Introduction to SAP September 30, 2003. 2 SAP Overview - Agenda 1.SAP R/3 System Overview –SAP R/3...

Introduction to SAP

September 30, 2003

2

SAP Overview - Agenda

1. SAP R/3 System Overview– SAP R/3 and Modules– SAP Organization Structure– SAP Master Data– SAP Security

2. SAP R/3 Module Overview and Master Data– Sales and Distribution– Materials Management and – Finance & Controlling

3. SAP R/3 System Benefits– System Integration – Data Consistency– Business Processes

3

Presentation Objectives

Provide an introduction to the SAP R/3 system

Introduce and define SAP R/3 terms

Explain the system’s functionality

Explain the purpose and function of master data

Introduce SAP R/3’s approach to business processes

SAP R/3 System Overview

5

• Systems, Applications and Products in Data

Processing

• German software company, founded in 1972

• Has been the market leader in ERP (Enterprise

Resource Planning) software, technology and product

development

• R/3 indicates Real Time – 3 Tier Architecture.

SAP R/3 Overview: SAP R/3

6

• The R/3 system was designed

for use in open, or client/server

environments.

• R/3 works with a common

database. This means

information entered into the

system by one part of the

organization is immediately

available to all other parts of the

organization.

SAP R/3 Overview: SAP R/3

7

SAP R/3 Overview: SAP R/3 Application Modules

Payroll Travel Expense Accounting Benefits Recruitment Personnel Administration

Workforce Planning Training Administration Organization Mgmt. Personnel Administration Time Management

Funds Management Resource Management Quality Control Time Management

Technical Asset Mgmt. Investment Control Traditional Asset Acct. Investment Mgmt.

MRP Purchasing Goods Movement Invoice Verification Inventory Management Vendor Evaluation Purchasing Information

Sales Planning Production Planning MRP / MRP II Forecasting Capacity Planning Production Activity Costing Project Management

Maintenance & Inspection Planning Processing of plant maintenance orders Management of completion

confirmations History Management Plant Maintenance Information

Sales Support Inquiries Quotations Orders

Shipping Invoicing Sales Information

General Ledger Accounts Receivable Accounts Payable Cash Management Financial Controlling

Financial Assets Management

Consolidation Foreign Currencies &

Taxation

Result of the ICOE’s Industry specific functionality

Automates Business Processes Supports all modules

Cost Element Accounting Cost Center Accounting Activity Based Cost Accounting Activities and Services Costing Order and Project Accounting

Quality Planning Quality Inspection Quality Control Quality Documentation Quality Information

R/3R/3

PP

Production

Planning

MM

Materials

Mgmt.

SD

Sales &

Distribution

PM

Plant

MaintenanceHR

Human

Resources

IS

Industry

Solutions

WF

Workflow

PS

Project

System

QM

Quality

Mgmt.

CO

Controlling

AM

Fixed Assets

Mgmt.

FI

Financial

Accounting

8

•The Multi’s• Multi-Company• Multi-Language• Multi-Currency


R/3R/3PP

Produc

tion

Planni

ng

MM

Material

s Mgmt.

SD

Sales

&

Distrib

ution

PM

Plant

Maintena

nce

HR

Human

Resour

ces

IS

Industr

y

Solutio

ns

WF

Workflo

w

PS

Project

System

QM

Quality

Mgmt.

CO

Controlli

ngAM

Fixed

Assets

Mgmt.

FI

Financi

al

Accoun

ting

• Real time processing• Data is entered once. Where it originates• GUI Icons, User friendly• Immediate checking, processing, and information availability

Integration• Common cross-department data basis (no redundancy in data storage)• Up-to-date information• Software development tools (for enhancements and own developments)

Usability• Convenient standardized user interface

• Optional menu/command mode• Intelligent online documentation and error dialog• Catchword catalog (detailed explanation of typical terms

• Search aids (matchcode)• Mutiple transactions simultaneously (alternatives session)• Long-running transactions in background processing• SAP is internet ready

9

SAP R/3 Overview:System Wide Features

• SAP Organization Structure

• Master Data

• Security

10

The fundamental data and functional architecture of the

R/3 system...– Defines the legal and organizational structure of a company from

different points of view.– Includes flexible organizational units for creating a comprehensive

company structure.– Links different application areas in the R/3 system to create an

integrated company structure.

SAP R/3 Overview: SAP Organizational Structure

11


Client

• Client is the highest level in SAP

R/3.

• The data within one client may

not be accessed while working in

another, different client.

• Some data is managed at the

client level because every one in

the corporate group of companies

will want to refer to exactly the

same information.

Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C

Sloc A Sloc ASloc A Sloc B

12


Chart of Accounts

• Consists of an organized list of

all General Ledger accounts for

an organization

• Can be specific to a single Com

pany Code or used across multi

ple Company Codes

• Can be used for one or multiple

Controlling Areas

• Can be maintained in different l

anguages

Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C


13


Controlling Area

• An organizational unit within a

corporation in which the internal

management of costs and profits

can be performed

Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C


14


Company Code

• The identification number of an

independent accounting unit

that can generate its own

financial statement.

• It is a legal requirement that a

group that operates in several

countries must establish a

separate company code unit for

each country.Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C


15


Plant

• A plant is the central organizational unit to the production planning and inventory management concept

• Typically represents a manufacturing location or distribution center

• A plant can be production site or a group of storage locations that share materials.

Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C


16


Storage Location

• A physical or “virtual” location

that the system uses to manage

inventory.

• Defines the location of materials

within a Plant

• Inventory is managed in storage

locations at the quantity level.

• May be a warehouse, storeroom,

or a specific location within a war

ehouse or storeroom

Plant 1

Company A

Plant 2 Plant 3

Controlling Area B

Chart of Accounts

Client

Controlling Area A

Company B Company C


17

SAP R/3 Overview: Master Data

• Master Data refers to core information that is used by the various SAP modules. This information is typically entered only once, after which, the user will refer to the information to accomplish other tasks.

• The master data files can also be updated with new information so that its use as a reference is always accurate.

• SAP’s functional modules share and use the various master data records across multiple areas and processes.

MasterData

MM

PP

SD

FI/CO

QM

WM

18

Purchasing:•Material masters•Vendor master•Info Records•Source Lists

Sales and Distribution:•Material masters•Customer Masters•Customer Material lists•Customer Price records

Finance and Controlling:•Material masters•G/L Accounts•Cost Centers•Profit Centers

Inventory Management•Material masters•Plants•Storage locations

SAP R/3 Overview: Master Data - Types of Master data

Customer Master

?

Purchasing

Vendor

RFQ

Quotation

Vendor Master

Chart of Accounts

B

Chart of Accounts

A

Company Codes

Client

Currency CAD

Line itemDisplay X..

CC 0003

Currency USD

Line itemDisplay X..

CC 0001

G/L Account BANK

Bal sheet acct X

Account group FIN...

G/L Account Master

19

SAP R/3 Overview: Master Data - Material Master

Invoice Verification

Inventory Management

Sales Order

Processing

Purchasing

SAP R/3

Material Master Record

Central repositoryof material data for all areas within logistics:Finished ProductsSemi-finished productsRaw materialsConsumablesMarketing Materials

20

SAP R/3 Overview: Master Data - Key Data in the Material Master

• Client level data– Description and texts– Units of measure, weights, volumes– Material type

• Sales organization data– Sales organization, distribution channel, shipping points...

• Inventory Management and Purchasing organization data– Purchasing group, receipt processing time, quality inspection indicator, storage

location…

• Planning data– Planning type, MRP controller, lot size data, forecast consumption data…

• Finance and Controlling data– Material valuation, cost estimate data…

21

SAP R/3 Overview: Master Data - Terms and Concepts

• Material– A generic term for any article, item or service that is subject to materials

management. Material numbers are assigned internally by SAP or

externally by the user.

• Record– A collection of data pertaining to one item.

• View– A view groups together on a screen all the data for an item that a particular

department creates in a master record. Individual views can be processed

separately.

22


• Document– A document contains text explaining components or functionalities in the

SAP system. The document type distinguishes the business transactions to

be posted. A document class explains the purpose of the document.

• Field– The area on a screen where information is input or displayed.

• Extendable Master– A master record in which a view has not yet been created.

23


• Populate– Filling in information for a field in a view or document.

• Maintaining– The act of placing information into a view or document , or continuing to

provide updated information into specific master records.

• Default– The system automatically populates fields with pre-determined data,

however, changes may still be input manually.

SAP R/3Security

25

SAP R/3 Overview: Security

Security

• Controls the authority to perform a

particular action in the R/3 System.

• Profiles , Objects , Authorizations

– Each authorization refers to one

authorization object and defines

one or more permissible values for

each authorization field listed in the

authorization object.

– Authorizations are combined in

profiles which are entered in a

user's master record.

26

SAP R/3 Overview: Security - Profiles

• An authorization profile gives

users access to the system. A

profile contains individual

authorizations, which are

identified by the authorization

name and one or more

authorization objects. If a

profile is specified in a user

master record, the user has all

the authorizations defined in

this profile.

27

SAP R/3 Overview: Security - Objects

• Authorization objects allow you to

define complex authorizations.

• An authorization object groups

together up to 10 authorization

fields in an AND relationship in

order to check whether a user is

allowed to perform a certain action.

• To pass an authorization test for

an object, the user must satisfy the

authorization check for each field

in the object.

28

SAP R/3 Overview: Security - Authorizations

• This field contains the name of a program group that allows users to

– Execute programs

– Schedule jobs for background processing

– Maintain programs

– Maintain variants

• When creating a program, you can specify an authorization group as one of the program attributes. This allows you to group together programs for the purposes of authorization checking.

29

An Overview Typical Business Cycle

Controlling – Internal Reporting

Cost Element Accounting

* Delivery – if materials are sold

Pro

fit

Cen

ter

Acc

ou

nt i

ng

Co

st Cen

ter Acco

un

ting

Sales Processing

BillingDelivery*Sales Order

Interface

Financial Accounting – Legal Reporting

FI Postings

FI – General Ledger

FI – Account Payable FI – Account Receivable

Customer Invoice

Delivery of Goods / Services

Payment to Vendor

Receipt of Goods / Services

Vendor Invoice

Receipt of Payment

USER COMPANYVENDOR CUSTOMER

Module Overview: Sales and Distribution

(SD)

31


Sales and Distribution (SD)

• The SD application module

helps to optimize all the tasks

and activities carried out in

sales, delivery, and billing

32

Module Overview: SD

Sales and Distribution (SD)

• The process of taking orders,

checking availability, delivering

goods, invoicing customers, and

receiving payment.

• Its functionality includes the

following:– Sales order processing– Delivery – Billing– Customer payment– Sales Information System (SIS)

CustomerOrder

33

Module Overview: SDSD Process

• The sales order is a legally binding agreement between a sales organization and a sold-to party

concerning the delivery of materials or the provision of services. The sales order specifies prices,

quantities and dates.

• The "Delivery" is the central shipping document. Delivery creation initiates shipping activities such

as picking and delivery scheduling. The data generated during shipping processing is recorded.

• The invoiced payment process resolves discrepancies between the order, receipt, and

invoice.

Delivery BillingCustomer Payment

Sales Order Processing

Planning, Reporting and Analysis

Quotes

34

Module Overview: SDSD Process

• Billing and customer payment complete the sales and distribution process

• You can create billing documents with references to sales orders and deliveries.

• You can bill explicitly, process a billing due list or bill in batch.

Delivery BillingCustomer Payment

Sales Order Processing


Quotes

35

Sales LogisticsSales Logistics

SDSD

FIFI

DeliveryDelivery BillingBillingSales Order Processing

Sales Order ProcessingQuotesQuotes


G/L COS / Inventory

G/L COS / Inventory

AR Invoice /

GL Revenue

AR Invoice /

GL Revenue

Customer Payment

Customer Payment

Integrated Business Process Overview

36

Module Overview: SDSales Information System

Standard analyses

These functions enable you to target specific key figures and to analyze them in detail.

You can specify the level of detail in which you wish to view the information.

The values for each list can also be viewed graphically.

Flexible analyses Enables you to group together

and aggregate key figures yourself and easily create reports.

0

10

20

30

40

50

60

70

80

90

1stQtr

2ndQtr

3rdQtr

4thQtr

East

West

North

37

Module Overview: SDOrganization Structure

Sales Org A

Company A Company B

Dist Channel 1 Dist Channel 2

Division a1

Sales Org B Sales Org C

Division a2 Division a3 Division b1 Division a2

Plant 1000 Plant 2000 Plant 3000

� Distribution Channel Usually the sales channels (i.e., Wholesale, Retail

, Direct Sale, Merchandising, Mail Order, etc.)

Division

Combination of similar products

Often used to define Product Line

Sales Organization Logical selling unit

Geographical or other logical

subdivision of Company

38

Module Overview: SDMaster Data

• Sales and Distribution data

elements are comprised of:– Material masters– Customer Masters– Customer Material lists– Customer Price records– Output– Business Partners– Sales Organization– Distribution Channel– Division– Sales Group– Sales Reps

Module Overview: Materials Management (MM)

40


Material Management (MM)• The MM application module

supports the procurement and

inventory functions occurring in

day-to-day business operations

41

Module Overview: MM

Materials Management (MM)

• Purchasing in SAP refers to the

process of requisitioning, vendor

sourcing, purchasing, receiving, and

paying for materials and services

used throughout the organization.

• Inventory Management manages

materials in a plant by material

number. Inventory management is

used to plan, enter, and check

goods movements.

42

Module Overview: MMPurchasing

• The SAP R/3 system supports procurement of materials through approved

suppliers and materials.

• The business process begins with the buyer determining the source to fulfill the

goods requirement and ends with vendor payment for goods.

• The invoiced payment process resolves discrepancies between the order,

receipt, and invoice.

Requirement for Goods / Services

Purchase

Order

Goods

Receipt

Invoice

Verification

Vendor

Payment


Purchase

Requisition

43

Purchasing

MM

FI

Requirement for Goods /

Services

Requirement for Goods /

Services

Purchase

Order

Purchase

Order

Goods

Receipt

Goods

Receipt


G/L Inventory / GRIR

G/L Inventory / GRIR

G/L GRIR/ Expense AP

Invoice

G/L GRIR/ Expense AP

Invoice

Vendor

Payment

Vendor

Payment

Invoice

Verification

Invoice

Verification

Integrated Business Process Overview

44

Module Overview: MMPurchasing Organization Structure

Purch Org A

Company A Company B

Purch Group 1

Purch Group 2

Purch Org B Purch Org C

Plant 1000 Plant 2000 Plant 3000

Purch Group 2 Purchasing Organization

Responsible for procuring materials and services for one or more Plants

Capable of spanning Companies to produce a central purchasing organization

Negotiates prices and delivery conditions with the vendor

Required for entry of all purchase orders

Can be a central buying group responsible for company wide purchases

Purchasing Group

• Individual buyer per Plant

• Group of buyers per Plant

45

Module Overview: MMInventory Management

• Materials are managed on

both a quantity and value

basis.

• Work is managed at the plant

and storage location levels.

• Inventory management is used

for performing physical

inventories and inventory

counts within the SAP system.

Plant

Building 2Building 1

Storage locations

46

Module Overview: MMMaster Data

• Materials Management Master

Data Elements are comprised

of:– Material masters– Vendor master– Info Records

Module Overview: Financial Accounting

and Controlling(FI/CO)

48


Financial Accounting (FI)

• The FI application module is

designed for automated

management and external

reporting of general ledger,

accounts receivable, accounts

payable, and other sub-ledger

accounts with a pre-defined

chart of accounts

49

Module Overview: FI/COFinancial Accounting

FI


• The central task of G/L

accounting is to provide a

comprehensive picture for

external accounting and

accounts.

• Recording all business

transactions in a fully integrated

software system ensures that

the accounting data is always

complete and accurate.

50

Module Overview: FI/COFinancial Accounting


• SAP R/3 Financial Accounting

applications in-scope include:– General Ledger Accounting– Accounts Payable– Accounts Receivable

51


Controlling (CO)

• The CO application module

represents the company’s flow

of cost and revenue

• CO is a management

instrument for organizational

decisions

52

Module Overview: FI/COControlling

Controlling (CO)

• Controlling provides you with

information for management

decision-making.

• It facilitates coordination,

monitoring and optimization of all

processes in an organization.

• This involves recording both the

consumption of production factors

and the services provided by an

organization.

CO

53

Module Overview: FI/COControlling

Controlling (CO)

• SAP R/3 Controlling

applications in-scope include:– Budgeting– Cost centers / Elements– Internal Order Accounting– Profit center Accounting

CO

54

Module Overview: FI/COMaster Data

• FI/CO Master Data Elements

include– G/L Accounts– Cost Centers– Profit Centers

55

Module Overview: FI/COOrganization Structure

Profit Center Hierarchy

Company A

Cost Center A

Controlling Area

Chart of Accounts

Client

Controlling Area

Company B Company C

Manufacturing

Profit Center A

Profit Center B

Profit Center A1

Cost Center Hierarchy

FI

CO

56

Module Overview: FI/COOrganization Structure

Cost Center The smallest area of cost responsibility withi

n a company’s overall organizational structur

e

Must be assigned to a standard hierarchy str

ucture

May define alternative hierarchy structures f

or roll-up analysis

Cost Centers may capture the following type

s of postings for internal allocation purposes:

Transfer postings

Postings from distribution

Postings from internal cost allocations

Represent lowest hierarchical level in cost c

enter accounting

Profit Center Calculates net profit at organization level

A business unit within a company which m

onitors both costs and revenue and which

behaves as if it is an independent unit oper

ating in the marketplace

All objects with profit related data must be

assigned to a profit center, including cost c

enters, internal orders, sales order line ite

ms, projects, assets, etc.

Must be assigned to a standard hierarchy

structure

May define alternative hierarchy structures

for profitability roll-up analysis

Represents lowest hierarchical level in prof

it center accounting

57

Module Overview: FI/COFI/CO Processing and Reporting

Accounts Payable

Accounts Receivable

Cost Center Accounting

Internal OrderAccounting

Profit CenterAccounting

General Ledger

Financial Statements

TransactionProcessing (FI)

Financial Reporting (FI)

Management Reporting (CO)

SD

MM

SAP R/3System Benefits

59

SAP R/3 System Benefits

•Integrated

•Enterprise-Wide•Best Business Practices

•Multi-Currency

•Multi-Lingual

•Secure Information

60

SAP R/3 System Benefits:SAP and Integration

The value of integration:

• Integrated systems enable simplified business processes, standard data

definition, and a common business language

• Simplified business processes enhance productivity to allow focus on value

added activities

• Integrated database allows data to be entered only once and all related

information to be updated automatically

• Integrated applications instill confidence in information and eliminates need

for redundant analysis and reconciliation

61

PurchaseOrder

GoodsReceipt

ProductDelivery

MM, FI,CO, PP

MM, FI,CO, QM, WM

MM, FI, PPCO, QM, WM

MM, SD,FI, CO, WM

Manufacture

SAP R/3 System Benefits:SAP and Business Processes

Introduction to SAP September 30, 2003. 2 SAP Overview - Agenda 1.SAP R/3 System Overview –SAP R/3...

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