolbar. When you receive a message that the program is finished, you will be able to proceed with further processing steps.

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3-1-6 Display your proposed run by selecting Edit → Proposal → Display Proposal. You could make changes at this point by choosing Edit → Proposal → Edit, but we will accept the proposal and continue. 3-1-7 Select the payment run option off the toolbar, again selecting the start immediately option. This will post the document. A document has been created at this point recording your payment transaction. Refresh the status button in the toolbar until you receive the message that posting orders are generated and completed 3-1-8 View the payment transaction by displaying the cleared actives for today for your vendor and record the payment document. Accounting → Financial Accounting → Accounts Payable → Account → Display/change Line Items Display Vendor Line Items Initial Screen Vendor

VEND-##

Company Code

1000

Choose All Items. Hit enter to proceed. Choose the document with the document type of ZP and look at the overview. 3-1-9 Was your discount taken into account? If so, what account was it charged to? The discount should be charged to account 276000 Discount Received R/3 provides various output options for the payment program after the selection has been run and the journal entry posted. The method chosen relates to individual business requirements and country customs. In our example the payment method was S for Scheck/Check. The final step in the process would be to print the checks. We will not include this step in our testing.

3-2

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Answer the following questions or perform requested tasks to gain a better understanding of daily transactions.

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3-2-1 Enter an invoice for your customer, CUST-##, dated 6 months in the past (both document date and posting date) for 50 000 EUR in company code 1000. The credit (PK 50) should be booked to revenue account 800200. Proceed through any tax warnings you might receive. Record your invoice number. Accounting → Financial Accounting → Accounts Receivable → Document Entry → Invoice Document Header Information: Customer: Cust-## Doc Date: 6 months in the past Post Date: 6 months in the past Company Code: 1000 Amount: 50000 Tax Code: A0 (zero) Currency: EUR First Line Item G/L acct: 800200 Credit should default to the D/C field Amount: 50000 Tax Code: should default to A0 from above Post the document by choosing the Post icon or choosing the menu path: Document → Post A unique document number will be assigned.

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Solutions Unit: Fixed Asset Accounting Topic: Fixed Asset Master Data and Transactions

4-1

IDES is to purchase an office building for the plant in Hamburg (1000). Before it can be capitalized, an asset master record has to be created in asset class 1100 (buildings) with the description Office Building Hamburg ##. In Germany, buildings such as this have a useful life of 50 years. 4-1-1 Assign the building to your cost center CC## and business area BA##. Write down the asset number. Accounting → Financial Accounting → Fixed Assets → Asset → Create → Asset Field Name

Value

Asset Class

1100 (buildings)

Company Code

1000

Number of similar assets

1

Choose Master data. Field Name

Value

Description

Office Building Hamburg ##

Select Time Dependent tab. Field Name

Value

Business area

BA##

Cost center

CC##

Plant

1000

Choose Save. Write down the asset number.

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4-2

IDES will purchase the office building from a real estate agency, vendor Agency##. This agency has already done business with IDES and thus the vendor master record already exists. The office building is worth 1,000,000 EUR, not including the tax of 10%. 4-2-1 Post the asset acquisition completely; that is, post the acquisition and the amount payable to the vendor in one document. The date of the invoice and posting is today. Input tax of 10% (1I) is in addition to the net amount. Payment terms come from three installment payments. Make certain you use the correct payment terms R001. Use transaction type 100 (external asset acquisition). Accounting → Financial Accounting → Fixed Assets → Posting → Acquisition → External Acquisition → With Vendor Field Name

Value

Document date/posting date

Today’s date

Posting key (PstKy)

31

Account

Agency##

Choose Enter. Field Name

Value

Amount

1,100,000

Tax amount

100,000

Tax code

1I (input tax training 10%)

Payment terms

R001

Posting key (PstKy)

70

Account

Your office building asset

Transaction type

100

Choose Continue.

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Confirm warning about changing the payment terms by choosing Enter. Field Name

Value

Amount

*

Tax code

1I

Reference date

Today’s date

Choose Post. Write down the asset number. NOTE: do not exit this screen before proceeding to the next exercise 4-2-2 Review the document details. Display the document in the document overview. View the document details using Document → Display Which three accounts were posted to in this document and to which ledgers do they belong? The document is posted to accounts in the following ledgers: (1) your asset - asset subsidiary ledger (2) Agency## - AP subsidiary ledger (3) 154000 – general ledger 4-2-3 Use the asset explorer to check the values of the new asset in depreciation area 01 (book depreciation). Accounting → Financial Accounting → Fixed Assets → Asset → Asset Explorer Field Name

Value

Company code

1000

Asset

Your office building asset

Select Depreciation area 01 (book depreciation). What are the planned and posted depreciation values for the current year? (a) The planned depreciation is 50,000 EUR. Select the Posted Values tab. The posted depreciation is still zero since the depreciation is posted by a depreciation run that has not occurred yet. (b) Return to the SAP Easy Access menu by typing /N in the command field.

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Solutions Unit: Prepare Financial Statements Topic: Prepare Financial Statements

5-1

Create the compact document journal to display the documents created up to this point in the class. 5-1-1 Create the compact document journal for company code 1000 and the current week. Fill in your user ID as a dynamic selection. Accounting → Financial Accounting → General Ledger → Information System → General Ledger Reports → Document → General → Compact Document Journal → SAP Minimal Variant Field Name

Value

Company code

1000

Posting date

Current period

Choose the Dynamic selections icon at the top of the screen. Fill in your user ID in the User Name field. Choose Execute. Return to the SAP Easy Access menu by typing /N in the command field. 5-2

When IDES closes its books, it runs financial statements showing an actual/actual comparison for the previous period. 5-2-1 Create financial statements for company code 1000 using an actual/actual comparison for the previous period. Use financial statement version INT. Create the report first for the entire company code and then for your business area BA##. Accounting → Financial Accounting → General Ledger → Information System → General Ledger Reports → Balance Sheet/Profit and Loss Statement/Cash Flow → General → Actual/Actual Comparisons → Periodic Actual/Actual Comparison Field Name

Value

Company code

1000

FIS annual rep. struc

INT

Fiscal year (period)

Current fiscal year

Period (per. Eval)

Last period

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The financial report for the last period compared to the same period of the previous year is displayed. You can drill down to the transaction figures of the accounts in the financial statement. Open the Commercial Balance Sheet folder under the Financial Statement Items column if it is not already open. Open up more folders and select an amount. With your cursor on an account, from the menu, choose Go to → Line Items to drill down to the line items for the account. Return to the selection screen. Answer “No” when asked if you want to save the data upon exiting the report. Re-run the report using the same data but just for your business area BA##. Return to the SAP Easy Access menu by typing /N in the command field.

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Test Your Knowledge

1.

A legal entity is represented by a ___________________in SAP.

2.

Key business segments are represented by ___________________ in SAP.

3.

Determine whether this statement is true or false. More than one company code is assigned to a controlling area.

4.

The ____________________ has a range of numbers assigned to it and controls the screen layout of the company code segment of a GL account.

5.

Determine whether this statement is true or false. Reconciliation accounts can be posted to directly.

6.

The __________________________________ determines the structure of a balance sheet and income statement as far as which accounts map to which line items on the report.

7.

A document consists of two parts: a ____________ and ______________.

8.

When a document is posted, a number range is assigned to that document. This number comes from a number range assigned to the _____________ in the header of the document.

9.

Determine whether this statement is true or false. When a transaction is posted in FI, it automatically appears on the balance sheet.

10.

For postings to recur on a regular basis, the _______________________ can be used to generate the necessary documents.

11.

The parameters for the payment program define the ________________, ______________, and ______________ to include in the automatic payment run.

12.

Determine whether this statement is true or false. When a purchase order is created, a financial document is also created.

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13.

Determine whether this statement is true or false. When a short pay for an incoming payment is processed used the partial payment method, the invoice being partially paid is cleared and a new open item in the amount of the payment difference is created.

14.

A sales area consists of a ___________________, a ____________________, and a __________________.

15.

When the billing document is created in Sales and Distribution, an accounting document that debits the _________________ and credits _________________ is automatically created.

16.

A transaction type tells us where the posting is placed on the _________________________.

17.

What are the various acquisitions and retirements that can be posted in Asset Accounting?

18.

What is the purpose of the asset explorer?

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19.

Answers

A legal entity is represented by a ___________________in SAP. Answer: Company code

20.

Key business segments are represented by ___________________ in SAP. Answer: Business area

21.

Determine whether this statement is true or false. More than one company code is assigned to a controlling area. Answer: True. In order for this to occur, the company codes must have the same operating chart of accounts and fiscal year variant.

22.

The ____________________ has a range of numbers assigned to it and controls the screen layout of the company code segment of a GL account. Answer: Account group

23.

Determine whether this statement is true or false. Reconciliation accounts can be posted to directly. Answer: False – You can post to a reconciliation account only through a subledger account.

24.

The __________________________________ determines the structure of a balance sheet and income statement as far as which accounts map to which line items on the report. Answer: Financial statement version

25.

A document consists of two parts: a ____________ and ______________. Answer: Header and line items.

26.

When a document is posted, a number range is assigned to that document. This number comes from a number range assigned to the _____________ in the header of the document. Answer: Document type

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27.

Determine whether this statement is true or false. When a transaction is posted in FI, it automatically appears on the balance sheet. Answer: True – The account must be assigned to an appropriate line item in the financial statement version used when running the balance sheet. Otherwise, the posting will appear at the end of the financial statement in a category called Accounts not assigned.

28.

For postings to recur on a regular basis, the _______________________ can be used to generate the necessary documents. Answer: Recurring entry program

29.

The parameters for the payment program define the ________________, ______________, and ______________ to include in the automatic payment run. Answer: Company code, vendors, and invoices

30.

Determine whether this statement is true or false. When a purchase order is created, a financial document is also created. Answer: False – A financial document is created when goods are received and when the invoice is received, but not when the purchase order is created.

31.

Determine whether this statement is true or false. When a short pay for an incoming payment is processed used the partial payment method, the invoice being partially paid is cleared and a new open item in the amount of the payment difference is created. Answer: False – This statement pertains to a residual item.

32.

A sales area consists of a ___________________, a ____________________, and a __________________. Answer: Sales organization, distribution channel, and division

33.

When the billing document is created in Sales and Distribution, an accounting document that debits the _________________ and credits _________________ is automatically created. Answer: Customer and revenue

34.

A transaction type tells us where the posting is placed on the _________________________. Answer: Asset history sheet.

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35.

What are the various acquisitions and retirements that can be posted in Asset Accounting? Answer: (1) Without a vendor or purchase order, the offsetting entry is made to a GL clearing account, (2) to a vendor, but without reference to a purchase order, and (3) via MM by creating a purchase order.

36.

What is the purpose of the asset explorer? Answer: The asset explorer gives a clear overview of the activity for an asset per depreciation area and fiscal year for planned values, posted transactions, posted amounts, posted and planned depreciation, and depreciation parameters.

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Contents: z Organizational Structures and Master Data z Cost Center Accounting z Internal Orders z Profit Center Accounting z Profitability Analysis z Product Costing z Reconciliation Ledger z Optional: Activity Based Costing

 SAP AG 2004

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Management Accounting: Unit Objectives

At the conclusion of this unit, you will be able to: z Define the organizational structures and master data used in Management Accounting z Explain the functions of the different Controlling components z Identify the other mySAP ERP processes that post data to Management Accounting z Explain the purpose of the Reconciliation Ledger z Identify the integration points between Financial Accounting, Materials Management, Production Planning, Sales and Distribution, Project Systems, and Human Resources z Perform cost analysis using different Management Accounting tools  SAP AG 2004

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Management Accounting: Course Overview Diagram TERP10


 SAP AG 2004

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Management Accounting: Business Scenario

z Planning, monitoring, and controlling costs allow your enterprise to achieve profitability and growth. Therefore, to proactively monitor business performance, you need to understand the functions of the different Management Accounting components.

 SAP AG 2004

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Standards Versus Flexibility



Management Accounting Cost Accounting Various Valuations Flexibility

IAS GAAP GOB

Tax Audit

Financial Accounting Financial Statements Legal Requirements Standards

 SAP AG 2004

All businesses have requirements to provide accounting information for users both external and internal to the organization. External parties requiring accounting information would include regulatory agencies, banks, and insurance companies. Accounting information of this type would typically be prepared according to standards issued by a governing regulatory agency. This helps to ensure that operating results are accounted for and reported so that the information is comparable from one enterprise to the next. There are also many varied information requirements for users inside the organization, including all levels of management, marketing, finance & accounting, sales, manufacturing, etc. Accounting information of this type is frequently prepared in a format unique to the organization's requirements rather than according to any standard.

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Views of Management Accounting CO PA


CO PCA Profit Center Statement

Bal.Sheet

CO Overhead Costs Controlling OM Cost Centers

CO PC

P/L

Product Cost Controlling PS

HR

Internal Order

Project

PP Production Order

MM

SD Sales Order

CO Cost Element CEL Accounting

What costs?

Where?

For what?

In which area? How profitable?

 SAP AG 2004

Controlling (CO) is assigned the task of recording all business-related expenses and revenues in detail, in order to provide more exact information about the utilization of costs and assets within the company. Management Accounting consists of: The Cost Element Accounting (CO-OM-CEL) provides information about what type these cost or revenues are (e.g. personnel costs). Overhead Costs Controlling (CO-OM) focuses on assimilating costs that cannot be directly assigned to the goods and services of a company and, when possible, allocating them further on a cause-effect basis. Product Cost Controlling (CO-PC) assimilates the costs for the creation of goods and services (and, in certain cases, their sales revenues) and settles these in FI or in the profitability and sales accounting. The Profitability Analysis (CO-PA) is used for both company planning and to display the business success. When you install the Profit Center Accounting (CO-PCA), assign a specific Cost Center to every object for which costs and revenues are incurred in your system.

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Integrated Value Flows in mySAP ERP Financials CO PA


CO PCA Profit Center Statement

Bal.Sheet

CO Overhead Costs Controlling OM Cost Centers

CO PC

Activity Allocation

CO Cost Element CEL Accounting FI

FI AP

Vendor

Puchasing

Product Cost Controlling

$

HR Process Costs

PS Internal Order

Cost Type Expense Accounts FI AA

Assets

P/L

PP Production Order

MM Project

Assets Accounts

Bal.Sheet

FI GL

Manufacturing & Services

P/L

SD Sales Order

Revenue Types Revenue Accounts FI AR

Customer

Sales Order Mgt.

 SAP AG 2004

In the different business-related processes such as Purchase to Pay (purchase settlement), Plan to Product (process from the planning to the internal added value) and Order to Cash (sales), it is necessary to display external and internal quantity and value flows in a differentiated way. Between the different accounting components, the costs and services quantity flows are displayed that are necessary for efficient accounting.

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Organizational Structures and Master Data: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the various organizational units used by the management accounting. z Explain the integration between the financial accounting and management accounting organizational structures. z Describe the master data utilized by management accounting.

 SAP AG 2004

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Organizational Structures in Financials CO PA

Operating Concern

Global Enterprise

CO

Europe

Controlling Area

North America

Profit Center

FI

Germany

France

USA

Company Code IAS/GAAP/Ger. HGB

Business areas

MM

Hamburg

Dresden

PP

SD

New York

Dallas

Plant Warehouse

 SAP AG 2004

The Controlling Area is the basic organizational unit in Controlling. A Controlling Area represents a closed system for the purposes of cost accounting. Allocations can only be executed within a controlling area, they cannot apply to objects in other controlling areas. Several company codes can be assigned to a controlling area. This enables cross-company code Controlling. The profitability analysis (CO-PA) is carried out within the Operating Concern. The operating concern is an organizational unit that depicts the structure of external market segments for the company. It can assign several controlling areas to every profitability area in order to analyze these jointly. The company code is an independent Accounting entity. Balance sheets and P&L statements are prepared at company code level in order to correspond to legal Reporting requirements. The General Ledger is managed at company code level and, from this, the balance sheets required by the legislator as well as the P/L statement are compiled. Business Areas can be used to group strategic business fields and to report in the form of nontestable P&L statements and balance sheets. Business areas can also be cross-company code. The Plant represents a logistically closed organizational unit, for example, for the manufacture or sale of products. It represents the central organizational unit in the R/3 components Materials Management and Production Planning. When defining organizational structures, plants are assigned to company codes. A purchasing organization is an organizational unit of MM-Purchasing, the sales organization is an organizational unit of SD-Sales. Several warehouse locations can be assigned to the plants for the different warehouse storage of products or materials.

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G/L Accounts and Cost Elements Example: International Chart of Accounts Financial Accounting 0

1

2

Current assets and shortterm capital

NonMaterial Expense operatinventory accounts ing costs, revenues

1

2

Current assets and shortterm capital

3

Financial Accounting 4

3 Material Noninventory operating costs, revenues

Primary cost elements

5

6

Secondary cost elements

Secondar y cost elements

7

8

Semifinished products and finished products

Revenue/ Closing inventory change/ current internal activity

9

Revenue elements

Management Accounting/Controlling Profit Center Accounting  SAP AG 2004

The chart of accounts is created in Financial Accounting. All expense accounts are grouped in one class (class 4) and all revenue accounts (class 8). Expense accounts to which costs are posted for cost accounting purposes must also be created as cost elements in Management Accounting. This ensures that all postings to this type of expense account always arrive in CO at the same time. Secondary cost elements are defined only in CO and are used for internal CO allocations (such as assessments or settlements). Secondary cost elements do not have any corresponding G/L accounts in FI.

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Cost Centers and Activity Types Invoices Personnel cost Depreciation …

Cost Center

Cost Center Activity Type

Fixed/variable prices

Order Order Order

 SAP AG 2004

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Statistical Key Figures z A measurable quantity that can be assigned to Cost Centers, Activity Types, Overhead Orders, Business Processes and Profit Centers z Used as an allocation base (“Tracing Factor”) in overhead cost allocations z Two categories: Type 1 = Fixed, Type 2 = Totals z Can be linked to Logistics Information System (LIS)

Periods

1

2

3 . . . 12

Type 01

Employees

20

20

20

20

Type 02

Counter no.

1300

1355

1275

1325

 SAP AG 2004

Statistical key figures define some measurable value applicable to cost centers, profit centers, internal orders, or processes. Examples could include total number of employees in a cost center, minutes of long-distance phone calls, number of employees in the Transportation cost center who perform vehicle repairs, etc. You can post both plan and actual values for statistical key figures. You can use statistical key figures as an allocation base (or “tracing factor” in CO terminology) for periodic allocation transactions, such as distribution or assessment, as well as for analysis purposes (e.g. to calculate the rent cost per employee). You define a statistical key figure as a fixed value or a totals value: y The fixed value is carried over from the period in which it is posted to all subsequent periods of the same fiscal year. This is useful for statistical key figures that tend to remain constant over time (such as the number of employees). You need enter a new posting only when the value changes. y The totals value is not transferred to the following period but must be entered for each individual period. This is preferable for statistical key figures whose values tend to change each period (such as kilowatt hours of electricity consumption). You can also transfer statistical key figures values from the Logistics Information System (LIS). This is accomplished by linking a key figure from LIS to a statistical key figure in Cost Center Accounting.

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Internal Orders FI

CO

MM

Internal Orders Overhead Cost Orders

Investment Orders

Accrual Orders

Orders with Revenues Revenue

z Order z Prof. Segmt z Cost Center z Project

z G/L Account z Cost Center z Assets z Project

z Prof. Segmt

Cost Accounting Functions

Costs

z G/L Account z Prof. Segmt z Sales Order z Billing Element z Orders with Revs z For Any Receiver

 SAP AG 2004

An Internal Order is an extremely flexible CO tool that can be used for a wide variety of purposes to track costs and, in some cases revenues, within a controlling area. Internal orders provide capabilities for planning, monitoring, and allocation of costs. Internal orders may be used for a variety of purposes, and can be grouped into four general categories: y Overhead orders: Used to monitor overhead costs incurred for a particular purpose, such as conducting a trade fair, or tracking costs for maintenance and repair work. y Investment orders: Used to monitor costs incurred in the production of a fixed asset, such as building a storage facility. y Accrual orders: Used to offset postings of accrued costs (costs calculated in CO) to cost centers. y Orders with revenue: Used to replace the cost accounting parts of SD customer orders if SD is not being used, so that both costs and revenues can be tracked; or to monitor revenues not affecting the organization's core business (such as miscellaneous revenues).

© SAP AG

TERP10

15-13

Profit Center Accounting – An Internal View The goal of Profit Center Accounting is to measure the profitability of areas of responsibility within the organization.

Cost Center, Business Process

Cost Object

Profitability Segments

Sales Order

Profit Center

Asset

Production Order

Internal Order, Project Material

 SAP AG 2004

A profit center is a management-oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as "companies within the company". EC-PCA lets you set up your profit centers according to product (product lines, divisions), geographical factors (regions, offices or production sites) or function (production, sales). Profit Center Accounting (PCA) allows you to calculate internal measurements of profitability. This internal view of profitability, then, reflects the success of a given profit center at meeting the profitability goal for which it was given responsibility. Account Assignment Logic in Controlling: y When Controlling is active in R/3, each posting to a revenue or expense account that has been set up as a cost element in CO requires an account assignment object. This specifies where the revenue or cost will reside in CO. Examples of real account assignment objects are cost centers, internal orders, production orders, profitability segments, etc. Note that profit centers are not real account assignment objects! y The master records of controlling objects contain a profit center field. When Profit Center Accounting is active, the various controlling objects are linked or assigned to the profit center identified in that field. This causes the system to generate a statistical posting (additional posting) in EC-PCA to that profit center whenever there is a debit or credit posting to the object. y Whenever there are postings within CO (allocations) which move revenues and/or costs between objects with different profit center assignments, Profit Center Accounting will be updated. The EC-PCA module keeps track of all internal value flows. y Sometimes a profit center cannot be determined automatically by the system during a transaction. In these cases, the system assigns a dummy profit center to the posting, in order to ensure that ECPCA has complete data. These costs can subsequently be moved to the correct profit centers.

© SAP AG

TERP10

15-14

Values

Sales Region

North

Product

Prod1

Product Group

Electronics

Customer

Cust1

Cust. Grp

Wholesale

Federal Land

Bavaria

Sales Rep.

Miller

C G US R T P. .

Characteristics

REGION S N W

Profitability Segment

Food Bicy. Electr. PRODUCT GRP

Value Fields Revenues

800

Sales, discounts and returns

100

Revenue Sales, discounts and returns

Cost of goods sold

650

Cost of goods sold


 SAP AG 2004

The system uses the combination of characteristic values to automatically create, during a posting, the affected market segment called the profitability segment. The profitability segment is generated automatically. Characteristics answer the question: “About what aspect do I want to report?”. Examples of characteristics are divisions, regions, products, and customers. Characteristic values answer the question: “What values can I have for the characteristics?”. Examples of characteristic values are Region south, Region North. Value fields answer the question: “Which key figures do I want to track and analyze?”. Examples of value fields include gross sales, surcharges, discounts, and cost of sales.

© SAP AG

TERP10

15-15

Organizational Structures and Master Data: Topic Summary

You are now able to: z Describe the various organizational units used by the management accounting function. z Explain the integration between the financial accounting and management accounting organizational structures. z Describe the master data utilized by management accounting.

 SAP AG 2004

© SAP AG

TERP10

15-16

Processes in Cost Center Accounting

At the conclusion of this topic, you will be able to: z Define the role of the cost center standard hierarchy and the various uses of cost centers. z Describe the typical planning steps for cost centers. z Define the various methods of planning against cost centers and the differences between them. z Explain the various methods posting to and allocating from cost centers.

 SAP AG 2004

© SAP AG

TERP10

15-17

Standard hierarchy represents all Cost Centers per Controlling area H1 IDES Europe H2000

H1000

H2300

H2100

UK

Germany

Spain

Portugal

H1010

H1200

H1200

H1400

Corporate

Finance & Administration

Sales & Marketing

Technical Department

H1110

H1120

H1210

H1220

H1230

Executive Board

Corporate Services

Admin.

Human Resource

Purchasing

1110

2100

2200

2300

Executive Board

Finance & Admin.

Human Resources

Purchasing

1200

1000

1210

1220

1230

Canteen

Corporate Services

Telephone

Motor Pool

Power

 SAP AG 2004

The cost center is an organizational unit in a controlling area representing a clearly delimited location where costs occur. You can make organizational divisions on the basis of functional, settlement-related, activity-related, spatial, and/or responsibility-related standpoints. Use cost centers for differentiated assignment of overhead costs to organizational activities based on utilization of the relevant areas (cost determination function) and for differentiated controlling of costs arising in an organization (cost controlling function). The cost center accounting component (CO-OM-CCA) tracks where costs occur in your organization. The cost center is an organizational unit in a controlling area. Cost centers can be defined according to several different design approaches. A typical approach could be for an enterprise to define a cost center for each low-level organizational unit that has responsibility for managing costs. As costs are incurred, they are assigned or posted to the appropriate cost center. These costs could include payroll costs, rent and utility costs, or any other costs relevant to a given cost center. The posting and assignment of costs to cost centers not only makes managerial accounting possible; but is a vital step for utilizing the other controlling components. Cost centers can be set up according to different design approaches, including: functional requirements, allocation criteria, activities or services provided, geographic location and/or area of responsibility. But whichever approach is selected, it should be consistent throughout the enterprise.

© SAP AG

TERP10

15-18

Cost Center Planning Process CO OM Overhead Costs Controlling HR FI AA

Cost center structure

Planned Calculatory Costs

CO PC

Admin. W-house Server

Prod.

$

$ Pres.

Maint

Cons.

$

$

Planned Quantities/ Prices

Sales

Overhead Costs Surcharges

Plan Allocations (e.g. assessment) Planned Activity Allocations

Transfer to Results

Formula Planning Manual Cost Element Planning

Planned Quantities

H1

Personnel Costs Planning Planned Depreciation

PP

CO PA

CO Cost Element CEL Planning

Planning to simulate internal cost flow and value creation  SAP AG 2004

The Cost Center Planning can be done manually or with the help of automatic procedures, such as formula planning. Planned values (such as planned personnel costs and planned depreciation) can also be transferred automatically to the Cost Centers from Human Resources HR and Assets Accounting (FI-AA). Both fixed and variable costs can be planned for each area of responsibility, i.e. for each Cost Center. The delimitation process means that calculatory costs can also be charged to the Cost Centers. Within the framework of distributions and assessments, costs that were planned on one Cost Center can be allocated according to keys (such as percentages, amounts or statistical key figures) predefined by the user. The advantage of this procedure is that it is easy to manage: the keys, as well as the sender and receiver relationships are usually defined only once. It is the aim of Cost Center Planning to calculate planning costs to define deviations later and to prepare the allocation to cost bearers. As a rule, planning is based on absorption costing, that is, you try to allocate all costs in the overheads area to the cost bearers in a company using different procedures. The activity type planning is an important step in Cost Center planning, as the planned activity amounts can influence planned costs. The amount of activities can be determined either manually or be transferred from other modules, such as Production Planning (PP). Therefore, the closing of the cost center planning also shapes price determination for the activities of the cost centers. The price per Cost Center/activity type is entered manually or, in cases of automatic price calculation, on the basis of the planned costs. As the activity amount is evaluated with this price, a combined quantity and value flow is the result of the allocation of an activity.

© SAP AG

TERP10

15-19

As an alternative to activity allocations, the Cost Centers can also be credited with the help of overhead rates or assessments. These procedures are also prepared in the plan and executed later in Actual. The Cost Centers are then each credited with the allocated amount. There is no binding sequence for the order of planning steps in Cost Center planning. SAP recommends, however, that certain general rules be observed, in order to guarantee a logical process that fulfils your requirements. Maybe you would like to adjust this sequence to the situation in your company.

© SAP AG

TERP10

15-20

Integrated Planning Process in mySAP ERP Strategic Procedure

Planned Requirements

Sales Planning

Sales

Profit Planning

Template Routing

Bill of Material

Cost of Goods Manufactured / Sold Material Cost Estimate

Production Planning Cost Center Planning Activity Input Quantity Process Input Quantity

Business Process

Activity Price Process Price

 SAP AG 2004

In the Sales Information System (SIS), the company can plan sales quantities at product or product group level for the following year. Similarly, sales quantity planning can be accomplished in Profitability Analysis. The sales plans can be compared with one another so that a single forecast can be transferred to Sales and Operations Planning (SOP). A capacity-based comparison of plan quantities with production resources then takes place in SOP. If the plan cannot be met, additional resources must be obtained or the sales plan must be changed. The activity requirements can then be created in SOP or Long Term Requirements Planning (LTP) and transferred as scheduled activities to cost center planning. In cost center planning, the plan activity quantities are created on the basis of scheduled quantities from SOP. Cost planning is performed for cost centers and internal orders, as well as additional activity planning for Overhead Cost Controlling. Planned costs from HR and Assets can be transferred to cost center planning. Plan activity prices are then calculated. The calculated plan activity prices go to Product Cost Planning, which estimates the production costs of the planned products by using bills of material and routings. The costs of goods manufactured that were calculated on the basis of the sales plan are then transferred to CO-PA. These costs are used, alongside the forecasted revenues, to create a profit plan. You can use the results of this plan to make adjustments to the original sales plan, which then initiate the complete integrated planning process again.

© SAP AG

TERP10

15-21

Posting from Financial Accounting to a Cost Center

FI

Cost origin: Cost center XY

Income statement account

Balance sheet account

~~

~~

CO

Controlling Object: Cost Center Cost Element (420000)

Amount

Cost Center Debit under a cost element

 SAP AG 2004

When a journal entry is created in FI that includes an expense line item, that expense can be posted to CO as a cost if: (1) a primary cost element has been created in CO that corresponds to the expense account used in the FI journal entry, and (2) a valid cost center is referenced in the FI line item. As a result, two separate documents are created: both an FI document as well as a CO document. Each document has a unique document number. It is possible to drill down in either document to link to the other. When an FI document is created that posts to an expense (or revenue) account having a corresponding cost element, and a valid controlling object (such as a cost center) is identified for the expense line item, a controlling document is also created. This CO document has its own unique number and contains the following details: (1) controlling object posted to, (2) the cost element used, and (3) the amount In the above example, the FI document debited a P&L account and credited a Balance Sheet account. The CO document debited the controlling object (using the corresponding primary cost element of the same number). Note that there is no corresponding credit entry in the CO document. When a primary cost is initially posted into CO, it is treated as a one-sided journal entry, unlike a traditional balanced financial accounting journal entry. (Note that as any subsequent cost movements occur within CO, the transactions creating these cost flows are balanced entries. When a cost is moved from one controlling object to another, such as from one cost center to another, the sending object is credited, and the receiving object is debited for the same amount.)

© SAP AG

TERP10

15-22

Posting from Materials Management to a Cost Center MM


Material issued from stock FI


Material consumption (400000)

Material stock

~~

~~

CO

Controlling Object: Cost Center Cost Element (420000)

Amount

Cost Center Debit under a cost element

 SAP AG 2004

Goods issue transactions posted in the Material Management component can be assigned to a cost center. An example could be parts issued to an R & D cost center for constructing a product prototype. From the aspect of the cost center, this type of transaction is called material consumption. When you enter a goods issue in the system, you must enter a movement type to differentiate between the various categories of goods movements. A movement type is an identification key which has important control functions in Inventory Management, such as updating stock and consumption accounts. A goods issue to a cost center creates an FI transaction that debits a material consumption expense account and credits a material stock (inventory) account. The cost center is debited with the value of the goods issued using a primary cost element.

© SAP AG

TERP10

15-23

Direct Activity Allocation

10 h IT-services

Manufacturing

3h

Program ming

Administration

5h Activity Allocation xxxxxxx

………

………

Cost Center.

activity

Program

PrgH

Program Program

PrgH PrgH

quantity Rec.CC 10 3 5

Order Order Sales Order

Order

Produktion KService Project 1

 SAP AG 2004

Direct activity allocation deals with the measurement and allocation of a quantity of activity type units produced by a cost center. To enter a direct activity allocation, you record the cost center providing the service (sender cost center), the object receiving the service (receiver), the type of service performed (activity type), and the quantity of service provided. Note that only a cost center can be the sender on an activity allocation. The receiver can be any real controlling object, such as a cost center, order, project, and so on. Direct activity allocation credits the sender cost center and debits the receiver object. Debits and credits use a secondary cost element (category = 43). The allocation is valued by multiplying the quantity of activity produced by the planned activity price. A direct activity allocation is documented by creating line items from the perspectives of both sender and receiver.

© SAP AG

TERP10

15-24

Periodic Allocations with Sender/Receiver Relationships

Receiving Cost Center “Administration"

Sending Cost Center “Energy" Costs to be allocated: Material Wages

3000 4000

Tracing factor: M² Floor Space

Receiving Cost Center “Production"

Examples for periodic allocation techniques: z z z z

M² Floor Space: 40 Allocated Costs: Material 300 Wages 400

M² Floor Space: 360 Allocated Costs: Material 2700 Wages 3600

Periodic Reposting Assessment Distribution Indirect Activity Allocation

z Template Allocation  SAP AG 2004

This is an example of a Sender-Receiver relationship within an Allocation Cycle. The same principle applies to Periodic Repostings, Distributions and Assessments. y Here, the sending Cost Center has costs to allocate to the receiving Cost Centers. This allocation will be done using an appropriate Tracing Factor (a user-defined key for determining cost and quantity assignments in periodic allocations, in this case a Statistical Key Figure representing the Number of M² Floor Space that each Receiving Cost Center occupies). y The allocation cycle uses this information to determine the costs to be allocated to each Receiving Cost Center as follows: Receiving Cost Center “Administration” occupies 40 M² Floor Space Receiving Cost Center “Production” occupies 360 M² Floor Space Total number of M² Floor Space is 400 Therefore, “Administration” is allocated costs of; Material Costs = (40/400) * 3000 = 300 Wages Costs = (40/400) * 4000 = 400

© SAP AG

TERP10

15-25

Example for a periodic Allocation: Assessment 420000 Direct Labor January 416100 Electricity

3100 - Cafeteria 420000 6,000.416100 1,000.612000 2,000.∑ 9,000.631000 -9,000.Assessment (Cafeteria)

612000 Maintenance

Allocation Rule: Statistical key figure (Employees) Employees 30 stat. KF

Employees 10 stat KF

Employees 50 stat KF

1000 - Corporate Services

1220 - Motor Pool

3200 - Marketing

631000 +3,000.-

631000 +1,000.-

631000 +5,000.-

 SAP AG 2004

An Assessment is designed for the allocation of primary and secondary costs from a sender cost center to receiver controlling objects. Only cost centers or business processes may serve as senders in an assessment allocation. The receivers on an assessment can be other cost centers, WBS elements, internal orders, cost objects, or business processes. You can restrict the allowed receiver types in Customizing. Primary and secondary costs are allocated at period-end closing according to rules defined in the assessment cycle. In the example above, the allocation rule uses statistical key figures to determine the allocation amount for each receiver. Other rules are also available, depending on your requirements. Each segment of an assessment cycle is assigned an assessment cost element (secondary cost element category 42). All costs allocated in an assessment are classified on the receiver(s) with these assessment cost elements. Alternatively, you can use an allocation structure to define which cost elements are to be allocated under which assessment cost elements. You can assign individual cost elements, cost element groups or intervals to an assessment cost element. The allocation structure can be stored during segment maintenance. Similar periodic allocations are: Distribution, Periodic Reposting, Indirect Activity Allocation or Template Allocation. Line items are recorded for the sender and receiver sides in order to document the allocations in detail. The original cost elements are not displayed on the receivers; therefore, an assessment allocation is useful when the breakdown of costs is unimportant to the receiver. Similarly to a distribution, an assessment updates the partner in the totals record. An assessment can be reversed and repeated as often as desired.

© SAP AG

TERP10

15-26

Cost Center Accounting: Topic Summary

You are now able to: z Define the role of the cost center standard hierarchy and the various uses of cost centers. z Describe the typical planning steps for cost centers. z Define the various methods of planning against cost centers and the differences between them. z Explain the various methods posting to and allocating from cost centers.

 SAP AG 2004

© SAP AG

TERP10

15-27

Internal Order: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the typical planning steps for internal orders. z Explain the various methods posting to and allocating from internal orders.

 SAP AG 2004

© SAP AG

TERP10

15-28

Posting to an Internal Order

FI


Income statement account

Balance sheet account

~~

~~

CO

Controlling Object: Internal Order

Order Order Internal

Cost Element (420000)

Amount

Order

Debit under a cost element

 SAP AG 2004

An internal order is a bucket that allows a better view of costs that could not be itemized in detail in a cost center. An order can be real or statistical (informational postings only). If it is a statistical posting, the cost object that the internal order is attached to would receive the real posting.

© SAP AG

TERP10

15-29

Order Settlement

Possible Settlement Receivers

Orders Settlement Debits % Credits Order Balance

Options: z Cost element specific via settlement cost element z Settlement rule to all cost elements or differentiated based on origin layout z Distribution: %/amount/ equivalence number z Based on settlement hierarchy

z z z z z z z

Cost Center Order Project Profit. Segment G/L Account Asset Customer Order With Cost Collector . . .

 SAP AG 2004

Internal orders are usually used as an interim collector of costs and an aid to the planning, monitoring, and reporting processes. When the task is complete, the costs have to be passed on to their final destination (cost center, fixed asset, profitability segment, ... etc.). This process is called "settlement". It is another form of periodic cost allocation. Settlement may occur at the end of each period, or at the end of the order's life, depending on the type of order and its business purpose. An order settlement can be made to numerous different types of receivers, as long as the receivers are defined as valid in customizing and no impending system restrictions (such as locks) prevent settlement. Examples of possible settlement receivers include cost centers, other orders, projects, profitability segments, fixed assets, and G/L accounts. A settlement rule must be defined for each order. This rule is defined in the order master record. It may specify that all of the costs on the order are settled to a single receiver, or may be split to multiple receivers. Settlement can be structured quite flexibly with the use of the many available settlement options.

© SAP AG

TERP10

15-30

Internal Order: Topic Summary

You are now able to: z Describe the typical planning steps for internal orders. z Explain the various methods posting to and allocating from internal orders.

 SAP AG 2004

© SAP AG

TERP10

15-31

Profit Center Accounting: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain how profit centers are a part of integrated planning. z Explain how balance sheet items relate to profit centers. z Define the purpose of allocations in profit center accounting.

 SAP AG 2004

© SAP AG

TERP10

15-32

Integrated Planning in Profit Center Accounting

Profitability Analysis Projects Networks

Internal Order

PC

Profit Center Plan Sales Discounts Cost of Sales Marketing Costs Administration Costs ….

100,000 5,000 50,000 10,000 15,000

MRP/SOP t

Cost Center

Business Process

 SAP AG 2004

Profit center planning is an integral part of overall business planning. Profit centers illustrate particularly well the integrated nature of business planning because the planning data is essentially generated by other applications and supplemented/modified in profit centers. Profit center planning is part of short-term planning that covers one fiscal year. During the planning process, the individual planning areas are combined into an integrated planning network. You can use different plan versions to account for changes during the planning process or to enable different planning scenarios to be used for a given time frame. Profit center planning involves two steps. First, the planning data is transferred to the profit centers from cost centers, internal orders, profitability analysis, and product cost planning. The planning data can then be modified directly in the profit centers.

© SAP AG

TERP10

15-33

Balance Sheet Items in Profit Center Accounting EC-PCA

Online


z Assets

z Assets

z Work in Process

z Work in Process

z Inventory Values

z Inventory Values

z Down Payments

z Down Payments z Receivables z Payables

 SAP AG 2004

If you assign balance sheet items to profit centers, the profit center manager is responsible not only for the operating results, but also for its fixed assets, for example. Profit centers, therefore, can also be used as investment centers. You can also calculate additional key figures, such as return on investment. You can transfer the following balance sheet items to profit centers: y Fixed assets (acquisition costs and accumulated depreciation) y Material stocks (raw materials, semi finished products, and finished products) y Work in process y Payables and receivables

© SAP AG

TERP10

15-34

Profit Center Accounting: Topic Summary

You are now able to: z Explain how profit centers are a part of integrated planning. z Explain how balance sheet items relate to profit centers. z Define the purpose of allocations in profit center accounting.

 SAP AG 2004

© SAP AG

TERP10

15-35

Profitability Analysis: Topic Objectives

At the conclusion of this topic, you will be able to: z Define the purpose of profitability analysis. z Explain the role of planning in CO-PA. z Describe postings to a profitability segment. z Explain how to use the drilldown report capability in CO-PA. z Define the function of period-end closing for profitability analysis.

 SAP AG 2004

© SAP AG

TERP10

15-36

Profitability Analysis – An External View The goal of CO-PA is to determine the profitability of market segments: Company

Market

Key Sales Figures: Revenues, Cost of Sales...

Market Segments: Customer, Product, Product Group, Distribution Channel

Billing Document in Sales Order Management

Profitability Analysis in Management Accounting

 SAP AG 2004

Profitability Analysis (CO-PA) enables you to analyze profits and contribution margins for market segments of your company. The objective of CO-PA is to support sales, product management, and corporate-wide planning and decision-making, using an external view from a market-oriented perspective. The market segments are defined in terms of characteristics such as products, product groups, customers, customer groups, geographic areas, etc. For example, you may wish to analyze profitability for a specific group of products that you sell to a particular customer (or group of customers). When setting up CO-PA for use in your company, you will have broad flexibility to choose whichever characteristics are relevant for defining your company's market segments. Each unique combination of characteristic values (e.g. sales of product A to customer Y) defines a profitability segment. You must also decide which specific values related to profitability should be analyzed for those segments. These values are known as key figures. For example, you can define which types of revenue and expense/cost categories should be used to determine a value for gross margin according to your company's requirements. Here again, CO-PA gives you the ability to freely select whichever values are relevant to the various users in your company. If different types of users define gross margin differently (e.g. sales management vs. product management), it is possible to provide separate gross margin figures for each, calculated according to their individual requirements. CO-PA provides a multidimensional reporting tool that can be used to design reports that analyze data for any selected market segments, and any defined measures of profitability.

© SAP AG

TERP10

15-37

Profitability Analysis – Planning

Sales Organization Time frame from … to ... Version Industry

Product

Quantity

Revenue

COGS

Media

1000

3000

2000

Software

5000

4000

3000

Pharma

3000

1000

800

 SAP AG 2004

Because of the contents and level of detail of individual plans can vary according to role and area of responsibility, the planning framework enables you to structure your plan by planning level and content, which you can allocate to the individual responsible. The planning hierarchy is displayed in a tree structure. You can execute nearly all planning functions directly from the planning framework from modeling the planning process to monitoring planning tasks and entering plan data manually. To support the individual steps of the planning process, the planning tools for Profitability Analysis provide numerous planning functions and planning aids that you can use to create and change plan data. Included are both automatic functions that create and change data for the whole plan and manual functions for entering plan data manually. Alternatively, you can enter plan data decentrally in Microsoft Excel and then reload it to the SAP system.

© SAP AG

TERP10

15-38

CO-PA – Top Down Distribution Plan Values Product Group Pumps

Revenues

Distribution Value

3000

Reference Data Product Product Group

Sales Qty 1999

P1

Pumps

100

P2

Pumps

200

Operating Profit: Distribution Values Product

Product Group

Revenues

P1

Pumps

1000 +1/3*3000

P2

Pumps

2000 +2/3*3000

Operating Profit

 SAP AG 2004

With top-down distribution, data planned at one level in CO-PA is distributed to other levels. Distribution takes place on the basis of reference data, which can be planning data or actual data from CO-PA. One example of top-down distribution is planning values at the product group level and then distributing these values to the individual products in that group. Another example might be planning values at the individual product levels, and then distributing those values to the plants where the products are sold. Plan values can be distributed on the basis of reference data by period or across periods. If periodindependent reference data is used as the basis for distribution, the distribution percentages are aligned across the periods for the receivers. When performing top-down distribution, you have to specify the field(s) in the reference data whose values are to be used as the distribution basis. In the example shown above, revenue for the product group is distributed to the individual products belonging to this group. The values in the Sales Quantity field serve as reference data. The value 100 is used as the distribution base for product P1 and 200 is used for product P2.

© SAP AG

TERP10

15-39

Sample CO-PA Drilldown Report Sales Quantity

Reporting Dimensions

z Sales revenue Customer discount Sales commission Direct sales costs

Region

Customer

Area

Product Sales Office

z Net revenue Direct material costs Variable production costs

z Contribution margin I Material overhead costs Fixed production costs

Answers Profit Analyses Market Segments Revenue

z Contribution margin II

fit Pro Cost.

Variances

z Contribution margin III ss Lo

Overhead

z Operative profit  SAP AG 2004

The above example shows how you can quickly analyze your data: y When creating drilldown reports, both characteristics and value fields are selected. y You place the characteristics in a sequence, creating a hierarchy. The selected characteristic combination makes it possible to access all the profitability segments that meet your selection criteria. Three characteristics, each with three different characteristic values, have a potential of defining up to 27 profitability segments (not all of which necessarily exist). The diagram above utilizes a cube to represent this example, with each characteristic appearing as one of the three dimensions of the cube. y You can navigate anywhere within the hierarchy. You can analyze all 27 profitability segments as a combined whole, or choose one characteristic and look at that part of the data. If you choose one value for each of the three characteristics, you can look at exactly one of the 27 elements of the cube.

© SAP AG

TERP10

15-40

Period-End Closing – Assessment of administrative costs

Cost Center Administration 400000 430000

630000

20,000 30,000 50,000

Assessment

- 50,000

Allocation Rule: Fixed percentages per product line

CO PA Value Field: Admin Costs 50,000

 SAP AG 2004

Allocation of Overhead costs to Profitability Analysis is separate and distinct from the Overhead Cost allocation cycles in cost center accounting. Overhead costs can be assessed to CO-PA using CO-PA specific assessment cycles. This function makes it possible to transfer costs from production cost centers as well as the costs in sales and administrative cost centers to Profitability Analysis. These costs are always transferred to a single profitability segment. Production cost centers: These cost centers are first credited during production as the activities they perform are required (machine hours, assembly hours, and so on). The amount of the credit is based on the activity quantities confirmed by production and the activity unit prices. To be reflected in CO-PA, any over or under absorption that remains in the production cost center must be passed on to the appropriate profitability segments. Sales and Administration cost centers: Sales, general, and administrative cost centers can transfer any remaining costs to CO-PA at the end of each period.

© SAP AG

TERP10

15-41

Profitability Analysis: Topic Summary

You are now able to: z Define the purpose of profitability analysis. z Explain the role of planning in CO-PA. z Describe postings to a profitability segment. z Explain how to use the drilldown report capability in CO-PA. z Define the function of period-end closing for profitability analysis.

 SAP AG 2004

© SAP AG

TERP10

15-42

Product Costing: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe the product cost planning overview. z Describe how to update the standard cost estimate on a material master.

 SAP AG 2004

© SAP AG

TERP10

15-43

Product Cost Planning: Overview Costing structure

Detail list

Error log for all messages or specifically for a cost estimate

Header Data z z z z z

Master data Valuation Quantity structure History Costs Report

The results of a material cost estimate: z z z

Cost component split Itemization Costed multilevel BOM.

Which views should first be displayed in the header data Which view should be displayed in the detailed reports Which lot size should be displayed: z z z

Costing lot size Price unit Free: quantity, unit of measure

 SAP AG 2004

When you create a cost estimate with a quantity structure, you must enter the costing variant, the material, the plant, and the lot size. The dates are proposed from the costing variant and specify the following: (1) the period of validity of the cost estimate, (2) the selection date for the bill of material and routing, and (3) the pricing date for the material components and activities. The costing results can be saved and displayed as itemizations, cost element itemizations, or cost component splits. The itemization shows detailed information about the origin of the costs, such as the quantities and prices of the materials and internal activities used. The cost element itemization groups the individual costing items into the cost elements. The cost elements group the costs in order of appearance. Cost elements are determined via account determination for materials, via activity type master record or via activity type planning for activities, and via the process master record for processes.

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Material Master: Prices

View: Costing/Accounting Material Master Prices z Planned prices 1, 2, and 3 z Tax-based prices z Commercial prices z Price control

S price Link to standard cost estimate

 SAP AG 2004

Planned prices 1, 2, and 3. These can be used for raw materials and purchased parts, and to valuate the materials in the cost estimate. Tax-based and commercial prices. These prices are entered for purchased parts in inventory costing for values such as the determination of lowest value. An inventory cost estimate can use these prices for valuation, and then update the costing results for finished and semifinished products in these fields. Price control. Indicator that controls which price is used to valuate the inventory of a material. The following options are available: y Standard price y Moving average price These prices are used to valuate goods movements within R/3 and to valuate inventories. A standard cost estimate can be used to update the standard price. You can branch from the accounting and costing views to the results of standard cost estimates. These results update the standard price.

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Integration: Standard Price and Std Cost Estimate Material Inventory z Standard price

Manufacturing Order

Inventory valuation

Valuation of goods movements

z Standard cost estimate

Benchmark for Cost Object Controlling/variance calculation

Cost of Sales

CO PA

Itemization required

Used in Profitability Analysis to show the cost of sales by valuating the quantity billed

 SAP AG 2004

Price control plays a crucial role in material valuation. When the price control indicator is set to S, the inventory is valuated at standard price. In addition, goods movements are valuated directly in the R/3 System using a price selected in accordance with the price control indicator. If the standard price was updated by a standard cost estimate, it can be used in Cost Object Controlling. The system can use the itemization of standard cost estimates to determine the target costs for manufacturing orders. The difference between target cost and actual cost can be analyzed at the level of variance categories, such as quantity or price variances. The saved itemization provides the basis for the variance calculation. In Profitability Analysis, you can use standard cost estimates (or other material cost estimates) to compare the revenues of the billed quantity with the cost component split of the product. A standard price is also required in the Material Ledger to determine the actual price.

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Product Costing: Topic Summary

You are now able to: z Explain the purpose of the standard price and standard cost estimate. z Describe the product cost planning overview. z Describe how to update the standard cost estimate on a material master.

 SAP AG 2004

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Reconciliation Ledger: Topic Objectives

At the conclusion of this topic, you will be able to: z Explain the purpose of the reconciliation ledger. z Describe the basic cost flow and structure of the reconciliation reports.

 SAP AG 2004

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Reconciliation Ledger Overview Primary Posting Allocation

External Accounting

Reconciliation

Reconciliation Ledger

Internal Accounting

Controlling Objects FI Organizational Units Company Code, Business Area, Functional Area  SAP AG 2004

Data from internal and external accounting must be reconcilable. One of the main functions of the reconciliation ledger is the reconciliation of postings: y Postings in FI are automatically transferred to the relevant CO module for cost accounting purposes (online and in real-time). The CO totals in the reconciliation ledger are updated for these postings. y If amounts are allocated within CO using company codes, functional areas or business areas, then this information must be transferred back to FI. The R/3 System does not automatically send this data to FI. The CO totals in the reconciliation ledger, however, are automatically updated for these postings. y You can use the reconciliation ledger to make a posting that synchronizes the FI data with the CO postings. You can decide whether to activate the reconciliation ledger in the R/3 System or not. In addition to the reconciliation of FI and CO data, the reconciliation ledger can be used for the following: y CO Overall cost analysis without long processing times y Navigation help and access to CO via the profit & loss account.

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Reconciliation Reports

FI

Difference (e.g. from reposting)

OK

General Ledger

CO

Reconciliation Ledger

Reconciliation Report for company code 3000 Account 400000 415000

FI 200000 500000

CO 150000 500000

Balance 50000 0

 SAP AG 2004

Special cost element reports are supplied in the SAP R/3 System for evaluating the reconciliation ledger. You can use these reports to compare the values in internal and external accounting, display the costs incurred for each object class, and see the cost flows between company codes. You use the cost flows overview report to document the cost flows in Controlling, as well as the reconciliation postings. This report displays all the cross-company-code, cross-business-area or cross-functional-area cost flows in Controlling. You can use the data in the reconciliation ledger to make interesting analyses using other reports (including your own).

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Reconciliation Ledger: Topic Summary

You are now able to: z Explain the purpose of the reconciliation ledger. z Describe the basic cost flow and structure of the reconciliation reports.

 SAP AG 2004

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Optional Unit: Activity Based Costing

At the conclusion of this topic, you will be able to: z Describe the basic cost flow of activity based costing. z Describe the allocation approaches for activity based costing. z Define the tools for resource and process cost assignment.

 SAP AG 2004

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Model of Activity-Based Costing Processes

Products

Processes

ABC

Processes

Product Families Customers Distribution Channels ...

CO-CCA

 SAP AG 2004

Traditionally, overhead costs are allocated from cost centers to cost objects through various methods, such as surcharges and activity allocations. By contrast, Activity-Based Costing assigns costs to business processes, without regard for which organizational units may be involved in generating those costs. A process is a cross-functional object, which can pull resources from any cost center in a controlling area. In ABC, all overhead costs are still assigned to cost centers. The cost centers that utilize resources in carrying out a process allocate the cost of those resources to the process. (Example: a Purchasing cost center would allocate costs it incurred in preparing and distributing a Request for Quotations to a Procurement business process.) The processes are then consumed by cost objects (such as production orders) and the related costs are allocated to those cost objects. Process costs not related to cost objects are passed along to CO-PA in order to provide a more accurate and complete accounting of overhead costs. Cost Center Accounting answers the question of where costs occur, whereas Activity-Based Costing answers the question of why (for what purpose) costs occur.

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Basic Cost Flow of Activity Based Costing Cost Center

AT

1

AT

2

Resource Assignment

Process Process Assignment

Internal Order


Product Cost Object

 SAP AG 2004

“Resource Assignment” means allocating costs from cost centers to processes. R/3 includes several methods to accomplish these allocations. Any combination of these allocation methods may be used. “Process Assignment” means allocating costs from processes to cost objects or profitability segments. R/3 includes several methods to accomplish this allocation. Any combination of these allocation methods may be used.

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Activity Based Management Push Approach

Pull Approach

Financials

Financials

Cost Assignment

Cost Assignment

Cost Assignment

Cost Center (Resources)

Pull quantity

Process Cost Assignment

Process Pull quantity Products, Customers Channels, etc.

Products, Customers Channels, etc.

Charge Quantity * Price

Cost Center (Resources)

 SAP AG 2004

Expenses in FI are first assigned as costs in CCA, which are then allocated either by a value flow or quantity flow to processes. The advantage of dealing with quantity flows in the context of ABC is that costs are not just distributed by using tracing factors from the cost center resources to the processes, products, or profitability segments. Instead, resource quantities are pulled automatically by the corresponding objects as they are consumed. This methodology is the basis for Activity Based Management, or ABM. ABM allows you to identify idle capacity of overhead resources at the cost center level. It also simulates changes in capacity usage when the sales quantity plans are modified in the CO-PA component. As a result, overhead resources can be leveraged more effectively. By multiplying the process quantities by the process price you can not only identify the cost of the consumed quantities but the cost of unused capacities as well.

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Activity Based Costing: Topic Summary

You are now able to: z Explain the purpose of activity based costing. z Describe the basic cost flow of activity based costing. z Describe the allocation approaches for activity based costing. z Define the tools for resource and process cost assignment.

 SAP AG 2004

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Management Accounting: Unit Summary

You are now able to: z Define the organizational structures and master data used in Management Accounting z Explain the functions of the different Controlling components z Identify the other mySAP ERP processes that post data to Management Accounting z Explain the purpose of the Reconciliation Ledger z Identify the integration points between Financial Accounting, Materials Management, Production Planning, Sales and Distribution, Project Systems, and Human Resources z Perform cost analysis using different Management Accounting tools  SAP AG 2004

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Management Accounting: Exercises Unit: Management Accounting Topic: Organizational Structures and Master Data • Cost elements • Cost Centers • Cost Center group (user-defined) • Activity Types • Statistical Key Figures • Internal Order You will be tracing through the steps of managing cost centers and internal orders. In order to effectively manage, the master data needs to be created initially and then later, planning, postings, and period-end closing can be reviewed.

1-1

Create a new cost element. 1-1-1 Create a secondary cost element 6200## in the CO Europe controlling area (1000). Make sure that the cost element is valid for the entire fiscal year. Name the cost element DAA Check Assets and assign the cost element category 43. Save the new cost element. 1-1-2 How can you use this cost element in the system? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ ____________

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1-2

Create two cost centers in the CO Europe controlling area (1000) and the German subsidiary company code (1000): an internal service cost center and a production cost center. Make sure that the cost centers are valid the entire fiscal year and are assigned to the HAC040 node on the standard hierarchy. 1-2-1 Cost center SERV-##, Group ## Services, is a service cost center category (H), which will be assigned to the Corporate other business area (9900) and the Internal Services profit center (1400). Save your cost center master data. 1-2-2 Cost center PROD-##, Group ## Production, is a production cost center category (F), which will be assigned to the Mechanical engineering business area (1000) and the High Speed Pumps profit center (1010). Save your cost center master data.

1-3

Create a cost center group to work with your two new cost centers collectively. Name your cost center group CENTERS-##, with the description Group ## Cost Centers, and assign your production and service cost centers (PROD-## and SERV-##). Do not assign your cost center group to the standard hierarchy.

1-4

Create an overhead order for detailed controlling of all costs related to a trade fair in which the production cost center participates. The costs will be settled each accounting period to this cost center. 1-4-1 Enter the master data information for the trade fair order. Use the Int. Order – Marketing order type (0400). Name your order Trade Fair Group ## and assign it to the Corporate other business area (9900) and Internal Services profit center (1400). Identify your production cost center (PROD##) as the responsible cost center. Do NOT save your order yet. 1-4-2 Create a periodic settlement rule to settle 100% of the actual costs to your production cost center (PROD-##). Save the order.

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Exercises Unit: Management Accounting Topic: Cost Centers

• Postings • Period-End Closing • Reporting

2-1

Post an expense in the General Ledger (FI) to a cost center and review the costs that are transferred into CO. 2-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit (posting key 40) of 5000 to G/L account 403000. Specify that the offsetting credit (posting key 50) is to G/L account 113100. What error message is displayed? 2-1-2 Enter SERV-## in the cost center field to charge the raw materials costs to your service cost center. Enter an * (asterisk) for the credit posting to default in the appropriate amount. Post the document. 2-1-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). 2-1-4 Drill down to the original document. What type of document is displayed?

2-2

Record the consumption of a material by a cost center in Inventory Management (MM). Review the costs that are transferred into CO. 2-2-1 Enter a goods issue for your service cost center (SERV-##). Use movement type 201 and get 20 pieces of material T-T200 from storage location 0001 in the Hamburg plant (1000). 2-2-2 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). 2-2-3 Drill down to the original document. What type of document is displayed? 2-2-4 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). Review the quantity and cost flows out of the service cost center.

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2-3

Create an assessment cycle and segment to allocate your service cost center costs to the production cost centers that it supported. 2-3-1 Create an actual assessment cycle AAC-##, which starts on the first day of the current fiscal year. Call the cycle Group ## Assessment. Use the menu path “go to” to create an assessment run group with the name GR##. 2-3-2 Attach a segment ASSESS##, with the description Service ## Assessment and corporate services assessment cost element (631300). Allocate 100% of the actual posted amounts from your sender cost center. The basis (tracing factor) rule is to allocate fixed percentages. 2-3-3 The sender of the allocation is your service cost center (SERV-##). Specify the allocation of cost element group OAS. The receiver of this allocation is cost center group HAC040. 2-3-4 Go to the tracing factor screen to establish an allocation of 5% of the costs to cost center PROD00 and 95% to cost center PROD-##. Perform a formal check of your cycle and segment. Save the cycle and add to cycle run group Gr##.

2-4

Process the actual assessment for your service cost center. 2-4-1 Execute the assessment in test for your cycle (AAC-##) and the current period. Select processing with Detailed lists. 2-4-2 Execute the assessment in production to post your allocation. (De-select processing with a Test run.) 2-4-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0 to view the effect of the assessment on your service cost center (SERV-##). What is the balance on your cost center?

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Exercises Unit: Management Accounting Topic: Internal Orders

• Postings • Period-End Closing • Reporting

Internal orders usually act as interim cost collectors and as an aid for planning, monitoring, and reporting transactions. Once the order postings are complete, the costs must be settled to their final destination (cost center, fixed asset, profitability segment, and so on). 3-1

Post an expense in the General Ledger to the trade fair order. 3-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit of 5,000 to G/L account 415000. Specify that the offsetting credit is to G/L account 113100. 3-1-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). 3-1-4 Drill down to the original document. What type of document is displayed?

3-2

(OPTIONAL) You have completed the actual postings on your trade fair order. Now settle it to the production cost center that is responsible for the costs incurred. 3-2-1 Carry out an actual cost settlement for your trade fair order. For the settlement and posting periods, use the current period. 3-2-2 Run the Orders: Actual/Plan/Variance report for the current period and plan version 0 to see how the settlement affects your cost center. Run the report for the trade fair order.

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Exercises Unit: Management Accounting Topic: Profit Center Accounting

• Postings • Reporting

Before you can analyze your profits by profit center, the system must summarize all of the revenue and expense profit-related postings in Profit Center Accounting. If you assign balance sheet items to profit centers, the profit center manager is responsible not only for the profit center’s operating results, but also for it’s fixed assets, for example. Profit center, therefore, can also be used as investment centers.

4-1

(OPTIONAL) Post an expense in the General Ledger (FI) to the production cost center and review the costs that are transferred into CO, specifically to the profit center. 4-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit of 5,000 to G/L account 415000. Specify that the offsetting credit is to G/L account 113100. 4-1-2 Review the document posted to analyze the profit center document created. 4-1-3 Process the Profit Center List: Plan/Actual report for the current period and plan version 0. Execute the report for the profit cost center (1010).

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Exercises Unit: Management Accounting Topic: Profitability Analysis

• Postings • Reporting

CO-PA lets you analyze the profitability of different segments of your operative business -defined according to products, customers, orders, or any combinations or groups of these -- or organizational units, such as company codes or business areas. The aim of CO-PA is to provide the accounting department and decision-makers in sales, marketing, product management and corporate planning with information about the market. You can define the master data and basic structures in CO-PA flexibly to meet your company’s specific requirements.

5-1

(OPTIONAL) Create an actual line item directly in Profitability Analysis and then display the associated document. 5-1-1 Create a profitability analysis document for revenue and cost of goods sold for customer (1000) and product (R-F1##) in currency (EUR). 5-1-2 Display the line items in profitability for the document posted in the preceding step.

5-2

Produce a report in Profitability Analysis for the IDES Worldwide operating concern (IDEA). Process the Contribution Margin report AC040 for the current fiscal year and plan version 100 to view the results for different market views. 5-2-1 Drill down to view the results for the Hamburg plant (1000). What is the gross revenue for this view? 5-2-2 Drill down from the plant 1000 report to view material R-F1## and customer 1000. What is the actual gross revenue for this view?

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Exercises Unit: Management Accounting Topic: Product Costing

• Planning • Reporting • Price update

When using product costing with quantity structure, costs are calculated for a material via automatic derivation of the quantity structure from bills of material and routings or the master recipe, or from network resources. If certain prerequisites exist, the results can be updated in the standard price field or in another price field of the material master record.

6-1

Display the most current cost estimate for material R-F100 in plant 1000 that has the status FR (released without errors) and is valid on today’s date. Use costing variant PPC1 and costing version 1. 6-1-1 The manufacturing engineer wants to know how many units the setup costs are based on. Therefore, determine the costing lot size. _____________________________________________________________ _______________________________________________ 6-1-2 The costs are usually determined per unit. Set the cost base so that the cost per 1 piece is displayed. Select this setting so that you can answer the following questions. 6-1-3 In which posting period was the cost estimate created? In which fiscal year was the cost estimate created? _____________________________________________________________ _______________________________________________

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Exercises Unit: Management Accounting Topic: Activity Based Costing

• Planning

One of the company’s objectives is to minimize the application of overhead. For this reason, the company wants to use ABC business process allocation to allocate the costs from the overhead controlling area with the production controlling area.

7-1

(OPTIONAL) Display your standard cost estimate from the previous exercise (material R-F1##, costing variant PPC1). Which process template is this costing based on? Look this up on the Valuation tab page. 7-1-1 Display your standard cost estimate. 7-1-2 On the Costs tab page, change the costing to the display of costs of goods sold. 7-1-3 Select layout 1SAP06 from the itemization (grouped by operations). To which costs and quantities has overhead been applied for the automatically allocated processes? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _________________________________

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7-1-4 On the Costs tab page, change the costing to the display of cost of goods manufactured. To which costs has overhead been applied for automatically allocated processes now? What conclusion do you draw? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _________________________________ 7-1-5 Notice the system valuates process 300900 with a value of 12 EUR. Where did this value developed?

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Exercises Unit: Management Accounting Topic: Reconciliation Ledger

• Reconciliation • Cost Flows

The reconciliation ledger monitors the cost allocations in Management Accounting and proposes entries in FI that reflect transfer between controlling objects of differing company code, business areas, and functional areas.

8-1

(OPTIONAL) In the Cost Element Information System, run the appropriate report to analyze cost flows between business areas. Look at the cost flow between the business areas to which our production and service cost centers are assigned (1000 and 9900, respectively). 8-1-1 Run the Cost Element report for allocations between business areas for the current period for all business areas in controlling area 1000. 8-1-2 To view the appropriate report, set the business area to 1000 (Mechanical Engineering) and the trading partner business area to 9900 (Corporate Other). Explain the data displayed.

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Management Accounting: Solutions Unit: Management Accounting Topic: Organizational Structures and Master Data

1-1

Create a new cost element. 1-1-1 Create a secondary cost element 6200## in the CO Europe controlling area (1000). Make sure that the cost element is valid for the entire fiscal year. Name the cost element DAA Check Assets and assign the cost element category 43. Save the new cost element. Accounting → Controlling → Cost Center Accounting → Master data → Cost element → Individual processing → Create secondary If prompted, enter 1000 as the Controlling Area. Enter 6200## in the Cost element field. Enter the first day of the current fiscal year in the Valid from field. Enter the last day of the current fiscal year in the To field. Select the Master Data icon Select Basic tab. Enter DAA Check Assets in the Name field. Enter 43 in the CElem category field. Select Save. 1-1-2 How can you use this cost element in the system? By defining the cost element as a cost element category 43, you determined that it will be used for internal activity allocations. Internal activity allocations result in the flow of costs from a cost center to other controlling objects (cost centers, overhead orders, production orders, and so on) based on the number of units of activity provided by the sender to the receiver. The allocated costs are posted using this type of cost element.

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1-2

Create two cost centers in the CO Europe controlling area (1000) and the German subsidiary company code (1000): an internal service cost center and a production cost center. Make sure that the cost centers are valid the entire fiscal year and are assigned to the HAC040 node on the standard hierarchy. 1-2-1 Cost center SERV-##, Group ## Services, is a service cost center category (H), which will be assigned to the Corporate other business area (9900) and the Internal Services profit center (1400). Save your cost center master data. Accounting → Controlling → Cost center Accounting → Master data → Cost Center → Individual processing → Create Enter SERV-## in the Cost center field. Enter the first day of the current fiscal year in the Valid from field. Enter the last day of the current fiscal year in the To field. Select the Enter icon Select Basic tab. Enter Group ## Services in the Name field. Enter any name in the Person responsible field. Enter H in the Cost center category field. Enter HAC040 in the Hierarchy area field. Enter 1000 in the Company code field. Enter 9900 in the Business area field. Enter 1400 in the Profit center field. Select Save. Remain in the Create Cost Center: Initial screen for the next exercise. 1-2-2 Cost center PROD-##, Group ## Production, is a production cost center category (F), which will be assigned to the Mechanical engineering business area (1000) and the High Speed Pumps profit center (1010). Save your cost center master data. Enter PROD-## in the Cost center field. Select the Enter icon Select Basic tab. (Validity periods should remain from the first cost center.) Enter Group ## Production in the Name field. Enter any name in the Person responsible field. Enter F in the Cost center category field. Enter HAC040 in the Hierarchy area field. Enter 1000 in the Company code field. Enter 1000 in the Business area field. Enter 1010 in the Profit center field. Select Save.

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1-3

Create a cost center group to work with your two new cost centers collectively. Name your cost center group CENTERS-##, with the description Group ## Cost Centers, and assign your production and service cost centers (PROD-## and SERV-##). Do not assign your cost center group to the standard hierarchy. Accounting → Controlling → Cost center Accounting → Master data → Cost center group → Create Enter CENTERS-## in the Cost center group field. Select Enter. Enter Group ## Cost Centers in the description field. Select Insert Cost Center. Enter both PROD-## and SERV-## in the left column. Select Save.

1-4

Create an overhead order for detailed controlling of all costs related to a trade fair in which the production cost center participates. The costs will be settled each accounting period to this cost center. 1-4-1 Enter the master data information for the trade fair order. Use the Int. Order – Marketing order type (0400). Name your order Trade Fair Group ## and assign it to the Corporate other business area (9900) and Internal Services profit center (1400). Identify your production cost center (PROD##) as the responsible cost center. Do NOT save your order yet. Accounting → Controlling → Internal Orders → Master data → Order Manager Choose Create icon. Enter 0400 in the Order type field. Select the Enter icon. Select Master data. Enter Trade Fair Group ## in the Short text field. Enter 9900 in the Business area field. Enter 1400 in the Profit center field. Enter PROD-## in the Responsible CCtr field. Do NOT Save the order master record yet.

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1-4-2 Create a periodic settlement rule to settle 100% of the actual costs to your production cost center (PROD-##). Save the order. Select Settlement rule. Enter CTR in the Cat. field. Enter PROD-## in the Settlement Receivers field. Enter 100 in the Percent field. Enter PER in the Settle (Settlement type) field. Select Save. Record the order number.

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Solutions Unit: Management Accounting Topic: Cost Centers

2-1

Post an expense in the General Ledger (FI) to a cost center and review the costs that are transferred into CO. 2-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit (posting key 40) of 5000 to G/L account 403000. Specify that the offsetting credit (posting key 50) is to G/L account 113100. What error message is displayed? In the G/L account master records, some of the expense accounts are configured to indicate that taxes may be associated with these accounts, but are not mandatory. A tax warning message will appear prior to the mentioned error message. This is to ensure that you do not forget to enter a tax code when appropriate. For these exercises, we are treating all expenses as non-taxable. Therefore, you can ignore the warning message. Accounting → Financial accounting → General ledger → Document entry → Enter G/L account Document If prompted, enter company code 1000. Enter the current date in the Document date field. Enter EUR in the Currency field. Enter 403000 in the Account field. Enter Debit in the D/C field. Enter 5000 in the Amount field. Enter 0I in the Tax code field. Enter 113100 in the Account field. Enter Credit in the D/C field. Enter 5000 in the Amount field. Select Enter. The system displays the error message “Account 403000 requires an assignment to a CO object.”

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2-1-2 Enter SERV-## in the cost center field to charge the raw materials costs to your service cost center. Enter an * (asterisk) for the credit posting to default in the appropriate amount. Post the document. Enter SERV-## in the Cost center field. Select Enter. Select Post. 2-1-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). Accounting → Controlling → Cost Center Accounting → Information system → Reports for Cost Center Accounting→ Plan/Actual Comparisons → Cost Center: Actual/Plan/Variance If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To period field. Enter 0 in the Plan version field. Enter SERV-## in the first Or value(s) field. Select Execute. 2-1-4 Drill down to the original document. What type of document is displayed? Double-click on the report line for cost element 403000. Double-click on the Cost Centers: Actual Line Items report. Double-click on the line item with a value of 5000. A Financial Accounting document is displayed (the G/L account posting). 2-2

Record the consumption of a material by a cost center in Inventory Management (MM). Review the costs that are transferred into CO. 2-2-1 Enter a goods issue for your service cost center (SERV-##). Use movement type 201 and get 20 pieces of material T-T200 from storage location 0001 in the Hamburg plant (1000). Logistics → Materials Management → Inventory Management → Goods Movement → Goods Issue Enter 201 in the Movement type field. Enter 1000 in the Plant field. Enter 0001 in the Storage location field. Select Enter. Enter SERV-## in the Cost center field. Enter T-T200 in the Material field. Enter 20 in the Quantity field. Select Post.

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2-2-2 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). Accounting → Controlling → Cost Center Accounting→ Information System → Reports for Cost Center Accounting→ Plan/Actual Comparisons → Cost Center: Actual/Plan/Variance If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To period field. Enter 0 in the Plan version field. Enter SERV-## in the first Or value(s) field. Select Execute. 2-2-3 Drill down to the original document. What type of document is displayed? Double-click on the report line for cost element 400000. Double-click on the Cost Centers: Actual Line Items report Double-click on the line item with a quantity of 20 pieces. A Material document is displayed (the goods issue document). Select the Doc. Info. tab. Click FI Documents icon. Select Accounting document. 2-2-4 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). Review the quantity and cost flows out of the service cost center. Accounting → Controlling → Cost Center Accounting → Information System → Reports for Cost Center Accounting→ Plan/Actual comparisons → Cost Center: Actual/Plan/Variance If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To period field. Enter 0 in the Plan version field. Enter SERV-## in the first Or value(s) field. Select Execute.

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2-3

Create an assessment cycle and segment to allocate your service cost center costs to the production cost centers that it supported. 2-3-1 Create an actual assessment cycle AAC-##, which starts on the first day of the current fiscal year. Call the cycle Group ## Assessment. Use the menu path “go to” to create an assessment run group with the name GR##. Accounting → Controlling → Cost Center Accounting → Period-End Closing → Single Functions → Allocations → Assessment Extras → Cycle → Create Enter AAC-## in the Cycle field. Enter the first day of the current fiscal year in the Start date field. Select the Enter icon to proceed to the next screen. Enter Group ## Assessment in the Text field. 2-3-2 Attach a segment ASSESS##, with the description Service ## Assessment and corporate services assessment cost element (631300). Allocate 100% of the actual posted amounts from your sender cost center. The basis (tracing factor) rule is to allocate fixed percentages. Select the Attach Segment pushbutton. Enter ASSESS## in the Segment name field and Service ## Assessment in the description field which follows. On the Segment Header Tab: Enter 631300 in the Assessment CEle field. Verify that the Sender values are set correctly: •

Posted Amounts in the Rule field

•

100 in the Portion in % field

•

Act. value origin selected

For the Receiver tracing factor: •

Enter Fixed Percentages in the Rule field

2-3-3 The sender of the allocation is your service cost center (SERV-##). Specify the allocation of cost element group OAS. The receiver of this allocation is cost center group HAC040. On the Sender/Receiver Tab: Enter SERV-## in the Sender Cost center From field. Enter OAS in the Sender Cost element GROUP field. Enter HAC040 in the Receiver Cost center GROUP field.

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2-3-4 Go to the tracing factor screen to establish an allocation of 5% of the costs to cost center PROD00 and 95% to cost center PROD-##. Perform a formal check of your cycle and segment. Save the cycle and add to cycle run group Gr##. On the Receiver Tracing Factor Tab: Enter 5 in the Percent field for cost center PROD00. Enter 95 in the Percent field for cost center PROD-##. Go back to the Segment Header tab. Cycle → Check → Formal check. Save the cycle. Create cycle run group. Goto → Cycle run group Enter Gr## and select Create. Select Confirm and proceed through informational message. 2-4

Process the actual assessment for your service cost center. 2-4-1 Execute the assessment in test for your cycle (AAC-##) and the current period. Select processing with Detailed lists. Accounting → Controlling → Cost Center Accounting→ Period-End Closing → Single Functions → Allocation → Assessment Enter the current period in the From period field. Enter the current period in the To period field. Enter the current fiscal year in the Fiscal year field. Select to process a Test run with Detailed lists. Enter AAC-## in the cycle field and select Enter. The Start date will be copied from your cycle. Select Execute. Select the Receiver pushbutton to view the amounts to be assessed. 2-4-2 Execute the assessment in production to post your allocation. (De-select processing with a Test run.) Go Back to the assessment initial screen. Click on Test run to de-select it. Select Execute.

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2-4-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0 to view the effect of the assessment on your service cost center (SERV-##). What is the balance on your cost center? Accounting → Controlling → Cost Center Accounting → Information System → Reports for Cost Center Accounting→ Plan/Actual Comparison → Cost Center: Actual/Plan/Variance If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To field. Enter 0 in the Version field. Enter SERV-## in the Cost Center field. Execute the report.

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Solutions Unit: Management Accounting Topic: Internal Orders

3-1

Post an expense in the General Ledger (FI) to the trade fair order. 3-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit of 5,000 to G/L account 415000. Specify that the offsetting credit is to G/L account 113100. Accounting → Financial Accounting → General Ledger → Document Entry → Enter G/L Account Document If prompted, enter 1000 in the Company Code field. Enter the current date in the Document date field. Enter EUR in the Currency field. Enter 415000 in the Account field. Enter Debit in the D/C field. Enter 10000 in the Amount field. Enter 0I in the Tax code field. Enter your trade fair order in the Order field. Enter 113100 in the Account field. Enter Credit in the D/C field. Enter * in the Amount field. Select Post.

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3-1-3 Process the Cost centers: actual/plan/variance report for the current period and plan version 0. Execute the report for the service cost center (SERV##). Accounting → Controlling → Internal Orders → Information System → Reports for Internal Orders → Plan/Actual Comparisons → Orders: Actual/Plan/Variance If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To period field. Enter 0 in the Plan version field. Enter your trade fair order in the first Or value(s) field. Select Execute. 3-1-4 Drill down to the original document. What type of document is displayed? Double-click on the report line for cost element 415000. Double-click on the Orders: Actual Line Items report Double-click on the line item with a value of 10000. A Financial Accounting document is displayed (the G/L account posting). 3-2

(OPTIONAL) You have completed the actual postings on your trade fair order. Now settle it to the production cost center that is responsible for the costs incurred. 3-2-1 Carry out an actual cost settlement for your trade fair order. For the settlement and posting periods, use the current period. Accounting → Controlling → Internal Orders → Period-End Closing → Single Functions → Settlement → Individual Processing In the Order field, enter your trade fair order number. In the Settlement Period field, enter the current period. In the Posting Period field, enter the current period. In the Fiscal Year field, enter the current period. The processing type is automatic. Make sure that the Test Run field is not selected. Choose Execute. Select the Detail Lists icon. Select the settlement line item and click the Accounting Documents. Double-click the Controlling Document. Expand the settlement document line item to view the allocation from order to cost center.

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3-2-2 Run the Orders: Actual/Plan/Variance report for the current period and plan version 0 to see how the settlement affects your cost center. Run the report for the trade fair order. Accounting → Controlling → Internal Orders → Information System → Reports for Internal Orders → Plan/Actual Comparisons → Orders: Actual/Plan/Variance If prompted, enter 1000 in the Controlling Area field. In the Fiscal Year field, enter the current fiscal year. In the From Period field, enter the current period. In the To Period field, enter the current period. In the plan version field, enter 0 In the for Or Value(s) field, enter your trade fair order number. Choose Execute. The balance should be zero.

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Solutions Unit: Management Accounting Topic: Profit Center Accounting

4-1

(OPTIONAL) Post an expense in the General Ledger (FI) to the production cost center and review the costs that are transferred into CO, specifically to the profit center. 4-1-1 Create a G/L account posting with today’s date for the purchase of raw materials for the German company code (1000) in currency EUR. Enter a debit of 5,000 to G/L account 415000. Specify that the offsetting credit is to G/L account 113100. Accounting → Financial Accounting → General Ledger → Document Entry → Enter G/L Account Document If prompted, enter 1000 in the Company Code field. Enter the current date in the Document date field. Enter EUR in the Currency field. Enter 415000 in the Account field. Enter Debit in the D/C field. Enter 10000 in the Amount field. Enter 0I in the Tax code field. Enter PROD-## in the Cost Center field and hit Enter. Notice the profit center defaulted into the Profit Center field. Enter 113100 in the Account field. Enter Credit in the D/C field. Enter * in the Amount field. Select Post. 4-1-2 Review the document posted to analyze the profit center document created. Once the document above was posted, go to Document → Display. Once in the Financial document, go to Environment → Document Environment → Accounting documents Double-click on the Profit Center document. Notice the posting to the profit center.

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4-1-3 Process the Profit Center List: Plan/Actual report for the current period and plan version 0. Execute the report for the profit cost center (1010). Accounting → Controlling → Profit Center Accounting → Information system → Reports for Profit Center Accounting → List-Oriented Reports → Profit Center List: Plan/Actual If prompted, enter 1000 in the Controlling area field. Enter the current fiscal year in the Fiscal year field. Enter the current period in the From period field. Enter the current period in the To period field. Enter 0 in the Plan version field. Enter 1010 in the first Or value(s) field. Choose Execute.

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Solutions Unit: Management Accounting Topic: Profitability Analysis

5-1

(OPTIONAL) Create an actual line item directly in Profitability Analysis and then display the associated document. 5-1-1 Create a profitability analysis document for revenue and cost of goods sold for customer (1000) and product (R-F1##) in currency (EUR). Accounting → Controlling → Profitability Analysis → Actual Postings → Create Line Items If prompted, enter IDEA in the Operating Concern field and Costing Based Profitability. Enter the current date in the Posting date field. Enter current period in the Period field. Enter B in the Record type field. Choose Enter. On the Characteristics tab: Enter 1000 in the Customer field. Enter R-F1## in the Product field. Enter 1000 in the Company code field. Enter 1000 in the Plant field. Enter 1000 in the Sales Organization field. Enter 10 in the Distr. Channel field. Enter 00 in the Division field. Enter 00107 in the Material Group field. On the Value Fields tab: Enter 50000 in the Cost of goods sold field. Enter 150000 in the Revenue field. Select Post.

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5-1-2 Display the line items in profitability for the document posted in the preceding step. Accounting → Controlling → Profitability Analysis → Actual Postings → Display Line Items If prompted, enter IDEA in the Operating Concern field. Enter B in the Record type field. Enter the current period/year in the Period/year field. Enter your SAP userid in the Entered by field. Choose Execute. Select the Display Profitability segment icon. Review the characteristics and value fields. Select Continue. Choose the Select layout icon and select standard layout /ZIDES-PCA2. Type /n in the command box to return to the SAP menu. 5-2

Produce a report in Profitability Analysis for the IDES Worldwide operating concern (IDEA). Process the Contribution Margin report AC040 for the current fiscal year and plan version 100 to view the results for different market views. 5-2-1 Drill down to view the results for the Hamburg plant (1000). What is the gross revenue for this view? Accounting → Controlling → Profitability Analysis → Information System → Execute Report In the Set Operating Concern screen, enter IDEA in the Operating concern field and select the costing based radio button. Select Continue. Select report AC040. Select Execute. Enter the current fiscal year in the fiscal year field. Enter the current period in the From Period field. Enter the current period in the To Period field. Enter 100 in the version field. Select Classic drilldown report. Select Execute. Click on Plant in the Navigation area. Select Continue if the Drill-down: Call up for documentation for hotspots screen is displayed. Verify that plant 1000, Hamburg is displayed. If necessary, you can scroll with the arrows or click on the magnifying glass to see the available plants.

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5-2-2 Drill down from the plant 1000 report to view material R-F1## and customer 1000. What is the actual gross revenue for this view? Click on Plant. Verify that plant 1000 is displayed. Click on Product. Click on the magnifying class icon to the left of the displayed product. Double-click on R-F1##. Click on Customer. Verify that customer 1000 is displayed. Type /n in the command box to return to the SAP menu.

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Solutions Unit: Management Accounting Topic: Product Costing

6-1

Display the most current cost estimate for material R-F100 in plant 1000 that has the status FR (released without errors) and is valid on today’s date. Use costing variant PPC1 and costing version 1. Accounting → Controlling → Product Cost Controlling → Product Cost Planning → Material Costing → Cost Estimate with Quantity Structure → Display Enter the following data: Material: R-F100 Plant: 1000 Costing variant: PPC1 Costing version: 1 Valid on: Today's date Use the binoculars to search for cost estimates that meet these criteria, and enter the following: Material: R-F100 Plant: 1000 Current standard cost estimate Costing variant: PPC1 Costing version: 1 Costing status: FR Most current, valid on: Today's date Select With quantity structure. Execute the function. 6-1-1 The manufacturing engineer wants to know how many units the setup costs are based on. Therefore, determine the costing lot size. You see the costing lot size in the header in the right-hand screen area. The costs are based on a costing lot size of 100. 6-1-2 The costs are usually determined per unit. Set the cost base so that the cost per 1 piece is displayed. Select this setting so that you can answer the following questions. Choose Settings → Cost Display and select Costs based on 1 piece. Choose Enter.

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Changing the cost display does not result in a new calculation of producing just one pump. It simply changes the reported values from presenting the value for 100 pumps to presenting the value of 1 pump.

6-1-3 In which posting period was the cost estimate created? In which fiscal year was the cost estimate created? Go to the Dates tab. The cost estimate was for posting period___ in fiscal year __________.

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Unit: Management Accounting Topic: Activity Based Costing

7-1

(OPTIONAL) Display your standard cost estimate from the previous exercise (material R-F1##, costing variant PPC1). Which process template is this costing based on? Look this up on the Valuation tab page. 7-1-1 Display your standard cost estimate. Accounting → Controlling → Product Cost Controlling → Product Cost Planning → Material Costing → Cost Estimate with Quantity Structure → Display In the Material field, enter R-F1##. In the Plant field, enter 1000. In the Costing Variant field, enter PPC1 and choose Find Cost Estimate button. In the next dialog box, choose Execute. Choose the Valuation tab page. The name of the template is COPC-10-1. 7-1-2 On the Costs tab page, change the costing to the display of costs of goods sold. Choose the Costs tab page and change the display to Cost of Goods Sold. 7-1-3 Select layout 1SAP06 from the itemization (grouped by operations). To which costs and quantities has overhead been applied for the automatically allocated processes? Enlarge the itemization screen. Choose Select Layout and then select layout 1SAP06. The process costs are identified by the item category X. You can see the value and the quantities. The system used processes 300900 and 400900 to calculate the cost of goods sold. These processes are related to the overhead costs that were taken into account. The quantity 1 was specified because the template makes it clear that one unit of both processes is required to manufacture pumps..

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7-1-4 On the Costs tab page, change the costing to the display of cost of goods manufactured. To which costs has overhead been applied for automatically allocated processes now? What conclusion do you draw? Now the system displays costs for process 300900. It can be deduced, therefore, that process 400900 is allocated using a cost element that was assigned only to the target costs, and thus is not included in the cost of goods manufactured. 7-1-5 Notice the system valuates process 300900 with a value of 12 EUR. Where did this value developed? Accounting → Controlling → Activity-Based Costing → Planning → Process Quantities/Prices → Display If prompted, select Controlling Area 1000. In the Version field, enter 0. In the From period, enter the current period. In the To period, enter the current period. In the Fiscal year field, enter the current year. In the Business Process field, enter 300900. Choose the Overview Screen icon. Notice the Fixed price of 5 EUR + the Variable price of 7 EUR equals the 12 EUR price.

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Unit: Management Accounting Topic: Reconciliation Ledger

8-1

(OPTIONAL) In the Cost Element Information System, run the appropriate report to analyze cost flows between business areas. Look at the cost flow between the business areas to which our production and service cost centers are assigned (1000 and 9900, respectively). 8-1-1 Run the Cost Element report for allocations between business areas for the current period for all business areas in controlling area 1000. Accounting → Controlling → Cost Element Accounting → Information System → Reports for Cost and Revenue Element Accounting → Cost Flow→ Cost Elements: Allocations Between Business Areas In the Controlling Area field, enter 1000. In the Fiscal Year field, enter the current fiscal year. In the Period field, enter the current period. Under “Selection Groups,” enter the values 1000 and 9900. Select Execute. 8-1-2 To view the appropriate report, set the business area to 1000 (Mechanical Engineering) and the trading partner business area to 9900 (Corporate Other). Explain the data displayed. In the list of business areas, select 1000 Mechanical Engineering. The setting for the business area should now be 1000. Under Variation: Characteristics, select Trdg. Part. B.A. From the list of business areas, select 9900 Corporate Other. The setting for the trading partner business area should now be 9900. The report shows the flow of costs between business areas, summarized at cost element level. These costs will be reconciled to FI at the end of the posting period before the financial statements are produced.

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Management Accounting: Test Your Knowledge 1.

List the five components of Management Accounting.

2.

Fill in the blank to complete the sentence. _____________________________________________ focuses on assimilating costs that cannot be directly assigned to the goods and services of a company and, when possible, allocating them further on a cause-effect basis.

3.

Fill in the blank to complete the sentence. The ________________________ is an independent Accounting entity. Balance sheets and P&L statements are prepared at company code level in order to correspond to legal reporting requirements.

4.

Cost centers normally proceed through a number of steps during the planning process. List six typical planning steps for cost centers. _________________________________________________________ _________________________________________________________ _________________________________________________________

5.

Determine whether this statement is true or false. When allocating cost centers using assessments, the original cost elements are used to track the movement from sender to receiver.

6.

What are the four typical uses of internal orders?

_________________________________________________________

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7.

Describe the goal of Profit Center Accounting.

8.

Determine whether this statement is true or false. Profit center planning involves two steps. First, the planning data is transferred to the profit centers from cost centers, internal orders, profitability analysis, and product cost planning. The planning data can then be modified directly in the profit centers. _______________

9.

Describe the goal of Profitability Analysis.

10.

List five examples of characteristics used in Profitability Analysis?

11.

Fill in the blank to complete the sentence. _______________ and _______________ refers to the process of defining a “new” future price for a standard cost estimate and then converting the future price to the current standard price.

12.

Determine whether this statement is true or false. Cost Center Accounting answers the question of where costs occur, whereas Activity-Based Costing answers the question of why (for what purpose) costs occur.

13.

Fill in the blank to complete the sentence. The ___________________ and ___________________ approaches are used in activity based costing to allocate from the process out to the receiving controlling objects.

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14.

Determine whether this statement is true or false. The purpose of the reconciliation ledger is to synchronize FI data with MM postings.

15.

Fill in the blank to complete the sentence. The ___________________, __________________, and ___________________ are the three FI organizational units that can be affected by the running of the Reconciliation Ledger.

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Management Accounting: Answers 16.

List the five components of Management Accounting. Answer: Cost Element Accounting, Overhead Cost Controlling, Product Cost Controlling, Profitability Analysis, and Profit Center Accounting.

17.

Fill in the blank to complete the sentence. _____________________________________________ focuses on assimilating costs that cannot be directly assigned to the goods and services of a company and, when possible, allocating them further on a cause-effect basis. Answer: Overhead Cost Controlling

18.

Fill in the blank to complete the sentence. The ________________________ is an independent Accounting entity. Balance sheets and P&L statements are prepared at company code level in order to correspond to legal reporting requirements. Answer: Company code

19.

Cost centers normally proceed through a number of steps during the planning process. List six typical planning steps for cost centers. Answer: Plan statistical key figures (used as tracing factors in plan allocations); Activity type planning (plan quantities on activities used during allocations); Primary cost planning (cost elements planned as activityindependent or activity-dependent); Secondary cost planning (allocations between controlling objects); Plan reconciliation (used to check and reconcile the planned exchange of internal activities);and Activity price calculation (determination of the activity price).

20.

Determine whether this statement is true or false. When allocating cost centers using assessments, the original cost elements are used to track the movement from sender to receiver. Answer: False Periodic reposting and distributions used the original cost elements while assessments use secondary cost elements.

21.

What are the four typical uses of internal orders? Answer: Overhead orders (used to monitor costs incurred for a particular purpose such as conducting trade fairs or tracking maintenance or repair work); Investment orders (used to monitor costs incurred during the construction of assets such as building a storage facility); Accrual orders (used to offset postings of accrued costs in CO); and Orders with revenue (used to replace the cost accounting parts of SD customer orders if SD is not being used).

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22.

Describe the goal of Profit Center Accounting. Answer: The goal of profit center accounting is to measure the profitability of areas of responsibility within the organization.

23.

Determine whether this statement is true or false. Profit center planning involves two steps. First, the planning data is transferred to the profit centers from cost centers, internal orders, profitability analysis, and product cost planning. The planning data can then be modified directly in the profit centers. Answer: True

24.

Describe the goal of Profitability Analysis. Answer: The goal of profitability analysis is to determine the profitability of market segments.

25.

List five examples of characteristics used in Profitability Analysis? Answer: Five examples of characteristics used in Profitability Analysis include product, customer, plant, division, and product group.

26.

Fill in the blank to complete the sentence. _______________ and _______________ refers to the process of defining a “new” future price for a standard cost estimate and then converting the future price to the current standard price. Answer: Marking and releasing refers to the process of defining a “new” future price for a standard cost estimate and then converting the future price to the current standard price.

27.

Determine whether this statement is true or false. Cost Center Accounting answers the question of where costs occur, whereas Activity-Based Costing answers the question of why (for what purpose) costs occur. Answer: True

28.

Fill in the blank to complete the sentence. The ___________________ and ___________________ approaches are used in activity based costing to allocate from the process out to the receiving controlling objects. Answer: Push and Pull approaches are used in activity based costing to allocate from the process out to the receiving controlling objects.

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29.

Determine whether this statement is true or false. The purpose of the reconciliation ledger is to synchronize FI data with MM postings. Answer: False The purpose of the reconciliation ledger is to synchronize FI data with CO postings.

30.

Fill in the blank to complete the sentence. The ___________________, __________________, and ___________________ are the three FI organizational units that can be affected by the running of the Reconciliation Ledger. Answer: Company code, business area, and functional areas are the three FI organizational units that can be affected by the running of the Reconciliation Ledger.

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ERP Analytics: Strategic Enterprise Management

Contents: z Overview of the functions and components of the SEM applications

 SAP AG 2004

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ERP Analytics: SEM : Unit Objectives

At the conclusion of this unit, you will be able to: z Explain the components of SEM and their main features z Explain the positioning of SEM and it’s use of data for analytic purposes

 SAP AG 2004

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SEM: Course Overview Diagram TERP10


 SAP AG 2004

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ERP Analytics: Strategic Enterprise Management : Business Scenario

z The enterprise is considering implementing the SEM (Strategic Enterprise System) in conjunction with ongoing transaction systems, but first, needs an overview of the SEM components and functionality.

 SAP AG 2004

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Traditional Approach to Enterprise Management

Research & Development

Purchasing & Logistics

Production

Marketing & Sales

Distribution

Business Process Management Focus: z

Develop, produce and sell products that meet market demands Period in consideration: Last month, last quarter, last year

z

Typically a transaction-based system (OLTP)

z

 SAP AG 2004

In the past competition between companies was focused on their products and the respective product markets. In most cases historically these product markets have been limited in respect of size and geographical location. Accordingly the traditional approach to enterprise management has been focused on the internal processes concerned with the development, manufacturing and selling of the company‘s products within the local market. That is to say that the operational management of these internal processes was seen as the cornerstone of competitive advantage and corporate success. How did such organisations then measure this ‘success‘? Depending on the efficiency of the internal processes a profit was either generated or not. This being the case success was measured by the ability of a company to generate a profit from it‘s products. Such an approach - known as the ‘inside-out‘ approach - has become outmoded in the modern competitive environment and is seen as being inadequate for the following reasons: y concentration on the historic success of the business y external influences not formally captured y more often than not a purely financial approach (ignoring or not giving as much weight to nonfinancial indicators) y promotes short-term, tactical management with little understaning of whether the operational ‘success‘ will lead to the success of the company‘s overall stratagies and vision (the head being led by the body)

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SEM Delivers Value Based Management… Strategic Planning & Budgeting Corporate Objective

Valuation Components

Shareholder return Dividend Capital gain

Cashflow from operations

Competitive advantage period

Discount rate

Sales growth Operating margin Cash tax rate

Operations

Working capital investment Fixed capital investment

Investment

Cost of capital

Finance

Change in net value of business

Debt

Value Driver

Corporate Decisions

Operational Management Operational strategies projects & initiatives

Decision making processes

Performance measures

Source: PricewaterhouseCoopers

 SAP AG 2004

Having determined what we mean by ‘value‘ in today‘s economy we then need to ensure that this ‘value‘ is measurable, otherwise how do we determine the success of the strategy? Quite often because the organization as a whole is valued by the capital market it is not obvious to the management which business units contribute to the generation of corporate value and which business units destroy value. Evidently if we are to concentrate our resources for the maximum return then we need this information. Once we have this information we can then take the action necessary to ensure that we invest our capital wisely and for the maximum return (creation of value). The key to having this level of visibility and also the key to managing a company or a business unit according to Value Based Management (VBM) principles, is the ability to identify the relationships between the key value drivers of a business and the measures of the operational business execution. In the scheme above the key value drivers according to Alfred Rappaport are illustrated: y sales growth / operating margin / cash tax rate / working capital investment / fixed capital investment / competitive advantage period Basically the management decisions in the operations, investment and financing areas influence the 7 key value drivers which then in turn impact corporate value. This method is looking at the Shareholder Value Added (SVA) / Discounted Cash Flow (DCF) approach to corporate valuation. The benefit of this approach is that we are looking at future cash flow generation at multiple levels of the business (e.g. at business unit level, for the whole company etc.). By analysing the likley cash flow at these levels of the business we can determine which strategies are likely to generate an acceptable rate of return and so provide added value to our shareholders. It is also useful to look at this method of valuation as it is increasingly being used by the financial markets as the key method for determining an enterprise‘s future value potential.

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SEM Value Proposition Integrating strategic, financial and operational information Business Planning & Simulation (SEM-BPS) Business Consolidation (SEM-BCS) Strategy Management (SEM-SM)

+ robust web access

Streamline planning cycle, integration, flexibility (stress-test, what-if), control Financial and management consolidation. Cut down on time-elapsed in getting credible, timely data for reporting on demand. Align the organization around your strategy through the Balanced Scorecard & Value Driver Trees. Manage intangible value. Best of breed.

Performance Measurement (SEM-PM)

Performance measurement, exception reporting with the Management Cockpit

Stakeholder Relationship Management (SEM-SRM)

Integrate your most important stakeholders into your enterprise management process. Get a higher return on management (ROM)

 SAP AG 2004

Strategic Enterprise Management ( SEM) is a mysap.com application component which completely supports strategic enterprise management processes in an organization on all the relevant levels.) It comprises five functional software components which allow tight integration of SEM processes (component architecture). The SEM application is under-pinned by the SAP BW. All functions of the SEM components can operate on one or several SAP BW infocubes.

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SAP SEM Strategic Enterprise Management

Strategy Management

Performance Measurement

Business Consolidation

Business Planning

z Balanced Scorecard z Risk Management z Value based Mgmt. z Strategy Templates

z Management Cockpit z Measure Builder z Measure Tree Analysis z Benchmark Integration & Analysis

z Legal & Mgmt Cons. z GAAP Adjustments z Currency Translation z Interunit Eliminations z Cons. of Investments z Restatement z Organizational changes

z Modelling z Planning Framework z Planning Applications z Simulation z Planning Process Coordination

Stakeholder Relationship Management z Contact Mgmt. z Stakeholder selfservice z Stakeholder reporting

SAP BW & BDS

 SAP AG 2004

Strategy Management, encompassing the Balanced Scorecard, is an instrument to convert business strategies into understandable, meaningful targets, and the individual targets are assigned to a perspective or „view“. The standard scorecard, has 4 views, namely, Financial, Customer, Internal Processes and Learning & Growth. Performance Measurement, and the other visual information units enable management to grasp complex situations at a glance and thus facilitate and accelerate management decision making. The Management Cockpit, on a traditional basis is made of 4 walls, each representing a „view“ of the organization Business Consolidations take care of the elimination of inter-dependent accounting entries and allow for the amalgamation of planning and operating results and the consolidation of investments. BPS allows for integrated operational and strategic planning on a task level, using data from a specified info-cube via a planning area. SRM allows for data management and documentation on various business partners, and the ability to write queries theron.

© SAP AG

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16-8

The Key: Linking External and Internal Data

External Internet sources Collect, Filter, Evaluate SAP SEM external

Source

Editorial Workbench

internal

Internal data sources

Internal Data Collection

Market volume, market share, consumption, ...

Press releases, patents, appraisals, ...

Incoming orders, Sales reports, revenues, costs, project reports, contribution ... margin, ... quantitative

qualitative

Type

 SAP AG 2004

The key to avoiding data fog is to structure how we search but, most vitally, how we store the information that we find. The method of storage is also the key to turning information into knowledge. For example, you can read all about the theory of how an upcoming tax law change may affect the company but it becomes far more potent and useful when you directly link it to your internal key figure ‘Net Operating Profit After Tax‘ and see the quantitative and qualitative story together. People must have speedy access to information that is relevant to them because information is only useful (i.e. will only give you competitive advantage) for an increasingly short period of time. Employees today, then, cannot afford to be deluged with useless information and must be able to find, and make sense of, the relevant information immediately. Establishing the link between the unstructured information from the external world and the structured information contained within your internal databases, is the key to providing your people with the information they need. Additionally you are providing it in a manner that helps them to make sense of the information. By making sense of the information this enables them to turn it into knowledge and it is this knowledge that then helps to provide the competitive advantage in a world where knowledge is power.

© SAP AG

TERP10

16-9

Architecture of SAP SEM-BIC Business Information Collection (SEM-BIC) SAPOffice

Business Consolidation (SEM-BCS)

Information Requirements

Business Planning & Simulation (SEM-BPS)

Editorial Workbench (EWB)

Source Profile Builder (SPB)

InfoUser

KW

Internet

Same SEM system

Strategy Management; Performance Measurement (SEM-SM/PM) Stakeholder Relationship Management (SEM-SRM)

 SAP AG 2004

Slide builds as follows. y 1. An information request is raised or a search is triggered. The details are sent to EWB y 2. Having received an information request we use the EWB to source data from the internet y 3. The EWB is supported by the SPB which provides details of the possible sources y 4. Once we have sourced the information, edited it and attached the document to info-objects in the database the document is stored in the Knowledge Warehouse. y 5. The Info-user can now access the document from the SEM components (BPS, SM, PM and SRM), from the BW Business Explorer or directly via the Knowledge Warehouse y 6. Alternatively, or in addition, we can send the document from SRM-BIC directly to the user via e-mail.

© SAP AG

TERP10

16-10

SEM-BPS Integration

BCS BEx

SEM-BPS SAP BW Extraction/ Retraction

HR CO ABC

CO CCA

IM CO PA

The ‘Bridge’

 SAP AG 2004

Starting from the right: SEM-BPS has a number of possible interfaces through which data can be displayed, manipulated or entered. Amongst those specifically shown are EXCEL in PLACE- and additionally the Web offers another option. Most SEM-BPS configuration data is stored in standard OLTP tables within SEM-BPS. Transactional and master data is stored in the BW, and is either entered via SEM-BPS or also typically via extraction. Once the data is in the BW then it can be retracted as necessary. Similarly, of course, further data can be extracted back into the BW (and therefore available to BPS) as necessary (e.g. actuals to kick-start plan).

© SAP AG

TERP10

16-11

Object Relationships in SEM-BPS General Structure

Example

Planning Planning area area

Infocube Infocube C002 C002

1 n

Planning Planning level level

Profit Profit Center/ Center/ Brand Brand

1

1

n

n

Planning Planning Package Package

Planning Planning Function Function

Profit Profit Center Center GB00010001 GB00010001

Quantity Quantity Conversion Conversion

1 n

Parameter Parameter Set Set

Gallons Gallons in in Cases Cases

 SAP AG 2004

In the Planning area, the info cube is determined (provider) which will supply the data on which we intend to plan. The characteristics and key figures for planning are also specified. With a planning level the data supplied from the cube is restricted to whatever is relevant to the planning task, which is done by selecting the relevant key figures and characteristics. Also, with the level, characteristic values that are constant for all planning packages can be specified. A Planning Package is a subset of a Planning level ( for example, version, or a range of profit centers for a planner) to try and tie-down the planning task for efficiency and minimization of errors.

© SAP AG

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16-12

Within SEM-BPS… Portfolio Management

Capital Market Interpreter

z Market Portfolio z Technology Portfolio

z Shareholder Value z Value Gap Analysis ... z Sensitive Analysis

Integrated Financial Statements P&L z Net Revenue z COGS z Overheads

Profitability Plan z Net Revenue z COGS z Overheads z Promotional Exp.

Sales Plan z Sales volume z Discount

Cash Flow Balance Sheet z Indirect/Direct Method z Increase of Fixed Assets z Cash Flow operating, invest., finance activities

Cost Center Plan z Promotional Exp. z Overheads

Headcount Plan z New Employee z Salary

Investment Plan z Investment Budget

...

IT Cost Plan z New Hardware z Maintenance

...

 SAP AG 2004

Business Content provides the following benefits: y Faster and lower cost implementations y Lower cost of ownership y Consistent definitions of data y System-openess y Flexibility and scalability

© SAP AG

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16-13

SAP SEM – Business Consolidation Master Data z Financial statement items z Consolidation units z Consolidation groups z Versions

Consolidation Monitor

Data Collection

z Interface to SAP R/3 and SEMz Graphic control BPS of the process from data collec- z Flexible file uploads tion through z Manual data consolidation entry z Central (decentralized) environment to z Validation execute tasks z Currency OK Translation ERR

Automatic Consolidation Functions z Interunit elimination z Consolidation of investments z Reclassification z Elim. of IU profit/ loss A z Manual B 30 C Posting 35

Strategy Management

Performance Measurement

Business Consolidation

z Balanced Scorecard z Risk Mgmt z Strategy Templates z Value Driver Trees z Value Based Mgmt

z Management z Legal Cockpit Consolidation z Measure Builder z Management z Measure Consolidation Catalogs z Benchmarking

Reporting

D

Business Planning z Modelling z Planning Framework z PlanningApplications z Simulation

z Full BW based query functionality. z Special consolidation reports

25

Stakeholder Relationship Management z Integration of Stakeholders into the Strategic Management Process z Investor Portal

 SAP AG 2004

The smallest element in a corporate structure that is used for the consolidation is the consolidation unit. In the R/3 based tool EC-CS the unit for management reporting is a combination of Company and Profit Center or Business Area, while in Legal Consolidation it is the Company. This gave us two views and therefore two data records and each period an adjustment might be required between the two views. The BW based consolidation allows the two consolidation units to be handled in one data record (matrix consolidation). Both of these info-objects, however, need to be assigned to the role “Consolidation Unit” in BCS. Here the subsidiary only has to come up with one set of values.

© SAP AG

TERP10

16-14

Multiple Scorecard Analysis screen presentation Multiple Scorecard Analysis Portfolio

Current Date

Theme

Target Date

Perspectives ? Financial Perspective Incoming Performance Sales Revenues ? Asset Utilization ROCE RONA Customer Perspective Internal Growth Perspective Historical trend: ROCE

Corp

Q2/2001

SBU 01

Q1/2001

SBU 02

Q4/2000

SBU 03

Q3/2000

Corp SBU 01 SBU 02

 SAP AG 2004

For the comparison of several different scorecards, the “Multi-Scorecard Comparison” view is available. With this function, Scorecards can be compared in user-defined sets. With the concept of “Common Objectives” the Balanced Scorecard software provides an infrastructure to compare scorecards even if their strategies are not exactly the same and therefore provides for a model whereby we can leverage synergies across SBUs, for example. The hierarchy tree on the left side can work in two different ways: y All objectives of all compared Scorecards are displayed. y Only the objectives of the Scorecard in the left column are displayed (Leading Scorecard). In the example, the time series for a measure is displayed for the set of Scorecards in a subscreen. On this Scorecard comparison view, the measure Return on Capital Employed (ROCE ) of the common objective “more efficient asset utilization” is selected in all compared Scorecards. In the subscreen at the bottom, the time series of ROCE for all compared Scorecards is displayed.

© SAP AG

TERP10

16-15

SEM-SM/SEM-PM Integration BCS

Link from BScd to BPS

SEM-BPS BEx

SEM-SM SEM-PM

SAP BW HR CO ABC

CO CCA Extraction/ Retraction

IM CO PA

 SAP AG 2004

Starting from the right: y SEM-SM & SEM-PM have a number of possible interfaces through which data can be displayed. Amongst those specifically shown are the Balanced Scorecard, Management Cockpit and Driver Trees. You can additionally report on the Scorecard and Cockpit via the web. These tools receive their data via the use of queries created within the BW reporting tool. y Business Explorer (BEx) is the analysis and reporting tool embedded in Microsoft Excel.

© SAP AG

TERP10

16-16

Wall Overview SBU Pharmaceutical

Profitability Total Revenue Return on Equity Net Income % R&D Expenses Net Margin % dev BIC : Value Added Risks EBITDA curr. Operating Income NOPAT current EBITADA his. Operating Income NOPAT hist.

Black Wall

Growth Total Revenues curr Total Revenues hist. Rev. Growth curr. Rev. Growth hist. Total Rev. & Rev. Rev. current Custom Shareholder EP and Dev. Cycle time Economic Profit Capital Employed hist. ROCE current NOPA current WACC current

Sustainable Business Total Costs Total Cost current Total Costs Analysis Total Revenues/COGS Cost of Goods Sold BIC: Press Articles Cash Flow Cash from Operating Cash from Investing Cash from Financing

 SAP AG 2004

Wall: The Wall element is subordinate to the Cockpit element. A presentation may contain one to nine Wall elements and summarizes data of a particular type. By clicking on a Wall, a Logical View or a Frame, it is possible to open a new window where the selected presentation object is displayed. In the case of a Logical View, a window is displayed showing the selected View with its corresponding Frames. When showing the presentation, the current data is obtained from the data source (BW system / query / Cube / key figure) that was determined for each Frame when the Cockpit was set up.

© SAP AG

TERP10

16-17

Logical View: Profitability SBU Pharmaceutical

Profitability

Net Income %

Total Revenue

Net Margin % Dev

Return on Equity

R & D Expenses

BIC Documents: Value Added

BIC

z BASF-Gruppe:Forschungskosten 1998 z …….

 SAP AG 2004

Logical View: The Logical View element is subordinate to the Wall element. A Wall element consists of up to six Logical Views. Logical Views serve to summarize information of a particular type. A Logical View is created to focus in more detail on the subject area presented on a Wall (for example, internal view). At the same time, a Logical View can be used to define a general business factor (for example, product quality) that results from several key figures (for example, scrap rate, sales returns, guarantees)..

© SAP AG

TERP10

16-18

ERP Analytics: Strategic Enterprise Management: Unit Summary

You are now able to: z Explain the components of SEM and their main function z Explain the positioning of SEM and it’s use of data for analytic purposes

 SAP AG 2004

© SAP AG

TERP10

16-19

Strategic Enterprise Management (SEM): Exercises Unit: Strategic Enterprise Management (SEM) Topic: Management Cockpit (MC) At the conclusion of this topic, you will be able to: • Navigate within the Management Cockpit • Use the various Management Cockpit analysis screens As part of the management team for the Diabetes Division within a company PharmaStar you are concerned at the sudden fall in profitability and market share of your two key product lines – human-based insulin and animal-based insulin. Having checked the progress of the Division Diabetes Scorecard you follow this up with some deeper analysis of key figures using the Division’s Management Cockpit. In particular you are interested to see which products over this year-to-date have accounted for the Division’s sales and also how sales compare versus the competition. 1.

Management Cockpit Navigation and Analysis 1-1

Open the ‘Diabetes Products Division’ Management Cockpit ______________________________________________________ ______________________________________________________

1-2

How many walls does the Cockpit have and what do each of the walls represent? ______________________________________________________ ______________________________________________________

1-3

How would you differentiate the theory behind the Balanced Scorecard from the Management Cockpit? ______________________________________________________ ______________________________________________________

© SAP AG

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16-20

1-4

How many Logical Views does the Black Wall have and what are they called? What is the concept behind Logical Views? ______________________________________________________ ______________________________________________________

1-5

Expand the ‘Growth’ Logical View. How many Frames are contained in this Logical View? What do Frames represent? ______________________________________________________ ______________________________________________________

1-6

Open the ‘Growth’ Logical View. Are the Frames all graphics or a mixture of graphics, documents and BW reports? From the traffic lights how would you judge we are progressing against our targets? ______________________________________________________ ______________________________________________________

1-7

Select the ‘Sales per Product Line’ Frame. Of which product line are we selling most (as measured in USD) so far this year? ______________________________________________________ ______________________________________________________

1-8

© SAP AG

Now select the ‘Net Sales per Competitor’ Frame. Have we managed to gain back the lost ground from our competitors?

TERP10

16-21

1-9

Finally, because of the extra costs associated with bringing the inhaler product line to market you know that your Operating Income has suffered a little this year. That being the case, access the ‘Operating Income’ Frame within the ‘Profitability’ Logical View. Could you drill down to the BW to examine this trend in more detail if desired? ______________________________________________________ ______________________________________________________

1-10

Return to the ‘Management Cockpit: Overview’ screen. Lastly you are interested in any political news that may shape decisions with regards to the Diabetes market. Using the ‘Red Wall’ and the ‘Force Field Analysis’ Logical View and the ‘Political Docs’ Frame find out which documents are available? ______________________________________________________ ______________________________________________________

© SAP AG

TERP10

16-22

Strategic Enterprise Management (SEM): Solutions Unit: Strategic Enterprise Management (SEM) Topic: Management Cockpit (MC)

1.

Management Cockpit Navigation and Analysis 1-1

Open the ‘Diabetes Products Division’ Management Cockpit SEM → Performance Measurement → Management Cockpit → PharmaStar Training → PharmaStar SBUs → PharmaStar Divisions → Diabetes Products Division (double click) The Cockpit will default to June, 2002. Accept this as the ‘Period’

1-2

How many walls does the Cockpit have and what do each of the walls represent? The Cockpit has four walls (the maximum is nine walls per Cockpit). The black wall shows financial indicators, the blue wall shows internal indicators, the red wall shows external indicators and the white wall concentrates on current initiatives and projects.

1-3

How would you differentiate the theory behind the Balanced Scorecard from the Management Cockpit? The Balanced Scorecard primarily provides a framework to translate and communicate strategy throughout the business and therefore has a focus on the KEY measures that will help us to drive the strategy through analysis and feedback over the mid to long term. In essence, it is the tool we use for quarterly ‘double feedback loop reporting’ whereby we are interested in challenging and driving the strategy. The Management Cockpit is more focused on the analysis of a wider set of indicators, both of strategic but mainly operational performance. Evidently there are similarities between the two tools (theory behind walls and perspectives is very similar etc.) and they can be used together to good effect. Overall we use the Management Cockpit for monthly ‘single loop reporting’ whereby we are less interested in strategy and more concerned with whether we are making target.

© SAP AG

TERP10

16-23

1-4

How many Logical Views does the Black Wall have and what are they called? What is the concept behind Logical Views? The Black Wall has six Logical Views – Profitability / Growth / Cash Flow / Risk Management / Shareholder Management / Stakeholder Management. Logical Views are intended to pose a question, for which we then logically look for the answer in the Frames.

1-5

Expand the ‘Growth’ Logical View. How many Frames are contained in this Logical View? What do Frames represent? Expand the ‘Growth’ Logical View The Logical View has six Frames Frames are the visual representations of Key Figures but can also contain documents and BW Queries. They are intended to be - and are - easy to understand visual interfaces into the system. The results you are seeing are coming directly from the BW database, via the OLAP Buffer.

1-6

Open the ‘Growth’ Logical View. Are the Frames all graphics or a mixture of graphics, documents and BW reports? From the traffic lights how would you judge we are progressing against our targets? Double click on the Growth Logical View The frames are all graphics The traffic lights are almost entirely green for the Frames in this Logical View which would suggest that we’re on track.

1-7

Select the ‘Sales per Product Line’ Frame. Of which product line are we selling most (as measured in USD) so far this year? From within the ‘Growth’ Logical View, select the ‘Sales per Product Line’ Frame Product E, the insulin inhaler was our strongest performing product over the year-to-date. As our model predicted, this has had a moderately detrimental impact on our other Product Lines.

© SAP AG

TERP10

16-24

1-8

Now select the ‘Net Sales per Competitor’ Frame. Have we managed to gain back the lost ground from our competitors? Whilst still in the ‘Sales per Product Line’ Frame, select the Frame. We have made up the lost ground and then some.

1-9

Finally, because of the extra costs associated with bringing the inhaler product line to market you know that your Operating Income has suffered a little this year. That being the case, access the ‘Operating Income’ Frame within the ‘Profitability’ Logical View. Could you drill down to the BW to examine this trend in more detail if desired? Select the

‘Back to Overview’ icon

Within the ‘Black Wall’ select the ‘Profitability’ Logical View and double click on the ‘Operating Income’ Frame Some BW reports have been attached to this report (as you can tell from the icon below) so you can drill down as necessary

1-10

Return to the ‘Management Cockpit: Overview’ screen. Lastly you are interested in any political news that may shape decisions with regards to the Diabetes market. Using the ‘Red Wall’ and the ‘Force Field Analysis’ Logical View and the ‘Political Docs’ Frame find out which documents are available? Return to the ‘Management Cockpit: Overview’ screen by selecting the ‘Back to Overview’ icon Within the ‘Red Wall’ expand the ‘Force Field Analysis’ Logical View Select the ‘Political Docs’ Frame There are numerous available documents

© SAP AG

TERP10

16-25

Strategic Enterprise Management (SEM): Test Your Knowledge 1.

Name the Five components that support the SEM Value Proposition___________________________________

2.

The underlying data used by SEM is stored in the main OLTP system. True or False?

3.

Data retrieved from the internet and stored , could then be called up and used in any of the SEM applications, assuming proper settings. True or False?

4.

A Planning Area in BPS gets it’s information from an underlying Info Provider or Cube in BW. True or False?

5.

Value Driver Trees used in SM can contain both qualitative data and quantitative data depending upon the user defined definition. True or False?

6.

List the components used in the Management Cockpit and what they do.__________________

© SAP AG

TERP10

16-26

Strategic Enterprise Management (SEM): Answers 1. Name the Five components that support the SEM Value Proposition. BPS(Business Planning and Simulation), BCS ( Business Consolidations), SRM ( Stakeholder Relationship Management) SM ( Strategy Management and PM ( Performance Measurement)

2. The underlying data used by SEM is stored in the main OLTP system. True or False ? False, as it is stored in the BW 3. Data retrieved from the internet and stored , could then be called up and used in any of the SEM applications, assuming proper settings. True or False? Once stored in the Knowledge Warehouse, then the data would be available for all SEM applications, for example, to support the size of the market when doing a Business Plan. 4. A Planning Area in BPS gets it’s information from an underlying Info Provider or Cube in BW. True or False? True as a Plan Area is mapped to an underlying InfoCube in BW 5. Value Driver Trees used in SM can contain both qualitative data and quantitative data depending upon the user defined definition. True or False? True. Answer 6.

List the components used in the Management Cockpit and what they do____The cockpit is made up of up to 9 walls, which in turn could each have up to six logical views to represent some contention that needs to be supported, and each view in turn could have up to six configurable frames representing the data or “answer” to the contention

© SAP AG

TERP10

16-27

Appendix A: Navigation

Contents: z Navigation in the system z Help options z User-specific settings

 SAP AG 2004

© SAP AG

TERP10

17-1

Appendix A: Navigation: Unit Objectives

At the conclusion of this unit, you will be able to: z Identify the elements of a standard window z Navigate in the system z Use the basic help functions z Personalize your user settings

 SAP AG 2004

© SAP AG

TERP10

17-2

Logging Onto The System

User

System

Help

SAP R/3 New password

Client

100

User

|

Please call your user administrator on Tel. 1972 if you have problems logging on

Password

Language

EN

You can place your own text on the initial screen: See SAP Note 205487 DEV (1) (100)

TWDF0670 OVR

 SAP AG 2004

mySAP ERP systems are client systems. The client concept enables you to run several separate business operations at the same time in one mySAP ERP system. A client is, in organizational terms, an independent unit in the system. Clients have their own data environment and therefore their own user master and transaction data, assigned user master records and chart of accounts and specific Customizing parameters. So that you can log onto the system, you must have a user master record created for you for the corresponding client. For reasons of access protection, you must enter a password when you log onto the SAP System. The system does not display the password that you enter. SAP R/3 systems are available in several languages. Use the Language input field to select the logon language for each session. Multiple logons have been logged in SAP R/3 systems as of Release 4.6. This is for security as well as licensing reasons. A warning message appears if the same user attempts to log on twice or more. This message offers the user three options: y Continue with this logon and end any other logons in the system y Continue with this logon, without ending any other logons in the system (this will be logged in the system) y Terminate this logon You can place your own text on the initial screen in a number of ways. For more information, see SAP Note 205487.

© SAP AG

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17-3

SAP Easy Access Menu

Edit

Favorites

Extras

System

Help

SAP Easy Access Other menu

Create role

Assign users

Documentation

Favorites SAP menu Office Information Systems Tools

You are greeted by your logo in the right-hand part of the window DEV (1) (100)

TWDF0670

OVR

 SAP AG 2004

SAP Easy Access is the standard entry screen displayed after logon. You navigate through the system using a tree structure. You can include an image on the right-hand side of the screen, for example, your company logo. This image can only be entered system-wide and is a cross-client setting. Assuming you have the appropriate authorization, you can find a detailed description of the necessary settings by choosing Extras -> Administration Information. Note that this image is stored in the system and transported to the SAP Front End every time it is called by SAP Easy Access. Although this transfer is compressed, the image for the initial screen should not exceed 20 kB. You can prevent this image being called either by using the setting Low Speed Connection in the SAPLogon program (see SAP Note 161053) or by deactivating the calling of the image by choosing Extras -> Settings. For more information, see the slide "User-Specific Personalization".

© SAP AG

TERP10

17-4

Role-Based User Menu

Menu

Edit

Favorites

Extras

System

Help

SAP Easy Access Other menu Favorites URL - SAP Service Marketplace SM50 - Work Process Overview SM04 - User List Role SAP_BC_BASIS_ADMIN System: Running Operation System Configuration Performance Analysis

Create role

Assign users

Documentation

User's selected favorites shorten navigation times

Problem Analysis Overview RZ20 - CCMS Monitoring Details

Role-based menu contains the activities that the user can run in the system, as defined in their role DEV (1) (100)

TWDF0670

OVR

 SAP AG 2004

A role describes a suitably defined number of activities in the system. These represent the range of functions users typically need for their work. User roles have to be set up using the Profile Generator so that system users can work with userspecific or position-related menus. The authorizations for the activities listed in the menus are also assigned to the users using user roles. Predefined user roles from all application areas are included in the standard system. Users who have been assigned a user role can choose between the user menu and the SAP standard menu. You can find the roles that are supplied in the standard system by choosing Other menu on the SAP Easy Access initial screen. Every user can personalize the initial screen using Favorites. You can create your own Favorites list containing the transactions, reports, files and Web addresses that you use most often. You can add favorites either by choosing Favorites or by using the mouse to "drag & drop" items into the Favorites directory.

© SAP AG

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Elements of the Screen Layout User

Edit

Goto

System

Menu bar Standard toolbar Title bar Application toolbar

Help

Maintain User Profile

Command field ESCH

User

MENZ EL

Last changed by

Address

Defaults

08.12.2002 21 : 46 : 37

Parameter

Status

Tab page Input fields Checkboxes Radio buttons

StartMenu Logon language Output Controller OutputDevice

Saved

Decimalization 1.234.567,89 1,234,567.89 1 234 567,89

Output immediately Delete after output

Date format DD.MM.YYYY

Personal time zone CET

MM/DD/YYYY MM-DD-YYYY YYYY.MM.DD

CATT Test status

YYYY/MM/DD

DEV (1) (100)

 SAP AG 2004

Status bar

YYYY-MM-DD

TWDF0670

OVR

Command field: Use the command field (hidden as default) to go to applications directly by entering the transaction code. You can find the transaction code for an application in the SAP Easy Access menu (see User-Specific Personalization) or in the appropriate application by choosing System −> Status. Standard toolbar: The pushbuttons in the standard tool bar are found on every screen. Any pushbuttons that cannot be used in a particular application are grayed out. If you place your cursor on a pushbutton for a while, the system displays a quick info text that explains the pushbutton's function. The appropriate function key setting is also displayed here. The application toolbar shows you which functions are available in the current application. Checkboxes: Checkboxes enable you to select several options simultaneously within a group. Radio buttons: allow you to choose exactly one item from a selection. A tab page provides a clearer overview of several information screens. Status bar: The status bar displays information on the current system status, for example, warning or error messages. Other elements are: Menu bar: The menus shown here depend on which application you are working in. These menus contain cascading menu options. Title bar: The title bar displays the functions that are available for the user.

© SAP AG

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17-6

Selecting Functions

Menu

Edit

Favorites

Extras

System Create session End session

SAP Easy Access Command field Other menu

User profile Services Utilities List

Favorites URL - SAP Service Marketplace SM50 - Process Overview SM04 - User List Role SAP_BC_BASIS_ADMIN System: Running Operation System Configuration

Services for object Object history Own spool requests Own jobs Short message Status... Log off

Performance Analysis Problem Analysis Overview RZ20 - CCMS Monitoring

Details

Menu

SAP Easy Access and favorites list  SAP AG 2004

You can call functions in the system as follows: y Using the mouse by selecting a - menu option - Favorites - Entry in the SAP Easy Access menu y Using the keyboard (Alt + the underlined letter in the appropriate menu option) y By entering a transaction code in the command field: A transaction code is assigned to each function (but not every screen) in SAP R/3 systems. You call display the appropriate transaction code from each screen in the system, for example, to display the customer master data, enter /n and then the appropriate transaction code - /nsu3. You can determine the transaction code by choosing System -> Status. Additional input options: - "/n" ends the current transaction - "/i" deletes the current session - "/osm04" opens a new session and branches to the transaction specified (SM04.) The command field can also be called using keyboard commands. To do this, use the keyboard combinations Strg+Tab and the cursor moves from the current input field to the next input field. Use Tab to move within an input field group. By entering "search_sap_menu" in the command field, you can display menu paths for the desired SAP transactions. You can also search for text strings.

© SAP AG

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17-7

Field Help: F1 and F4

F1 Help Displays the meaning of fields and technical information

F4 Help

Output Controller OutputDevice

Displays possible entries

Output immediately Delete after output Personal time zone CET

CATT Test status

Address

Defaults

StartMenu Logon language Output Controller OutputDevice

Language (1) 38 Entries found Restrictions

Performance Assistant

Print parameter 2 Indicates whether spool requests are printed immediately. Select this field to print your spool requests immediately.

Leav the field blank to retain spool requests in the spool system until they are released. To release these spool requests for printing, you can use System -> Services -> Output controller.

Lang... AF AR BG CS DA DE EL EN ES ET FI FR HE HR HU ID

Language Afrikaans Arabic Bulgarian Czech Danish German Greek English Spanish Estonian Finish French Hebrew Croatian Hungarian Indonesian

 SAP AG 2004

Use F1 to display an explanation of fields, menus, functions and messages. F1 Help also provides technical information on the relevant field. This includes, for example, the parameter ID which you can use to assign values for your user to input fields, which have to refer to these parameter IDs. Use F4 to display possible input values. You can also access F4 help for a selected field using the button immediately to the right of that field. If input fields are marked with a checkmark icon, then you can only continue in that application by entering a permitted value. You can identify many fields in an application as either required entry fields or optional entry fields by using transaction variants, screen variants or Customizing settings.

© SAP AG

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Menus: System and Help Menu

Edit

Favorites

Extras

System

Help

Create session


Application help

End session

SAP Library

User profile

Glossary Create roleRelease Notes Assign users

Services Utilities

Favorites SAP menu Office

SAP Service Marketplace

List

Feedback

Services for object

Information Systems Tools

Documentation

Settings...

Object history Own spool requests Own jobs Short message Status... Log off

Both of these menus are available on every screen and always offer exactly the same options DEV (1) (100)

TWDF0670

OVR

 SAP AG 2004

The System menu contains the following options: y Create/End session: Allows you to create and end sessions. The maximum number of sessions can be set (between two and six) by the system administrator using the parameter rdisp/max_alt_modes. y User profile: This is where you can enter user-specific settings. For example, you can use parameter IDs in Own Data, in order to set default values for specific user-dependent fields in the system (for example, the company code field.) y List: Contains important list functions, such as searching for character strings, saving in PC fields, printing and so on. y Status: Enables you to display important user and system data. y Log off: Ends the SAP session (with a confirmation prompt.) The Help menu contains the following options: y Context-sensitive Application Help y Access to SAP Library (see next page) y A glossary

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SAP Library SAP Library

Getting Started

Show/Hide Tree

Open all Previous

IMG

Glossary

Search

Help on Help

Business unit

SAP Library

Close all Next

Release Notes

Synchronize

SAP Library Getting Started SAP Web Application Server SAP Know ledge Management Help on Help Help on the Web Copyright

SAP Web Application Server, Release 6.10, June 2001 © Copyright 2001 SA P AG. All rights reserved.

Local intranet

 SAP AG 2004

SAP provides comprehensive online help. You can display this help from every screen in the system by choosing Help. Alternatively, you can use the relevant icon (the yellow question mark) to display the documentation. You can access the SAP Library quickly and comfortably by using the SAP Service Marketplace. There you can find the SAP Help Portal under Knowledge and Training. Here you can access the Help documentation in HTML format and perform efficient full-text searches in the SAP Library. If you have the SAP Library installed, you can also take advantage of these options within your own company. You can access the SAP Help Portal at http://help.sap.com.

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User-Specific Personalization Menu

Edit

Favorites

Extras

System

Help

Display documentation


Shift+F6 Ctrl+Shift+F10

Technical details Settings Set start transaction

Shift+F9 Create roleShift+F7

Options Assign users

New Visual Design... Documentation Clipboard Generate graphic

Favorites SAP menu Office

Create shortcut... Activate GuiXT

Information Systems Tools

Default size Hardcopy Quick Cut and Paste Spelling Check Sapgui Help

Settings

About ...

This is used to specify settings Display favorites at end of list Do not display menu, only display favorites Do not display picture Display technical names

A range of settings simplifies working with the system DEV (1) (100)

TWDF0670

OVR

 SAP AG 2004

The end user has many possibilities for personalizing the system. Some are described below: y You can alter the layout of your initial screen by selecting Extras −> Settings, for example, by switching off the image in the right-hand part of the window to display the technical names (transaction codes) in the SAP Easy Access menu. y Under Customizing of local layout, you can activate the Quick Cut and Paste function. Under Options... you can influence the reaction time of the quick info that is displayed when you move your mouse over an icon or pushbutton. y By selecting System −> User profile −> Own data you can define your personal default values. When doing so, you can choose between the tab pages Address, Defaults and Parameters. As an example, the setting of Parameters is explained here: - Parameters: Here you can set defaults for frequently used input fields. In order to be able to set a default value for a field, it must have been assigned a parameter ID first. Procedure for finding the parameter ID: Goto the field for which you wish to set a default value. Select F1 Help and then choose Technical Info. The system displays an information window that contains the relevant parameter ID under the heading Field Data (as long as the field has been assigned a parameter ID.)

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Appendix A: Navigation: Unit Summary

You are now able to: z Identify the elements of a standard window z Navigate in the system z Use the basic help functions z Personalize your user settings

 SAP AG 2004

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Appendix B: Glossary ABAP

Advanced Business Application Programming: SAP’s programming language.

AGate

Application gateway: core processing component of the Internet Transaction Server (ITS) that links the ITS to the R/3 System.

ALE

Application Link Enabling: enables distribution of business processes and functions to several loosely-linked SP systems.

ALE Distribution Model

Describes the ALE message flow between logical systems. The relationships between logical systems, message types, BAPIs and filters are defined in the distribution model.

API

Application Programming Interface: software interface for application programs.

APO

Advanced Planner & Optimizer: software solution for dynamic supply chain management, that is, active processing of the entire logistics chain (supply chain) from the vendor to the customer.

Application Hosting

SAP or SAP partners set up and/or operate systems and applications.

ATP

Available to Promise

AWB


Backend system

Independent IT system with its own database (for example, mySAP.com component systems).

BAPI

Business Application Programming Interface: functional interfaces that use methods from business objects.

BBP

Business-to-Business Procurement: e-commerce business process that enables employees to purchase goods and services directly from the provider.

Business Object

Abstract program-related representation of actual business objects.

BW

SAP Business Information Warehouse: enables the evaluation of data from both SAP and non-SAP applications.

CFM

Corporate Finance Management: SAP initiative that provides a comprehensive package for financial resource management and for the analysis and optimization of a company’s financial business processes.

CGI

Common Gateway Interface: the CGI standard interface enables external programs to be started from the World Wide Web – which allows interactive Web pages to be created on the server.

Channel

Preselected transaction or Web page, of which an updated version is displayed either automatically or on request.

ChannelBar

Bar on the left-hand side of the Workplace browser window that displays the status of the channels available.

Classification of transactions

States which SAP GUI is supported by a particular transaction.

Client

A unit within an SAP System, self-contained from the points of view of commerce, organization, and data.

Component system

Umbrella term for the mySAP.com systems integrated into the Workplace.

Composite role

Collection of single roles. A new menu is structured around the menus from the single roles.

Cookie

Small text files or character strings that the Web server sends to the browser. They are used to register user behavior (passwords, personal data, which pages the user calls up most often) In the context of the Workplace, cookies are one of the options for implementing Single Sign-On.

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CRM

Customer Relationship Management: umbrella term covering all aspects of business relationships with customers with the aim of fostering long-term customer loyalty.

CSS

Cascading Style Sheet: enhancement that provides greater flexibility in the design of HTML pages and enables you to define frequently-used format templates and font types once only.

CUA

Central User Administration: a system group includes several SAP systems with several clients. The same users are often created and the same roles assigned in each client. Central User Administration is designed to perform these tasks in a central system and distribute the data to the systems in the system group.

Customizing

Settings that you need to make when implementing a system, for example, to adjust the company-independent functions provided to the business requirements specific to your company.

DIAG

Dynamic Information and Action Gateway: protocol for communication between the SAP GUI and the application server (also known as the SAP GUI protocol).

Digital certificate

Digital document that contains the information required to verify a user’s identity and the keys used for encrypting and decrypting messages. The most commonly used format for client certificates is the X.509 standard. In the context of the Workplace, cookies are one of the options for implementing Single Sign-On.

DME

Data Medium Exchange

Drag&Drop

You can use Drag&Drop to select objects in one area (source) with the mouse, and then move them to another area (target).

Drag&Relate

Browser-based navigation tool that enables you to link data from one application with another application. This includes both SAP applications and applications on the Web.

Drag&Relate Servlet

Processes information requests that are launched in the mySAP.com Workplace system landscape from a source system using Drag&Relate.

EAI Viewer

Enterprise Application Integration is a set of technologies that allows the movement and exchange of information between different applications and business processes within and between organizations.

ECL Viewer

Optional component for visualizing files in cFolders

EDI

Electronic Data Interchange

ERP

Enterprise Resource Planning: ERP systems ensure enterprise-wide resource planning using targeted workflow management. ERP includes back-office systems such as, for example, production, financial, human resource, sales and materials management systems.

ESA

Enterprise Services Architecture

ESS

Employee Self-Service: enables employees to be actively involved in human resource business processes. Employees can display, create and maintain certain types of data, anytime and anywhere, with an easy-to-use Web browser.

EWB

Engineering Workbench

Field attribute

In Central User Administration, you can specify a field attribute for every element of the user master data. This defines the system in which you must maintain that field entry and how the entry is distributed to the relevant component systems.

Firewall

Protects a local network against unauthorized outside access.

Flow logic

Flow logic is a programming model provided by the Internet Transaction Server for creating Web applications, and it is stored as a file in XML-enabled format on the AGate.

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Frame

A WWW page can consist of several HTML pages that are separated by visible or invisible frames.

Front end

Work station

Global User Manager

In the Global User Manager, the system administrator in the central system has an overview of all the users in the system group, existing user groups, the systems in the system group, and roles. The system administrator can use this overview to make changes and distribute them to the relevant systems.

GSS-API

Generic Security Services: standardized security interface with a standard communication model for abstracting from the individual products and their characteristics.

GSS-API V2

Standard interface for security functions that are used by SNC.

GUI

Graphical User Interface

HTML

Hyper Text Markup Language. Contains formatting instructions (that the Web browser can interpret) and links to other documents or objects.

HTMLBusiness

SAP’s own macro language that includes statements used to merge R/3 data dynamically into the HTML business templates of Internet applications that are driven by the Internet Transaction Server (ITS).

HTTP

HyperText Transfer Protocol: protocol between the Web server and the Web client.

HTTPS

Hyper Text Transfer Protocol Secure Sockets. Data packets that are transferred using an HTTPS connection are encrypted using SSL.

IAC

Internet Application Component: easy-to-use application in the mySAP.com Workplace. These components enable even first-time users to execute simple Web applications.

IDES

Internet Demonstration and Evaluation System that contains model companies to map the relevant business processes in the mySAP.com system.

Incoterms

International Commercial Terms

Internet Business Framework

Enables the integration of users, applications, and data distribution by supporting XML on all architecture levels. Cross-company business processes can be triggered at Workplace level from various internal applications and external Internet services.

ISAPI

Internet Server Application Programming Interface: Microsoft software interface for application programs for creating Web applications.

ITS

Internet Transaction Server: interface between the component systems and the Internet. The ITS enables Internet and intranet users to communicate directly with SAP systems by starting business transactions, function modules, and reports as Internet applications. It consists of two main components – the WGate and the AGate.

KW

Knowledge Warehouse: integrated environment for creating, translating, presenting, distributing, and administering multimedia content. The Knowledge Warehouse provides a comprehensive range of tools and functions to support corporate knowledge management and transfer.

LaunchPad

Role-specific list of activities in the Workplace containing links to SAP components and to the Web.

Logical system

System on which applications that are integrated and have a common database run. In the SAP environment, this corresponds to a client in an SAP System.

LTI

Long Term Incentives

LIS

Logistics Information System

Marketplace

Electronic marketplace that companies use to provide information, content, and products.

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Migration

Data transfer from one software system to another (for example, master data and transaction data).

MiniALV

List display in a small display area of the browser window. The MiniALV (SAP List Viewer) can be used either as a MiniApp in its own right, or as part of another MiniApp.

MiniApp

Intuitive, easy-to-use Web application or Web document. When the user starts the mySAP.com Workplace, MiniApps provide the user with an overview of and access to his or her most important information on the initial screen. The WorkSpace can contain several MiniApps.

MPS

Master Production Scheduling

MRP

Material Requirements Planning

mySAP Business Suite

SAP’s comprehensive solution concept for optimum integration of all relevant business processes on the Internet. mySAP Business Suite provides seamless, complete integration between SAP solutions and non-SAP systems across all business processes, thereby delivering a complete e-business environment.

NSAPI

Netscape Server Application Programming Interface: Netscape software interface for application programs for creating Web applications.

OLE

Object Linking and Embedding: enables objects from one application to be linked to another application.

One-Step Business

Dovetailing of business processes between business partners, for example, using a marketplace.

OLAP

Online Analytical Processing

OLTP

Online Transaction Processing

Partner profile

Definition of parameters for the electronic interchange of data with a trading partner using the IDoc interface: Which message is interchanged how in which direction?

Plug-In

Additional program that enhances a software system’s functionality.

Portal

Pages that serve as initial screens for Internet users, immediately provide relevant information and form a platform for visiting other Web sites.

PortalBuilder

ITS service responsible for the HTML page structure. The PortalBuilder also takes over role-dependent administration of the LaunchPad and MiniApps. The PortalBuilder communicates directly with the Workplace Server for displaying the Workplace on the front-end.

Profile (authorization)

Summarizes authorizations. A user’s authorization profiles are stored in the user master record.

Protocol

Collection of rules for formats and types of data transmission between different computer systems.

Remote system

Independent system in a different location, with which your system can communicate.

Repository

Central storage facility for all ABAP Workbench development objects.

RFC

Remote Function Call: SAP interface protocol, based on CPI-C. An RFC enables you to call and execute predefined functions in a remote system – or even in the same system.

Role

In the mySAP.com context, a role is a collection of activities that are required for participation in a business scenario. The Workplace offers a role-based view of all functions that the user requires for his/her business scenario.

Role maintenance

You can use the Profile Generator to create authorization profiles based on the activities (transactions) contained in a role.

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SAP

English: Systems, Applications, & Products in Data Processing German: Systeme, Anwendungen, Produkte in der Datenverarbeitung French: Systèmes, applications et produits dans l'informatique Italian: Sistemi, applicazioni & prodotti nell’elaborazione die dati

SAP DCOM

Distributed Component Object Model: standardized basis for creating and integrating distributed software components. External client applications can use DCOM as the infrastructure for communicating with SAP servers, if they need to access mySAP.com components.

SAP Easy Access

Navigation menu providing a user-specific initial screen for SAP Systems.

SAPGui

SAP Graphical User Interface

SAP GUI for HTML

GUI that runs in the Web browser and dynamically generates HTML pages based on SAP screens.

SAP GUI for JAVA

Platform-independent GUI, requires a JAVA environment on the PC.

SAP GUI for Windows

GUI for 32-bit Windows workstations.

SAP Service Marketplace

SAP’s global information and communication network.

SAP@Web Studio

PC tool for developing Internet applications that are driven by the Internet Transaction Server (ITS) and access data from the SAP System.

SAProuter

SAP program that acts as part of a firewall system. It enables the routing of traffic to and from the SAP network.

SEM

Strategic Enterprise Management: group of tools and processes enabling managers to introduce company-wide value-oriented management procedures.

Session handling

Session handling in the mySAP.com Workplace enables you to have several sessions open at the same time. The user works with several browser windows, all of which are directly displayed as frames in the mySAP.com Workplace.

Single role

See ‘Role’

Single Sign-On

Mechanism that removes the need for users to enter a password every time they log on to a system. The user only needs to enter a password once, and can then log on to all systems that are part of the Single Sign-On environment.

SIS

Sales Information System

SMTP

Simple Mail Transfer Protocol (Internet Mail) Secure Network Communication: software layer in SAP systems that enables them to communicate with an external security product. The external product can protect the communication links between the components of an SAP System.

SNC

SOAP

Simple Objecct Access Protocol

SSL

Secure Sockets Layer: protocol that uses powerful authentication mechanisms and encryption to protect data transmitted over the Internet.

SSO

Single Sign-On

System infrastructure

The system infrastructure defines the systems and clients required for the implementation and maintenance processes and their significance, as well as the transport routes between the systems.

TCO

Total Cost of Ownership

TCP/IP

Transmission Control Protocol/Internet Protocol: software protocol that defines communication between computers.

Template

Templates are used for certain types of HTML documents, to ensure consistency or provision of functions.

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Ticket

Authentication used for Single Sign-On (SSO) in the mySAP.com Workplace. The central Workplace server gives the user an SSO Ticket. This ticket is then verified by the component systems to allow the user access without having to enter the user ID and password again.

Transaction

Logically self-contained action in an SAP System. From the user’s point of view, a transaction represents one unit (for example, changing a customer address).

URL

Uniform Resource Locator: Internet address (for example, http://www.mysap.com)

User master record/user master data

Records containing important master data for users in the SAP System. User master records are used to assign user menus to users, along with the corresponding authorizations for the activities contained in the user menu.

VBM

Value Based Management (shareholder based approach to managing companies)

WAP

Wireless Application Protocol: protocol that defines the transmission and display of special Internet content on devices with limited display capabilities, for example, cell phones.

Web Browser

Easy-to-use navigation program with a graphical user interface that interprets and displays HTML documents on the Internet.

WebDav

Web-based Distribution Authoring and Versioning

Web Server

Server that manages connections to the Internet.

Web Application Builder

Tool for developing Internet applications driven by the Internet Transaction Server (ITS). You can use the Web Application Builder to create all the files required to run an application on a Web browser.

WebFlow

The SAP WebFlow provides functions that enable SAP Business Workflows to be executed over the Internet.

WGate

WebGateway: component of the Internet Transaction Server (ITS) that links the ITS to the Web server. It receives requests from the Web browser through the Web server and forwards them to the AGate.

Wizard

Software assistant that provides you with instructions for carrying out certain actions in applications.

WML

Wireless Markup Language

Work item

Runtime representation of a task or a step in the workflow definition.

Workflow

Computer-supported processing of highly structured, interlinked, and frequently repeated office processes.

Workplace

Role-based and personalized Web-browser portal to SAP systems, non-SAP systems and Internet services.

Workplace Middleware

Communication software on a server that replicates, synchronizes, monitors and distributes data between the center (network) and users outside the network or other systems such as the Business Warehouse or an R/3 System.

Workplace Middleware

Part of the Workplace architecture consisting of Web server, Internet Transaction Server, and optional Drag&Relate Servlets.

Workplace Server

Central server on which information about the Workplace user roles is stored.

WorkSpace

Right side of the mySAP.com Workplace browser window in which MiniApps, transactions and Web pages are displayed.

XML

Extensible Markup Language: Standard language for defining individual markup languages that tag structured information. XML, like HTML, is a link-oriented language for Web content.

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Appendix C: Further mySAP Business Suite solutions

Contents: z Enterprise Buyer Professional (mySAP SRM) z Customer Relationship Management (mySAP CRM) z Advance Planner & Optimizer (mySAP SCM)

 SAP AG 2004

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Appendix C: New Dimension Products: Unit Objectives

At the conclusion of this unit, you will be able to: z Identify the following further mySAP Business Suite solutions: Enterprise Buyer Professional (mySAP SRM) Customer Relationship Management (mySAP CRM) Advance Planner & Optimizer (mySAP SCM)

 SAP AG 2004

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Enterprise Buyer Professional: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe how SAP supports the business-tobusiness process z Explain how Enterprise Buyer Professional integrates with other SAP module areas and systems z Demonstrate how to create a shopping basket and confirm a goods receipt

 SAP AG 2004

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Enterprise Buyer Professional Sourcing

Analysis Business WarehouseBased Enterprise Reporting

• Receive product • Check invoice

Professional Purchasing Environment

Integration Marketplaces

Employee •Browse through online catalogs •Create shopping basket •Place order or save basket •Check status

Manager Professional Purchaser Employee

Components Planner

• Receive Purchase Order • Deliver product • Create Invoice

Vendor

Execution

Tendering (public and non-public) Reverse Auctioning • Approve or reject requirement coverage request

Components Planning (Plant Maintenance) One-Step Buying Over Marketplaces

Buying

 SAP AG 2004

SAP Business-to-Business Procurement also offers functions for purchasers, such as: y Component planning for maintenance orders y A professional purchasing environment y Bid invitations and reverse auctions In addition, the software can be opened to the outside world through the use of virtual marketplaces, for example, for publishing public bid invitations or to find new vendors/business partners. Key message: SAP BBP is more than just an employee self-service scenario - It covers all aspects of Internet-based procurement. Integration with the Business Information Warehouse (BW) provides sophisticated reporting examples: y Order volume per purchasing group y Order volume per product y Order volume per vendor y Analysis of bids

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Roles in Enterprise Buyer Professional People People assume assume Roles Roles to to participate participate in in Business Business Scenarios Scenarios implemented implemented by by Components Components

z Enterprise Buyer Professional z Marketplaces z SAP BW

z Professional Purchaser

• Process Bid Invitations • Process PO

z Bidder

• Request User • Submit Bids

z Enterprise Buyer Professional z Marketplaces

z Vendor

• Enter Invoice • Confirm Goods Delivery

z Enterprise Buyer Professional z Business Connector

z Internal Dispatcher

• Confirm Goods Delivery Centrally

z Enterprise Buyer Professional

 SAP AG 2004

Professional Purchaser Professional purchasers can Create public and restricted bid invitations and manage the bids received

Process incomplete purchase orders in the SAP B2B Procurement system further Bidder

Bidders submit bids against bid invitations and reverse auctions. If a bidder's bid is accepted, a vendor relationship is established. Employee With SAP B2B Procurement, all employees can carry out the following tasks directly at their desk via the user-friendly browser interface: Report their requirements and search for suitable products in catalogs Check the procurement status and delete requirement coverage requests that are no longer required Enter the goods receipt, receipt of performed services, or invoice, (if the business partner has not already done so) Manager Managers are responsible for approving the requirement coverage requests of their employees. The usage of the Web-capable SAP Business Workflow automates this process step. External Business Partner Vendors and service providers can enter delivery of goods or performance of services as well as invoices into your SAP B2B Procurement system via an extranet. Bidders can submit bids against bid invitations.

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Roles in Enterprise Buyer Professional People People assume assume Roles Roles to to participate participate in in Business Business Scenarios Scenarios implemented implemented by by Components Components

z Administrator

• Create Org. Plan • Manage User Data

z Enterprise Buyer Professional z Electronic Catalog

z Component Planner

• Purchase Spare Parts

z Enterprise Buyer Professional z Plant Maintenance z Electronic Catalog

z Accountant

• Enter Invoice Centrally

z Enterprise Buyer Professional

z Secretary

• Process Standard Shopping Basket • Confirm Goods Receipt Centrally

z Enterprise Buyer Professional z Electronic Catalog

 SAP AG 2004

Administrator System and application monitors are available so that system administrators can ensure the smooth running of the SAP B2B procurement applications and system availability. Component Planner The component planner can process maintenance and services orders, and plan the materials needed for execution of these orders. Accountant Accountants are responsible for entering invoices in the SAP Business-to-Business Procurement system, in cases where employees, secretaries or office assistants, or vendors have not already done so. They can enter invoices for purchase orders that: Exist locally in the SAP B2B Procurement system Are directly created in the ERP system Are created in the ERP system from a shopping basket in the SAP B2B Procurement system. Secretary Secretaries can define templates for recurring procurement processes, which employees can then use when creating shopping baskets. They can confirm goods receipts or service entry sheets for the employees in their department, centrally. After which, they can enter the invoice for the purchase orders that belong to it.

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Requisite Catalog

 SAP AG 2004

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Creating a Shopping Basket

 SAP AG 2004

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Manager’s Inbox - Approval

 SAP AG 2004

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Shopping Basket Status

 SAP AG 2004

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Goods Receipt

 SAP AG 2004

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System Landscape Intranet/Extranet/ Internet

Enterprise Buyer Professional

Catalog

Backend System

DB

DB

Internal catalog

Web server/ ITS

EBP

ALE/ BAPIs

R/3/ non-R/3

Web Browser

Catalog

BC SAP Business Connector

BC

External Catalog XML Message

XML Message

 SAP AG 2004

Three-part Internet architecture: y Backbone R/3 System y Electronic Commerce component y Internet Does it make sense to distinguish between a Enterprise Buyer Professional and backbone architecture? Yes, because then you can: y Remove the Internet load from the backbone y React faster to Internet developments without touching the backbone system y XML messages can be sent both from the mySAP ERP backend system and from Enterprise Buyer Professional.

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Enterprise Buyer Professional: Topic Summary

You are now able to: z Describe how SAP supports the business-tobusiness process z Explain how Enterprise Buyer Professional integrates with other SAP module areas and systems z Demonstrate how to create a shopping basket and confirm a goods receipt

 SAP AG 2004

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Customer Relationship Management: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe how SAP supports the front office functionality of customer relationship management z Explain how SAP customer relationship management integrates with other SAP module areas and systems

 SAP AG 2004

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CRM Integrated Business Processes

Customer Relationship Management Enterprise Enterprise Logistics Sales

Internet Sales Tele Sales Field Sales/Service

Finance Marketing HR

Face-toFace toFace-toFace Face

Contact Contact Center Center

Service Interaction Center Marketing Planning

Service

Customer Customer Internet Internet

Campaign Management

“One Face to the Customer”  SAP AG 2004

Customer Relationship Management (CRM) is a comprehensive sales and marketing approach to building long-term customer relationships and improving business performance. The integration of back-office enterprise systems (Logistics, Sales, Finance, HR, etc.) with frontoffice CRM functionality (Internet Sales, Tele Sales, Field Sales/Service, Service Interaction Center, Marketing Planning and Campaign Management) is a key advantage of SAP’s CRM solution. Face-to-Face interaction with a customer traditionally involves a sales persons and/or service representatives meeting with the customer directly. Contact Center is defined as a central point where all calls and phone interaction with the customer takes place. In the traditional role, you may have many departments taking calls, solving customer problems, and taking orders. Other uses would be in the “Help Desk” environment. The result is a central point of knowledge about customer issues. Internet interactions consists of using the internet to buy and sell. There are two distinct methods of using the internet to buy and sell: y B2C - Business to Consumer y B2B - Business to Business

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Business Process Elements

Basic CRM Business Process Elements Business Partner

Product

Organization

Interaction

Campaign

 SAP AG 2004

CRM consists of basic elements that form the foundation for which the CRM business processes are based. The basic elements of CRM business processes are: y Business Partners: Provide a consistent picture of your Business Partners to all employees involved in CRM activities. y Products: Access information on your products and product catalogs used in CRM processes. y Organizational Model: Manage your CRM Organizational Model exactly the way you set up your organization. y Interactions: Manage customer interactions, (sales orders, activities and opportunities) and provide a complete picture of the CRM relationship history. y Campaigns: Plan marketing campaigns and execute them through different channels, (E-Mail, Telephone, or Sales Force).

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CRM Architecture Mobile Clients

CRM System

R/3 OLTP

BW

Telephone

APO Internet

Workplace

 SAP AG 2004

The mySAP.com application component for CRM consists of a central CRM server and various extensions to support different ways of accessing the system. It also allows for connecting to other systems. Depending on you business requirements, not all extensions need to be installed or used. The CRM application component is referred to as the "CRM component" which means the sum of all CRM functionality. "CRM system" is used when addressing questions of data transfer to-and-from the central CRM server or installation configuration options. y The CRM component can be accessed via the mySAP.com Workplace by CRM users such as sales managers or contact center agents. y Internet users may configure and order products or services using the Internet components of the CRM application component. y The mobile sales force or mobile service engineers can connect to the system from their laptops or pervasive devices to exchange the latest information with the CRM component. y Finally, customers may use the phone, fax, or email to reach the sales or service representatives using the integrated contact center solutions.

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Customer Relationship Management: Topic Summary

You are now able to: z Describe how SAP supports the front office functionality of customer relationship management z Explain how SAP customer relationship management integrates with other SAP module areas and systems

 SAP AG 2004

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Advanced Planner and Optimizer: Topic Objectives

At the conclusion of this topic, you will be able to: z Describe how SAP supports the advanced planning and optimizing processes z Explain how SAP Advanced Planner and Optimizer (APO) integrates with other SAP Module areas and systems

 SAP AG 2004

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The Supply Chain Challenge “Managing a Dynamic Network of Supplier & Customer Relationships on a Global Basis to Achieve an Increase in Customer Responsiveness at Least Cost”

INFORMATION FLOW

Supplier

Manufacturing

Distribution

Retail Outlet

Consumer

CASH FLOW

Supply Chain Optimization

 SAP AG 2004

Today’s challenge is to: y Plan timely and cost efficient replenishment throughout the entire supply chain, not just plants and distribution centers as done previously by ERP systems. y Quickly react to constantly-changing business relationships, customer expectations, and business processes within the supply chain. y Manage the supply chain on a global basis. To meet today’s supply chain challenges software solutions must: y Provide immediate visibility to all supply/demand information. y Ensure replenishment plans are synchronized throughout the entire supply chain. y Provide modeling tools to help determine the best approach to reducing overall cycle time in the network. y Support the evolving techniques for buying and selling products/services over the internet. y Allow automation of business process between suppliers and customers in the supply chain. The ultimate goal of supply chain management is to do just-in-time delivery of goods and services to all locations in the supply chain at the lowest cumulative network cost (purchase, manufacturing, transportation, storage, handling, etc.) possible.

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What Is APO? APO Module

What it Does

Supply Chain Cockpit

z Provides a graphical user interface to all APO modules z Provides "Alert Monitors" to notify users of exceptions in the planning process

Supply Chain Engineer

z Provides a graphical design workbench for setting up APO models

Demand Planning

z Provides tools for gathering historical data and generating forecasts. Includes internet access to point of sale data and additional forecasting tools such as linear regression.

Supply Network Planning

z Provides tools for matching supply to demand. Calculates a supply solution that satisfies demand across the supply chain, taking into account constraints such as manufacturing capacity, transportation constraints, etc.

Production Planning/ Detailed Scheduling

z Provides tools for generating the best production schedule; uses algorithms to optimize the schedule to provide best service, lowest cost, etc.

Transportation Planning/ Vehicle Scheduling

z Provides tools to schedule and route vehicles, optimize loads and select the right carrier.

Available-to-Promise

z Provides constraint based available (capable) to promise functionality

 SAP AG 2004

APO is the planning component of SAP’s total supply chain management solution. APO supports planning the supply chain on a: y global basis y operational basis y simulation (what-if) basis APO consists of the following planning modules: y Supply Chain Cockpit The supply chain cockpit gives the user immediate visibility to all supply and demand information in the supply chain network. From the Cockpit users can execute plan adjustments and immediately see the results. The alert monitor gives the user immediate visibility to all exceptions (shortages, capacity overloads, etc.) in the network. y Supply Chain Engineer The supply chain engineer is the network configuration component. It defines the supply chain and the relationships of all locations planned. y Demand Planning (DP) Demand planning is a set of tools allowing users to create as accurate a picture of future demand as possible. Demand Planning supports: - Multiple versions - Multi-level planning - Statistical modeling with fitness of use measurements - Promotional planning - Life-cycle management

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Collaborative Planning in SCM Supplier Collaboration

Supplier

Customer Collaboration

Customer

Manufacturer z Material Requirements z Production Schedules z Purchase Plans z Shipment Schedules

z z z z z

Supply Chain

Sales Forecasts Order Forecasts Promotions/Price Inventory Levels Shipment Schedules

Optimization

Seek maximum efficiency with the shortest cycle time to improve satisfaction ratings with customers  SAP AG 2004

The key to E-Commerce is collaboration among customers and suppliers in a virtual environment. mySAP.com provides the infrastructure for this kind of collaboration. Example: Your customer uses collaborative demand planning to review and adjust its requirements as part of your company’s forecasting business process.

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Advance Planner & Optimizer: Topic Summary

You are now able to: z Describe how SAP supports the advanced planning and optimizing processes z Explain how SAP Advanced Planner and Optimizer (APO) integrates with other SAP Module areas and systems

 SAP AG 2004

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Appendix C New Dimension Products: Unit Summary

You are now able to: z Identify the following further mySAP Business Suite solutions: Enterprise Buyer Professional (mySAP SRM) Customer Relationship Management (mySAP CRM) Advance Planner & Optimizer (mySAP SCM)

 SAP AG 2004

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Appendix D: Production Execution – Process Order

Contents: z Production Process Execution

 SAP AG 2004

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Appendix D: Production Exec. – Process: Unit Objectives

At the conclusion of this unit, you will be able to: z Describe the basic steps used in producing a product with process orders z Create a process order, process inventory transactions, and report production confirmations z Identify the Financial and Controlling integration points of process orders

 SAP AG 2004

This topic covers the basics of manufacturing products using process orders. The LO310 course covers this topic in further detail.

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Application Areas for Process Orders Typical Typical industries industries

Chemical Pharmaceutical Food manufacturers (…)

PRODUCT COMPLEXITY

Production Production according according to to customer's customer's reqmts reqmts

Make-to-order Make-to-order production production

Batch Batch production production

Production campaigns

Mass production


Process orders are used in different areas of the process manufacturing industry. Process orders can be used for various production procedures and identified, for example, according to the criteria product complexity and product stability.

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Application-Wide Processes

Independent requirements

Demand program

Sales

Sales orders

Costing

Stock

MRP

Planned orders

Make-to-order prod.

Process orders

B A C D E

Order execution Delivery to stock Order settlement

Capacity Requirements Planning

Material forecast

Batch record/archiving Integration with QM/LIMS

Inventory mgmt

Integration with PCS

 SAP AG 2004

Process order management is a central part of a complex process chain starting with a requirement (planned or customer requirement) and ending with the goods issue of a finished product. Process order management controls the whole process of the in-house production of products. Process order execution is integrated with the functions of capacity requirements planning, costing, and inventory management. In addition, there are links or interfaces to Quality Management, external laboratory information systems (LIMS), and process control systems.

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Master Data for Process Orders Batch Batch Material Batch Batch

Batch Batch

Resource

.. . Production version

Master recipe

Integrated BOM maintenance

Material BOM

 SAP AG 2004

Master data is data in the SAP System that remains unchanged over a long period of time. It contains information that is used in the same manner over and over again. The material is the central master record in logistics. In general, SAP defines a material as a substance or commodity that is bought or sold on a commercial basis, or is used, consumed or created in production. A batch is a uniquely identifiable partial quantity of a material. The batches of one material are managed separately in stock. With regard to the production process, a batch is a quantity of a material produced during a given production run. This quantity, therefore, represents a nonreproducible unit with unique specifications. The master data for resources describes the means of production in the production process. A production version determines which alternative BOM in combination with which master recipe is used for process order manufacturing. The master data of the master recipe describes the production of one or more materials in one production run without relating to a particular order. Material BOMs describe the structure of products that are produced in a company. They are usually created and maintained from the master recipe (integrated maintenance).

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Master Data in Process Industries

Process manufacturing

Discrete manufacturing Î BOM

Î BOM

Î Routing

Î Master recipe

Î Work center

Î Resource

Î Production order

Î Process order

 SAP AG 2004

As previously described, discrete manufacturing master data is used when the controlling of production is mapped with production orders. A production order thus uses routings, work centers and BOMs. Other master data is required if production is to be mapped with process manufacturing (PP-PI). A master recipe instead of the routing and resources instead of work centers are used for the process order. Discrete manufacturing master data can logically be transferred to the process industries' terminology. The master recipe is actually a special routing that was enhanced with process industry-specific functions. Moreover, in Production Planning-Process Industries (PP-PI), production versions are usually used, so that the corresponding BOMs are assigned directly to a recipe. Maintenance of the BOMs can thus take place directly from the recipe. The resource largely corresponds to the work center. All of the previously portrayed conections thus also remain valid in PP-PI. Material Requirements Planning for example, is completely identical for PP and PP-PI.

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Master Recipe Structure

Resource network

Recipe header

Operations

Primary resource

Material (product)

Secondary resources Phases Material components

Process instructions

Inspection characteristics

PI characteristics

Relationships

 SAP AG 2004

A master recipe defines the following data required for the manufacturing of materials without relating to a particular order: processing steps, resources, material components, data for in-process quality inspection, control information for the process control level The recipe header contains data valid for the entire recipe. You can assign a resource network and the material to be produced to the recipe header. Operations describe the different steps required during the production process. For a more detailed description of the steps in the production process, operations are subdivided into phases. The time-based sequence of phases is determined by relationships. Relationships link the start and finish points of phases. An operation has only one primary resource assigned to it. Normally, this is where the operation is to be carried out. The assignment is valid for all phases subordinate to the operation. If required, you can assign additional secondary resources to operations and phases. If at certain points materials enter the production process, exist temporarily, or are discharged, you assign these as material list components to the corresponding operations and phases. Process instructions are structures used to transfer data from process planning to process control. Process instructions are assigned to the phases of the master recipe. Process instruction characteristics are assigned to process instructions. Together with the corresponding characteristic values, they define the content of the process instructions. Inspection characteristics specify the in-process quality inspections to be performed. They can be assigned to operations and phases.

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Resource Network Charge

Reaction

Discharge

R1 C1

R2

D1

R3

C2

 SAP AG 2004

Resource Networks are only supported in the Process Industry functionality. In manufacturing resources are sometimes unique and therefore can only be used with other resources in a specified sequence. In the presentation above resource C1 can be used with resources R1 and R2 but not with R3. To represent this sequence in the system, you can create predecessor/successor relationships between resources in the form of resource networks. Resource networks used in conjunction with the classification of resources and the resource selection conditions of the master recipe steps will ensure that the sequence is followed and the proper resources are selected.

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Production Resources/Tools (PRTs)

Document Document

Material Material

Equipment Equipment

Miscellaneous Miscellaneous

Production Resource/Tools Production resource/tools are moveable operating resources required for production.  SAP AG 2004

Production Resources & Tools (PRT's) are movable objects required for production. An example is a set of instructions, a calibration tool, or a machine that is not stationary. PRT's are distinguished in the system by their type (document, material, equipment, miscellaneous)

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Production Versions

Production version 1 Production version 2 Routing

Material master record - Receiving storage location (assembly) - Proposed issue storage location (components)

Describes the production procedure

 SAP AG 2004

The production version contains data relevant to all manufacturing environments. This following data is included in a production version: y The fields "Valid from" and Valid to" define the period of validity of the production version. y The "To location" is the proposed receiving storage location. y The fields "BOM alternative" and "BOM usage" define which BOM is to be used in manufacturing. y The task list fields for detailed, rate-based and rough-cut planning. Usually, you enter a group and a group counter in the rate-based planning fields. The values entered are used for scheduling and capacity planning. y The fields "From lot size" and "To lot size", define the area of validity for this version. y The field, "production line" defines the work center (production line) for assigning production quantities in the repetitive planning table. In repetitive manufacturing (in the planning table), the system only displays the capacity requirements for this work center. To be able to carry out capacity planning, this production line must exist in the routing. The creation of a production version is mandatory for repetitive manufactured products. Production versions are optional for discrete and process manufactured products.

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Batch

Batch A batch is a quantity of a material produced during a given production run. A batch represents a homogeneous unit with unique specifications. A batch is a subset of the total quantity of a material held in stock. This subset is managed separately from other subsets of the same material.

Batch master record A record containing data required for batch management.

 SAP AG 2004

In a process manufacturing environment, production is usually executed in batches (lots). In addition, many materials entering the process are managed separately in batch (lot) stocks with different specifications. An alphanumeric batch number identifies a batch master record. You can choose the level at which you want the batch number to be unique in accordance with the structure of your plant and company and your operational requirements. The material number is unique at the client level. However, the uniqueness of the batch number can be defined at the following levels. y In combination with the material and plant y In combination with a material number y At the client level Batches can be used in discrete and repetitive manufacturing environments, if required.

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Material and Batch Material T-FI100 Vanilla ice cream

Batch mgmt reqmt • Acidity : 7 - 9 pH • Total solids : 35 - 45 % • Freezing point : (-18o) - (-14 o) C

BatchB1 B1 Batch

Batch B2

Batch B3

Origin:

Origin:

Origin:

Process order 60000114



Specifications:

Specifications:

Specifications:

• Acidity : • Total solids : • Freezing point :

7 pH 36 % -18 oC

• Acidity : • Total solids : • Freezing point :

8 pH 39 % -15 oC

•Acidity : •Total solids : •Freezing point :

7 pH 43 % -16 oC

 SAP AG 2004

Batch master records always depend on their corresponding material master records. Batches are created for a material. In general, the data of a material master record is valid for all batches assigned to it. In contrast, a batch master record contains data that uniquely identifies a batch and characterizes it as a nonreproducible unit. If a material is to be produced in batches and is subject to inventory management, you must set the Batch management indicator in either the material master view Work Scheduling or Storage 1. You either create a batch master record directly during master data maintenance or the system creates it in the background under certain conditions.

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Editing a Process Order Archiving / deleting

Order request Process order creation

Batch record Process order settlement

Availability check

Proc. order

Resource/ line scheduling

Variance calc. Operations

Material receipts

Phases

In-process quality checks

Process instructions Costs

Order confirmations

Resource selection Batch determination Material quantity calculation

Resource assignme nts Material components

Process order release

Relationships

Order print

Material staging / Material withdrawals

Send control recipes

Process messages to diff. dest.

Edit PI sheet

 SAP AG 2004

The graphic shows the main steps that are performed during process order management to control process manufacturing in the SAP System. The procedure involved in process order management can be divided into the following steps: y Process planning y Process order execution / process management y Completion of order Many of these activities can run automatically or in the background so that manual processing of orders is minimized. WIP determination, deviation determination, and settlement are generally periodic work for Cost Object Controlling and are usually processed in the background. A number of settings must be made (Customizing) for each step to allow for successful order processing.

© SAP AG

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Structure of the Process Order

Process order Header

Material

Operation overview

Material list Material component

Operation

Resource Phase

Material quantity calculation

 SAP AG 2004

Operations describe the different steps required during the production process. For a more detailed description of these steps, operations are assigned phases. An operation is assigned exactly one resource. At the same time, the resource assignment applies for all phases assigned to the operation. The processing sequence of the phases is defined in relationships. The material list is made up of components representing the materials entering and leaving the production process as well as temporarily existing materials and their planned quantities. It also defines the assignment of these material components to phases of the order according to their appearance in the process. In material quantity calculation, you define formulas to calculate the material quantities to be used or obtained in a production process, taking into account the mixing ratios of the input materials, yield ratios of the products and remaining materials as well as specific material attributes (for example, active ingredients).

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Elements of the Process Order Order header

Order no. Status Material number Batch Prod. qty (plnd/act.) Dates (plnd/act.) Plant

Assignments

Resource

Confirmations

Control key Standard values Relationships Ctrl. recipe destination

Char. for process control level

Planned Actual costs

Settlement profile Settlement receiver

Material list Material components

Settlement rule

Header

Phases

Process instructions

Costs

Doc. number Doc. type

Operation overview

Operations

Documents

Production version Resource network Prod. scheduler Planned order Sales order Insp. lot (QM) ( ... )

Activities Time periods Op. quantities

Material number Req. qty (plnd/act.) Requirements date Reservation Batch

Secondary resources

Control key Standard values

Material quantity calculation

 SAP AG 2004

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Order creation options Creating without a planned order

Material Production version

Master recipe

Master recipe

Material BOM

Production version

Material BOM

Process order

Create with planned order

Master recipe

Production version

Material BOM

Planned order

Process order

 SAP AG 2004

For the creation of a process order and a planned order, a suitable production version is determined for the material based on the validity period and the charge quantity range. A production version determines which alternative BOM in combination with which master recipe is used for production. If a process order is created without a planned order, it takes the recipe and BOM from the production version. When a planned order is converted, the production version created for it is made known to the process order and its recipe is transferred. The BOM is not reread, but rather the dependent requirements of the planned order are converted to reservations for the process order.

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Order creation with planned orders Planned order z z z z z z z z

Material Material no. no. (product) (product) Production Production version version Requirements Requirements quantity quantity Requirements Requirements date date

z z z z z z

Material Material no. no. (component) (component) Requirements Requirements quantity quantity Requirements Requirements date date

Material components (reservations)

Order item

Process order Inspection lot Inspection data

Secondary resources Operations / phases

Material quantity calculation Process instructions z z

z z z z

Insp. Insp. char. char. Insp. Insp. procedures procedures

z z z z z z z z

Operations Operations // phases phases Control Control key key Standard Standard values values Relationships Relationships

z z z z

Formulas Formulas

Process Process instruction instruction characteristics characteristics Ctrl. Ctrl. recipe recipe destination destination

Master recipe (for production version)  SAP AG 2004

Planned orders are created in material requirements planning (R/3 - MRP) or in planning in APO (APO - PP/DS or SNP) The creation of process orders via planned orders is the most important application form when using the PP-PI application. The process order data is created automatically this way. Inspection data is copied from the master recipe when an inspection lot is generated, but not written in the process order. Planned orders generated in planning can be converted to process orders (and purchase requisitions to purchase orders) by the MRP controllers (buyers) both in APO and in R/3.

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Process planning

Order request Process order creation Resource/line scheduling Resource selection Batchdetermination Material quantity calculation

Material availability check Process order release

 SAP AG 2004

Process planning comprises all activities that are performed during the time between creation and release of a process order. The goals and methods of resource scheduling for process orders are the same as those for work center scheduling for production orders. They can be found in the unit Order-Controlled Production with Production Orders on the pages Detailed Scheduling (Work Center Scheduling) and Example: The Detailed Scheduling Planning Board (APO). The material availability check for process orders is the same as the availability check for production orders. They are described in the unit Order-Controlled Production with Production Orders on the page Availability Check for Material.

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Batch determination Search strategy

Process order Material list

. . .

Batches found in stock: Batch C1 Dextrose equiv. 80 %

Cornstarch . . .

Selection criteria

Dextrose equivalent: 75 % - 85 %

Batch C2 Dextrose equiv. 66 % Batch C3 Dextrose equiv. 78 %

Batch assignment  SAP AG 2004

You can use the batch determination function to find batches with certain material specifications required for production. According to specific selection criteria, the system looks for batches in stock and selects them. You can classify material list components in classes of the class type Batch. This is how you define selection criteria for batch determination as characteristic values for material list components. The actual characteristics of a batch are also specified using characteristic values. Based on the selection criteria and a search strategy, the system looks for and selects suitable batches in stock. An availability check is performed at batch level.

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Order Release Functions

Order creation Resource/line scheduling Batch determination Availability check

Order release

Print documents

Create and download control recipes

Generate insp. lots

Process messages

In-process quality inspections

Material withdrawal

Confirmations

Goods receipts

 SAP AG 2004

Process orders have a status management which controls the possible processing sequence of the individual business operations. When an order is released, a status is set accordingly. The process order must have status Released so that the business transactions for process order execution and process management can be executed. You can release individual phases and operations, one complete order or several orders at once. Various activities can be triggered automatically when an order is released: y Batch number assignment for the product y Batch determination for the material components y Material availability check y Control recipe generation y Generation of an inspection lot for an in-process quality check

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Standard postings for process orders Process control system

PI-PCS

Postings for process orders

Manually

Process Process messages messages z PI sheet z

Goods issue postings Confirmations

(same as for production orders)

- For phases and sec. res. - For process orders

z

PI-PCS

Goods receipt postings

Control Control recipies recipies (process (process instructions) instructions)

Process order

Documents

Data updates

Resulting activities

 SAP AG 2004

The standard postings for process orders (goods issue, confirmation, goods receipt) can be performed using manual data entry in the R/3 System, process messages from a PI sheet or a process control system. The functions and procedures for manual entry for process orders are the same as those for production orders. They are explained in the unit Order-Controlled Production with Production Orders (goods issue posting, order confirmation, confirmation procedures, goods receipt posting). The process instructions of the order define which process messages are requested by a PI sheet or a process control system. Confirmations are entered for phases and secondary resources (and not for operations). The simplest confirmation procedure is the confirmation for the process order.

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Goods Issue R/3 transaction (manually)

Proc. mess. Process control system

PI sheet

Î Î Î Î

Goods issue posting

Material document

Acctg document

Updating stock quantities Updating stock values Reducing reservations Calculating actual costs and updating the order

 SAP AG 2004

When you create a process order, the system automatically makes a reservation for the material components required for the order. Each material component of the order is given an item number within the reservation. By withdrawing materials, the reserved quantity is reduced and the values of the material components are updated as actual costs in the order grouped according to cost elements and origin. Withdrawal postings can be made using process messages from within a PI sheet or process control system. Goods issue postings can also be made using the relevant transaction.

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Confirmations

Manually

Process Process message message

PI sheet

Confirmations for phases z Events

z Cap.

z Activities

z Cost

z Resources

z Update

(Phase start/finish)

z HR

load reduction at resource update

of order data (e.g. status, dates)

z Quantities Process Process message message

Business operations

data

Process ctrl system

 SAP AG 2004

Confirmations record the tasks that have been performed for the order. Confirmations document the processing state for process orders, operations, and phases. Confirmations are recorded for the phases during process order execution. The figure shows the data that can be confirmed and the business operations that are carried out after a phase has been confirmed. Important confirmations for process manufacturing are confirmations on the start and finish times of phases, from which the costs of activities are derived. Using a PI sheet or a process control system, you can use process messages to confirm phase events. You can also confirm data using the confirmation transactions for the process order.

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Goods Receipt

Process control system

R/3 transaction (manually) Proc. mess.

PI sheet

Goods receipt posting

Material document

Î Î Î

Î

Acctg document

Cost calculation (Valuation strategy: material) Update - Total stock of all valuated stocks (Material) - Total value of all valuated stocks - Moving average price Update - Confirmed quantities (Order) - Confirmed finish date - Status (partially delivered / delivery completed) Credit posting

 SAP AG 2004

Goods receipt postings can be made using process messages from within a PI sheet or process control system. Goods receipt postings can also be made using the relevant transaction. As a result, the quantities and values within the process order and the material records are updated.

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Process Management Process planning

Process order

Other message destinations

Process management

Process control

Execution

Control recipe (process instructions)

Process messages

PI-PCS Process control system PI sheet

 SAP AG 2004

Process management is the interface between PP-PI and the systems involved in process control. Due to its flexible structure, it can be linked to fully automated, partially automated, and manually operated lines. Process management includes the following functions: y Receiving control recipes with process instructions from released process orders. The process instructions define in detail the process steps to be executed and the process data to be confirmed (using process messages). y Transferring control recipes to the corresponding process operators or process control systems y Manual processing: displaying control recipes in natural language in the form of PI sheets that can be maintained on the screen by the process operator y Receiving, checking, and transferring process messages with actual process data from the process control system or the PI sheet Data is exchanged with process control systems using the interface PI-PCS.

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HTML-Based PI Sheet PI sheet

Header

PI sheet 1000000449 Process order: 1234

Received Comment sheet Material: XYZ test material

Comments

Operating group: W01

Control information Additional information

Due to an error... Temp: ______ °C Freq.: ______ Quantity: ____ kg Signature: ____

Phase 10 / Instr. 10 Heat solvent Start agitator. Add material ABC. Note:

Note:

Phase 20 / Instr. 10 Check material quality. Record material quantity. Stop heating and slow down agitator.

Record insp. results Call mat. qty calculation Quantity:____ kg Freq.: ______ Signature: ____

Phase 10 / Instr. 30 Start cooling. Record time and temperature every hour.

Input values

Time 10:00 11:01

Total quantity:?___

Input values

Insp. results recording Function call Signature for proc. step Formula result

Temperature 175.0 168.3

 SAP AG 2004

The SAP PI sheet favors processing on the screen, which means the process operator is to enter, confirm, or complete data interactively. In connection with the process instructions contained in a control recipe, the PI sheet has the following elements and functions: y Display of information on process (control instruction, notes, and so on) y Input fields and tables for entering process data, input validation, signatures y Batch determination and batch check y Process data calculation y Function call for calling data from internal or external applications y Link to QM inspection results recording y Sequence definition for determining the processing sequence of phases y Comments on documentation and messages from process events As of Release 4.6C, you can generate PI sheets in HTML. The browser-based PI sheet is an enhancement of the ABAP list-based PI sheet. It gives you the advantage of a flexible, user-specific layout definition and allows you to define frames, for example, for linking to documents, graphics, the internet and intranet.

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Production in compliance with GMP

Material reconciliation Digital Signature

? ?

Approved recipe

?

Material identification

Quality process management Approved order

Batch record Approved inspection plan

Quality management Batch management

 SAP AG 2004

The guidelines on Good Manufacturing Practices (GMP) laid down by the U.S. Food and Drug Administration (FDA) and other international institutions have become an international standard in many areas of process industries. In particular, they must be taken into account in processes of the pharmaceutical industry. You can specify that a process order can only be created if an approved recipe exists. The order data is therefore locked and cannot be changed. The approval procedure is performed in R/3 engineering change management. You use the material identification function to check whether the material that was picked for the process order is completely available at the production line and will be used in the correct sequence. You can exchange information about the product quality and analysis values between the production plant and the laboratory or the quality assurance system. You use the R/3 Quality Management System to do this. For batch specification, the inspection results can be automatically transferred to the class characteristics of the batch produced. You use the material reconciliation function to analyze and verify the ingredients and yield at the end of the production process. With regard to product liability, the batch record contains all planned and actual data for the production process of a batch. You can activate the digital signature function to execute certain business operations in the R/3 System.

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Process Orders: Information Systems Basis Order information system

Process orders

Process message evaluation

Process messages

Missing parts information system

Missing parts

Business Information Warehouse

BW InfoCubes

Logistic Information System LIS

R/3 LIS Library

Batch where-used list

Material documents

Controlling reports

CO object of order

 SAP AG 2004

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Appendix D: Production Exec. – Process: Unit Summary

You are now able to: z Describe the basic steps used in producing a product with process orders z Create a process order, process inventory transactions, and report production confirmations z Identify the Financial and Controlling integration points of process orders

 SAP AG 2004


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Appendix E: Exercises Appendix E: Production Execution – Process Order General Information In this unit we will use a process order to perform production execution activities. The business scenario is:

SuperChem

© SAP AG

•

Produces fertilizer for the landscape and gardening industry.

•

The fertilizer is built to stock.

•

Uses process orders to manufacture the fertilizer.

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Unit: Production Planning & Execution Topic: Master Data for Process Industries At the conclusion of these exercises, you will be able to: • Display a master recipe

In your plant 1100 in Berlin, liquid fertilizer by SuperChem is only ordered by Specialty Garden Products whose requirements are unpredictable. This fertilizer needs to be used within a limited period of time after it is produced, for it to be effective. Since the liquid fertilizer has a very limited requirement, is expensive to carry, and tends to lose its potency over time, SuperChem only produces the product only after the customer orders it. The make-to-order planning strategy in the R/3 System is used to support the planning of the special formulation liquid fertilizer. 1-1

Display master recipe T-RC9##. 1-1-1 Which short description has been maintained for the recipe? ______________________________________________________ 1-1-2 You are in the recipe's operation overview. Here, an overview of the individual steps in the manufacturing process is displayed. 1-1-3 Display the material list for the recipe. The recipe is used to describe the production of which product? ______________________________________________________

Which material components are required to manufacture this product? ______________________________________________________ ______________________________________________________ ______________________________________________________ © SAP AG

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Unit: Production Planning & Execution Topic: Sales Order and Material Requirements Planning At the conclusion of these exercises, you will be able to: • Create a sales order • Perform material requirements planning in make-to-order production • Describe the special aspects of material requirements planning in make-to-order production • Describe the key material master data settings that support a make-toorder environment Specialty Garden Products orders 10,000 liters of the special liquid fertilizer. You will create a sales order and carry out material requirements planning.

2-1

Create a sales order for your material T-FF9##. 2-1-1 Create the sales order for order type OR (standard order) using the following organizational units: Sales organization: 1000 Distribution channel: 10 Division: 00 The sold-to-party, that is, the customer placing the sales order, is the company Specialty Garden Products. The customer record is managed and identified in the system under sold-to-party number F-1001 at SuperChem. Enter purchase order number 12389-## to identify the customer’s order. The required delivery date should be made two weeks from today. The order quantity for the requested product T-FF9## is 10,000 liters. Enter data as required when creating the sales order and save the order. Write down the order number: _______________________________________________________

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Exit sales order processing. 2-2

Display the stock/requirements list for material T-FF9## in plant 1100. 2-2-1 Write down the data displayed in this list in the following table: Date MRP element

Recpt/Reqd qty

Available qty

2-2-2 What do the MRP elements displayed in the list mean? STOCK: ____________________________________________________ ORDER: ____________________________________________________ ORDER: ___________________________________________________

2-3

Carry out single-item multi-level planning for your material T-FF9## in plant 1100. 2-3-1

Display the MRP list for the material after the MRP run. Write down the data displayed in this list in the following table:

Date MRP element

© SAP AG

Recpt/Reqd qty

TERP10

Available qty

21-4

What changes occurred or additional items added during the MRP run? ______________________________________________________ 2-3-2 Display the planned order the system has created from within the MRP list. Display the account assignment data in the planned order. To which sales order account has the system assigned the planned order? Sales order: _______________________________________________ Display the material components for the planned order. Record them below: ______________________________________________________ ______________________________________________________ ______________________________________________________ 2-3-3 Branch from the MRP list to the MRP data for your material T-FF9##. Which strategy group has been defined for the material on the MRP 3 view. Strategy group: ______________________________________________ 2-3-4 Display the MRP list for your material component T-RF7##. Write down the data displayed in this list in the following table: Date

MRP element

Recpt/Reqd qty Available qty

Display the pegged requirement for the dependent requirement. Follow the route right back to the sales order.

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What is the pegged requirement for the dependent requirements? ______________________________________________________

2-3-5 Branch from the MRP list to the MRP data for material component TRF7##. Which value has been entered in the Individual/Coll. field (dependent requirements indicator for individual and collective requirements) in the MRP 4 view. Individual/Collective: __________________________________________ Which functions do the different settings for the dependent requirements indicator have in make-to-order production? ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ How does the indicator setting 2 affect material component T-RF7## in your example? ______________________________________________________ ______________________________________________________ ______________________________________________________

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Make-to-Order Production: Process Order Execution Unit: Production Planning & Execution Topic: Process Order Execution, Goods Receipt, and Costing At the conclusion of these exercises, you will be able to: • Describe how planned and actual costs are calculated in a process order • Describe the special aspects of process order execution in make-toorder production • Describe how a process order is settled in a make-to-order environment You will convert the planned order created for the sales order to a process order. You will execute the process order and analyze the planned and actual costs. You will settle the process order.

3-1

In collective conversion for planned orders, convert the planned order for material T-FF9## that the system has created in the MRP run for the sales order to a process order. Enter the following criteria to select the planned order: Plant: 1100 MRP controller: F## Sales order: Your sales order number from the previous exercises Use order type PI01 for the conversion. Write down the number of the process order created after planned order conversion. Process order number: ______________________________________________

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3-2

Display your process order. 3-2-1 Which activities did the system carry out automatically after the process order was created? To answer this question, display the order statuses, the Goods recpt detail screen for the order header, and the material list. ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ 3-2-2 Display the settlement rule for the process order. To which settlement receiver are the process order costs allocated during the settlement procedure? ______________________________________________________ 3-2-3 Display the costs incurred by the process order. Write down the planned and actual costs in the table below. You will have to change the layout of this report to include planned costs, as the default layout only has target and actual costs. Origin

Plan

Actual

Planned qty

Actual qty

T-RF7## T-RF8## T-RF9## Total Goods Issues 4250/1420 Total

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3-3

Display the stock/requirements list for your product T-FF9##. Write down the data displayed in this list in the following table: Date

3-4

MRP element

Recpt/Reqd qty

Available qty

Select the control recipe for your order in the control recipe monitor and send it to its destination. Write down the control recipe number: ___________________________________

3-5

Maintain the PI sheet that was created by sending the control recipe. Enter your signature to report the start of phases. Enter your user name, PI-## and confirm the signature by entering the password PASSWORD##. Report the actual quantities of the ingredients charged. Use the input help (F4) to display the target quantities as default values and copy them to the Actual quantity fields. The produced quantity you report in the last phase should be the same as the planned quantity. When you have finished maintaining the PI sheet, set it to complete.

3-6

Select the process messages created by maintaining the PI sheet in the message monitor Send the process messages to their destinations.

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3-7

Display the stock/requirements list for your product T-FF9##. 3-7-1 Write down the data displayed in this list in the following table: Date

MRP element

Recpt/Reqd qty

Available qty

3-7-2 Which changes occurred in the stock/requirements list as a result of the delivery of the product? ______________________________________________________ ______________________________________________________ ______________________________________________________ 3-8

Display the stock overview for your product T-FF9##. In which stock column displayed in the overview, can the batch you just produced be found? __________________________________________________________

Display the detail data about the sales order stock. Write down the number of the sales order to which the sales order stock refers. Sales order (document): _____________________________________________

3-9

Display your process order. 3-9-1 Write down the quantity that was produced: _______________________________

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3-9-2 Display the costs. Write down the planned and actual costs in the table below. You will have to change the layout of this report to include planned costs, as the default layout only has target and actual costs. Origin

Plan

Actual

Planned qty

Actual qty

T-RF7## T-RF8## T-RF9## Total Goods Issues 620000 Activity of alloc. machines Debits Qty of goods manufactured As a result of which business transactions did the system determine the actual costs? ______________________________________________________ ______________________________________________________

3-10

Settle your process order in individual processing. 3-10-1 Write down the settlement sender and receiver that the system displays after the settlement run. Sender: _____________________________________________________ Receiver: __________________________________________________ Display the detail data about the sender and receiver.

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How does process order settlement affect the process order and sales order in terms of crediting and debiting? ______________________________________________________ ______________________________________________________ 3-10-2 Display the costs in your process order. Write down the actual costs in the following table: Cost elements

Actual

400000 Raw materials consumed 620000 Activity of alloc. machines Debits 651000 Order settlement - material 652000 Order settlement - internal processing Credits Balance How does process order settlement affect the process order costs? ______________________________________________________ ______________________________________________________

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3-10-3 Display the cost report for your sales order. Write down the actual costs in the following table: Cost elements

Actual

651000 Order settlement - material 652000 Order settlement internal processing Debits

How does process order settlement affect the sales order? ______________________________________________________

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Solutions Unit: Production Planning & Execution Topic: Master Data for Process

1-1

Logistics → Production - Process → Master Data → Master Recipes → Recipe and Material List → Display Recipe group: T-RC9## Select: Enter 1-1-1 Recipe description: Fertilizer, liquid, form SX 1-1-3 Select the Materials tab Product:

T-FF9## Fertilizer, liquid, form SX

Material components:

T-RF7## Ammonia T-RF9## Potassium sulfate T-RF8## Phosphoric acid

Select: Exit

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Unit: Production Planning & Execution Topic: Sales Order and Material Requirements Planning

2-1

Logistics → Sales and Distribution → Sales → Order → Create 2-1-1 Order type: Sales organization: Distribution channel: Division:

OR "Standard order" 1000 10 00

Choose Enter. The Create Standard Order: Overview screen appears. Enter the following data: Sold-to party: Purch.order no.:

F-1001 12389-##

In the Sales tab Enter the following data: Req. deliv. date: Material: Order quantity: SU (Sales unit)

Today + 2 weeks T-FF9## 10,000 L (liters)

Save the order. Acknowledge any messages regarding the recalculation of dates by selecting Enter. The system displays the order number in the status bar at the bottom of the screen. Note that a new sales order is ready to be entered after your order has been saved. Choose Back to exit sales order processing. Select no when asked if you would like to save this new incomplete order.

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2-2

Logistics → Production - Process → MRP → Evaluations → Stock/Reqmts List Material: T-FF9## Plant: 1100 Select: Enter 2-2-1 Date

MRP element

Recpt/Reqd qty

Available qty

Today

Stock

0

Today

Order

0

Requirement date

Order

10,000 (-)

10,000-

2-2-2 Place your cursor on the MRP element column and select (F1). STOCK: Plant stock ORDER: Individual customer stock for the sales order ORDER: Sales order The quantity of goods received and the requirement quantity for your sales order are both managed in the individual customer stock. Select: Exit

2-3

Logistics → Production - Process → MRP → Planning → Single-Item, Multi-Level Planning Material: T-FF9## Plant: 1100 Select: Enter twice Select: Exit 2-3-1 Logistics → Production - Process → MRP → Evaluations → MRP List Material: T-FF9## Plant: 1100 Select: Enter Date

MRP element

Today

Stock

0

Today

Order

0

Planned goods receipt

PlOrd.

10,000

10,000

Requirement date

Order

10,000 (-)

0

© SAP AG

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Recpt/Reqd qty

Available qty

21-16

During the MRP run, the system creates a planned order to cover the requirements that result from processing the sales order. 2-3-2 In the MRP list for material T-FF9##, position the cursor on the MRP element PlOrd. and choose the Display element button in the lower tool bar. Choose the Assgmt tab to display the account assignment data for the planned order. The planned order has been assigned to the sales order account. In make-toorder production, costs are managed separately for each sales order. To display the material components of the planned order, choose the Components button. The following components are assigned to the order: T-RF7## Ammonia T-RF9## Potassium sulfate T-RF8## Phosphoric acid Select Back twice to return to the MRP list. 2-3-3 Double-click material number T-FF9## in the MRP list. The MRP 1 view of the material master appears. Choose the MRP 3 tab. Strategy group: 20 "Make-to-order production" Select Back Select Exit 2-3-4 Logistics → Production - Process → MRP → Evaluations → MRP List Material Material: T-RF7## Date

MRP element

Today

Stock

Requirement date

DepReq

Recpt/Reqd qty

Available qty 100,000

9,000 (-)

91,0000

To display the pegged requirements, position the cursor on the MRP element DepReq and choose Pegged requirements button in the lower toolbar at the bottom of the screen. To display the route to the sales order, choose Order route. Your sales order is the pegged requirement of the dependent requirements. Select Exit

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2-3-5 Double-click material number T-RF7## in the MRP list. Select the MRP 4 tab. Individual/collective requirements: 2 "Collective requirements only" Setting "2" in the individual/collective requirements indicator for material component T-RF7## implies the following: The dependent requirement is managed in the plant stock. Since there was no shortage in the plant stock, no purchase requisition was created. Settings "1" or " " would mean that dependent requirements would be managed in the individual customer stock. In this case, the system would create a sales order-specific purchase order. Exit the MRP List.

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Unit: Production Planning & Execution Topic: Process Order Execution, Goods Receipt and Costing

3-1

Logistics → Production - Process → MRP → Planned Order → Convert to Process Order → Collective Conversion Planning plant: MRP controller: Sales order: Proc. order type:

1100 F## Order number PI01

Note: If a material number is displayed on this screen, remove before proceeding. Choose the Execute selections icon. The Collective Conversion of Planned Orders: List screen appears. According to the selection criteria, the system only displays the planned order that was created for your sales order. Select the corresponding line in the list and choose the Convert button on the lower toolbar. The system converts the planned order to a process order. The process order number is displayed in the status bar at the bottom of the screen. Select Exit twice. 3-2

Logistics → Production - Process → Process Order → Process order → Display Process order: Select Enter

Order number

Select Status 3-2-1 After creating the process order, the system automatically carried out the following activities:

© SAP AG

Mat. availability check:

MACM "Material committed"

Order release:

REL "Released"

Control recipe creation:

CRCR "Control recipe created"

TERP10

21-19

Batch master record creation for product T-FF9##: BASC "Batch assignment complete" Also check the automatically created batch number in the Goods Receipt/Valuation tab Select: Back Select the Goods Recpt tab Select the Materials list button See automatically assigned batch in the material list for the batch managed components.

3-2-2 Go to the order header. Select: the Header button Choose Header → Settlement rule. The process order costs are charged to your sales order number of the receiver category SDI (Sales document item) at 100 %. Select: Back 3-2-3 In the order header, choose Goto → Costs → Analysis The system determines the planned costs and quantities during process order creation. Origin

Plan

Actual

Planned qty

T-RF7##

4190.00

9000

T-RF8##

329.00

700

T-RF9##

113.00

300

1072.00

9700

10.49

.71

Total Goods Issues 4210/1420 Total

Actual qty

1122.49

At this stage, the system has not yet determined any actual costs. Actual costs are determined only after material withdrawals (for cost element 400000) and confirmations (for cost element 620000) have been performed. Select: Exit twice

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3-3

Logistics → Production - Process → Process Order → Environment → Stock/Requirements List Material: T-FF9## Plant: 1100 Select: Enter element

/Reqd qty

able qty

ed goods receipt RD

0

0

rement date

0 (-)

Select: Exit

3-4

Logistics → Production - Process → Process Management → Control recipe → Control recipe monitor Plant: Process order:

1100 Order number

Choose Enter. The Control Recipe Monitor: Overview screen appears. Select your control recipe and choose Send. After sending, choose the Refresh icon to update the list. The control recipe will now have the status Sent. Select Back Select Exit

3-5

Logistics → Production - Process → Process Management → PI sheet → Find In the Find PI Sheet screen, enter Plant 1100 and your process order. Select Execute. Select your PI sheet, then select the Maintain PI sheet button.

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Enter your signature to report the start of phase 110. Enter your user name, PI-## and confirm the signature by entering your password. Report the actual quantities of the ingredients ammonia and potassium sulfate charged. Use the target quantities as default values and copy them to the Actual quantity fields. Report the end of phase 110. Note that phase 210 is locked for maintenance until you have entered your signature to confirm the end of phase 110. Maintain phase 210 in the same way. When maintaining phase 220, report the quantity of the fertilizer produced. In our example, the quantity produced should be the same as the planned quantity. Use the default value for the Quantity produced field. When you have entered the last signature to report the end of phase 220, set the PI sheet to complete. Choose PI sheet → Set to complete. Select: Back 3-6

Logistics → Production - Process → Process Management → Message → Message monitor Plant: Process order:

1100 Order number

Choose Enter. The Process Message Monitor: Messages screen appears. Select all process messages and choose the Send button to send them. After sending, choose the Refresh icon to update the list. The messages will now all have the status Sent. If some messages still have status To be resubmitted or Destination error, try to analyze the error in the logs and send these messages again. Select Back Select Exit

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3-7

Logistics → Production - Process → Process Order → Environment → Stock/Requirements List Material: T-FF9## Plant: 1100 Select Enter 3-7-1 Date

MRP element

Recpt/Reqd qty

Available qty

Today

Stock

0

Today

Order

10,000

Requirement date

Order

10,000 (-)

0

3-7-2 The MRP element for the process order was deleted as soon as product TFF9## was delivered. The quantity produced is kept in the individual customer stock for the sales order. Select: Exit 3-8

Logistics → Materials Management → Inventory Management → Environment → Stock → Stock Overview Material: T-FF9## Plant: 1100 Program → Execute The batch you have produced is kept in the sales order stock. Double-click the corresponding table line to display the detail data for the sales order stock. The number of your sales order is displayed as the document number. Select: Back (In the dialog box) Select: Exit

3-9

Logistics → Production - Process → Process Order → Process order → Display Process order: Select:

© SAP AG

Order number Enter

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3-9-1 The quantity produced is displayed on the General data tab in the order header. Delivered: 10,000 L (liters) 3-9-2 In the order header, choose Goto → Costs → Analysis Origin

Plan

Actual

Planned qty

Actual qty

T-RF7## T-RF8## T-RF9## Total Goods Issues 620000 Activity of alloc. machines Debits Qty of goods manufactured The material withdrawals and confirmations performed for the order trigger actual cost determination. Note: In the display, the resource activities have been rounded down to full hours. Select: Exit Select: Yes to exit the report Select: Exit Select: Back 3-10

Logistics → Production - Process →Process Order → Period-end closing → Settlement → Ιndividual processing Controlling area: Select:

1000 Enter

Order: Settlement period: Fiscal year:

Order number Current month Current year

Processing type:

Automatic

Processing options: Test run: deselect Settlement → Execute © SAP AG

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3-10-1 When the settlement run is completed, the Actual Settlement: Order Basic List screen appears. Choose the Detail lists icon. The Actual Settlement: Order Detail List screen appears. Your process order is the sender and the sales order the settlement receiver. To display more detailed information on the corresponding settlement object, mark it and choose the Sender or Receiver button. By settling the order, the process order is credited. The sales order is debited with the material and production costs incurred during process order processing. Exit from the settlement processing screen. 3-10-2 Logistics → Production - Process →Process Order → Display In the order header, choose Goto → Costs → Analysis After order settlement, the process order is completely credited. Its balance is now blank and there are new line items listed above the balance line indicating the settlement. Select: Exit Select: Yes to exit the report Select: Exit Select: Back 3-10-3 Logistics → Sales and Distribution → Sales → Order → Display Order:

Sales order number

Choose Enter. The Display Standard Order: Overview screen appears. Choose Environment → Cost report. [Note: You may find that the controlling area screen appears. Select the Execute button to display the report.] Since the process order has been credited, the sales order is now debited. The sales order is debited with the material and production costs incurred during process order processing. Select: Exit Select: Yes to exit the report Select: Exit

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Appendix F: Production Execution – Repetitive Manufacturing

Contents: z Repetitive Manufacturing Execution

 SAP AG 2004

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Appendix F: Repetitive Manufacturing: Unit Objectives

At the conclusion of this unit, you will be able to: z Explain the characteristics of period-based repetitive manufacturing z Describe the main steps of repetitive manufacturing z Explain the main functions within repetitive manufacturing

 SAP AG 2004

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Application Areas Typical Typical industries industries

PRODUCT COMPLEXITY

Mechanical engineering, consumer products, electronics, and more

Takt-based Takt-based flow flow manufacmanufacturing turing

Period-based production

Mass production


Repetitive manufacturing is mainly used for production with high product stability and high repetition rate as well as low product complexity.

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Period-Based Repetitive Manufacturing: Characteristics (1) Repetitive Manufacturing z z

Order type: - without order Quantity- and period-based production

Integration of Repetitive Manufacturing z z z z z z z z z

Master Data Management Sales Production or Material Requirements Planning Capacity Requirements Planning Materials Management Logistics Execution Quality Management Controlling Business Information Warehouse Logistics Information System

(mySAP PLM) (mySAP CRM, SAP R/3-SD) (SAP R/3, SAP APO) (SAP R/3, SAP APO) (SAP R/3 IM) (SAP R/3 WM) (SAP R/3 QM) (SAP R/3 CO) (SAP BW) or (SAP R/3 LIS)

 SAP AG 2004

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Period-Based Repetitive Manufacturing: Characteristics (2) Basic Functions of Repetitive Manufacturing z z z z z z z z

Scheduling Calculation and monitoring of capacity requirements Costing Availability checks Printing of dispatch list and operational method sheet Material staging (without reservations!) Goods issue: component backflushing by default Goods receipt: closely linked to final confirmation

(quantities and activities) z Period-end closing (process cost allocation, overhead rates, WIP determination, variance calculation, cost collector settlement)

 SAP AG 2004

Apart from the basic functions, repetitive manufacturing offers several other functions (see next slide).

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Period-Based Repetitive Manufacturing: Characteristics (3) Enhanced Functions of Repetitive Manufacturing z Printing of operational method sheet and dispatch list with Microsoft Office link z Reporting point backflush (milestone) z Action control z Mapping of takting to the system using takt-based flow manufacturing

 SAP AG 2004

There is an MS Office link for the printing of shop papers and quantity papers (no shop floor papers!): MS Word can be used to print operational method sheets and MS Excel for print dispatch lists. Beside make-to-stock production, sales-order-oriented repetitive manufacturing is also supported. This enables, for example, dealing with configurable materials. To determine work in progress or to post component withdrawals timelier, you can use a reporting point procedure (only make-to-stock). With regard to configurable materials, action control enables the automatic triggering of actions (for example, printing the component list). The modelling of takts along with the sequence planning it involves is represented by a separate function: takt-based flow manufacturing.

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Costing

Demand program

Material forecast

SD

Indep.reqmts

Sales orders Stock

Planned orders

MRP Rep. Manufacturing

B A C D E

Planned orders (RSQ) Manufacturing

Confirmation w. stock receipt Settlement of cost collector

Integration with QM

Inventory management

Capacity requirements planning

Application-wide processes

Integration with PDC

 SAP AG 2004

The complex process chain from independent requirements to the goods issue of the finished product is reproduced in a lean version in repetitive manufacturing. Typical features are, for example, the use of planned orders for production (Planned orders are not converted to production orders. They only obtain the new order type run schedule quantity (RSQ) when the production version is assigned.) as well as the confirmation of the finished product with simultaneous backflushing of the components used.

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Master Data for Repetitive Manufacturing z

Repetitive mfg indicator and REM profile

z

Production version

BOM

z

Material BOM

Work center

z

Production line as work center (or as an exception, as a line hierarchy)

z

Rate routing (or standard routing)

z

Usually one operation

z

Definition of production rate (quantity per time)

Material

BOM

Routing

Routing

 SAP AG 2004

To allow a material for repetitive manufacturing, you set the Repetitive Mfg indicator in the material master record (in the MRP4 view). This means you can use all the various production versions of this material for repetitive manufacturing (that is, you can set the indicator Repetitive Mfg allowed for version in the production version). The BOM defines the planned material consumption for the components. In the status/long text of the BOM item (Production storage location field), you can define the issue storage location from which components are to be backflushed. Production lines are usually created as simple work centers. In the work center, you define from when and to when the production line is available. The production line created as the work center is entered in the production version in the Production line field. This same work center is specified in the single operation of the routing. Production lines that have more than one work center can be represented in a line hierarchy. In repetitive manufacturing, the routing defines the production rate (quantity per time unit) used to produce materials on production lines. The production quantities are scheduled according to the production rate, and capacity requirements are calculated for this production quantity. The routing therefore provides the basis for lead time scheduling. In repetitive manufacturing, work centers are not usually used to describe the actual operations to be performed. Therefore, routings in repetitive manufacturing often only have one operation. The total production rate of the line is specified in this operation. It defines how many materials per time unit can be produced on this production line. In the single operation, you enter the production line as the work center. Two different routings are available: standard routings and rate routings. Rate routings are specially designed for the needs of repetitive manufacturers and can be used instead of standard routings for organizational purposes. You can, however, also use standard routings for repetitive manufacturing.

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Repetitive Manufacturing: Process Flow

Settlement by product cost collector

Requirements

1

10

Planning of line loading and capacity check

2

9 Final confirmation and stock receipt with component backflushing

3

4 WIP determination (optional with reporting point backflush)

5

8

Availability check Printing of operational method sheet

Printing of dispatch list

6

7

Material staging

Production execution  SAP AG 2004

Despite the lean implementation of basic functions, a number of activities are possible in repetitive manufacturing. The main aspects are the planning of line loading and the (usually simultaneous) capacity monitoring. You can, for example, use the planning table (multi-level access) to check the availability of assemblies for the finished product. The worker gets the information he or she needs from the operational method sheet (description of the operation if necessary) and from the dispatch list (materials, quantities, and dates). Material staging is done by stock transfers or KANBAN provision to the line. During production, reporting point backflush can be used to determine work in progress. After order processing, the finished product is confirmed to stock. This means both the goods receipt as well as the component backflush is posted. Costs are settled by means of a product cost colletor.

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Planning Line Loading: Overview

PlOrd.

PlOrd.

PlOrd.

PlOrd. PlOrd. Planned order assignment using... Optionally R/3 planning table/ APO product planning table

Alternative selection (automatically) Quota arrangement (automatically)

 SAP AG 2004

You can use any of the following three options to plan the line loading (dispatching of planned orders on the production line): y Alternative selection: - If only one valid production version, that is, for example, only one line, is available, you can set the alternative selection indicator 2 in the material master (MRP4 view). Planned orders are then automatically assigned to this line. If several lines are available, the system assigns the first line it finds. Since this reduces your freedom when planning the line loading, we recommend using this option only if there is only one valid production version or production line. y Quota arrangement: - If several production lines are available but one is preferred (for example, it is always to reach full capacity load), you can use quota arrangements to distribute the remaining quantity to the alternative lines. To do so, you maintain the Quota arr. usage field in the MRP2 view in the material master and trigger quota maintenance in the MRP menu under Master Data. We recommend using quota arrangements only for rough-cut planning with additional postprocessing in the planning table.

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Actions for Manual Planning of Line Loading

Capacity data Line 1 Requirement Available Line 2 Requirement Available

% h h % h h

Material data Material A Requirements Available qty Production line 1 Production line 2 Not yet assigned

PC PC PC PC PC

Due

04.09.

0 0 16 0 0 16

100 16 16 0 0 16

Due

04.09.

200

100 200 100

0

200

05.09. 50 8 16 150 24 16

Monitoring: Capacity utilization

05.09. Activitiy: Assign lines 50 150 0

 SAP AG 2004

The planner uses the R/3 planning table to process the master plan. He or she can check the production quantities, change them if required, and create new production quantities (planned orders). He or she can determine the capacity utilization of the production line as well as the availability situation of the products. In addition, he or she can display the source of the capacity requirements (pegged capacity) by double-clicking the capacity requirements. Since planning in repetitive manufacturing is carried out in a quantity- and period-based manner, the display in the planning table is quantity- and period-based. You can choose any planning period (shift, day, week, month, planning calendar period). In the assignment mode, the planner can assign the production quantities (planned orders) to a production version and thus to a production line. If this was already done in MRP, he or she can also change existing assignments. Planned orders that are assigned manually to a line obtain order type PE (run schedule quantity) and are usually fixed. By means of the repetitive manufacturing profile, the fixing behavior can be limited to the planning time fence per material or deactivated in general. In addition, you can choose Materials Overview to go to a separate material overview displaying the exception message and range of coverage situation. Changes you make in the planning table are not written to the database unless you save them.

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Material Staging Options Pull list: z Staging from storage location level

MM-IM Warehouse Mgmt Inventory Management

z z

Kanban control

Pull list: z List of transfer requirements z Transfer orders

LE-WM Warehouse Mgmt System Release order parts Pick parts

List of kanbans to be moved Pull list: event-driven kanban

Prod. order

Crate parts

z

Material is ordered

z

Order-based creation of transfer requirements

z

Container is ordered

 SAP AG 2004

mySAP ERP has various procedures for controlling material staging. a) Warehouse management with the component MM-IM (Inventory Management) b) Replenishment control with the component KANBAN c) Handling of storage bins and replenishment control with the component LE-WM (Warehouse Management) The pull list enables processing by means of transfer postings on the storage location level, supports event-driven KANBAN, and enables integrating Warehouse Management (WM). Since pick part processing is order-based, the Warehouse Management System prefers to use release order parts for non order-based repetitive manufacturing: Release order parts are ordered manually. Here the required quantity is calculated from the target quantity of the components of the selected orders that have been released. Both pick part processing and crate part processing can be used when the typical repetitive manufacturing functions (for example, the planning table) are used by means of production orders.

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Backflush and Goods Receipt

Upload PDC interface

Manual entry Product cost collector

Goods receipt of finished products

Saving backflushes

Standard actions using backflushing data

Goods issue of components

Update statistics

Production costs

Reduction of PL Ord.

 SAP AG 2004

The BAPI interface can be used for backflushing from PDC systems. A separate transaction (MFBF) is available for manual entry of backflushes in the SAP R/3 System. By posting the goods receipt for the finished products during backflushing a number of different actions are performed by default (controlled by the repetitive manufacturing profile): y Goods issue posting for the components used (usually by backflushing) y Statistics update in the Logistics Information System (LIS) or the Business Information Warehouse (BW) y Reduction of run schedule quantities/planned orders and the connected capacity requirements on the production lines y Posting of production costs incurred (material costs, production activities, overhead costs) to a product cost collector y Data entry document creation y Other optional actions (see Details in the REM backflush transaction) include the following: consideration of setup costs for lot-size independent material quantities, posting of component/assembly scrap, collective entry for different materials of a line, archiving of backflush documents, pure goods issue backflush or pure activity backflush (more/less activity), reporting point backflush, decoupled backflushing processes, aggregation as well as various postprocessing and reversal options. In addition, sales-order based production enables backflushing with reference to the sales order.

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Reporting Point Backflush Example:

Production line 1 Work center 1-1

Operation 10

Work center 1-2

Work center 1-3

Receiving storage location Work center 1-4

Goods receipt

Operation 20 Operation 30 Operation 40

Goods issues Issuing storage location

Issuing storage location

Report. point backflush Report. point backflush

Report. point backflush with GR

 SAP AG 2004

Scenario: A long production line with longer lead time exists. However, the goods issues for the first components at work centers 1-1 and 1-2 are to be posted timely and not by backflushing with final confirmation at the end of the production line. During final confirmation, all components used along the production line are usually backflushed. If there are long lead times, the goods issues for the components may be posted much later in the system than after they have actually been withdrawn physically. In this case, it makes sense to use the reporting point backflush to timelier post the withdrawal of components (and production activities) after operations already completed. The above example contains the three reporting points connected with operations 10 (work center 1-1), 20 (work center 1-2), and 40 (work center 1-4). Prerequisite: In addition to having activated reporting point backflush in the repetitive manufacturing profile, the relevant work centers must exist, and the operations must be available in the routing and defined as reporting points by means of the control key. Depending on the application, optional or required reporting point backflush is possible and makes sense.

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Action Control Example: Printing the component list for configurable material

Action control Printing component list for planned order

Components available?

Issuing storage location 1

 SAP AG 2004

The Actions in planned order function provides a solution for an interface to external assembly control systems. This is used to transfer progress at the assembly line and other dependent actions to the SAP System using a standard interface or an adjusted interface. The following standard functions are available: BEMA BOM explosion with availability check, BFPL Backflush planned order, BOME BOM explosion, COPD Change planned order data (e.g. sequence number, order quantity), DLPL Delete planned order, FIKM Firm planned order components, FIRM Firm planned order header, MAAV Availability check with BOM explosion if necessary, NEMA Availability check without BOM explosion, PRNT Print component list, RSMA Reset material availability check, SCHE Scheduling planned orders, Execution of custer-defined actions, ZZXX Customer action. You can use this function to execute one or more actions for a series of planned order simultaneously. Without this function, you would have to execute these actions individually per planned order online. Furthermore, action control defines which actions are allowed and the sequence in which the actions are to be carried out The date and the time of the last action are then saved in the planned order. Executing actions: To execute actions, you must maintain a report that transfers the customerspecific data for the action. You can use the Execute Action transaction in the MRP menu as an example. To print the planned order component list, the system uses the printer defined in Customizing for MRP in the activity Procurement Proposals -> Planned Orders -> Define Layout for Component List.

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Cost Debit / Credit (Product-Related COC) Debit product cost collector Material cost Production costs Overhead costs to material

Costing document from material costing

Product cost collector M 1000 100-100 E 1421 4230 1310 G Surcharge, raw material

12,000 25,000 8,500

E ... 25.000 12 11 1 10 2 9 3 8 4 7 6 5

Material withdrawal

Processing Processing

Confirmation

Goods receipt

Settlement Settlement

Credit Credit product product cost cost collector collector GR valuation control Material stock account (quantity * standard/price acc. to valuation variant) Plant activity account (quantity * price acc. to valuation variant)

 SAP AG 2004

Actual costs at time of settlement

Settlement profile z

Settlement receiver

z

Distribution rule

z

Settlement parameters

Settlement account (acc. to allocation structure) Plant activity account Difference account

Settlement in repetitive manufacturing is always period-based based on the costs of the product cost collector (product-related cost object controlling). When executing confirmations in repetitive manufacturing, the material costs for the components and the production activities (only if a material cost estimate with price update was carried out in advance) are automatically posted to the product costs collector during backflushing. The product cost collector is debited with the material costs and production activities (in the repetitive manufacturing profile, you can define whether activity backflush is to be made with reference to the material cost estimate or the version-specific cost estimate). Morevover, the product cost collector is credited with the valuation price (materials controlled with standard price) or with the moving average price of the assembly (materials controlled with the moving average price). Overheads are not determined with reference to an operation (that is, not for each goods movement or activity confirmation). Instead they are determined periodically during period-end closing in Controlling by way of an overhead structure and are posted to the product cost collector. There is a separate transaction in the Repetitive Manufacturing menu for this. It is possible that components different to those planned are used in production or that the overhead cost rates change. This results in variances in the product cost collector and settlement must be executed. The aim of settlement is to completely credit the product cost collector. During settlement, the costs not yet credited to the product cost collector are transferred; for a material that is valuated using the standard price, the variant costs are posted to the price difference account.

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Appendix F: Repetitive Mfg.: Unit Summary

You are now able to: z Explain the characteristics of period-based repetitive manufacturing z Describe the main steps of repetitive manufacturing z Explain the main functions within repetitive manufacturing

 SAP AG 2004

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Appendix G: Exercises Unit: Repetitive Manufacturing Topic: Master Data At the conclusion of these exercises, you will be able to: • Name the main master data for repetitive manufacturing • Explain what is special about the master data for repetitive manufacturing

You work for a company that uses repetitive manufacturing to produce PCs on two production lines. You are a member of the SAP project team responsible for implementing the functions of SAP SCM Repetitive Manufacturing. You therefore first try to get a general overview of the basic master data for repetitive manufacturing. In particular, you look at the master data for the PC T-F10## (material master, BOM, routing, and work center as well as the product cost collector from Controlling).

1-1

Name the basic Logistics master data for repetitive manufacturing. ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

1-2

In the Logistics folder in the R/3 menu, navigate to the material master of PC TF10## (## = your group number), MRP4 view, plant 1200. Use the change mode (transaction MM02). Name three material master settings that are specific to repetitive manufacturing: ____________________________________________________________ ____________________________________________________________

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____________________________________________________________ 1-2-1

Display production version 0001. Check the consistency of the combination of BOM and routing by choosing Check.

1-2-2 Which production line is entered in production version 0001? ______________________________________________________ 1-2-3 Write down the group counter of the rate routing entered: ______________________________________________________ 1-3

Check the material BOM for material T-F10##in the Logistics master data. How many assemblies are on the hierarchy level directly below the finished product? ____________________________________________________________

1-4

Display the rate routing for material T-F10##, plant 1200 in the Logistics master data. 1-4-1 How many different routings are displayed in the overview? ______________________________________________________ 1-4-2 Select the first routing with group counter 1 and choose Operations. What is special about the routing? ______________________________________________________ ______________________________________________________ 1-4-3 Name the work center involved and the production rate planned: ______________________________________________________ 1-4-4 Exit the operation overview and go back to the rate routing overview. Which work center belongs to group counter 2? ______________________________________________________ 1-4-5 Write down the group counter number and compare it with exercise 1-3-3. Note: You find the group counter number in the rate routing header data. ______________________________________________________ 1-4-6 Does production version 0001 enable repetitive manufacturing with the two routings? Give reasons.

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______________________________________________________ ______________________________________________________ 1-5

In the Repetitive Manufacturing menu, check in the master data whether a product cost collector already exists for material T-F10## in plant 1200. Note: To do so, you must activate the field next to the material in the display transaction. How many product cost collectors exist and how are they assigned? ____________________________________________________________ ____________________________________________________________

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Exercises Unit: Repetitive Manufacturing Topic: Integration with Production Planning and MRP At the conclusion of these exercises, you will be able to: • Create a quantity- and period-based master production schedule for repetitive manufacturing • Interpret the results of a planning run in the stock/requirements list

In your plant 1200 in Dresden, you produce PCs. To achieve shorter delivery times, you execute planning for assembly production (make-tostock strategy) together with the Planning without final assembly strategy (make-to-order) for the finished product. This means that the last step of final assembly is made only after a corresponding sales order was received. First, check whether the master data for materials T-F10## (PC) and TB10## (motherboard) and then create planned independent requirements.

2-1

Make sure that for the finished product T-F10## the correct settings have been made for the strategy groups in the material master (plant 1200, MRP3 view): 50 – Planning without final assembly:

2-2

Is the material allowed for repetitive manufacturing? Note: Check the settings in the material master, MRP4 view and the release indicator (REM allowed) in the relevant production versions.

2-3

Now create planned independent requirements for the finished product in your plant 1200: Menu path: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Create Data: Values: Material Plant Planning period

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T-F10## 1200 W

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In the next screen, choose the Sched. Lines tab. Create a planned independent requirement with a requirements date for the next week (enter the calendar week in the format week.year). The planned quantity should be 600 pieces. The quantity with period indicator W is to be distributed over the individual working days. Therefore, set the T (day format) indicator in the Splt column and confirm your entry. Confirm warning messages that may be displayed and save your planned independent requirements. 2-4

A sales order is received in Sales and Distribution. Now act as if you were the sales employee and create the following sales order for the finished product T-F10##: Menu path: Logistics → Sales and Distribution → Sales → Order → Create Data:

Values:

Order type Sales organization Distribution channel Division

TA 1000 10 00

Sold-to party Purch.order no. Req.delivery date Material Quantity

1171 660## Tuesday in two weeks T-F10## 100 pieces

Save the sales order. 2-5

Plan the BOM structure of the PC in an MRP run: Menu path: Logistics → Production → MRP → Planning – Single-Item, Multi-Level Use the following settings: Material Plant Further settings

T-F10## 1200 2, 3, 1, 1, 1

Start the MRP run by choosing Enter twice. Note: Multi-level planning ensures that secondary requirements are also created for lower BOM hierarchy levels.

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2-6

Use the stock/requirements list for the finished product T-F10## in plant 1200 to interpret the results: Menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List Why is the plant stock for the material not included? ____________________________________________________________

2-7

Use the stock/requirements list for assembly T-B10## in plant 1200 to interpret the results: Menu path: Logistics → Production → MRP → Evaluations → Stock/Requirements List

2-8

Double-click a planned order to display the detail data. Why are there no pushbuttons to convert the planned order to a production order? ____________________________________________________________ ____________________________________________________________

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Exercises Unit

Repetitive Manufacturing

Topic: Planning Line Loading At the conclusion of these exercises, you will be able to: • Assign production quantities to production lines, taking capacity into account. The production quantities either originate from MRP or they were created manually and assigned to the production lines in the planning table. For the final assembly of your PC T-F10## and for the assembly of the motherboard T-B10##, there is one production line respectively. After the MRP and production planning in the previous exercise, the basic dates as to quantities and periods have been determined. As the production planner, assign the quantities to the relevant production line. 3-1

Use the planning table for repetitive manufacturing from the repetitive manufacturing planning menu to assign the planned orders to the production lines, taking available capacities into account. Call up the planning table, enter plant 1200 and select by production line. First, enter the final assembly line T-L1##. Then choose Planning table. Familiarize yourself with the period-based display of quantity and capacity data in the planning table. Fields that are ready for input are shown in white, display fields are gray as usual.

3-2

Double-click the quantity in the planning table section that is ready for input to display the detail data for the planned order. Which order type is assigned (F4 help)? ___________________________________________________________

3-3

Switch on the assignment mode for the quantities not yet assigned in the planning table section that is ready for input by choosing the corresponding pushbutton. Assign the quantity not yet assigned to the final assembly line. Note: You cannot yet assign the planned orders for the planned quantities. The reason for this is the planning strategy Planning without final assembly used. In this strategy, final assembly is only allowed when sales orders are received. In this case, the planning quantities only serve to create the relevant secondary requirements (which, however, are planned using a make-to-stock strategy and therefore can be produced without a sales order).

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3-4

Double-click the quantity you just assigned. Which order type is now assigned (F4 help)? ____________________________________________________________

3-5

Look at the capacity data. Does the production line reach full capacity through the planned order in the relevant time interval or is there still available capacity for further orders in the same period? ____________________________________________________________

3-6

Save the line loading planning for the finished product and do exercise 3-1-3 for assembly production (use line T-L3##, plant 1200 to access the planning table). Why does the quantity that was already available at the beginning (plant stock) reduce the oldest planned order? ____________________________________________________________ ____________________________________________________________ Save the line loading planning for the assemblies. Note: Since there is only one production line for final assembly and one for assembly production, you could also use alternative selection (material master, MRP4 view, alternative selection indicator = 2) to plan line loading and, if required, check the results in the planning table afterwards.

3-7

© SAP AG

Optional: Create a planned order manually in the planning table. To do so, access the planning table (line T-L3##, plant 1200) and use the function keys right at the bottom of the planning table (not the scrollbar!) to scroll to the date Today + 1 month. Enter a quantity of 300 pieces on line T-L3## and choose Enter to confirm. You have manually created a planned order that can be used for production in this form. Double-check this in the planned order details. However, do not save.

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Exercises Unit: Repetitive Manufacturing Topic: Material Staging and Backflush At the conclusion of these exercises, you will be able to: • Use the pull list to stage components at your production line • Carry out quantity- and period-based backflushing in repetitive manufacturing For assembly production of motherboard T-B10##, you want to check for missing components in the production storage location PL03 and use stock transfer measures to stage missing components for a certain production period. After a production section has been completed, the quantity produced is backflushed in the system. Both tasks are within the supervisor’s or production scheduler’s area of responsibility, whose roles you will be playing during the following exercise. 4-1

Here, you use the pull list to execute the stock transfer from the central warehouse to the production line. Perform component staging at assembly production line TL3##. 4-1-1 Call up the pull list from the Repetitive Manufacturing menu. Staging is performed for line T-L3## in plant 1200 for all requirements that are received until Tuesday in two weeks. In this example, material staging is performed at storage location level (note that the pull list supports further staging types: using the Warehouse Management System or by event-driven KANBAN) by stock transfer from the central warehouse 0001 to the production storage location PL03. Some steps in the pull list can be carried out automatically. Make the following global settings: Dialog control tab:

Field name

Value

Create replenishment proposals Execute batch/stock determination Stage replenishment proposals Post replenishment elements Print replenishment elements

Automatically Automatically In dialog In dialog In dialog

Execute the report and note the status bar.

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4-1-2 Go to the pull list. Interpret the results of the automated steps: For which materials have planned requirements caused missing parts until Tuesday in two weeks and how big are they? ______________________________________________________ 4-1-3 For which storage location are there missing quantities? ______________________________________________________ 4-1-4 At which storage location has the system found a replenishment quantity? ______________________________________________________ 4-1-5 Can the complete missing quantity be covered from it? ______________________________________________________ 4-1-6 You accept the system proposal. Trigger material staging for the relevant components from warehouse 0001 to production storage location PL03 by choosing Stage. 4-1-7 Caution! Material staging (here by means of stock transfer) is not carried out until you save the pull list. If you need a printout of the list for the physical stock transfer, we recommend printing it before you save (Pull list ### Print). Save. 4-1-8 Check the stock transfer posting in the message log for the pull list (separate transaction). 4-2

After a production unit that was predefined with regard to time and quantity and in which you produced 90 motherboards on line T-L3## has been completed, you are to backflush the quantity produced in the system. 4-2-1 First, create a second session of the planning table for repetitive manufacturing (access by selection production line T-L3##, plant 1200). 4-2-2 In the first session, backflush 90 pieces of the motherboard material T-B10## produced on line T-L3## in plant 1200. To do so, enter the data on the backflush transaction screen. You can find it in the Backflush menu for repetitive manufacturing. Then choose Post with correction. 4-2-3 From the following screen, explain which components of assembly T-B10## were backflushed on the line but do not exit this display: ______________________________________________________ ______________________________________________________ ______________________________________________________

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4-2-4 Due to a technical defect of a machine, you needed 3.5 hours to produce 90 pieces instead of 3 hours as specified in the production rate in the routing (30 pieces per hour). To correct this, choose Actual activities. On the following screen, select the only line offered and confirm. On the next screen, choose the ProdTime field under Activities and overwrite the planned value under Current to Confirm with the actual value of 3.5 h. Choose Enter to confirm and save. 4-2-5 Go to the second session (planning table) and look at the quantities on the line while pressing F5 (= Update). How have the planned quantities changed? ______________________________________________________

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Solutions Unit: Repetitive Manufacturing Topic: Master Data 1-1

Logistics master data: - Material master - BOM - Routing - Work center (line)

1-2

SAP Easy Access screen: Logistics → Production → Master Data → Material Master → Material → Change → Immediately Material View Plant

T-F10## MRP4 1200

The three settings are: 1) Repetitive manufacturing indicator 2) REM profile 3) Production version 1-2-1 On the production version detail view, choose Check in the top right-hand corner. The consistency check has the following results: BOM and routing exist. There are no error messages. Exit the screen by choosing Cancel. 1-2-2 On the detail screen, you can find out that production version 0001 contains production line T-L1##. 1-2-3 The number varies. The group counter is also displayed on the production version detail screen. You can find it under Planning data in the Rate-based planning line. 1-3

SAP Easy Access screen: Logistics → Production → Master Data → Bills of Material → Bill of Material → Material BOM → Display Material Plant Usage

T-F10## 1200 1

The assembly indicator Asm is set for 3 BOM items.

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1-4

SAP Easy Access screen: Logistics → Production → Master Data → Routings → Routings → Rate Routings → Display Material Plant Key date

T-F10## 1200 Today

1-4-1 → Rate Routing Overview or Return Two routings exist (two group counters). 1-4-2 In the routing overview, select the line with group counter 1 and choose Operations. What is special is the fact that there is only one 1-4-3 operation that contains the (entire) line T-L1## as the work center and the production rate (30 pieces per hour). 1-4-4 Choose Goto → Header overview. In the routing overview, select the line with group counter 2 and choose Operations. The work center used in the second routing is T-L2##. (Note: we will not produce anything on this work center in the following exercises.) 1-4-5 In the routing overview, select a line and choose Header. The group counter is the same as that in exercise 1-3-3. 1-4-6 Production version 0001 only allows production according to the routing with group counter 1 since the group counter is taken over to the production version for a more detailed specification of the routing. 1-5

SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Master Data → Product Cost Collector → Process Product Cost Collector Material Plant

T-F10## 1200

Select material T-F10## in the left part of the screen. Two product cost collectors already exist. They are assigned to the material by means of the production version (one product cost collector per production version).

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Solutions Unit: Repetitive Manufacturing Topic: Integration with Production Planning and MRP 2-1

SAP Easy Access screen: Logistics → Production → Master Data → Material Master → Material → Display → Display Current Material Plant

T-F10## 1200

Strategy 50 (Planning without final assembly) has been defined. 2-2

SAP Easy Access screen: Logistics → Production → Master Data → Material Master → Material → Display → Display Current 1) Check whether the Repetitive Manufacturing indicator has been set on the MRP4 view for both materials. It has been set. 2) Check the production version for both materials. Has the Release indicator been set? Answer: Yes.

2-3

SAP Easy Access screen: Logistics → Production → Production Planning → Demand Management → Planned Independent Requirements → Create – For the procedure, see the exercise. No solution required. –

2-4

SAP Easy Access screen: Logistics → Sales and Distribution → Sales → Order → Create – For the procedure, see the exercise. No solution required. –

2-5

SAP Easy Access screen: Logistics → Production → MRP → Planning → SingleItem, Multi-Level – For the procedure, see the exercise. No solution required. –

2-6

SAP Easy Access screen: Logistics → Production → MRP → Evaluations → Stock/Requirements List Material Plant

T-F10## 1200

The plant stock as well as an individual customer segment for the sales order and a planning segment are displayed. There are planned orders for the planned independent requirements in the planning section. One planned independent requirement has been partly consumed by the sales order and results in a planned order in the individual customer segment due to the MRP run. The plant stock and the sales order stock must never be consumed by each other. Make-to-order production always involves separate, sales order-specific inventory management.

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2-7

SAP Easy Access screen: Logistics → Production → MRP → Evaluations → Stock/Requirements List Material Plant

T-B10## 1200

Assembly T-B10## is produced in a make-to-stock strategy, which is why the plant stock is considered in the consumption. The secondary requirements that were created due to the planned independent requirements as well as the relevant planned orders are displayed. 2-8

© SAP AG

Materials T-B10## and T-F10## are pure repetitive manufacturing materials (Repetitive Manufacturing indicator is set in the material master). The planned orders can be used for production and can therefore not be converted to production orders.

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Solutions Unit: Repetitive Manufacturing Topic: Planning Line Loading 3-1

SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Planning → Planning Table → Change Mode To access the planning table, enter: Plant Selection

1200 Production line T-L1##

Choose Planning table. 3-2

Double-click a planned order in the planning table section that is ready for input (shown in white). The planned order has order type KD (Individual customer order).

3-3

Activate the assignment mode for the quantities not yet assigned in the planning table section that is ready for input by selecting the Not yet assigned line in the bottom Material data table (to select, click on the button at the beginning of the line) and then choosing the pushbutton displaying a truck. A symbol appears at the start of the line, signifying that you are in assignment mode for this line. Read the quantity in the Not yet assigned section and enter it in the field on the production line that belongs to the same period, and confirm. Deactivate the assignment mode again by choosing the corresponding pushbutton.

3-4

Double-click a planned order that has been assigned to the production line in the planning table. The planned order has order type PE (Run schedule quantity).

3-5

By dispatching a planned order on production line T-L1##, the line only reaches a comparatively low capacity load (see planning table: capacity data in the row for production line T-L1##). This means, you could theoretically dispatch further quantities for the same period. Note: The capacity data is not available on the same day as the production quantities since the quantities are determined to the day according to availability while the capacity load of the production line is determined to the hour and minute according to the production date. You can change the display from within the planning table by choosing View → Reference Dates → Production Dates.

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3-6

Save the line loading planning for the finished product T-F10##. SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Planning → Planning Table → Change Mode To access the planning table, enter: Plant Selection


Choose Planning table. Switch on the assignment mode for the quantities not yet assigned in the planning table section that is ready for input by selecting the Not yet assigned line and then choosing the pushbutton showing a truck. Read the quantities in the Not yet assigned section and enter them in the field on the production line that belongs to the same period, and confirm. Switch off the assignment mode again and save. The T-B10## (which does not belong to any sales order) is on stock; the existing stock can be used for production planning. 3-7

© SAP AG

– For the procedure, see the exercise. No solution required. –

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Solutions Unit: Repetitive Manufacturing Topic: Material Staging and Backflushing 4-1

SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Material Staging 4-1-1 Pull List – Trigger Replenishment Staging type Plant Selection period

Storage location level 1200 Tuesday in two weeks

On the Planned order tab, choose: Production line

T-L3##

Choose Global settings. On the Dialog control tab, choose: Create replenishment proposals Execute batch/stock determination Stage replenishment proposals Post replenishment elements Print replenishment elements

Automatically Automatically In dialog In dialog In dialog

Confirm your entries and execute the report. 4-1-2 Due to the planned requirements, there are missing quantities for material TT6## until Tuesday in two weeks. The system automatically created a replenishment proposal and determined stock for component T-T6## in storage location 0001. The pull list shows how big the missing quantity is. 4-1-3 There are missing quantities at the production storage location PL03, where the components for assembly production are to be staged. 4-1-4 The replenishment quantity was found in central warehouse 0001. 4-1-5 Yes, the staging quantity is equal to the missing quantity. 4-1-6 – For the procedure, see the exercise. No solution required. – 4-1-7 – For the procedure, see the exercise. No solution required. – 4-1-8 ###Log Call up the log in the Material Staging menu, enter Today as the from-date, and choose Execute. The stock transfer was successfully posted in the system.

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4-2

SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Backflush → REM Backflush 4-2-1 Choose System → Create session to create another session. In the new session, choose: SAP Easy Access screen: Logistics → Production → Repetitive Manufacturing → Planning → Planning Table → Change Mode To access the planning table, enter: Plant Selection


Choose Planning table. 4-2-2 Enter the following data on the Backflush transaction screen: Backflush type Backflush qty Material Plant Prod.version *)

Assembly backflush 90 pieces T-B10## 1200 0001*)

The production version comprises the production on line T-L3##.

Choose Post with correction. 4-2-3 The current BOM was exploded during the backflush. The system determined the materials to be backflushed in the BOM explosion. The all or nothing principle applies, which means that all four materials displayed are backflushed. 4-2-4 – For the procedure, see the exercise. No solution required. – 4-2-5 Go to the second session (planning table) and choose F5 (Reaccess planning table). The oldest planned order quantity or quantities are reduced according to the backflush quantity. Explanation: For demonstration purposes, the backflush was made with a date (today) that is before the actual production dates. The backflush quantity is therefore interpreted as “over-production” that reduces later planned orders accordingly (oldest planned orders first).

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Appendix H: Procurement Cycle

Contents: z Additional Course Slides: Procurement Cycle

 SAP AG 2002

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Appendix H: Procurement Cycle: Unit Objectives

At the conclusion of this unit, you will be able to: z Identify additional procurement cycle functionality

 SAP AG 2002


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Material Valuation Procedures

Material Valuation

Price control (in material master)

"S" Standard price

"V" Moving average price

 SAP AG 2002

You set the material valuation procedure you want to use in the accounting view of the material master record. In the R/3 System, you can carry out material valuation using the standard price procedure or moving average price procedure. In the standard price procedure (price control “S”), the system carries out all stock postings at a price defined in the material master. Variances are posted to price difference accounts. In the moving average price procedure (price control “V”), the system valuates goods receipts with the purchase order price and goods issues with the current moving average price. The system automatically calculates the latter upon every goods movement by dividing the total value by the total stock quantity. Differences between the purchase order price and the invoice are posted directly to the relevant stock account if there is sufficient stock coverage.

© SAP AG

TERP10

24-3

Delivery Costs

Delivery costs Planned

Unplanned

PO

PO

100 pcs = EUR 1000 Freight = EUR 2/pcs

100 pcs =EUR 1000

Invoice 100 pcs Freight

Invoice EUR 1000 EUR 200 EUR 1200

100 pcs Freight

EUR 1000 EUR 50 EUR 1050

 SAP AG 2002

The R/3 System differentiates between planned and unplanned delivery costs. You arrange planned delivery costs in advance with the vendor, a carrier, or the customs office and enter them when creating the purchase order. At goods receipt, provision accounts are posted, which are then cleared when the invoice is received. Unplanned delivery costs are delivery costs you do not know about when you are creating the purchase order. You do not enter these until the you receive the invoice. The advantage of planned delivery costs is that they are included in the valuation of a material at goods receipt or, for purchase orders with account assignment, the system can debit the account assignment object. The system only carries out subsequent debits at invoice receipt if the delivery costs in the invoice differ from those planned.

© SAP AG

TERP10

24-4

Blanket Purchase Order

Outside the system

M

M

Jan 01 1998

Dec 31 1998

PO Validity period Jan 01 98 Dec 31 98

Invoice Dec 09 98 CCtr 24,000.00 4,000.00

Invoice Feb 03 98

Inside the system

CCtr 18,000.00 CCtr 51,000.00 CCtr 31,000.00 10,000.00

®

 SAP AG 2002

You can use blanket purchase orders to procure consumable materials or services for which it is not worth creating a separate purchase order for each procurement transaction. Blanket purchase orders are usually valid for a longer period of time. You can directly post the invoices for the materials and services procured for this blanket purchase order.

© SAP AG

TERP10

24-5

Shipping Notification and Goods Receipt

33

11 22

Purchase Order

Shipping notification Order acknowledgement

10 20 30

10 Confirmation control

Goods receipt

 SAP AG 2002

If you expect an order acknowledgement for your purchase order, you can set a confirmation control key in the purchase order item. You can configure which type of order acknowledgements you expect to receive and whether these are relevant to Materials Planning and goods receipt. You configure your system so that a particular type of order acknowledgement is referenced (e.g. a shipping notification) at goods receipt. The goods receipt cannot be posted without an order acknowledgement. You can post a goods receipt with reference to a shipping notification or purchase order. If you enter the goods receipt with reference to the purchase order, the system recognizes from the confirmation control key whether the one or more order acknowledgements are required, and whether acknowledgements have already been entered in the system. You can only post the goods receipt for the quantities on the acknowledgement.

© SAP AG

TERP10

24-6

Evaluated Receipt Settlement

Vendor

Selection screen: Purchase order

Invoice

100 pcs at $ 10.00

z

Vendor

z

Purchase order

z

Posting date GR

Information

Goods receipt

Company

Invoice

z

Plants

z

Others

 SAP AG 2002

You can choose transactions for settlement according to the following criteria: y Posting date of the goods receipts y Vendor y Company code y Purchase order and purchase order items y Plant You can use the following criteria to delimit the invoice documents created: y An invoice document per vendor y An invoice document per purchase order y An invoice document per purchase order item y An invoice document per goods receipt document

© SAP AG

TERP10

24-7

Appendix H: Procurement Cycle: Unit Summary

You are now able to: z Identify additional procurement cycle functionality

 SAP AG 2002


© SAP AG

TERP10

24-8

TERP10 - ERP Business Process Integration Based on R3 Enterprise(2005Q1)

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