Unit 1
Business Processes,Integration, and
Configuration in the SAP R/3 Environment
Unit 1
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Learning Approaches
• Our Approach– Cross functional– Understand business processes and their
relationships to SAP's organizational structure– Highlight integration/configuration!!
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Learning by Creating a Model Business
• Understanding business processes and their integrative nature
• Understanding SAP organizational structures• Combining business processes and SAP
organizational structure (i.e., configuration)• Test the newly configured system• View system outputs - statistics, reports, and
graphics
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Pen Incorporated
• Start-up company in the promotional pen business
• Initially buys and re-sells different lines of promotion pens
• Sells to both wholesale and retail – procure and distribute
• Later acquires a production facility to manufacture its own product – produce and distribute
SAP R/3 andBusiness Processes
- Overview -
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Pen Incorporated Procure for Sales Order
Pre-Sales Activity
Sales Order Delivery Billing
General Ledger Accounts
Purchase Requisition
Purchase Order
Goods Receipt
In Inventory Plant or Warehouse
Invoice Receipt
Availability Check
NO
YES
Goods to Delivery
Goods from Purchase Order
InventoryPostings
AccountsReceivable
AccountsPayable
January 2008© SAP AG - University Alliances and The
Rushmore Group, LLC 2008. All rights reserved.
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Pen Incorporated Produce for Sales Order
Pre-Sales Activity
Sales Order Delivery Billing
Planned Order
Production Order
Completion Confirmation
In Inventory Plant or Warehouse
Availability Check
NO
YES
Goods Issued to Delivery
Goods from Production Order
General Ledger Accounts
InventoryPostings
AccountsReceivable
AccountsPayable
Issue Goods to Production
Order
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R/3
FIFinancialAccounting
COControlling
PSProjectSystemWF
WorkflowISIndustrySolutions
MMMaterials Mgmt.
HRHumanResources
SDSales and Distribution
PPProductionPlanning
QMQualityMgmt.PM
Plant Maintenance
SMServiceMgmt.
Client / ServerIntegrated BusinessSolution
ECEnterpriseControlling
AMFixed AssetsMgmt.
SAP Enterprise System
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Logistics
• Materials Management (MM)
• Sales and Distribution (SD)
• Production Planning (PP)
• Quality Management (QM)
• Plant Maintenance (PM)
• Service Management (SM)
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Accounting and Finance
• Financial Accounting (FI)• Treasury (TR)• Controlling (CO)• Enterprise Controlling (EC)• Fixed Asset Management (AM)• Project Systems (PS)
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Human Resources
• Human Resources (HR)
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Rushmore Group, LLC 2008. All rights reserved.
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R/3
FIFinancialAccounting
COControlling
PSProjectSystemWF
WorkflowISIndustrySolutions
MMMaterials Mgmt.
HRHumanResources
SDSales and Distribution
PPProductionPlanning
QMQualityMgmt.PM
Plant Maintenance
SMServiceMgmt.
Client / ServerIntegrated BusinessSolution
ECEnterpriseControlling
AMFixed AssetsMgmt.
Materials Management (MM)
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Rushmore Group, LLC 2008. All rights reserved.
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Components of Materials Management
MaterialsManagement(MM)
LogisticsInvoiceVerification
MaterialMaster
PhysicalInventory
Valuation
MRP
ServiceEntrySheet
ServiceMaster
ProductCatalogPurchasing
InventoryMgmt.
ForeignTrade/Customs
Purchasing is a component of Materials Management (MM).
The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.
The tasks of the MM Purchasing component are as follows:• External procurement of materials and services• Determination of possible sources of supply for a requirement
identified by the materials planning and control system or arising directly within a user department
• Monitoring of deliveries from and payments to vendors• Good communication between all participants in the
procurement process is necessary for Purchasing to function smoothly.
Inventory Management and Physical Inventory (MM-IM) PurposeThis component deals with the following tasks:Management of material stocks on a quantity and value basis Planning, Entry, and Documentation of all Goods Movements Carrying out the Physical InventoryFeatures
MRP Procedures in Consumption-Based Planning UseIn consumption-based planning, the following MRP procedures are available:Reorder point procedure Forecast-based planning Time-phased materials planning
Logistics Invoice Verification (MM-IV-LIV) PurposeLogistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.
Product CatalogA number of media can be used as vehicles for presentations, including:Print mediaCD-ROMOnline services (such as internet, T-Online, CompuServe, AOL)Information kiosks at the point of purchaseThe Product Catalog functionality comprises a programming interface (Business API) for accessing the data and integrated maintenance of product catalog-related data. This data comprises:The layout of the product catalogThe materials and prices in the product catalogTextsMulti-media objects (graphics, sound documents, video clips etc.).Service MasterMM External Services Management provides a basic process for the procurement of externally performed services. This basic process comprises the following functionality:
Foreign TradeOfficial customs brokers are licensed by the customs service to assist you with import and export transactions. They have the responsibility to ensure that all foreign trade customs procedures are followed completely and comply to legal regulations. They also ensure that the duties collected from your company are turned over to the government when they become due. Although the services of a customs broker replace the need for your company to handle the necessary tasks associated with foreign trade, they can be very costly. SAP's FT system incorporates all of the necessary checks and balances necessary to ensure that your import and export transactions are handled lawfully and that the duties owed to the customs authorities are calculated instantly and accurately.
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IntegrationProcurement Process (Procure-to-Pay)
Purchase Requisition
Paymentto Vendor
Notify Vendor
VendorShipment
InvoiceReceipt Goods
Receipt
Purchase Order
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Rushmore Group, LLC 2008. All rights reserved.
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R/3
FIFinancialAccounting
COControlling
PSProjectSystemWF
WorkflowISIndustrySolutions
MMMaterials Mgmt.
HRHumanResources
SDSales and Distribution
PPProductionPlanning
QMQualityMgmt.PM
Plant Maintenance
SMServiceMgmt.
Client / ServerIntegrated BusinessSolution
ECEnterpriseControlling
AMFixed AssetsMgmt.
Sales and Distribution (SD)
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Rushmore Group, LLC 2008. All rights reserved.
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Components of Sales and Distribution
Sales andDistribution(SD)
SalesSupport
Sales
CreditMgmt.
ShippingTransport
Billing
ForeignTrade
SalesInformationSystem
MasterData
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Sales Order Process(Order-to-Cash)
Integration
Sales OrderEntry
Post Goods Issue
Invoice Customer
Pick Materials
Receipt ofCustomer Payment
Pack Materials
Check Availability
January 2008© SAP AG - University Alliances and The
Rushmore Group, LLC 2008. All rights reserved.
24
R/3
FIFinancialAccounting
COControlling
PSProjectSystemWF
WorkflowISIndustrySolutions
MMMaterials Mgmt.
HRHumanResources
SDSales and Distribution
PPProductionPlanning
QMQualityMgmt.PM
Plant Maintenance
SMServiceMgmt.
Client / ServerIntegrated BusinessSolution
ECEnterpriseControlling
AMFixed AssetsMgmt.
Financial Accounting (FI)
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Rushmore Group, LLC 2008. All rights reserved.
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Components of Financial Accounting
Financial Accounting
(FI)
AccountsReceivable
AccountsPayable
SpecialPurposeLedger
FixedAssets
Banks
GeneralLedger
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Rushmore Group, LLC 2008. All rights reserved.
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IntegrationProcurement Process (Procure-to-Pay)
Purchase Requisition
Paymentto Vendor
Notify Vendor
VendorShipment
InvoiceReceipt Goods
Receipt
Purchase Order
January 2008© SAP AG - University Alliances and The
Rushmore Group, LLC 2008. All rights reserved.
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Sales Order Process(Order-to-Cash)
Integration
Sales OrderEntry
Post Goods Issue
Invoice Customer
Pick Materials
Receipt ofCustomer Payment
Pack Materials
Check Availability
SAP R/3 Configuration
- Overview -
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Rushmore Group, LLC 2008. All rights reserved.
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SAP Enterprise System
R/3
FIFinancialAccounting
COControlling
PSProjectSystemWF
WorkflowISIndustrySolutions
MMMaterials Mgmt.
HRHumanResources
SDSales and Distribution
PPProductionPlanning
QMQualityMgmt.PM
Plant Maintenance
SMServiceMgmt.
Client / ServerIntegrated BusinessSolution
ECEnterpriseControlling
AMFixed AssetsMgmt.
January 2008© SAP AG - University Alliances and The
Rushmore Group, LLC 2008. All rights reserved.
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Business Process Integration • “The Stool”– Components• Organizational Data• Master Data• Rules• Transactions
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Business Process Integration
FI
MM
SD
Org
Dat
a
RulesFI
MM
SD
Master Data
FI
MM
SD
FI SDMM
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Organizational Data
• A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions
• Are static data and are rarely changed
• The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured
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Master Data
• Master data is relatively fixed– Material master data– Vendor master data– Purchasing information record– General Ledger master data
• Before making the master data configurations, you must have completely defined the organizational structures
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Rules
• Defines the parameters for Master Data and Transactions
• Determines functionality for Master Data and Transactions
• Relatively fixed• Changes as policy changes
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Transaction Data
• Includes internal and external exchanges that describe business activities
• Unlike master data, aggregate transactional data is dynamic – each transaction is unique
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Functional Areas – Where and When
• Business Process Integration I– Financial Accounting (FI)– Materials Management (MM)– Sales and Distribution (SD)
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Functional Areas – Where and When
• Business Process Integration II– Financial Accounting (FI)– Controlling (CO)– Materials Management (MM)– Production Planning (PP)– Quality Management (QM)– Sales and Distribution (SD)