ERP 201 INTRODUCTION TO SAP ERP OPERATIONS ESWAR

ERP 201 INTRODUCTION TO SAP ERP OPERATIONS ESWAR RAMAN © 2009 Eswar Raman 1

INTRO 12 years in ERP l Mechanical Engg + MBA l Certified in Production and Inventory Management l Certified Project Management ESWAR RAMAN Professional l Email: eraman@cklrcsi. com M: 001 -630 -715 -5307 © 2009 Eswar Raman 2

AGENDA Business and IT l Close l © 2009 Eswar Raman 3

BUSINESS AND IT Innovation Obsolescence Global competition Regulations Technology Society Market Ethics Responsibility Companies Information Technology (IT) is a general term that describes any technology that helps to produce, manipulate, store, communicate, and/or disseminate information © 2009 Eswar Raman 4

Goals for ERP implementations - Poll What is the single most important reason for ERP implementations in 2008? (i) Standardize processes across enterprise (ii) Cost reduction (iii) Improve customer responsiveness (iv) Upgrade technology Standardize processes 2008 © Aberdeen Research © 2009 Eswar Raman 5

BUSINESS AND IT • • • Information for decisions Value for Money Risk Management Process Responsiveness Innovation © 2009 Eswar Raman 6

ERP System – an introduction l l ERP emerged from MRPII grew from MRPII extended MRP’s focus on production and inventory to other functions such as Order Processing, Finance etc. ERP is different from MRPII – replacing legacy apps, managing globalization, handling regulatory requirements and improving integration of functions © 2009 Eswar Raman 7

SAP ERP System – Architecture Can be a laptop, mobile device, a browser etc. UI UI UI Business Logic resides here Database layer Three distinct layers, can exist on separate machines Purchased from db vendors © 2009 Eswar Raman 8

ERP System – Solution Maps End-User Service Delivery Analytics Strategic Enterprise Management Financial Analytics Operations Analytics Workforce Analytics Financial Supply Chain Management Financial Accounting Management Accounting Corporate Governance Human Capital Management Talent Management Workforce Process Management Workforce Deployment Procurement Supplier Collaboration Inventory and Warehouse Management Inbound and Outbound Logistics Transportation Management Production Planning Manufacturing Execution Enterprise Asset Management Product Development Life-Cycle Data Management Sales and Service Sales Order Management Aftermarket Sales and Service Professional-Service Delivery Foreign-Trade Management Incentive and Commission Management Corporate Services Real Estate Management Project Portfolio Management Travel Management Environment, Health and Safety Quality Management SAP Net. Weaver People Integration Procurement and Logistics Execution Product Development and Manufacturing Information Integration © 2009 Eswar Raman Process Integration Application Platform 9

SAP ERP – Procurement and Logistics Execution Procurement Supplier Collaboration Managing Catalog Content (S 12) Development Collaboration (S 63) Self-Service Procurememt (S 63) Purchase Order Collaboration (S 12) Service Procurement (S 12) Invoice Processing (S 12) Purchase Order Processing (S 64) Inventory and Warehouse Management Inbound and Outbound Logistics Cross Docking (S 64) Inbound Processing (S 64) Warehousing and Storage (S 64) Outbound Processing (S 64) Transportation Management Transportation Execution (S 64) Freight Costing (S 64) Physical Inventory (S 64) Account and Payment Information (S 12) Receipt Confirmation (S 64) Service Confirmation (S 12) Invoice Verification (S 64) SAP Product Available Partner Product Available SAP Product Available with Future Releases Partner Product Available with Future Releases Future Focus Collaborative Business Map Available © 2009 Eswar Raman Sxx, Vxx, Bxx Pxx SAP Product & Service Partner Product For more information see: http: //www. sap. com 10

SAP ERP – Product Development and Manufacturing Production Planning (S 64) Enterprise Asset Management Manufacturing Execution (S 64) Phase-In Equipment (S 64) Product Development Life-Cycle Data Management Product Development (S 62) Document Management (S 62) Development Collaboration (S 63) Product Structure Management (S 62) Maintenance Planning (S 64) Supervision and Control (S 51) Maintenance Execution (S 64) Recipe Management (S 62) Phase-Out Equipment (S 64) Specification Management (S 62) Change and Configuration Management (S 62) SAP Product Available Partner Product Available SAP Product Available with Future Releases Partner Product Available with Future Releases Future Focus Collaborative Business Map Available © 2009 Eswar Raman Sxx, Vxx, Bxx Pxx SAP Product & Service Partner Product For more information see: http: //www. sap. com 11

SAP ERP – Sales and Service Sales Order Management Aftermarket Sales and Service Account Processing (S 12) Phase-In Equipment (S 64) Internet Sales (S 59) Phase-Out Equipment (S 64) Professional-Service Delivery Foreign-Trade Management Managing Auctions (S 12) Project Planning & Scoping (S 62) Sanctioned Party List Screening (S 56) Incentive Plan Maintenance (S 12, S 9) Project Resource Planning Export Control (S 56) Incentive Processing (S 12, S 9) Inquiry Processing (S 12) Asset Scrapping (S 64) Quotation Processing (S 59) Product & Warranty Registration (S 12) Quotation Processing (S 12) Product Classification (S 56, S 57, S 3) Sales Order Processing (S 12) Waranty Claim Processing (S 12) Sales Order Processing Customs Value Calculation (S 57) Mobile Sales (S 12) Service Contract Processing (S 12) Managing Employee Time & Attendance (S 12) Contract Processing (S 59) Maintenance Plan Processing (S 12) Travel Expense Management (S 12) Billing (S 59) Mobile Measurement & Counter Reading (S 12) Project Accounting (S 12) Service Employee Resource Planning (S 12) Resource-Related Intercompany Billing Service Notification Processing (S 12) Billing (S 12) Inbound Telesales (S 12) Returnable Packaging Management (S 12) Consignment (S 12) Incentive and Commission Management Project Execution (S 62) Customs Processing Import (S 57) Presentation to Customs (S 57) Resource-Related Billing Service Order Processing (S 12) Billing (S 12) Returns Processing (S 12) In-House Repair Processing (S 12) © 2009 Eswar Raman 12

SAP ERP in Enterprise System Landscape my. SAP Business Suite my. SAP PLM Purchase Order Requisitioning my. SAP SRM my. SAP ERP Analytics Financials Human Resources Operations Inventory & Warehouse Mgmt. Corporate Services Sales Order Internet Sales Life-Cycle-Data, Project-, Quality- and Asset Management my. SAP CRM Manufacturing & Transportation my. SAP SCM SAP Net. Weaver © 2009 Eswar Raman 13

ERP System – Sales Processes an example Purchase order Order is entered into ERP system üPricing üCredit Check üAvailability üetc © 2009 Eswar Raman 14

ERP System – Quote to Cash process overview Sales Order Processing Inventory Sourcing Pre-Sales Activities & Quote Shipping Payment Billing © 2009 Eswar Raman 15

ERP System – Effects of sales order creation Sales Information System Integration to SD, MM, FI, CO & SIS FI: Customer’s credit management account Order CO: Profitability analysis 120 MM: Requirements Order confirmation 100 80 SD: Delivery worklist 60 40 20 0 1 2 3 4 5 6 © 2009 Eswar Raman 16

ERP System – Effects of shipping process Delivery FI: Customer credit management account Sales Information System MM: Goods issue General business costs - production x Delivery -> Delivery due list MM: Requirements Integration to MM, FI & SIS Stock x Picking -> Shipping papers Packing -> © 2009 Eswar Raman Goods issue 17

ERP System – Effects of billing process FI: Revenue FI: Customer credit management account Billing doc FI: Receivables x x Sales Information System CO: Profitability Analysis 120 100 80 60 Delivery 40 20 0 Order 1 2 3 4 5 6 Invoice Integration to SD, FI, CO & SIS © 2009 Eswar Raman 18

ERP System – Effects of incoming payment Post Payment Receivables Incoming payment from customer X © 2009 Eswar Raman X 19

ERP System – Audit Trail Standard order Outbound delivery Billing doc. Accounting document Document Standard order 6839. Delivery 80002832. . WMS transfer order 482. . GD goods issue: delvy 4900001537. . Invoice 90005371. . . Accounting document 100001276 © 2009 Eswar Raman 20

ERP System – Concept of Integration as applied to Sales Process Financial Accounting CO/PA Post Goods Issue Billing Sales Information System Data Sales Orders Materials Management Warehouse Management Stock Reservation Stock removal Availability check Picking Removal from stock location Project Systems Sales and Distribution Make to Order © 2009 Eswar Raman Production Planning 21

POLL QUESTION What is the inventory accuracy for best -in-class RP users? (a) 52% The correct answer is (d) – (b) 75% 97%. The laggards on the (c) 97% hand showed an accuracy of 83%. (d) 10% © 2009 Eswar Raman 22

BREAK TIME LET US HAVE BREAK FOR 10 minutes © 2009 Eswar Raman 23

MADE TO STOCK PROCESS Forecast, Plan demand Create Work orders Receive sales order MRP using net change Procure Raw materials Release Work orders Confirm production Ship sales order Invoice customer © 2009 Eswar Raman Receive payment 24

COST PER USER PERCENTAGE POINT OF FUNCTIONALITY USED © 2009 Eswar Raman 25

Benefits accruing from an ERP system l l l Cost reduction , cycle time reduction, productivity improvement, customer service betterment, better management of processes etc. Better resource management, improved planning and decision making capabilities Support growth, support alliance, provide platform for innovations, build cost leadership, build linkages to partners, enable e-commerce, expand globally IT cost reduction, build flexibility for growth and change Provide catalyst for organizational changes, empower users, improve morale © 2009 Eswar Raman 26

OVERVIEW OF AN ERP IMPLEMENTATION PROJECT l l l l Various approaches – Big Bang, Franchizing, Slam Dunk and On. Demand increments Implementation timelines vary – depending upon size of company, complexity of processes and the political desire to customize solutions Implementation usually needs a well-versed partner who is skillful in configuring the chosen ERP system and is able to guide, coach the company’s employees and understand the company’s processes Project needs to be blessed by a person at the level CEO or CIO , Change needs to be communicated and followed through Change management is established and adhered to Typical project sequence is – Gather requirements, Develop prototype, Test processes, Release to production upon approval, Load into production and Go-live, Review results and adjust as necessary Go or No-go decisions are made at various QA points during the project More to be added © 2009 Eswar Raman 27

SYSTEM DEMO © 2009 Eswar Raman 28

THANK YOU Please proceed to http: //erpcourse. cklrcsi. com/Course_ Homepage_files/page 0005. htm , you can register and download material © 2009 Eswar Raman 29

COPYRIGHT ACKNOWLEDGEMENT ALL RIGHTS RESERVED l l l l This presentation was prepared by Eswar Raman and he holds the copyright. He wishes to acknowledge the following. Business Value of IT : Managing Risks, Optimizing Performance and Measuring Results IT Success: Towards a new model for Information Technology for Management The Enterprise Resource Planning Decade: Lessons learned and issues for the future CIO. com article – ERP definitions and solutions SAP. com for solution maps SAP, R/3, my. SAP. com, x. Apps, x. App, SAP Net. Weaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves information purposes only. National product specifications may vary. Epicor is a registered trademark of Epicor Software Corporation. Infor, Adage is a registered trademark of Infor. Oracle, People. Soft, JDE are registered trademarks of Oracle Corporation. Lawson is a registered trademark of Lawson Software Inc. Sage is a registered trademark of Sage Software Inc. © 2009 Eswar Raman 30