the logistic information system in sap erp

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The Logistic Information System in SAP ERP

Sales & Distribution and Material Management

Author: Domicián Máté

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Table of Contents Preface ..................................................................................................................................................... 3

Introduction to SAP ERP Logistics ......................................................................................................... 4

Logistics Components ......................................................................................................................... 4

Enterprise Structure in SAP ................................................................................................................ 7

Questions ............................................................................................................................................. 8

Solutions of the Questions ................................................................................................................. 10

Sales and Distribution ........................................................................................................................... 11

Organizational Structure in and Distribution .................................................................................... 11

Processes in Sales and Distribution ................................................................................................... 14

Master Data in Sales and Distribution ............................................................................................... 17

The Company of GBI in SD .............................................................................................................. 18

SAP HANA Overview and SD Application ...................................................................................... 19

Exercises ............................................................................................................................................ 21

Questions ........................................................................................................................................... 40


Material Management (MM) ................................................................................................................. 48

Organizational Structure in Material Management ........................................................................... 48

The Procurement Process .................................................................................................................. 50

Master Data in Materials Management ............................................................................................. 52

Global Bike Structure for Materials Management ............................................................................ 53

Exercises ............................................................................................................................................ 54

Questions ........................................................................................................................................... 70


References ............................................................................................................................................. 80

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Preface

This article guides the end-users through different processes of Logistical Information System

(LIS), such as Material Management, Sales and Distribution, etc. As one of the most im-

portant and implemented logistics functionalities, the SAP makes information more managea-

ble and accessible. However, the primary target group for this item includes students of eco-

nomics at the University of Debrecen who will execute logistics transactions as a part of their

future job functions, but this material is also aimed to support the members of SD community

to solve MM and SD issues, furthermore, this material is recommended to all people who

wish to master new functionality of SAP R/3.

The next chapters provide a detailed, comprehensive guide to the day-to-day logistics func-

tions. Its objective is to give a resource to the users of SAP for learning how to perform all of

the key functions of the logistics, how to trouble-shoot minor business problems and other

system issues, how to explore the advanced LIS functions, etc.

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Introduction to SAP ERP Logistics

Logistics Components

Logistics in SAP ERP is built on a collection of applications, components, and functional-

ities which enable the automation of requirements relating to material handling and services,

orders of internal customers, processes of production, storage and quality assurance, etc. The

current version of SAP ERP 6.0 includes much new functionality of logistics that add new

features, such as global trade management, compensation management and agency business,

but the core has not changed much throughout the years (Mazzulo–Wheatley, 2011). Let's

have an overview on some of the most important logistics components:

Materials Management

The Materials Management (MM) in SAP ERP is one of the oldest logistics functions that

serves as a foundation of the entire company. The main components of MM include con-

sumption-based planning, purchasing, inventory management, logistics invoice verification,

and physical inventory. It houses master data objects that are shared with other system mod-

ules and includes the material masters, service masters, batch records, and vendor masters.

There are also component-specific master data objects, such as purchasing info records,

source lists, and quota arrangements. These are very important while the different logistics

transactions, are executed because the system will determine the correct data based on these

records.

Sales and Distribution

Sales and Distribution (SD) cover the entire chain of processes (order-to-cash) from custom-

er inquiry and sales orders to the delivery of products to the customer destination of choice

through billing and payment collection. The components of logistics execution are also

heavily integrated and include picking, packing, and shipping.

Logistics Execution

The Logistics Execution (LE) functionality of SAP ERP covers the entire product movements

in companies starting with goods receipts through inbound delivery including the standard

processes of pick, pack, and put-away. This application is accomplished by using the Ware-

house functions of the system. Following the transfer order process goods can be moved in-

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ternally within the plant between the storage locations, using inventory management or ship-

ping functions of outbound delivery to execute cross-plant or -company movements.

Production Planning and Control

The Production Planning (PP) functionality in SAP ERP helps in managing the production

process of companies. The production process starts with the analysis of requirements and

includes input from forecasts, planning tools and material master settings. The basic planning

procedures are defined in different material requirements planning (MRP) types. This plan-

ning system reviews the past consumption values and sales figures, forecast and estimate sta-

tistical calculations to determine future requirements.

Plant Maintenance

The Plant Maintenance (PM) functionality is applied to maintain the equipment and other

technical infrastructure used by companies and customers. It makes possible the execution of

inspection of planning, timing, maintenance and prevention. Furthermore, it allows the exe-

cution of various external services. The PM has independent components on its own, for ex-

ample, plant maintenance unit, master data handling unit and further logistical units.

Customer Service

The Customer Service functionality helps companies in servicing customers with warranty

repairs and servicing products in those cases when materials can be sent back to be repaired

or to be maintained on site. Guarantee services are especially important to help companies

maximize the efficiency of their services and the satisfaction of their customers.

Quality Management

The Quality Management (QM) is fully integrated with other SAP functionalities and compo-

nents, and configured to meet company-, and industry-specific requirements. The standard

QM supports the quality management tasks, such as quality planning, quality inspection, and

quality control, as well as other supplementary integrated SAP logistics functions.

SAP Global Trade Management

The SAP Global Trade Management (GTM) is part of modules from the SAP Business Suite.

It was designed by SAP, taking into consideration those companies which are oriented with

large scale trading contracts or partners around the world involving multiple trading coun-

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tries. One of the main objectives of GTM is to keep and improve the effectiveness of the sup-

ply chain, primarily by integrating all elements of logistics, FI and settlements to the buyers

and sellers.

The GTM processes concern both domestic sales and foreign sales. Each process begins with

an inquiry and is followed by a draft contract, which is supposed to be confirmed as a final

contract. The global trading business starts with a sales order for customers or a purchase or-

der for vendors. The implementation and configuration of both SD and MM components and

settings are obligatory. The customer and vendor master data should be configured to allow

the GTM application to exist and integrate FI, MM and SD modules properly. (See: Figure 1.)

Figure 1. The integration of FI, MM and SD modules

Source: (Chudy at al., 2015)

Additional SD elements such as pricing conditions and sales transactions are also required.

Enabling purchasing transactions in the MM side is also essential for the smooth operation of

the GTM applications. The Trading Contract interacts with the Sales and Purchase orders,

while Trading Execution interacts with the Delivery, Shipping, and Billing on the SD side, as

well as Shipping, Goods Receipts, and Invoice Verification on the MM side. The FI modules

of (AR and AP) postings are placed throughout the supply chain cycle.

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Enterprise Structure in SAP

Logistics is a process-oriented application, so it needs to reflect the company's structure

(Chudy–Castedo, 2012). The enterprise structure consists of several levels across various are-

as, such as financial, logistical, manufacturing, sales and further areas. Let’s get an overview

of the enterprise main components.

Client

The Client is the highest level in the SAP structure. ( Note: The client number should be

entered in the logon screen along with the users’ ID and password.)

Company Code

The company code is the first functional level that belongs to Financial Accounting. The

company code reflects a company's legal entity. As recommended the SAP has probably more

than one company code.

Plant

The logistics structure reflects the operational structure of a company. At the top of the pyra-

mid there is the plant. The plant is the element where a company's operations are executed

(i.e., purchasing, production, inventory, and sales). The plant should be an SAP element that

reflects a physical location within the structure of companies. Below the plant, there are sev-

eral levels from different functional areas.

Storage Location

The storage locations are places where the stock is kept. In the SAP system, the storage loca-

tions retain the quantity and the value of each material that a company uses. Every time any

material is received from a vendor, or sold to a customer, a production order is needed. The

storage location reflects the results of these changes in the stock levels and it updates the

General Ledger as well.

Warehouse

The warehouse and warehouse number represents all of the racks, cages, and crates that are

used to store the products. The storage location informs us how many units of a certain prod-

uct are available. The warehouse numbers signify the place of the products. It is built from a

number of storage types, sections and bins. The storage types define the logical and physical

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locations to reflect either the physical layout of the facility or the logical division of zones

based on the picking or put-away techniques. The storage type consists of one or more storage

sections to subdivide or group together them into storage bins with similar features or uses,

such as rack spaces or slots.

Purchasing Organization

The Purchasing Organization is an organizational unit within Logistics. Almost all business

transactions related to procurement are carried out in a purchasing organization. The Purchas-

ing Organizations represents the different purchasing groups (i.e. raw materials, assets and

equipment etc.) of companies.

Purchasing Group

The purchasing groups denote the people in charge of the procurement. Each purchasing

group has master data of its name, telephone and/or fax number, email address etc. The pur-

chasing group is responsible for procuring a material or a class of materials for internal units

and the contact for external suppliers.

Questions

Answer the following questions!

1. An ERP Logistics in SAP ERP is built on a collection of applications, components,

and functionalities which enable the automation of requirements relating to material

handling and services, orders of internal customers, processes of production, storage

and quality assurance etc.

a) True

b) False

2. The main components of …….. include consumption-based planning, purchasing, in-

ventory management, logistics invoice verification, and physical inventory.

a) SD

b) MM

c) LM

d) PE

http://help.sap.com/saphelp_46c/helpdata/en/35/26bfd3afab52b9e10000009b38f974/content.htm

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3. The ……………… functionality helps companies in servicing customers with warran-

ty repairs and servicing products in those cases when materials can be sent back to be

repaired or to be maintained on site.

a) Quality Management

b) Plant Maintenance

c) SAP Global Trade Management

d) Costumer Service

4. The SAP Global Trade Management is fully integrated with other SAP functionalities

and components, and configured to meet company-, and industry-specific require-

ments.

a) True

b) False

5. Describe SAP Global Trade Management (GTM) application could integrate FI, MM

and SD modules.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

6. The Purchasing Group is an organizational unit within Logistics.

a) True

b) False

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7. The enterprise structure consists of several levels across various areas, such as finan-

cial, logistical, manufacturing, sales and further areas.

a) True

b) False

8. The …………………….. are places where the stock is kept.

a) warehouses

b) storage locations

c) plants

d) companies

9. The ……………….. is the first functional level that belongs to Financial Accounting.

a) clients number

b) storage location

c) company code

d) warehouse code

Solutions of the Questions

Check your answers!

1. True

2. MM

3. d

4. false

5. Check Figure 1.

6. false

7. true

8. b

9. c

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Sales and Distribution

The Sales and Distribution (SD) module functionality in SAP ERP covers the entire order-to-

cash (fulfillment) process of companies (Mohapatra, 2014). The Global Bike Inc. currently

uses a very simple process to fulfill customer orders. The process begins when GBI receives a

customer’s purchase order, which it validates and authorizes via a sales order. The warehouse

then prepares and sends the shipment, after which accounting forwards an invoice. The pro-

cess ends when GBI receives payment from the customer.

This simple process has worked well for GBI up to this point. Because GBI has grown

rapidly, however, the company wants to utilize the new ERP system it acquired to enhance its

process for filling customer orders. Specifically, it wants to make the process more efficient

and customer friendly as well as more transparent by keeping track of the status of every or-

der throughout each step in the process. In addition, it wants to incorporate other sales-related

activities, such as developing leads and responding to inquiries, into the new process.

In this chapter, we discuss the fulfillment process in detail, with a special focus on how

an ERP system supports the process. We begin by identifying the key organizational levels

and the master data related to the process. Next we examine the process steps in detail, and we

explain how fulfillment is integrated with other processes. We conclude by discussing the

various reports related to fulfillment.

Organizational Structure in and Distribution

The SAP system allows complex volume of business units to be defined and to represent the

functional and legal structure of a company. In this section, firstly, the components of enter-

prises will be overviewed (see Figure 2.) that are used in SD.

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Figure 2. An overview of Enterprise Structure in SAP SD

Source: (Mohapatra, 2014)

Sales Organization

The sales organization has an own enterprise structure in logistics to define for distributing

goods and services. At least one sales organization has to be assigned to the company code for

accounting. A defined sales organization has an own address, currency, a calendar etc.

Distribution Channel

The distribution channel identifies a unique way for customers to obtain goods and services

from the company, such as wholesale, retail, internet sales, and so on. One or more plants can

be assigned to a combination of sales organizations and distribution channels. ( Note: at

least one distribution channel is needed for SD to function properly. After defining the distri-

bution channel the following SD functions are available:

defining materials and servicing master data,

creating and maintaining customer master data,

allowing complex pricing strategies,

defining determination of sales document types,

using the channels in sales statistics.

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Division

The SAP enterprise structure is usually based on a wide group of products or services. A dis-

tribution channel, similarly to a single division, can be assigned to multiple sales organiza-

tions, and exactly one division is needed for logistics function.

Sales Office

In the SAP system, the sales office is optional. A sales office can be assigned to one or more

sales areas and it can consist of sales groups, usually representing a salesperson or a group of

salespeople.

Sales Group

Sales groups are optional functionalities in the SD module and usually represent the salesper-

son or a group of salespeople.

Sales Area

One of the main components that required for SD to function properly is the sales area. A

sales area is built from a combination of sales organization, distribution channel and division,

as described earlier. Basically, the sales area defines distribution channel that a specific sales

organization can use to sell products or services of a particular division.

Credit Control Area

The credit control area is a FI organizational unit that maintains and monitors credit limits for

customers. A credit control area can be assigned to one or more company codes.

Plant, Storage Location

A plant is needed to procure, store, and distribute goods and services, which is linked to the

company code. It is also linked to the Sales Organization and Distribution Channel. A storage

location is also recommended to inventory products to function and fulfill the deliveries.

Shipping Point

This enterprise structure is responsible for the distribution activities. At least one shipping

point can mirror a physical shipping dock, a mail depot, or a group of people. A shipping

point has its own address and calendar function, influencing the scheduling and processing of

deliveries to customers, or replenishment deliveries. The shipping point also influences the

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pick storage location determination together with the plant and shipping condition. The organ-

izational assignment of the shipping point is carried out at plant level.

Loading Point

The Shipping points could have loading points representing specific logistics structures, such

as loading docks, responsible persons for loading location that are assigned during the deliv-

ery process.

Transportation Planning Point

The transportation planning point is assigned to the company code and allows for planning

and execution of shipments. These optional points represent the physical transportation de-

partment that are responsible, amongst other things, for shipment and geographical territory

responsibility. ( Note: at least one planning point is needed for proper transportation func-

tionality to available, but they cannot be shared among multiple company codes.

Processes in Sales and Distribution

The package of SD module functionalities in SAP R/3 covers most of the standard business

functions that are universal for each industry.

(See Figure 4. for the overview of SD processes).

Figure 3. The Sales and Distribution Process Overview

Source: (Chudy at al., 2015)

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Pre-Sale Activities

In real-life scenarios, before the sale takes place, the company needs to collect some infor-

mation and create master data records in the SAP system about existing and potential custom-

ers. After master data records have been created, the actual contact with the sales prospects is

made and can be recorded as an SD document in the form of an inquiry or a quotation. These

documents help to determine important sales-related data that can be accessed for reporting

purposes to evaluate sales activities, and finally to convert to sales orders. The full records of

the sales activities establish the contact with customer to collect the payment. The storage of

the pre-sales data also aims to establish large contracts and scheduling agreements.

Order Processing

Order processing is built on numerous activities and usually it starts with recording the actual

sales order, then procurement steps if goods or services are not available, followed by deliv-

ery picking, packing, and shipping to the final destination.

The sales order document stores the data of customer's firmed request for goods or services

of the companies. The system maintains and establishes master data to fulfill the request. The

sales order also contains customer information, partner data (sold-to, ship-to, bill-to), materi-

al, quantity, pricing, delivery date, shipping and other transportation information required for

delivery.

The goods availability check is performed at the time of the order entry, generating the po-

tential procurement requests as needed. The requirements created by the sales order can be

filled from the available inventories, and procured by replenishment that is processed by in-

ternal source of transport or production orders and other external purchase order documents.

On the shipping date, the delivery documents are created, and the route is determined by

using SAP. In this case the process of picking, packing, staging processes can be determined.

The transfer order includes master data from the delivery document, picking methods

(grouped deliveries, wave picking) etc. The confirmation of the transfer order completes the

picking activities.

The transportation functions of logistics module can start co-operating with freight service

providers, the tendering process, and finished by creating the shipment cost document, which

captures the payable activities related to the delivery for the customers. The delivery packing

list and the bill of lading output are usually triggered at the completion of these steps.

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The posting of the goods issue completes the sales process and results in stock movement

or a confirmation of service that changes the actual inventory, and modifies the accounts bal-

ance in Financial Accounting.

Billing

The last step of SD process, before collecting the customer's payment, is creating a billing

document or invoice which is to be sent to the customer's bill-to party for payment request.

The billing data are copied from either the sales or the delivery and other billing documents,

creating credit or debit memos. When the billing documents are created, an account determi-

nation is performed, and the appropriate General Ledger postings are executed.

Financial Accounting

The material documents recorded when the goods issue was posted, and a subsequent ac-

counting document stored the stock movement data. The transportation service provider end-

ed up the purchase order as an entity for accounts payable, and the incoming payment from

the customer was also posted against the invoice (as a billing document) was submitted during

the previous steps.

All activities in the SD process are reflected in the system as documents, master data, and

pricing records, and they are used as a foundation for the sales info system (SIS) or SAP

Business Warehouse (Chudy at al., 2015).

Special orders

Cash Sale

In cash sales, the goods are paid for immediately when your customer receives them, and the

delivery document is created at save. In the cash sale delivery can be defined to be picking

relevant or not depending on business requirements, so it may need to confirm picks and then

post goods issue. Also, when the order is saved, the output condition is triggered to generate

the paper invoice as a receipt for the customer.

Rush Order

In a rush order, a customer picks up the goods, or deliver them the same day the order is

placed, but the invoice for the customer is later created. In the standard SAP system, you de-

fine the sales document type SO for rush orders. The subsequent delivery document type LF

is created immediately at order save. Then, execute picking, removing goods from storage,

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and posting goods issue. The goods are delivered to or picked up by the customer. Then, the

billing documents are created most likely during the standard billing run batch processing,

and invoices are printed and sent to your customer.

Master Data in Sales and Distribution

Master data in SD consists of information that does not change frequently (e.g., addresses)

and pertains to customers, employees, SAP system users, materials, batches, condition records

(discussed later), vendors, and more (Mohapatra, 2014). Master data is composed of specific

master records; for example, a single customer will have a customer master record, and all of

the customer master records together generate the customer master data. SAP software was

created with the objective of serving almost any company, regardless of its size, industry, or

country, predefined master data requires little customization.

Customer Master Data

In SAP systems, customer master records are broadly divided into three parts: general data,

company code data, and sales area data. This data is stored in tables, which consist of fields

that are important from a Financial Accounting and Sales and Distribution perspective. Gen-

eral data contains address, communication, control, marketing, payment transaction, unload-

ing point, contact person, and trade-related information etc.

Company code data contains the fields important from a Financial Accounting perspec-

tive. Sales area data mainly contains the fields important from a Sales and Distribution per-

spective. The information about partners defined in the customer master record. There are

different transactions that allow you to create, change, and display customer master data based

on the combination of areas to be maintained.

Customer Credit Master Data

The Customer credit master data is created and maintained for individual customers and for

mass processing. The screens that constitute the customer credit master record are Overview,

Address, Central Data, Status, and Payment History. The Address, Status, and Payment Histo-

ry are automatically populated from customer master and transaction data. The fields that

must be entered manually are Credit Limit (and its currency), Customer Credit Group, Risk

Category, Accounting Clerk, Customer Representative Group, and other data from external

rating agencies or internal information and texts.

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Material Master – Sales Views

The material master data is considered to be the most important master data in SAP systems

and has many screens for storing Materials Management, Financial Accounting, Sales and

Distribution, Production Planning, Quality Management, and Controlling information. The

Sales and Distribution data is stored in three screens: Sales: Sales Org. Data and Sales: Gen-

eral or Plant Data. In the next two sections, we will discuss important sales-relevant fields in

material master records and a few examples of customizing material master fields.

Batch Management Master Data

A batch management master data is often used in process industries (i.e. oil and gas, concrete,

paint, pharmaceuticals, fast-moving consumer goods, and others) or where shelf-life man-

agements a concern (e.g., foods and beverages). A batch number is a number associated with

a specific storage unit of a material. Products with the same batch number should be used.

The Company of GBI in SD

The following sample company is used to demonstrate logistics functionalities. The Global

Bike Group is composed by the Global Bike Inc. (GBI) in the US and in Germany the sec-

ondary Global Bike Germany GmbH. In North America, there are three geographical loca-

tions, namely Dallas, San Diego and Miami, that assigned to the sales regions (East and

West). In Germany, Hamburg is established in the North and Heidelberg in the South of Ger-

many. In order to visualize the organizational structure of Global Bike see Figure (4.).

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Figure 4. The GBI’s basic enterprise structure for SD

Source: based on ARIS(2015)

SAP HANA Overview and SD Application

In this section, we explain in simple terms what SAP HANA has to offer, how daily jobs will

be impacted by this new IT technology, and also what SAP HANA is and how it impacts the

Sales and Distribution component (Chudy et al. 2015).

Let’s begin by identifying SAP HANA, which is a piece of information technology that

allows to process massive analysis of real-time data in the memory of the servers. This means

no more delays or long hours spent on nights running that report required. SAP HANA is be-

coming the new platform for current and future SAP analytics and applications. This is the

reason why it’s important to understand the basics of SAP HANA to manage the future chal-

lenges better. SAP HANA stands for high-performance analytic appliance and relates to a

relational database management system developed by SAP. SAP HANA available for the

Cloud, Mobile, and Social Media networks.

SAP supports cloud computing solutions. In October 2012, HANA (One) was broad-

casted as a variation of the original SAP technology, which uses a smaller amount of memory

via Amazon Web Services. In 2013, SAP HANA also began offering the HANA Cloud Plat-

form (hosting services and cloud environment), and SAP HANA enterprise cloud (enterprise

solutions for SAP Business Suites and Business Warehouse as Service). Mobile and social

Global Bike

Global Bike Inc

US West

San Diego Dallas

US East

Miami

Global Bike Germany

Germany South

Heidelberg

Germany North

Hamburg

Client

Company Code

Sales Organization

Sales Office

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networks are supported by a real-time data platform in SAP to allow you uniformity and a

faster data analysis.

SAP HANA Impact on Sales and Distribution (SD) and is delivered with functionality

for SD. SAP HANA also provides a platform to develop applications and is expected to have

more SD applications based on this new technology. SAP HANA significantly advances the

time spent running Sales and Distributions reports.

SAP HANA-Optimized is part of business intelligence (BI) that uses HANA technology

and BI content uses DataSources and (BEx) queries to accelerate analysis of SD reports such

as sales overviews, delivery, pricing conditions, service levels, and even SD backorders. SAP

delivers queries using MultiProvider, which enables to run reports at a more granular level

without the loading of data into an InfoCube (real-time data).

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Exercises

Exercise No. 1.: Display the costumer’s Sales Areas and Master Data of the given cus-

tomer of Global Bike Inc. from the USA.

The additional needed information is the following:

Company (Code): Global Bike Inc. (US00).

Costumer (Code): Rocky Mountain Bikes (1000)

Solution of Exercise No. 1.: Use the following menu path of SAP to display master data

of the given costumer or enter the transaction code of XD03.

Logistics Sales and Distribution Master Data Business Partner Customer

Display Complete

Figure 5. Display costumers Master Data (XD03)

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In the next screen (Figure 6.), the SAP system expects to enter the search criteria, such as the

customer, the company and the sales area data.

In this case, enter the four-digit number of the costumer code (1000) that was given by the

instructor into the field of “Costumer”. Following this, enter the field of “Company Code”

with US00.

Figure 6. Costumer display – Initial Screen

After this click on the dialog box Costumer’s sales areas…, so the following screen will

come up to display the type of the sales organizations, distribution channels and divisions in

relation to the given costumer.

Figure 7. Sales Areas by Costumers

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Go back and click on or press Enter in order to display the master data for Rocky

Mountain Bikes. The following screen will come up:

Figure 8. The Master Data of Rocky Mountain Bikes

Click on the exit icon to return to the SAP Easy Access Menu screen.

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Exercise No. 2.: Use the SAP Easy Access Menu to create a Customer Inquiry.

(Remember: An inquiry is a customer’s request to be provided with a quotation or sales in-

formation without obligation. An inquiry can be related to materials, services, conditions and

delivery dates.)

Additional information:

Costumer (Code): Rocky Mountain Bikes (1000)

Solution of Exercise No. 2.: To create an inquiry, follow the SAP menu path or execute

the command of VA11:

Logistics Sales and Distribution Sales Inquiry Create

Figure 9. Create an inquiry

Enter the following information into the following screen:

IN for Inquiry Type,

UW00 for Sales Organization (US West),

WH (Wholesale) for Distribution Channel and

BI (Bicycles) for Division.

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Figure 10. Create an Inquiry – Initial Screen

Then press Enter. This will produce the following screen.

Figure 11. Create an Inquiry – Initial Screen

Click on the Sold-to party field and enter the costumer’s code (1000).

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Enter 0001 for the PO Number, the today’s date for the PO date (F4, then use ), the

today’s date for the Valid from date (F4, then use ) and a date one month from today for the

Valid to date (F4, then select the concrete date).

The costumer wants only one product – the Deluxe Touring Bike (black).

Use the search function of the system. ( Note: Make sure that the Sales material at the

description tab is active)

On the Sales material by description tab, enter Sales Organization (UW00), the Distribu-

tion Channel (WH) and type Material description as *Deluxe*.

Figure 12. Restrict the range area of the material

Then click on to get the list of bicycles, choose (double click) on the DXTR1000 mate-

rial. This will produce the following screen (see Figure 12.).

Enter an order quantity of 5 pieces.

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Figure 13. Create an inquiry - Overview

Figure 14. Create an inquiry – Net Value

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The Expected ordinary value (4,500$) is a calculated value, which takes the net value

(15.000$) of the order and multiplies it by the probability (30%) of having an inquiry from

this customer. The order probability of 30% is the default value that was set for GBI for in-

quiry documents.

( Note: Use the scroll icon to get to the Order probability column (two columns right of the

Net value column).

Click on to save the inquiry. The SAP system will assign a unique number to the in-

quiry: . ( Note: remember on it later.)


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Exercise No. 3.: Use the SAP Easy Access Menu to create a Customer Quotation.

An inquiry presents the terms, such as price, delivery schedule etc. to a customer considering

a purchase. A quotation is similar to inquiry, except that it is a legally binding offer for deliv-

ering the requested product or services.

Solution of exercise No. 3.:

The Bike Zone would like a quote for the items in the inquiry created before. ( Note: copy

the details from the inquiry into the new quotation.)

To create an inquiry, follow the next menu path or execute the command of VA21:

Logistics Sales and Distribution Sales Quotation Create

Figure 15. Create a Quotation

Enter QT for Quotation Type, UW00 for Sales Organization (US West), WH (Wholesale)

for Distribution Channel and BI (Bicycles) for Division.

Click on the Sold-to party field and enter the costumer’s code (1000). Enter “0002” for the

PO Number, the today’s date for the PO date, the today’s date for the Valid from date and a

date one month from today for the Valid to date. Choose the black Deluxe Touring Bike

(DXTR1000) as a material.

This will produce the following screen.

30

Figure 16. Create a quotation – Enter Order Quantity

Add 5 as the order quantity.

To encourage the Bike Zone to become a loyal customer, a $50.00 discount should be author-

ized on each Deluxe Touring bike on the entire order.

In order to add the $50.00 discount select the Deluxe Touring bike line in the order, then

click on the Item conditions icon ( ).

Add the condition type of K004 (material discount) with an amount of 50$ to the pricing

procedure.

The following figure shows the changed pricing details of the Deluxe Touring Bike.

31

Figure 17. Create a Quotation – Item Data

Note that the discount is now applied to the order. Click on the back icon to return to

the main quotation screen.

Click on to save the new quotation. The SAP system will assign a unique number to the

quotation: . ( Note: remember on it later.)


32

Exercise No. 4.: Use the SAP Easy Access Menu to create a Sales Order with reference to

a quotation.

The Bike Zone has agreed upon the terms and conditions of the created quotation, and wants

to order some bikes. ( Note: try to simplify the order creation process by copying the quota-

tion into the sales order).

Solution of Exercise No. 4.:

To create a sales order, follow the next menu path or execute the command of VA01.

Logistics Sales and Distribution Sales Order Create

Figure 18. Create a Sales Order

Enter the Order Type of OR. The other fields (Sales Organization, Distribution Channels

etc.) should not essentially be filled now.

Click on the Create with Reference icon. This will produce the fol-

lowing pop-up search window (Figure 19.).

33

Figure 19. Create a Sales Order with Reference

( Note: make sure that the Quotation tab is selected), choose the Quotation field, and then

click on the search matchbox icon.

Make sure that you have selected the last created Sales document according to customer

PO number of “0002”, then click on the icon. (See: Figure 20.)

Figure 20. Create a Sales Order with Reference

After double-clicking on the quotation, the number (20000000) for the quotation will be en-

tered automatically into the Create with Reference window.

Click on the Copy icon to copy the order information from the quotation into the sales

order screen.

34

Figure 21. Create a Sales Order - Overview

Enter a new PO number (i.e. “0003”) and the valid PO date. ( Note: the Req. deliv. date

is copied from the quotation and could be different from the available date).

Click on to save the sales order.

The SAP system will assign a sales order number. (

Note: remember on it)


35

Exercise No. 5. : Use the SAP Easy Access Menu to start the Delivery Process.

In this exercise, let’s start the Delivery Process and fulfill The Bike Zone’s order with a deliv-

ery document.

Solution of Exercise No. 5. :

Follow the menu path or execute the command of VL01N:

Logistics Sales and Distribution Shipping and Transportation Outbound De-

livery Create Single Document With Reference to Sales Order

Figure 22. Outbound Delivery with Reference to Sales Order

Enter “DL00” as a Shipping Point (Dallas). Then enter a selection date one week from the

PO day.

Figure 23. Create Outbound Delivery

36

Then click on the enter icon. This will produce the following screen (Figure 24.).

Figure 24. Outbound Delivery Create - Overview

This screen shows that the order has not been picked yet.

After clicking on the save icon, a delivery document will be created with a unique doc-

ument number: .

Click on the exit icon to return to the SAP Easy Access Menu.

37

Exercise No. 6. : Use the SAP Easy Access Menu to pick materials

In this exercise pick materials on delivery note.




livery Change Single Document

If the Outbound Delivery document number is not entered automatically, search for the deliv-

ery document using the tab Outbound Delivery: Not Posted for Goods Issue (MI00 for Ship-

ping Point and your customer number for Ship-to party).

After clicking on the enter icon also click on the picking tab, then enter FG00 for SLoc (stor-

age location) and the appropriate quantity for the picked quantity (5 for DXTR1000).

Click on to save the picking information. You should get the following message at the bot-

tom-left corner of the screen.

Click on the exit icon to return to the SAP Easy Access Menu.

38

Exercise No. 7. : Use the SAP Easy Access Menu to post a goods issue and check the

stock status.

In this exercise post a goods issue and check the stock list.




livery Change Single Document

If the Outbound Delivery document number is not entered automatically, search for your de-

livery document using the tab Outbound Delivery: Not Posted for Goods Issue (MI00 for

Shipping Point and your customer number for Ship-to party). With the correct delivery docu-

ment number filled in, click on the Post Goods Issue icon. The following message at the bot-

tom-left corner of the screen should be seen.

To see the impact that the goods issue for the bikes in the sales order for The Bike Zone has

had on the inventory position of GBI, follow the following menu path:

Logistics Materials Management Inventory Management Environment

Stock Stock Overview

The Material and Plant fields are not automatically filled in, click on the Material field, then

click on the search icon. Use the Sales material by description tab with the Sales Organiza-

tion, Distribution Channel and * for Material. Pick the black Deluxe Touring bike. Then, enter

the Plant field. When the Material and the Plant field are correctly filled (compare with the

screenshot above), click on the execute icon. (Note that the available inventory has

changed. Select the Miami DC, then click on the Detailed Display icon.)

The inventory is reduced from before by the amount that used to appear as Schd. for delivery.

Click on the enter icon to close the window and then click on the exit icon to return

to the SAP Easy Access Menu.

39

Exercise No. 8. :Use the SAP Easy Access Menu to review the document flow.

In this exercise review the document flow.


The document flow tool links all documents that were used in The Bike Zone’s sales order.

Again, there are many ways to access the document flow tool. One way is to start by display-

ing the sales order document.

Follow the menu path or execute the command of VA03:

Logistics Sales and Distribution Sales Order Display

If the sales order is not displayed, search for the sales order number using the Sales document

according to customer PO number tab. Enter your PO number.

To access the document flow tool, follow the pull-down menu path:

Environment Display document flow

Review the SD documents for The Bike Zone’s order. Select any document and click on

to look at it in detail.

Click on the exit icon to return to the SAP Easy Access screen.

40

Questions


1. The Sales and Distribution (SD) module functionality in SAP ERP covers the entire

order-to-cash (fulfillment) process of companies

a) True

b) False

2. Describe a typical Enterprise Structure in SAP Sales and Distribution.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

3. The …………….. has an own enterprise structure in logistics to define for distributing

goods and services.

a) sales office

b) division

c) distribution channel

d) sales organization

41

4. A ……….. is needed to procure, store, and distribute goods and services, which is

linked to the company code.

a) plant

b) storage location

c) shipping point

d) loading point

5. The division identifies a unique way for customers to obtain goods and services from

the company, such as wholesale, retail, internet sales, and so on.

a) True

b) False

6. At least one shipping point can mirror a physical shipping dock, a mail depot, or a

group of people.

a) True

b) False

7. At least one shipping point is needed for proper transportation functionality to availa-

ble, but they cannot be shared among multiple company codes.

a) True

b) False

8. Describe briefly the Sales and Distribution Process.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

42

9. Describe briefly the Pre-Sales SD Processes.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

10. Describe briefly the Order Processing SD Processes.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

11. Master data in SD consists of information that does not change frequently and pertains

to customers, employees, materials, batches, condition records vendors and etc.

a) True

b) False

43

12. The vendor master data is considered to be the most important master data in SAP sys-

tems.

a) True

b) False

13. The ………………. is created and maintained for individual customers and for mass

processing.

a) Customer Credit Master data

b) Customer Master Data

c) Material Master

d) Batch Management Master Data

14. In SAP systems ………………….. records are broadly divided into three parts: gen-

eral data, company code data, and sales area data

a) Customer Credit Master data

b) Customer Master Data

c) Material Master

d) Batch Management Master Data

15. Describe GBI’s basic enterprise structure for SD.

…………………………………………………………………………………………

…………………….……………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

16. SAP HANA, which is a piece of information technology that allows to process mas-

sive analysis of real-time data in the memory of the servers.

a) True

b) False

44

17. SAP is not support cloud computing solutions.

a) True

b) False

18. Use the SAP Easy Access Menu and create an Inquiry today with one week deadline.

Use the following information to solve this exercise, and describe it step by step:

a) Costumer code : (1000)

b) Sales Organization: (US West),

c) Distribution Chanel: wholesale trade

d) Divisions: Bicycles

e) Product: DXTR1000

f) Quantity: 5

g) ………………………………………………………………………………………

……………………….………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

…………………………………………………………………………………………

The unique number of the Inquiry: ………………………………………………

19. In North America, there are three geographical locations, namely Dallas, San Diego

and Miami, that assigned to the sales regions of East and West.

a) True

b) False

20. In Germany, there are three geographical locations, namely Hamburg and Berlin are

established in the North and Heidelberg in the South of Germany

c) True

d) False

45

21. Use the SAP Easy Access Menu and create a Sales Order with referring to an earlier

generated Quotation today with one month deadline. Use the following information to

solve this exercise, and describe it step by step:

a) Costumer code : (1000)

b) Sales Organization: (US West),

c) Distribution Chanel: wholesale trade



f) Discount: 100$ per bikes

g) Quantity: 10

h) ………………………………………………………………………………………

……………………….………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

The unique number of the Sales Order: ……………………………………………

The unique number of the Quotation:.. ……………………………………………

22. Use the SAP Easy Access Menu and create a Stock List of the DXTR2000 product

and send it via the mail to the instructor.

46


Check your answers!

1. true

2. Check Figure 2. for the correct answer.

3. d

4. a

5. false

6. true

7. false

8. Check Figure 3. for the correct answer



11. true

12. false

13. a

14. b


16. true

17. false

18. To create an inquiry, follow the SAP menu path or execute the command of VA11:

Logistics Sales and Distribution Sales Inquiry Create

Enter the following information:

• IN for Inquiry Type,

• UW00 for Sales Organization (US West),

• WH (Wholesale) for Distribution Channel and

• BI (Bicycles) for Division.

Click on the Sold-to party field and enter the costumer’s code.

Enter 0001 for the PO Number, the today’s date for the PO date and a date one

week from today for the Valid to date.

On the Sales material by description tab, enter Sales Organization (UW00), the

Distribution Channel.

Enter an order quantity of the pieces.

47

Click on the save icon to save the inquiry and wrote the assigned unique number to

the inquiry.

19. true

20. false

21. To create a sales order, follow the next menu path or execute the command of

VA01. Logistics Sales and Distribution Sales Order Create

Enter the Order Type of OR. The other fields (Sales Organization, Distribution

Channels etc.) should not essentially be filled.

Make sure that you have selected the last created Sales document according to cus-

tomer PO number.

Click on the Copy icon to copy the order information from the quotation into the

sales order screen.

Enter a new PO number (i.e. “0003”) and the valid PO date. (Note: the Req. deliv.

date is copied from the quotation and could be different from the available date).

Click on the save icon to save the sales order and wrote the assigned unique num-

ber to the sales order.

22. Follow the menu path or execute the command of MD04:


Stock Stock/Requirements List

Enter the Material of Deluxe Touring Bike (DXTR2000) and the Plant of Dallas.

Then click on the icon.

48

Material Management (MM)

In this chapter we represent the procurement process, where the initial step in this process is

to create a requisition, which is then converted to a purchase order and sent to a vendor. When

the vendor receives the purchase order, it ships the materials, which the ordering party re-

ceives in the receive materials step. The ordering party also receives an invoice from the ven-

dor, and it then makes a payment to the vendor.

This simple process has served GBI well until now due to its small size and closely

connected operations. However, as GBI has grown and its operations have become more dis-

persed and complex, GBI’s management has come to realize that it needs to reevaluate how

GBI procures materials so that the company can take advantage of the most effective and effi-

cient processes. To accomplish this objective, management needs to familiarize itself with the

various options available to GBI for executing the procurement process. In addition, it wants

to analyze the process steps and their impact in greater depth (Magal– World, 2012).

Once management has attained a thorough understanding of the tactical and strategic

aspects of this current procurement process, it can then design and implement a new process

that best meets GBI’s needs. It can also determine the best way to manage this process using

the SAP ERP system.

Organizational Structure in Material Management

The SAP system allows complex volume of business units to represent legal structure of a

company in accordance with the procurement processes. In this section, we shall give an

overview on the logistics components of enterprises used in Material Management (Bow-

ersox–Closs, 2012):

Client

A client is an independent environment in the system that is self-contained both in legal and

organizational aspect. A client in MM represents separated master records and other set of

tables.

Company Code

Company Code is the smallest organization unit for which a complete system can be main-

tained. The company code is a financial accounting unit that entry all logistics events that

require posting to the accounts and create a complete audit for financial statements.

49

Plant

A plant is an operating area or branch within a company in logistics that subdivide the pro-

curement process from the viewpoint of manufacturing, distribution, purchasing or mainte-

nance and material planning etc.

Storage Location

Storage Location is an organizational unit that facilitates the differentiation between the vari-

ous stocks of a material in a plant.

Purchasing Organization

The buying activity of a plant takes place at the purchasing organization. The Purchasing Or-

ganization unit is responsible for procuring services and materials. In other perspective it ne-

gotiates the conditions of the purchase with vendors.

Purchasing Group

The Purchasing Group is a key organizational unit that represents the buyer or group of buy-

ers who are responsible for certain purchasing activities, such as the procurement of a material

or class of material.

50

The Procurement Process

A typical procurement process includes the following phases (Akash, 2012):

Determination of requirements

Purchase requisitions are created manually to inform the Purchasing department about mate-

rial requirements. After setting an MRP procedure for a material in the material master, the

SAP system automatically generates a planned order or a purchase requisition. If the system

generates a planned order, it can later be converted to a purchase requisition.

Determination of supply source

The system supports buyers in determining possible supply sources. The sources of supply

determination can be used to create requests for buyer quotations (RFQs). In addition, pur-

chase orders, contracts, and conditions can be referred to in transactions as logistics docu-

ments that already exist in the system.

Vendor selection

After comparing the prize differences of various quotations, the appropriate vendors can be

selected easily in the procurement process. The rejection letter in this process can be sent au-

tomatically if the conditions are not acceptable.

Purchase order processing

The purchase orders can be created manually or automatically by the system. Data necessary

for purchase orders can be copied from purchase requisitions or quotations. The option of

working with outline agreements is also available.

Purchase order monitoring

This process monitor the processing status of the purchase orders in the system, for instance if

a delivery or an invoice has already been received for a purchase order item. The outstanding

deliveries can also be reminded to the vendors.

Goods receipt

In the goods receipt process the inbound deliveries are entered in the system by referring to

the associated purchase order to reduce the number of entries that need to be made. Referring

to the associated purchase order also allows us to check whether the goods are delivered in the

required quantities and match the relevant purchase order. The system updates the purchase

order history continuously.

51

Invoice verification

The incoming invoices are verified in the system by referring to the relevant purchase order or

delivery to check the calculations and accuracy of the invoice. The verification availability of

purchase order and goods receipt data means that the system notifies differences in quantity

and price.

Payment processing

During the payment process the vendor’s liabilities are settled. The accounting department is

responsible for running this program on a regular basis.

Beside the general procurement process described here (see Figure 26.), other procurement

processes are also possible.

Figure 25. The process of procurement

Source: (Akash, 2012)

Determinations of

requirements

Determinations of sources of

supply

Vendor selection

Purchase order

processingGoods receipt

Invoice verification

Payment processing

Purchase requsition

Purchase order

52

Master Data in Materials Management

In Material Management, there are a number of master data files that are fundamental to the

functionality (Murray, 2010). The Material Master contains all of the information that is re-

quired for a material with regards to each area the material is used, i. e., sales, finance, manu-

facturing, quality, and so on. The Vendor Master contains the information that is required for

purchasing any item or service. The purchasing information record is used when purchasing

specific items for a vendor. Batch data is held for each batch of material that is defined in the

system. That data can be used to determine which batch is used or sold. Serial number data is

used for items that need to be uniquely identified, for example, if each piece is purchased with

a warranty.

Material Master Data

The Material Master data is comprised of data that relates to a number of different areas. For

materials to be used successfully, the data has to be collected and entered into the Material

Master record. Not only does the data have to be entered for those areas but also for the spe-

cific organizational areas: plants, storage locations, sales organizations, and so on. For exam-

ple, a material cannot be purchased without the relevant purchasing data being entered.

Vendor Master Data

The Vendor Master record contains data that is used in purchasing. The Vendor Master has

three distinct sections: general data, purchasing data, and accounting data. The general data

has basic information on the vendor such as name, address and telephone number. The pur-

chasing data is entered for the vendor at a purchasing organizational level and includes con-

trol data required in purchasing, partner functions, and purchasing defaults. The accounting

data is the financial data that is entered at the company code level. This data includes tax in-

formation, bank details, and payment methods.

Purchasing Data

The Material Master will contain some purchasing data at the purchasing organization level,

which means that the material data may be different for one purchasing organization to the

next. However, it is the purchasing information record that contains data to a unique combina-

tion of vendor and material. This means that the same material can be purchased from differ-

ent vendors, and the price offered by each vendor may be also different.

53

Batch Management

The Batch Management is used when items of the same material number have the same at-

tributes and can be identified using those attributes. For example, for a biological company, a

batch of chemicals will be made at one time and that batch will have values for a number of

attributes that will be different from a different batch. The batch values can determine whether

a batch is suitable to be used, sold, or stored in a certain way.

Serial Numbers

A serial number is used to exceptionally distinguish items of the same material number. This

is important for companies that use materials that are purchased with a warranty or materials

that must be uniquely identified. For example, aircraft parts are serialized so that maintenance

personnel can record data against that serialized part and replace it when it has performed a

certain number of cycles.

Global Bike Structure for Materials Management

The following company (GBI) is used to demonstrate logistics functionalities in MM. The

Global Bike Inc. has three plants in Dallas, San Diego and Miami in the US. Thus, in Germa-

ny, in Hamburg and Heidelberg there are other ones. The storage locations refer to raw mate-

rials, finished or semi-finished goods and miscellaneous products.

Figure 26. The GBI’s enterprise structure in MM

Source: based on ARIS(2015)

Create Purchase Requisition

Global Bike

Global Bike Inc

San Diego and Miami

Trading goods

Finished goods

Miscellaneous

Dallas

Raw materials

Semi fin. goods

Finishes goods

Miscellaneous

Global Bike Germany

Heidelberg

Raw materials

Semi fin. goods

Finishes goods

Miscellaneous

Hamburg

Trading goods

Finished goods

Miscellaneous

http://aris-publisher-server.hs-harz.de:9090/businesspublisher/link.do?login=anonymous&password=anonymous&localeid=1033&ph=0mqdn7p&modelguid=245e4540-610a-11e0-6d87-0050568608ea

54

Exercises

Exercise No. 9. : Use the SAP Easy Access Menu to create a Purchase Requisition.

In this exercise a promotional campaign will be initiated in 1 month to introduce new bikes.

Create a purchase requisition about ten products. Choose a vendor who is capable of satisfy-

ing the needs emerging in this sales campaign.


Follow the menu path or execute the command of ME51N:

Logistics Materials Management Purchasing Purchase Requisition Create


Figure 27. Create Purchase Requisition

55

Figure 28. Create Purchase Requisition – Item Overview

Select the Item Overview icon to expand the item overview.

Figure 29. Create Purchase Requisition – Material

Enter into the Material field the Deluxe Touring Bike (DXTR1000) and the quantity of 10.

The selected day for Delivery Date has to be calculated as one month from today.

56

Following this, enter the Plant of Dallas (DL100), the Storage Location – Finished Goods

(FG00), and the Purchasing Group of North America (N00).

After clicking on compare the entering screen with Figure 29.

Then, click on the save icon to save the purchase requisition.

The system will create a unique Purchase requisition document number:


57

Exercise No. 10. : Use the SAP Easy Access Menu to display the Stock/Requirements

List.

In this exercise, display the stock/requirements list about the bikes. The created purchase req-

uisition should be visible within the stock/requirements list with a date of one month from

today.


Follow the menu path or execute the command of MD04:


Stock Stock/Requirements List

Figure 30. Stock/Requirement List in MM module

Enter the Material of Deluxe Touring Bike (DXTR1000) and the Plant of Dallas (DL100).

Then click on the icon. The stock/requirements list should be looked similar to the

screen below.

58

Figure 31. Stock/Requirement List – Initial Screen


Figure 32. Stock/Requirement List – Initial Screen


59

Exercise No. 11. : Use the SAP Easy Access Menu to create a Request for Quotation.

In this exercise, create a separate request for quotation (RFQ) for a vendor. This process will

be used to collect the necessary pricing, delivery, etc. information that is needed to support

the selection of a vendor to satisfy the needs for the requested bikes.

Solution of Exercise No. 11. : Follow the menu path or execute the command of ME41:

Logistics Materials Management Purchasing RFQ/Quotation Request for

Quotation Create

Figure 33. Request for Quotation (RFQ)

Figure 34. Request for Quotation (RFQ) – Initial Screen

60

Enter RFQ Type AN, today’s date as RFQ Date, and the first day of the next month as

Quotation Deadline.

In the Organizational Data field group enter the Purchasing Organization of GB US. –

(US00) and the Purchasing Group of North America (N00).

In the Default Data for Items, enter the Plant of Dallas (DL100).

Figure 35. Request for Quotation (RFQ) – Initial Screen

Then, select the icon, which will produce the following screen.

61

Figure 36. Selection of Purchase Requisition

If the Purchase Requisition number has not been entered yet, use the F4 help to find the

saved (10000010) number of the purchase requisition. Then, click on the icon and the

Create RFQ - Selection List (see figure 37.) will appear:

Figure 37. Create RFQ - Selection List

Enter the “SLoc” (Storage Location) as Finished Goods (FG00).

Click on the “Select all items” icon to select all items.

Then, click on the “Adopt” icon to adopt all item information into the RFQ.

62

Figure 38. Create RFQ – Item Overview

In the Create RFQ - Item Overview menu see Item (10) screen, then click on Header de-

tails icon to display the RFQ header data. Enter RFQ1000 as the Collective number - Coll.

No.

Figure 39. Create RFQ – Header Data

63

After comparing the entry with the following screen below, click on the “Line items”

icon to display the line items.

Figure 40. Create RFQ – Item Overview

Select the icon to display the vendor address. In the Vendor Address screen, use the F4

help function to find a vendor. Use the *Dallas* text for searching a vendor.

Figure 41. Vendor selection

64

Double-click on the result row (see Figure 41.) to insert the vendor number (103000) of

Dallas Bike Basics into the Vendor field.

Figure 42. Vendor selection - Result

Then, press enter to occupy the vendor’s data into the corresponding fields.

Figure 43. Create RFQ – Vendor Address

Click on the icon to save the RFQ. Then a warning message will appear. In this case

press “Yes” to save it anyway. Finally, the SAP system will create a unique document (RFQ)

number .


65

Exercise No. 12. : Use the SAP Easy Access Menu to create a Purchase Order with refer-

ence to an RFQ.

In this exercise, create a Purchase Order by referencing the quotation received from the ven-

dor. Reference is made to the successful quotation and the details are imported into a new PO.

Solution of Exercise No. 12. : Follow the menu path or execute the command of ME21N:

Logistics Materials Management Purchasing Purchase Order Create

Vendor/Supplying Plant Known

Figure 44. Create Purchase Order

If there is no navigation screen on the left side, click on the icon. As

selection variant choose “Requests for quotations” as shown below

Figure 45. Request for Quotation

66

In the following screen, in the Material Number field use the F4 help to find the requested

trading goods. On the Material by Material Type tab, select the Material field and search for

the Deluxe Touring Bike (DXTR1000).

Figure 46. Material by Material Type

Then, press Enter or click on .

Figure 47. Purchasing Documents

67

Double-click on the bikes to select it. Click on the execute icon. This will produce a

screen with the RFQ.

Figure 48. Document Overview

Single-click on the requisition/quotation that wants to be referred and select the “Adopt”

icon to adopt the information.

Figure 49. Create Purchase Order

68

Verify that the system copied the Material number. ( Note: if the header data have not

been displayed yet, open the section by clicking on the Header icon.)

Save the Purchase Order with “Save” icon. The system will assign a unique purchase

order document number.


Exercise No. 13. : Use the SAP Easy Access Menu to create Goods Receipt for Purchase

Order.

In this exercise, receive into inventory the stock items ordered in the previous task. A goods

receipt document will be created referencing our purchase order thereby ensuring the products

ordered was received within the timeframes requested and in quality condition. Goods on

hand will be increased and an accounting document will be generated recognizing the value

associated with these goods.

Solution of Exercise No. 13. : Follow the menu path:

Logistics Materials Management Inventory Management Goods Movement Goods

Receipt For Purchase Order GR for Purchase Order (MIGO)

Make sure that Goods Receipt and Purchase Order are selected in the dropdown lists. Enter

(or find) the PO number in the field next to them. Then, press Enter which will populate the

PO data into the fields.

If the line item in the item overview section is read only, click on it at the bottom of the screen

to close the item detail section. Then, check OK. The SLoc (Storage location) Trading Goods

should already be entered.

Finally, click on the icon or the save icon to post the goods receipt. The system will

create a unique goods receipt document.


69

Exercise No. 14. : Use the SAP Easy Access Menu to Display the purchase order history.

In this exercise, Review the status for the PO for chain locks. A PO history tab is created

within the PO once a transaction has taken place against the order number to support this

functionality.

Solution of Exercise No. 14.: Follow the menu path:

Logistics Materials Management Purchasing Purchase Order Display

The PO is displayed automatically. If not, click on (Other Purchase Order) icon and find

the PO number. If the line item data is not yet displayed, open the section by clicking on the

Item Detail icon.

On the Purchase Order History tab, review the activity that has taken place in reference to this

purchase order. Click on your WE (Goods Receipt) material document number. This will

bring directly to the material document created when the goods receipt is created.

On the Doc. info tab, select the icon. Now looking at the General Ledger post-

ing that took place in the background when goods receipt was saved. Click on the icon

twice to go back to your PO.

On the Purchase Order History tab, click on your RE-L (Invoice Receipt) document number.

This will bring directly to the invoice document that just created when the invoice receipt is

done.

Select the icon. Now looking at the General Ledger posting that hap-

pened in the background when saving the invoice receipt. Click on the icon to go back to

the invoice document.

Click on the exit icon three times to return to the SAP Easy Access screen.

70

Questions


1. The initial step in procurement process is to create a requisition,

a) True

b) False

2. A company code is an independent environment in the system that is self-contained

both in legal and organizational aspect

a) True

b) False

3. A ………………… is an operating area or branch within a company in logistics that

subdivide the procurement process

a) storage location

b) plant

c) purchasing organization

d) purchasing group

4. A ……………………………… is the smallest organization unit for which a complete system

can be maintained

a) storage location

b) plant

c) purchasing organization

d) company code

5. A Storage Location is an organizational unit that facilitates the differentiation between

the various stocks of a material in a plant.

a) True

b) False

71

6. A Storage Location unit is responsible for procuring services and materials.

a) True

b) False

7. Describe the process of procurement in MM.

…………………………………………………………………………………………,,

…………………….……………………………………………………………………

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………,

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

8. Purchase requisitions are created manually to inform the Purchasing department about

material requirements.

a) True

b) False

9. Purchase requisitions can be used to create requests for buyer quotations (RFQs).

a) True

b) False

10. This ……………. is the processing status of the purchase orders in the system can be

maintained.

a) purchase order

b) process monitor

c) goods receipt

d) invoice verification

72

11. The process of …………….. is verified in the system by referring to the relevant pur-

chase order or delivery to check the calculations and accuracy of the invoice.

a) purchase order

b) process monitor

c) goods receipt

d) invoice verification

12. The Vendor Master contains the information that is required for purchasing any item

or service.

a) True

b) False

13. The Vendor Master contains all of the information that is required for a material with

regards to each area the material is used.

a) True

b) False

14. The ………………… will contain some purchasing data at the purchasing organiza-

tion level, which means that the material data may be different for one purchasing or-

ganization to the next.

a) Serial Numbers

b) Material Master

c) Batch Management

d) Purchasing Data

15. The ………………… is used when items of the same material number have the same

at-tributes and can be identified using those attributes

a) Serial Numbers

b) Material Master

c) Batch Management

d) Purchasing Data

73

16. A serial number is used to exceptionally distinguish items of the same material num-

ber.

a) True

b) False

17. The Global Bike Inc. has three plants in Dallas, San Diego and Miami in the US.

a) True

b) False

18. The Global Bike Inc. has three plants in Germany, in Hamburg, Berlin and Heidelberg

there are other ones.

a) True

b) False

19. Describe the GBI’s enterprise structure in MM.

…………………………………………………………………………………………,,

…………………….……………………………………………………………………

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………,

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………,

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………,

…………………………………………………………………………………………

…………………………………………………………………………………………

74

20. Use the SAP Easy Access Menu and create a Purchase Requisition with one week

deadline. Use the following information to solve this exercise, and describe it step by

step:

a) Purchasing Group: North America

b) Storage Location: Finished goods

c) Plant: Dallas



f) Quantity: 10

g) ………………………………………………………………………………………

……………………….………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

The unique number of the Purchase Requisition: ………………………………

21. Use the SAP Easy Access Menu and create a Request for Quotation (RFQ) with one

month deadline. Use the following information to solve this exercise, and describe it

step by step:

a) Purchasing Organization: GB US.

b) Purchasing Group: North America

c) Storage Location: Finished goods

d) Plant: Dallas

e) Divisions: Bicycles

f) Product: DXTR1001

g) Quantity: 10

h) Vendor Code: 103000

75

………………………………………………………………………………………

……………………….………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

The unique number of the RFQ: ………………………………….

22. Use the SAP Easy Access Menu and create a Purchase Order with reference to an

RFQ.with one month deadline. Use the following information to solve this exercise,

and describe it step by step:

a) Purchasing Organization: GB US.

b) Purchasing Group: North America

c) Storage Location: Finished goods

d) Plant: Dallas

e) Divisions: Bicycles

f) Product: DXTR1001

g) Quantity: 10

h) Vendor Code: 103000

i) ………………………………………………………………………………………

……………………….………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

The unique number of the Purchase Order: ………………………………….

76

23. Use the SAP Easy Access Menu and to display the purchase order history. Describe

the solution step by step:

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………..

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………..

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………..

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………..

…………………………………………………………………………………………

…………………………………………………………………………………………

…………………………………………………………………………………………..

…………………………………………………………………………………………..

77


Check your answers!

1. true

2. false

3. b

4. d

5. true

6. false


8. true

9. false

10. b

11. d

12. true

13. false

14. b

15. c

16. true

17. true

18. false


20. Follow the menu path or execute the command of ME51N:

• Logistics Materials Management Purchasing Purchase Requisition

Create

Enter into the Material field the Material and the quantity. The selected day for De-

livery Date has to be calculated as given from today.

Enter the Plant of Dallas, the Storage Location, and the Purchasing Group of North

America.

Click on the save icon to save the purchase requisition.

21. Follow the menu path or execute the command of ME41:

Logistics Materials Management Purchasing RFQ/Quotation Request

for Quotation Create

78

Enter RFQ Type AN, today’s date as RFQ Date, and the first day of the next

month as Quotation Deadline.

In the Organizational Data field group enter the Purchasing Organization of GB

US. – (US00) and the Purchasing Group of North America (N00). In the Default

Data for Items, enter the Plant of Dallas (DL100).

Then, select the Reference to PReq icon.

Find the earlier saved number of the purchase requisition and click on the execute

icon.

Enter the “SLoc” (Storage Location) as Finished Goods (FG00).

Click on the “Select all items” icon to select all items.

Then, click on the “Adopt” icon to adopt all item information into the RFQ.

In the Create RFQ - Item Overview menu see Item (10) screen, then click on

Header details icon to display the RFQ header data. Enter the Collective number -

Coll. No.

Double-click on the result row to insert the vendor number (103000) of Dallas

Bike Basics into the Vendor field.

Then, press enter to occupy the vendor’s data into the corresponding fields.

Click on the save icon to save the RFQ.

22. Follow the menu path or execute the command of ME21N:

Logistics Materials Management Purchasing Purchase Order Create

Vendor/Supplying Plant Known

In the Material Number field use the F4 help to find the requested trading goods.

On the Material by Material Type tab, select the Material field and search for the

Deluxe Touring Bike. Then, press Enter or click on .

Double-click on the bikes to select it. Click on the execute icon. This will produce

a screen with the RFQ.

Single-click on the requisition/quotation that wants to be referred and select the

“Adopt” icon to adopt the information.

Verify that the system copied the Material number. ( Note: if the header data

have not been displayed yet, open the section by clicking on the Header icon.)

Save the Purchase Order with “Save” icon.

23. Follow the menu path of:

Logistics Materials Management Purchasing Purchase Order Display

79

The PO is displayed automatically. If not, click on the (Other Purchase Order) icon

and find the PO number. If the line item data is not yet displayed, open the section by

clicking on the Item Detail icon.

On the Purchase Order History tab, review the activity that has taken place in refer-

ence to this purchase order. Click on the WE (Goods Receipt) material document

number. This will bring directly to the material document created when the goods re-

ceipt is created.

On the Doc. info tab, select the FI document icon. Now looking at the General Ledger

posting that took place in the background when goods receipt was saved. Click on the

back icon twice to go back to your PO.

On the Purchase Order History tab, click on the RE-L (Invoice Receipt) document

number. This will bring directly to the invoice document that just created when the in-

voice receipt is done.

Select the Follow on Documents icon. Now looking at the General Ledger posting that

happened in the background when saving the invoice receipt. Click on the back icon to

go back to the invoice document.

Click on the exit icon three times to return to the SAP Easy Access screen.

80

References

Akash, A. (2012): Customizing Materials Management Processes in SAP ERP, SAP Press.

Anderson, G. (2011): Teach Yourself SAP in 24 Hours, Fourth Edition, Sams publisher

George Anderson.

Aris (2015): Aris Publisher Server: Online: http://aris-publisher-server.hs-

harz.de:9090/businesspublisher/login.do?login=anonymous&password=anonymous

Bowersox, D. J. – Closs, D. J. (2013): Logistical Management: The Integrated Supply Chain

Process, McGraw-Hill.

Chudy, M. – Castedo, L. – Lopez, R. (2015): Sales and Distribution in SAP ERP: Practical

Guide, SAP Press.

Chudy, M. – Castedo, L. (2012): Sales and Distribution with SAP: 100 Things You Should

Know About... , SAP Press.

Magal, S. R. – World J. (2012): Integrated Business Process with ERP Systems, Whiley.

Mazzulo, J. – Wheatley, P. (2011): SAP R/3 for Everyone: Step-by-Step Instructions, Practi-

cal Advice, and Other Tips and Tricks for Working with SAP, Prentice Hall

Mohapatra, A. (2014): Optimizing Sales and Distribution in SAP ERP: Functionality and

Configuration, SAP Press.

Murray, M (2010): Materials Management with SAP® ERP: Functionality and Technical

Configuration, SAP Press.

https://www.sap-press.com/customizing-materials-management-processes-in-sap-erp_3022/author/

http://aris-publisher-server.hs-harz.de:9090/businesspublisher/login.do?login=anonymous&password=anonymous

http://aris-publisher-server.hs-harz.de:9090/businesspublisher/login.do?login=anonymous&password=anonymous