SAP Lecture 1 Copyright 1999 Raymond F Boykin

SAP Lecture 1 Copyright 1999 - Raymond F. Boykin Contents of this file are for the exclusive use of the University of Missouri and CSU, Chico pilot project. Reproduction of this material in any form is not allowed without the written permission of the author. This material is confidential. CSU Chico 1 ã SAP AG

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SAP R/3 Materials Management Module CSU Chico ã SAP AG

Materials Management l Procurement l Inventory Management l Warehousing l Material Master l Materials Planning l Hazardous Materials Management CSU Chico ã SAP AG

Organizational Elements l Organizational elements are structures that represent the and/or organizational views of an enterprise. l Company structure is designed based on business processes. l The organizational elements provide a framework that supports all business activities. CSU Chico ã SAP AG

Organizational Elements for the Procurement Process l Company Code l Plant l Storage Location l Purchasing Organization l Purchasing Group CSU Chico ã SAP AG

Company Code l A company code represents an independent accounting unit. l Balance sheets and Profit & Loss statements, required by law, are created at the company code level CSU Chico ã SAP AG

Plant l A plant is an organizational unit within a company. It produces goods, renders services, or distributes goods. l A plant can be one of the following types of locations: n Manufacturing facility n Warehouse distribution center n Regional sales office n Corporate headquarters CSU Chico ã SAP AG

Storage Location l Storage locations are organizational units that allow the differentiation of material stocks within a plant. CSU Chico ã SAP AG

Purchasing Organization and Groups l Decentralized with a separate organization for each plant. l Centralized, one organization for all plants. l Hybrid - multiple organizations buy for multiple plants. l Groups can be a further division of purchasing responsibility and/or structure. CSU Chico ã SAP AG

Material Master l The material master contains all data required to define and manage material. It integrates data from engineering, manufacturing, sales and distribution, purchasing, accounting, and other departments. l The material master is used as a source of data for purchase order processing throughout the procurement cycle. CSU Chico ã SAP AG

Material Master - View(s) l The R/3 system allows selection and maintenance of the data that is relevant to a particular department. l To create a view, the view must be selected on the “Select View(s)” screen before the material data is entered. l Users are responsible for creating and maintaining the view(s) of the materials that are relevant to their departments. CSU Chico ã SAP AG

Material Master - Industry Sector l Industry sector determined the type of industry to which the material will be assigned. l Industry sector information determines: n which screens will appear and in what sequence n what industry-specific data will appear CSU Chico ã SAP AG

Material Master - Maintenance l Defaults - speeds entry of data by using the most frequently used organizational levels and views as default values. These defaults are user-specific and may be overridden. l Reference Material - speeds entry by copying pertinent data from existing material master records. l Profiles - speeds entry by copying standard data created in a profile into a selected view. l Collective entry of storage locations - speeds creation of additional storage locations by adding multiple locations at one time. CSU Chico ã SAP AG

Material Master - Material Type l Groups material with same basic attributes l Determines: n which department views are maintained n Whether changes in material quantities are updated n Whether internal or external procurement is allowed n Which general ledger accounts are updated CSU Chico ã SAP AG

Vendor Master l The vendor master includes all the data necessary for processing business transactions and corresponding with vendors. l Information is shared between the accounting and purchasing departments. l Data is grouped into three categories: n general data n accounting data n purchasing data CSU Chico ã SAP AG

Basic Procurement Process l Requirements determination - purchase requisition l Source determination - RFQ and quotation l Vendor selection l Order processing - purchase order l Order follow-up l Goods receipt and inventory management l Invoice verification l Payment CSU Chico ã SAP AG

Purchase Requisitions l Internal document l Requesting a certain quantity of material or service on a certain date l Can be created: n Manually n Automatically (MRP, sales orders, etc. ) l Release approval procedures can be established CSU Chico ã SAP AG

Purchase Requisition Sources l Manually created by user department l Automatically created by: n Planning (MRP, MPS) n Plant maintenance n Production orders n Sales orders CSU Chico ã SAP AG

Processing Purchase Requisitions l Create purchase requisition (manually or automatically) l Determine source of supply l Release procedure (optional) l Allocate vendor and process CSU Chico ã SAP AG

Creating a Purchase Requisition l Default data for line items n delivery dates, plants, purchasing groups, etc. l Maintain line item data n materials, quantities, delivery dates, etc. l Maintain account assignment (if required) n cost center, G/L accounts, project number, etc. l Check data l Save CSU Chico ã SAP AG

Purchase Requisitions - Menu Paths l Create: Logistics -> Materials management -> Purchasing -> -> Requisition -> Create l Change: Logistics -> Materials management -> Purchasing -> -> Requisition -> Change l Display: Logistics -> Materials management -> Purchasing -> -> Requisition -> Display CSU Chico ã SAP AG

Purchase Orders l Purchase orders are: n a formal request to provide materials or services n an internal planning and tracking tool l Purchase orders identify: n vendor n material and/or service n quantity and price n delivery dates n terms of payment CSU Chico ã SAP AG

Purchase Order Structure l Header - information specific to the entire purchase order n vendor n currency n payment terms CSU Chico ã SAP AG

Purchase Order Structure l Line item details n account assignment n delivery schedule n materials/services quantity n price n description n item category CSU Chico ã SAP AG

Item Category l Item category defines the form of procurement l Whether a purchase order requires: n material number n account assignment n goods receipt and/or invoice receipt l Examples: n subcontracting n consignment n stock transfer CSU Chico ã SAP AG

Purchase Order Output l Request for quotations l Purchase order l Order acknowledgment CSU Chico ã SAP AG

Purchase Order Output Format l Printed and mailed l EDI l Faxed (hardcopy or electronic) CSU Chico ã SAP AG

Purchase Order - Menu Paths l Create: Logistics -> Materials management -> Purchasing -> -> Purchase order -> Create n vendor known n vendor unknown n via requisition l Change: Logistics -> Materials management -> Purchasing -> -> Purchase order -> Change l Display: Logistics -> Materials management -> Purchasing -> -> Purchase order -> Display CSU Chico ã SAP AG

Goods Receipt l Goods receipt with reference to a purchase order: n copy data from purchase order n delivery notification n invoice verification n updates PO history n inventory update n automatic update of G/L accounts l You can search for the PO number with: n material number, vendor number, etc. CSU Chico ã SAP AG

Goods Receipt Destinations l Stock - given a storage location, can be posted to three different stock types: n unrestricted-use n quality inspection n blocked stock (valuated) l Consumption - can be assigned a recipient or unloading point l Goods Receipt Blocked Stock - updates inventory, but material is not valuated (conditional acceptance) CSU Chico ã SAP AG

Goods Receipt - Movement Types l Movement types - stock transactions: n goods receipt n goods issue n stock transfer l Movement type determines which: n quantity fields are updated n stock types are updated n G/L stock or consumption accounts are updated n fields are displayed during document entry CSU Chico ã SAP AG

Movement Type - Examples l 101 - goods receipt for purchase order into warehouse/stores l 102 - reversal of goods receipt for purchase order into warehouse/stores l 122 - return delivery to vendor l 501 - receipt w/o purchase order into unrestricted-use stock CSU Chico ã SAP AG

Goods Receipt - Account Postings l Inventory account is debited at standard price l GR/IR clearing account is credited at purchase order price l Price difference account is debited (credited) with difference between standard price and purchase order price CSU Chico ã SAP AG

Effects of a Goods Receipt l PO history and PO updated l Material master - stock and value updated l Notification of goods receipt issued (optional) l Transfer request to Warehouse Management system (if active) l Material and financial documents created and/or updated l Stock and consumption accounts updated l Inspection notification in QM (if active) CSU Chico ã SAP AG

Goods Receipt - Menu Paths l Create: Logistics -> Materials management -> Inventory management -> -> Goods movement -> Goods receipt -> For purchase order -> n PO number known n PO number unknown l Change: Logistics -> Materials management -> Inventory management -> -> Material document -> Change l Display: Logistics -> Materials management -> Inventory management -> -> Material document -> Display CSU Chico ã SAP AG

Invoice Verification l Matches the vendor’s invoice to the purchase order and the goods receipt (3 rd part of 3 -way match) l Matches price and quantity l Updates the purchase order and its history l Updates accounting information CSU Chico ã SAP AG

Invoice Payment l Selects invoices for payment based on the payment terms in the vendor master or purchase order l Generates payment for released invoices l Updates accounting information CSU Chico ã SAP AG

Accounts Payable Payment Process l Determines: n open items to be paid n when they will be paid n bank from which payment will be made n payment medium n who will get paid l Payment process creates a financial accounting document to record the transaction CSU Chico ã SAP AG

Invoice Processing - Menu Paths l Enter an Invoice: Logistics -> Materials management -> Invoice verification ->-> Document entry -> Enter invoice l Change: Logistics -> Materials management -> Invoice verification ->-> Further processing -> Change l Display: Logistics -> Materials management -> Invoice verification ->-> Further processing -> Display CSU Chico ã SAP AG

Invoice Processing - Menu Paths l Payment Processing: Accounting -> Financial accounting -> Accounts payable ->-> Document entry -> Outgoing payment -> Post l View PO History Documents: Logistics -> Materials management -> Purchasing ->-> Purchase order -> List display -> By PO number CSU Chico ã SAP AG

SAP R/3 Sales and Distribution Module CSU Chico ã SAP AG

SD Overview Introduction l Overview l Organizational Units l Master Data l Main Process l Integration CSU Chico 47 ã SAP AG

Overview l Handles the selling of products or services to business partners l Master data forms the basis for all activities in S/D n Need a customer to sell to, product to sell, and a price n Perform the task of sale, delivery and billing l Each activities creates a document flow based on Sale Doc n Allows for current status for a Bus. Event anytime, anywhere along the value chain CSU Chico 48 ã SAP AG

Overview l S/D handles several functions to support a sale n Material and price determination, availability check, schedule determination, collective invoice processing, etc. l In addition to a standard order, S/D handles different business events involving a sale activity n Consignment goods, leases, free of charge, third-party orders, etc. CSU Chico 49 ã SAP AG

Organization Units l Sales Organization - Sell and distributes products l Distribution Channel - Method in which material or services reach customer n Wholesale, retail, and direct sales l Sales Division - Responsible for sales or profits from services or materials n Group materials products or services l Sales Area - Combination of sales organization, dis. Channels, and divisions n Used for reporting CSU Chico 50 ã SAP AG

Organizational Unit CSU Chico 51 ã SAP AG

Organization Units l Sales Office - Reflects the geographical aspects of a sales organization n Establishes contact between the firm and the regional market l Sales Group - Individuals responsible for the sale l Plant - Place where a product or services is render from l Company Code - Legal reporting for external users CSU Chico 52 ã SAP AG

Organization Unit CSU Chico 53 ã SAP AG

Master Data CSU Chico 54 ã SAP AG

Master Data l Customer - sale org. (General View) n Various relationship can be stored (sales view) w n Sold-to, Bill-to, Ship-to, shipping, etc. Customer account is stored (accounting view) w Credit, invoice payment, etc. l Material - plant n Different characteristics w Sales status, Material type, etc. l Pricing n Uses a condition technique that allows prices to be executed automatically in the order CSU Chico 55 ã SAP AG

Processes CSU Chico 56 ã SAP AG

Main Process - Sale l All activities from request for quotation processing to processing all kinds of orders l Data from the first document is carried forward to subsequent documents l The sale document may result in a single order or a longerterm relationship in the form of outline agreement with special conditions n Outline agreements: divided into contracts and scheduling agreement, and are valid for a defined period of time n Contracts: quantities and prices are specified for scheduling agreements and delivery dates n Orders: price determination, availability check, credit limit check, and delivery scheduling serve as a basis for rejection or acceptance CSU Chico 57 ã SAP AG

Main Process - Shipping l Guarantee on-time and cost-saving retrieval and shipments of products agreed upon in a customer order l Data is copy from the sales order (integration) or created without reference to an order l Shipping handles picking, creation of packaging and loading instructions, and transportation routing and tracking l Foreign trade requirements are handled (export permits, notices to government agencies, etc. ) l Good issue is performed CSU Chico 58 ã SAP AG

Main Process - Billing l Creation of invoices based on deliveries and services rendered, of credit and debit memos, and proforma invoices l Deliveries from different orders can be combined or split into different invoices l Creations are passed on to FI, which monitors receipt of payment CSU Chico 59 ã SAP AG

Main Process (Function) - Sales Support and SIS l Contains marketing- and sales-related information about customers, potential customers and partners, as well as competitors and their products l Supports marketer in segmenting markets, business development and customer service SIS is tightly linked with Sales Support l Used to gather, condense and evaluate data from sales l Analysis of performance measure according to various methods n n Correlation curves, planned/actual comparisons, etc. Warning system CSU Chico 60 ã SAP AG

Integration l In order processing, an availability check for stocks in MM l Delivery processing, creates goods issues which is MM l Existing sales quantities of an order, can be transferred to PP and CO as planned independent requirements to be produce l Data of a product in S/D is passed to CO for product costing l During billing, profit centre postings are automatically updated l During billing, the invoice amounts is automatically transferred to FI as revenues where receipt of payment is monitored or open item are dunned CSU Chico 61 ã SAP AG

Integration CSU Chico 62 ã SAP AG