meljun cortes business processes, integration, and configuration in the sap r3 environment

Unit 1

Business Processes,Integration, and

Configuration in the SAP R/3 Environment

Unit 1

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

2

Learning Approaches

• Our Approach– Cross functional– Understand business processes and their

relationships to SAP's organizational structure– Highlight integration/configuration!!

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

3

Learning by Creating a Model Business

• Understanding business processes and their integrative nature

• Understanding SAP organizational structures• Combining business processes and SAP

organizational structure (i.e., configuration)• Test the newly configured system• View system outputs - statistics, reports, and

graphics

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

4

Pen Incorporated

• Start-up company in the promotional pen business

• Initially buys and re-sells different lines of promotion pens

• Sells to both wholesale and retail – procure and distribute

• Later acquires a production facility to manufacture its own product – produce and distribute

SAP R/3 andBusiness Processes

- Overview -

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

6

Pen Incorporated Procure for Sales Order

Pre-Sales Activity

Sales Order Delivery Billing

General Ledger Accounts

Purchase Requisition

Purchase Order

Goods Receipt

In Inventory Plant or Warehouse

Invoice Receipt

Availability Check

NO

YES

Goods to Delivery

Goods from Purchase Order

InventoryPostings

AccountsReceivable

AccountsPayable

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

7

Pen Incorporated Produce for Sales Order

Pre-Sales Activity

Sales Order Delivery Billing

Planned Order

Production Order

Completion Confirmation

In Inventory Plant or Warehouse

Availability Check

NO

YES

Goods Issued to Delivery

Goods from Production Order

General Ledger Accounts

InventoryPostings

AccountsReceivable

AccountsPayable

Issue Goods to Production

Order

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

8

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

SAP Enterprise System

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

9

Logistics

• Materials Management (MM)

• Sales and Distribution (SD)

• Production Planning (PP)

• Quality Management (QM)

• Plant Maintenance (PM)

• Service Management (SM)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

10

Accounting and Finance

• Financial Accounting (FI)• Treasury (TR)• Controlling (CO)• Enterprise Controlling (EC)• Fixed Asset Management (AM)• Project Systems (PS)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

11

Human Resources

• Human Resources (HR)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

12

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

Materials Management (MM)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

13

Components of Materials Management

MaterialsManagement(MM)

LogisticsInvoiceVerification

MaterialMaster

PhysicalInventory

Valuation

MRP

ServiceEntrySheet

ServiceMaster

ProductCatalogPurchasing

InventoryMgmt.

ForeignTrade/Customs

Purchasing is a component of Materials Management (MM).

The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.

The tasks of the MM Purchasing component are as follows:• External procurement of materials and services• Determination of possible sources of supply for a requirement

identified by the materials planning and control system or arising directly within a user department

• Monitoring of deliveries from and payments to vendors• Good communication between all participants in the

procurement process is necessary for Purchasing to function smoothly.

Inventory Management and Physical Inventory (MM-IM) PurposeThis component deals with the following tasks:Management of material stocks on a quantity and value basis Planning, Entry, and Documentation of all Goods Movements Carrying out the Physical InventoryFeatures

MRP Procedures in Consumption-Based Planning UseIn consumption-based planning, the following MRP procedures are available:Reorder point procedure Forecast-based planning Time-phased materials planning

Logistics Invoice Verification (MM-IV-LIV) PurposeLogistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.

Product CatalogA number of media can be used as vehicles for presentations, including:Print mediaCD-ROMOnline services (such as internet, T-Online, CompuServe, AOL)Information kiosks at the point of purchaseThe Product Catalog functionality comprises a programming interface (Business API) for accessing the data and integrated maintenance of product catalog-related data. This data comprises:The layout of the product catalogThe materials and prices in the product catalogTextsMulti-media objects (graphics, sound documents, video clips etc.).Service MasterMM External Services Management provides a basic process for the procurement of externally performed services. This basic process comprises the following functionality:

Foreign TradeOfficial customs brokers are licensed by the customs service to assist you with import and export transactions. They have the responsibility to ensure that all foreign trade customs procedures are followed completely and comply to legal regulations. They also ensure that the duties collected from your company are turned over to the government when they become due. Although the services of a customs broker replace the need for your company to handle the necessary tasks associated with foreign trade, they can be very costly. SAP's FT system incorporates all of the necessary checks and balances necessary to ensure that your import and export transactions are handled lawfully and that the duties owed to the customs authorities are calculated instantly and accurately.

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

20

IntegrationProcurement Process (Procure-to-Pay)

Purchase Requisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt Goods

Receipt

Purchase Order

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

21

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

Sales and Distribution (SD)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

22

Components of Sales and Distribution

Sales andDistribution(SD)

SalesSupport

Sales

CreditMgmt.

ShippingTransport

Billing

ForeignTrade

SalesInformationSystem

MasterData

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

23

Sales Order Process(Order-to-Cash)

Integration

Sales OrderEntry

Post Goods Issue

Invoice Customer

Pick Materials

Receipt ofCustomer Payment

Pack Materials

Check Availability

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

24

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

Financial Accounting (FI)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

25

Components of Financial Accounting

Financial Accounting

(FI)

AccountsReceivable

AccountsPayable

SpecialPurposeLedger

FixedAssets

Banks

GeneralLedger

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

26

IntegrationProcurement Process (Procure-to-Pay)

Purchase Requisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt Goods

Receipt

Purchase Order

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

27

Sales Order Process(Order-to-Cash)

Integration

Sales OrderEntry

Post Goods Issue

Invoice Customer

Pick Materials

Receipt ofCustomer Payment

Pack Materials

Check Availability

SAP R/3 Configuration

- Overview -

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

29

SAP Enterprise System

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

30

Business Process Integration • “The Stool”– Components• Organizational Data• Master Data• Rules• Transactions

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

31

Business Process Integration

FI

MM

SD

Org

Dat

a

RulesFI

MM

SD

Master Data

FI

MM

SD

FI SDMM

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

32

Organizational Data

• A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions

• Are static data and are rarely changed

• The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

33

Master Data

• Master data is relatively fixed– Material master data– Vendor master data– Purchasing information record– General Ledger master data

• Before making the master data configurations, you must have completely defined the organizational structures

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

34

Rules

• Defines the parameters for Master Data and Transactions

• Determines functionality for Master Data and Transactions

• Relatively fixed• Changes as policy changes

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

35

Transaction Data

• Includes internal and external exchanges that describe business activities

• Unlike master data, aggregate transactional data is dynamic – each transaction is unique

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

36

Functional Areas – Where and When

• Business Process Integration I– Financial Accounting (FI)– Materials Management (MM)– Sales and Distribution (SD)

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

37

Functional Areas – Where and When

• Business Process Integration II– Financial Accounting (FI)– Controlling (CO)– Materials Management (MM)– Production Planning (PP)– Quality Management (QM)– Sales and Distribution (SD)