SAP Logistics Overview

SAP Logistics & Operation Material Management

Maximize cost savings for all spend

Agenda

The Whole Picture Organizational Structure Master Data Procurement Special Procurement Material Planning Inventory Management Invoice Verification Automated Procurement Miscellaneous Logistics Functionalities Analytics

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The Whole Picture

SAP CRM

Opportunity Management Marketing Channel management Multi-channel sales Customer Interaction center

Master Data Management Document Management Project Planning & Execution Design Collaboration System Interfaces (e.g. for CAD, ) Change & Configuration Management Guided procedures / Adobe Interactive forms

mySAP PLM

Production Sales and Distribution

Return Delivery Process Cross-Company-Code Stock Transfer

Materials Requirements Planning Make-to-Order, Engineer-toOrder Production

Logistics Execution

Integrated processes with transportation and warehouse management.

FinancialsMaterial Stock Account Posting Accounts Receivables Payment

Material Management

Analytics

Controlling

Analytical insight at all company levels.

Profitability Analysis Product Cost Controlling (for Make-to-Order Scenarios)

mySAP SRM

SAP ERPmySAP SCM

Auctions Category Management Contract Negotiation and Management Strategic Sourcing with demand aggregation

Advanced Demand and Production Planning Supplier Network Collaboration Global ATP Transportation Optimization Advanced Scheduling

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ERP Process Flow

Stocks

Material Requirements Planning

Demand

Forecast

Requirement

Production (Internal Procurement)

Purchasing (External Procurement) Invoice

Goods Receipt Warehouse Management Goods Issue Transfer Posting

Invoice Verification

AccountingSales and Distribution

Agenda


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Organizational Structure

Organizational grouping of enterprise areas which, for legal reasons or for other specific business-related reasons or purposes, are grouped together. SAP 2008 / Page 6

Agenda


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Master Data

Material Master Service Master Vendor Master Inforecord Source List Quota Arrangement Vendor Evaluation Condition Records Output Message Excise Masters

Data which is used long-term in the R/3 System for several business processes. SAP 2008 / Page 8

Master Data in Procurement Process

The material master and vendor master are the most important master data in the procurement process. You can store data for a particular material (for example, delivery time and purchase price) on a vendor basis in info records. SAP 2008 / Page 9

Partner Role

By maintaining partner roles in the vendor master record, you can distribute one or more of roles among different vendor master records. SAP 2008 / Page 10

Material Master

The integration of all material data in a single database object prevents the problem of data redundancy. SAP 2008 / Page 11

Material Master

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Material Type

You can assign materials with the same characteristics to the same material type. Material types include raw materials, semi-finished products, and finished products, for example. SAP 2008 / Page 13

Units of Measure

In addition to the base unit of measure that the system uses for stock-keeping and to execute all its calculations, other departments can use their own units of measure. SAP 2008 / Page 14

Valuation Class

You can use the valuation class to combine materials for assigning G/L accounts so that you do not have to manage a separate stock account for each material. SAP 2008 / Page 15

Material Valuation Procedures

Valuation of goods receipts depends on the price control procedure you set in the material master record. SAP 2008 / Page 16

Purchasing Info Record

It is the centralized repository of important information regarding a vendor and material combination. SAP 2008 / Page 17

Conditions

Conditions are stipulations agreed with vendors concerning prices, discounts and surcharges, and so on. The effective net price in purchase orders is determined on the basis of these conditions. SAP 2008 / Page 18

Service Master

A service master record contains a service description and a unit of measure, for example, hour. You can assign a price to each service master record via the conditions. SAP 2008 / Page 19

Agenda


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Procurement Overview

PaymentInvoice

MRP Invoice Verification Requirement RFQ

Delivery

Goods / Service Receipt

Purchase History

Source Determined

Source ListPO

PO Created

Vendor Selected

Quota Arrangement Outline Agreement Info Record

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Purchase Requisition

Purchase requisitions are internal documents you use to request your Purchasing department to procure a particular quantity of a material or a service for a particular date. SAP 2008 / Page 22

Create Purchase Requisition

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RFX

You enter the quotations along with the conditions and delivery dates they contain with reference to the corresponding RFQ. SAP 2008 / Page 24

Display RFX

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Response & Awards

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Procurement of Stock or Consumables

Consumables are materials that are procured directly for any specific accounts.

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Multiple Account Assignment for Consumtion

You can procure consumables for different department together and then distribute the cost among them. It increases the negotiation power with supplier. SAP 2008 / Page 28

Account Assignment for Consumtion

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Purchase Order

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Procurement of External Services

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Procurement of External Services

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Special Procurement

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Stock Transport Order

s od ipt Goece R

Ve In rif vo ic ice at io n

Receiving Receiving Plant Plant

S Tra tock ns Ord port er

Purchase Order History

g Billin for ry e Deliv

Supplying Supplying Plant Plant

Goods Issue

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Agenda


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Material Planning

The main task of material requirements planning is to ensure material availability, that is, to procure the requirement quantities for in-house production and for sale on time. SAP 2008 / Page 37

Material Planning

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Material Planning

As opposed to MRP, consumption-based planning procedures are only based on material consumption. SAP 2008 / Page 39

MRP Consumption based Planning

MRP is useful for the planning of finished products and important assemblies and components (A materials). Consumption-based planning procedures are preferably used in areas without in-house production or in manufacturing plants in order to plan B and C materials and operating supplies. SAP 2008 / Page 40

Reorder Point Planning

The reorder point procedure is based on a comparison between the warehouse stock and the reorder point. SAP 2008 / Page 41

Net Requirement Calculation in Reorder Point Planning

In reorder point planning, the available warehouse stock is calculated from the following: Warehouse stock + order quantity (purchase orders, firm planned orders, and firm purchase requisitions). SAP 2008 / Page 42

Forcasting in Consumtion based Planning

On the basis of previous material consumption values the system determines the forecast values for future requirements. The reorder point and the safety stock are calculated from these values. SAP 2008 / Page 43

Forcast Models

When a series of consumption values is analyzed, certain patterns can usually be detected. From these patterns it is then possible to differentiate between various forecast models SAP 2008 / Page 44

Lot-Sizing Procedure

MRP (or MPS) determines how much stock is needed to satisfy demand in the net requirements calculation. This shortage quantity must now be covered by one or more receipts. The system calculates the receipt quantity in the lot size calculation. SAP 2008 / Page 45

Calculation of Deadlines

From the date of the purchase requisition's creation, System calculates the material's availability date by taking into account the three time components, purchasing processing time, planned delivery time, and goods receipt processing time. SAP 2008 / Page 46

MRP Result

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Agenda


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Valuated Goods Receipt

You can decide the stock type to which a quantity is posted. The stock type is relevant for determining the stock available in Materials Planning and is used for withdrawals in Inventory Management. SAP 2008 / Page 49


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The diagram once again shows an overview of all the key effects of a goods receipt referencing a purchase order. SAP 2008 / Page 51

Underdelivery and Overdelivery

When you enter a GR item, the System compares the GR quantity with the quantity in the open purchase order and thereby identifies underdeliveries or overdeliveries. SAP 2008 / Page 52

Reversal and Return Delivery

When returning material to a vendor, you can specify a reason for movement individually for each item or enter a reason for movement on the initial screen for goods movements. SAP 2008 / Page 53

Split Valuation

The stocks and stock values of split-value materials are cumulated at valuation area level. Moving average price control is required for material at valuation area level, because the moving average price is used for the entire valuation area. SAP 2008 / Page 54

Non-Valuated Stock Material

You manage low-value advertising or office materials in a warehouse, and can get an up-to-date report on stock levels at any time. Stock records are kept on a quantity basis, but the value is posted to a consumption account at the time of goods receipt. SAP 2008 / Page 55

Shelf Life Expiration Date Check at GR

If the shelf life expiration date check is activated, you have to enter the expiration date or production date of the material at the time of goods receipt. SAP 2008 / Page 56

Reservation

Reservations are requests to the warehouse to have materials ready for issue at a later date and for a particular purpose. SAP 2008 / Page 57

Dynamic Availability Check

If the dynamic availability check is actively set for a type of reservation, the System includes upcoming material requirements in the availability check. SAP 2008 / Page 58

Transfer Posting

When you carry out a transfer posting, the stock type, batch number, or material number is changed. A transfer posting may also involve an actual physical stock transfer. SAP 2008 / Page 59

Stock Transfer

Unlike stock transfers, transfer postings do not usually involve a physical goods movement, but a change in stock type, batch number, or material number. SAP 2008 / Page 60

Transfer Posting/Stock Transfer

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Plant-to-Plant Stock Transfer (2 Step)

If you use the two-step procedure, you can monitor stocks while they are in transit.

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Stock Transport Order: Two-Step Procedure

This can be done in one step as well.

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Goods Issue

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From Warehouse Goods Issue From Consignment Stores

Consumption Cost Centre Asset Sales

Issue Sample Scrap

Goods Issue might be done for different purposes and it has corresponding postings in Accounting. SAP 2008 / Page 64

Physical Inventory

You can carry out a physical inventory for special stocks as well as your own stocks. However, you have to inventory your own stock and each type of special stock separately, using different physical inventory documents.. SAP 2008 / Page 65

Stock Overview

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SAP Logistics & Operation Warehouse Management


Debashis MajumderSolution Architect, SAP India

June 2010

Inventory & Warehouse Management: Business Process and Functional ScopeInbound Processing Warehousing & Storage Physical Inventory Outbound Processes Analytics Inventory

Inbound Processes

Goods Receipt Advanced Shipping Notification (ASN) Cross Docking Yard Management

Internal Processes

Warehouse and Inventory Management Task and Resource Management RFID, Mobile Devices and Bar coding Handling Unit Management Physical Inventory

Outbound Processes

Goods Issue Delivery Processing and Distribution Proof of Delivery Value-Added Services (VAS)

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Elements of Warehouse

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Structure of Warehouse

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IM-WM Integration

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Putaway Strategies

The following putaway strategies are part of the basic functions in SAP:Fixedbin(F) Open storage (C) Addition to existing stock (I) Nextemptybin(L) Pallets/storage unit type (P) Bulkstorage(B) Nearpickingbin(K)

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Stock Removal Strategies

The following stock removal strategies are part of the basic functions in SAP:First in first out (F) Stringent FIFO (***) Last in first out (L) Partial pallet quantity (A) Large/small quantities (M) Expiration date (H) Fixedbin(P)

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Putaway & Removal Strategies

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Agenda


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Logistics Invoice Verification creates a separate accounting document in addition to the invoice verification document. This is used in Financial Accounting to settle the invoice SAP 2008 / Page 76


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Delivery Cost

Unplanned delivery costs are delivery costs you do not know about when you are creating the purchase order. SAP 2008 / Page 79

Terms of Payment

In Invoice Verification, you can enter terms of payment or a fixed cash discount amount. SAP 2008 / Page 80

Invoices in Foreign Currency

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Invoices with Variance

You must release a blocked invoice in a separate step before it can be paid. SAP 2008 / Page 82

Invoice Reduction

With invoice reduction, you not only reduce an invoice, but also post a credit memo for the amount of the reduction. The amount payable to the vendor is the value of the invoice reduced by the credit memo amount. SAP 2008 / Page 83

Subsequent Debit/Credit

A subsequent debit/credit changes the total invoice value of a purchase order item; the total invoice quantity remains unchanged. SAP 2008 / Page 84

Credit Memo

You usually receive a credit memo from a vendor if you were overcharged. SAP 2008 / Page 85

Reversing Invoices

If you enter an invoice incorrectly and post it despite the error, the invoice can subsequently be reversed. SAP 2008 / Page 86

Periodic Invoicing Plan

An invoicing plan consists of a series of invoicing dates and values and forms the basis for the mainly automatic creation and settlement of invoices. SAP 2008 / Page 87

Partial Invoicing Plan

The partial invoicing plan should be used for transactions involving invoicing and payment in stages (for example, in construction projects, where a down payment is required). The total value of the item is spread among the individual due dates defined in the invoicing plan. SAP 2008 / Page 88

Evaluated Receipt Settlement

In ERS, you arrange with the vendor that he or she does not create an invoice for a transaction. Instead, the system automatically posts the invoice document on the basis of the data from the purchase order and goods receipts. This ensures that there are no discrepancies between the goods invoiced and the goods received. SAP 2008 / Page 89

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Optimized Purchasing

SAP ERP System provides many ways to optimize your whole procurement process to reduce time and operating cost. SAP 2008 / Page 91

Source of Supply

In MM Purchasing, the term source of supply (or source) can mean a vendor (external supplier) or an outline purchase agreement. SAP 2008 / Page 92

Outline Agreement

Outline agreement is a longer-term purchase arrangement with a vendor concerning the supply of materials or the performance of services according to predetermined conditions. SAP 2008 / Page 93

Source Determination: Source List

The source list contains the allowed, preferred and/or blocked sources of supply for a material in a plant that are valid within a certain period. SAP 2008 / Page 94

Source Determination: Quota Arrangement

If a certain material is to be procured alternately from different sources of supply, these individual sources can be assigned quotas. The quotas indicate the percentages of a total requirement that are to be procured from each of the various sources over a period. SAP 2008 / Page 95

Priorities in Source Determination

Possible sources are determined and suggested by the system according to logical priorities. SAP 2008 / Page 96

Order Acknowledgement

If you do not use acknowledgements, Materials Planning can only go by the delivery dates and quantities in the purchase order. Acknowledgements enable you to plan more accurately by providing you with the actual delivery dates and quantities. SAP 2008 / Page 97

Automated Procurement

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Agenda


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Classification

You can search for Materials via classes in any situation where you need to enter a material number. Using the Classification System you have set up, you can find the material number you are looking for without leaving the application, and copy it across. SAP 2008 / Page 100

Release Procedure of Purchsing Documents

The release strategy defines the release (clearance, approval or authorization) process. The strategy specifies the conditions under which a requisition or external purchasing document must be approved, the individuals or departments required to approve it and the sequence in which the approvals must be granted. SAP 2008 / Page 101

Output Message

Each time you save a new purchasing document or one that has been changed (such as an RFQ, a purchase order, or an outline agreement), the R/3 System checks if it should generate an output format for this document. SAP 2008 / Page 102

Price Determination

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Price Determination

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Batch Management

Batch Management incorporates the entire logistics process, from procurement to sales. SAP 2008 / Page 105

Batch Creation

Define creation upon goods movements or in batch master Define creation for production/process order SAP 2008 / Page 106

Batch Creation

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Batch Level

Batch Level can be set as material/plant or material or client. SAP 2008 / Page 108

Batch Classification

The material and its batches must be classified via the same class. This ensures that the same characteristics are used for the material and the batch. Characteristics can pass on their values by inheritance. SAP 2008 / Page 109

Shelf Life Expiration Date Check in Goods Receipt

The time you specify in the material master can be defined in days or in other time periods, controlled via the period indicator. SAP 2008 / Page 110

Shelf Life Expiration Date Check in Goods Receipt

If both the total shelf life and the minimum remaining shelf life are maintained, the system executes two functions in succession. It: Calculates the shelf life expiration date of the goods received and Checks the shelf life expiration date that has been calculated. SAP 2008 / Page 111

Batch Determination

Batch determination can be fully used for stock transfers and goods issues. SAP 2008 / Page 112

Batch Determination

Batch determination depends on the strategy records of the respective application. For different purposes, you have to create different strategy records in the system. SAP 2008 / Page 113

Batch Tracebility

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Batch Information Cockpit

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Vendor Evaluation

Overall rating of vendor

Price Price level Price behavior Other automatically determined

QualityInspec. of goods rec. Shopfloor complaint

Delivery On-time delivery Quantity reliability Shipping reliability Other

Service Technology Other

Quality audit Other

other eligible criteria weighting in %

AnalyticsMaterial List Vendor List PR List PO List Reservation List Physical Inventory Document List ABC Analysis Slow-moving Stock Dead Stock Warehouse Stock Purchase Value Analysis Material Analysis Material Stock between Posting Dates Purchase Order Price History Vendor Analysis

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Scope of List and Selection Parameters

Scope of list parameters determine which data is displayed for a document. The selection parameter determines which purchasing documents the report evaluates. SAP 2008 / Page 118

Reporting in Logistics Information System

You can use the Early Warning System (EWS) to look for any unusual situations and react to and correct these in good time. SAP 2008 / Page 119

Reporting in Standard Analysis

Standard analyses provide a wide range of functions for creating presentations and analyses for the data basis in the LIS. SAP 2008 / Page 120

SAP Logistics & Operation Quality Management


Debashis MajumderSolution Architect, SAP India

June 2010

Functions in Quality Management

Material Master - Quality Management

Quality Management in Procurement

QM in procurement controls whether the goods are posted in quality inspection stock. Inspection lots are create at GR and the delivery or invoice is to be blocked as a result of complaint (missing certificate) SAP 2008 / Page 124

Source Inspection

We can also have the goods inspected at the vendor premises and released for the delivery to our company. SAP 2008 / Page 125

Inspection at GR

The goods are posted to inspection stock and are released for use or blocked, depending on the inspection result and usage decision. SAP 2008 / Page 126

Material Specification

In th QM component, you can inspect both on the basis of inspection plans, and on the basis of material specifications that are valid company-wide. SAP 2008 / Page 127

Material Specification with Batch Valuation

The link between master inspection characteristics and class characteristics allows inspection results from a quality inspection to be included in the batch valuation. SAP 2008 / Page 128

Batch Determination in Inspection

If there are inspections from both batch determination and the task list or material inspection that are relevant for the characteristic, the specifications from batch determination take precedence over those from the material specification. SAP 2008 / Page 129

Sample Determination

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Catalogs

Catalogs contain a number of content-related codes that enable qualitative descriptions of problems (in text form) to be encoded and processed in the system in machine form (like usage decision, defect types etc). SAP 2008 / Page 131

Screens

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Screens

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Screens

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Mobile Results Recording

You can also record inspection results using a mobile device on site. This results data can later be transferred to the SAP System.

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Digital Signature

The digital signature enables you to meet the security requirements stipulated in the Good Manufacturing Practice (GMP) with regard to the execution. It is implemented using Secure Store and Forward (SSF) which allows to link various external security products. SAP 2008 / Page 136

External Systems

The system features standardized, certified interfaces for linking external equipment to the QM component. SAP 2008 / Page 137

QM in Production/Process Industry

QM in production has a vast influence in controlling quality of the end product and communicating information to take necessary actions. SAP 2008 / Page 138

Production Chain

Production

Inspection during production and inspections for external processing are triggered automatically. SAP 2008 / Page 139

Intervening in the Process

If you run control charts, you can configure the system so it will automatically create quality notification if an action limit is exceeded. You can then use the notification to process the problem further. SAP 2008 / Page 140

Western Electric Rules

Apart from showing where control limits have been exceeded, control charts can indicate that a process may be running out of control on the basis of unusual patterns. Runs or trends are examples of this. The Western Electric Rules are the criteria used to detect such patterns. SAP 2008 / Page 141

QM in Sales and Distribution/Service

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Delivery Inspection

Quality info record SD defines the inspection specifications for a specific customer-material combination. SAP 2008 / Page 143

Quality-Related Costs

An inspection usually generates appraisal and nonconformity costs that can be posted to a QM order for cost settlement in the CO component. SAP 2008 / Page 144

Processing a Calibration Inspection

You process the inspection lot that was created by the PM planning activities and release of the maintenance order in QM. The items of equipment assigned in the maintenance item are copied into the inspection lot as objects to be inspected. SAP 2008 / Page 145

Early Warning System

You use the EWS to monitor statistics for characteristics that have been updated in QMIS. You can monitor this data on the basis of mathematical criteria such as threshold values, trends, target/actual comparisons SAP 2008 / Page 146

Using Statistics

Different displays of statistical values are available in QMIS like run chart, PCI etc. QMSTI interface is to transfer data to external statistical programs for further processing. SAP 2008 / Page 147

Roles in QM

A role describes a collection of activities within a company and contains all of the functions required to perform these activities. SAP 2008 / Page 148

Thank you!

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SAP Logistics Overview

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