Intro to SAP Enterprise Systems Configuration EGN 5620

Intro to SAP Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration Fall, 2012

SAP R/3 Introduction Enables a company to link it’s business processes Ties together disparate business functions (integrated business solution) Helps the organization run smoothly Real-time environment Scalable and flexible January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 2

SAP R/3 Introduction Central relational database ◦ Oracle, Informix, Microsoft SQL, etc. Client/Server – three-tiered ERP Components – Oriented towards common identifiable business modules: ◦ MM, SD, PP, FI, CO, HR, WM, QM, PM Add-ons: ◦ Customer Relationship Mgmt (CRM) ◦ Supply Chain Mgmt (SCM) ◦ Product Lifecycle Mgmt (PLM) ◦ Business Intelligence (BI) January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 3

Relational Database Tables: Defines and links a couple of tens thousands of tables of information (25, 000+) Advantages ◦ Consistent and accurate data ◦ Common definitions for terms ◦ Shared, but restricted usage (e. g. , profiles) ◦ Eliminates data redundancy January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 4

Client/Server Environment Client ◦ Software/hardware combination that can make a request for services from a central repository of resources Server ◦ Software/hardware combination that can provide services to a group of clients in a controlled environment January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 5

Three-Tier SAP Structure GUI – Graphical User Interface or Web Interface Application server (one or many) Database server (one single location) January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 6

SAP Enterprise System PCs, Laptops, etc. Browser Client Network Web Server Internet Transaction Server Presentation Application Servers Database January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 7

Enterprise Systems (history & Evolution)

SAP R/3 Introduction Instance – each install of the SAP R/3 software on an individual application server Configurable – each instance can be distinctively configured to fit the needs and desires of the customer (within limits) Most of the infrastructure decisions, including configuration decisions, occur during project implementation January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 9

SAP Configuration The process of tailoring SAP software by selecting specific functionality from a list of those supported by the software, very much like setting defaults (e. g. , Word, Access) DOES NOT involve changes to the underlying software code January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 10

Programming Code Modifications Changes to the delivered code ABAP/4 – Advanced Business Application Programming (ABAP) This should be done carefully as it can make migration to new versions of the software much more difficult January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 11

SAP Data Types Required data types: 1. Organizational levels (data, elements) 2. Master data 3. Transaction data

Data type: Organizational levels Defines the enterprise structure in terms of legal or business purposes, including legal entities, plants, storage areas, sales organizations, profit centers: Client (e. g. , 600) ◦ Highest organizational level ◦ Represents the enterprise consisting of many companies Company Code (e. g. , C 099) ◦ Identifies legal entities in an enterprise ◦ Central organizational element in financial accounting Organizational levels in Logistics ◦ Plant (e. g. P 099) Represents factory, warehouse, office, distribution center, etc. ◦ Storage locations (e. g. , 10, 20, 30) A location within a plant where materials are stored

Data Types: Organizational levels Client BPI Enterprise (600) Company Code Pen Company (C 099) Pen Company (C 098) Plant Pen Plant (P 099) Pen Plant (P 098) WIP FG (10) Storage Locations RM (30)

Data Type: Organizational levels § Organizational levels in Accounting § Client § Company code § Business area § Controlling area § Operating concern § Organizational levels in procurement § Purchasing organization § Purchasing group § Plant § Storage location n Organizational levels in fulfillment (sales) n Sales organizations n Divisions n Distribution channel n Sales areas n Shipping point n Plant n Storage location n Organizational levels in PP n Plant n Work Center n Storage location n Shipping Point

SAP Enterprise Structure Example Procurement DL## Shipping Point RM## Storage Location SD## TG## SF## FG## MI## TO## HD## RM## TG## FG## SF## MI## FG## HH## TG## FG## MI## Central Purchasing Organization Purchasing Org. US## CA## PO DE## (global) GL## Purchasing Group North America N## Dallas Miami S. Diego Toronto DL## MI## SD## TO## CC US## Client GBI PE## CA## PGr Europe N## Heidelb. Hamburg HD## HH## CC DE## AU## Asia AS## Perth PE## AU##

SAP Enterprise Structure Example BI isio Div n. A n. B icy c les Distribution Channel Wholesale WH Distribution Channel Internet IN cce sso ries AS and Distribution Div Sales SO West SO North UW## CW## DN## GN## AN## SO East SO South UE## CE## DS## GS## AS## CC DE## CC GB## CC AU## CC US## CC CA## Credit Control Area (global) GL## Client GBI

Key Concepts in SAP Data Type: Master data ◦ Long term data that represent entities of: Procurement ◦ Vendor ◦ Material ◦ Info records, source list Fulfillment (Sales & Distribution) ◦ Customer ◦ Material ◦ Conditions (pricing, output) Production ◦ Bills of material ◦ Work centers ◦ Product routings

Key Concepts in SAP Types of Data: Transaction data ◦ Data generated during executing process (steps) combining: Organizational levels Master data Situational data (who, what, when, and where) ◦ Example: sales order Organizational levels: customer, company code, sales area Master data: customer master, material master Situational data: date, time, person, quantities

Key Concepts in SAP • The Document concept ◦ An electronic record of transactions ◦ Each transaction creates document(s) • Document types ◦ ◦ Financial accounting documents (FI) Management accounting documents (CO) Material documents (goods movement) Others

SAP R/3 Document Principle Each business transaction that writes data to the database creates a uniquely numbered electronic document Each document contains information such as ◦ Responsible person ◦ Date and time of the transaction ◦ Commercial content Once created, a document can not be deleted from the database January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 21

Key Concepts in SAP The Document Concept: Transaction document Header Line items

Key Concepts in SAP The Document Concept: Material Document Header • • Document number Created by Date Reference Items • • Quantity Material Location (Plant / Sloc) Other data depending on process (vendor, customer)

PEN, Inc. System Configuration Introduction EGN 5620 Enterprise Systems Configuration Fall, 2012

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 January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 25

Pen Inc. 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 January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 26

Enterprise Structure Credit Control Area Client (600) Fiscal Year Variant Chart of Accounts Company Controlling Area Code (C_ _ _) Purchasing Organization Plant (P_ _ _) Purchasing Group SL 10 SL 20 Shipping Point Sales Organization Distribution Channel Division Sales Area

Company configuration ◦ Pen Inc. _ _ _US manufacturing Company Vermillion SD, US ◦ Facilities: One manufacturing plant with warehouse in Vermillion (Plant) ◦ Work Center ◦ Storage Location 10 for Trading and finished goods 20 for Quality 30 for Raw materials ◦ Shipping point ◦ Sales Organization ◦ Purchase Organization

The company to be configured n. Cost Center Standard Hierarchy n ADMIN_ _ _ (Cost Center Group) • Acct-Finance • Administration • Purchasing • Information Tech n Sales _ _ _ (Cost Center Group) • Sales • Marketing n Distribution-Production Cost Center _ _ _ (Cost Center Group) • Warehouse • Production

Pen Inc. : The company Products ◦ Trading Materials BPEN _ _ _ (Barrel Pen) CPEN _ _ _ (Click Pen) PPEN _ _ _ (Premium Pen) Box _ _ (Pen Box) ◦ Finished products EPEN _ _ _ (Executive Pen) ESET _ _ _ (Executive Set)

Pen Inc. : The company Customers Customer Name City State Channel Tanagers Vermillion SD , 57069 RE (C & V) The Rushmore Group Vermillion SD, 57069 RE SAP, America Newtown Square, PA, 19073 RE Promotional Products, Inc Sacramento Ca, 95814 WH FL, 33010 WH Pleasure Boats Buying Group Miami

Pen Inc. : The company Suppliers Vendor Name City State Zip code Promotions Ltd _ _ _ Chico CA 95929 Slick Pens _ _ _ Milwaukee WI 53201 Premier Pens _ _ _ Baton Rouge LA 70803 Boxes inc _ _ _ Sioux Falls SD 57101 Tanager Vermillion SD 57069

Pen Inc. : Key Processes ◦ Procurement (buy) ◦ Fulfillment (sell) ◦ Production (make) ◦ Material planning (plan) ◦ Financial Accounting (track) ◦ Management Accounting (track) ◦ Inventory and Warehouse Management (store) ◦ Enterprise Asset Management (maintain) ◦ Customer Service (service) ◦ HCM (people)

Pen Inc. : The company Information system requirement The IS of the Pen, Inc. will ◦ integrate and share all services for all business functions in the Vermillion Office ◦ Centralize all ERP functions ◦ Achieve the primary business objectives: Reduce Costs Deliver Best-in-Class Technology to all divisions

Exercises: due date – 9/17/2012 65. Initialize 66. Maintain Fiscal Period for Company Code Plant Parameters for Material Management 67. Activate Materials Requirements Planning 68. Define Attribute for Material Types 71. Define Posting Periods Variant 72. Open and Close Posting Periods 73. Assign Posting Periods Variant to Company Code

Exercises: due date – 9/17/2012 Create Tolerance Groups for Account Postings 75. Setup Payment Program 76. Create Tolerance Groups for Accounts Receivable and Accounts Payable 77. Create Financial Accounting (FI) Document Numbers 78. Review Document Types (Only Watch, and don’t make any changes) 79. Post Initial Cash Investment by Owners 80. Post Purchase of Operating Supplies 81. Display and Review General Ledger Account Balances and Individual Line Items (Only Watch, and don’t make any changes) 74.