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© 2009 Eswar Raman 2
INTRO
12 years in ERP Mechanical Engg + MBACertified in Production and
Inventory ManagementCertified Project Management
Professional ESWAR RAMAN
Email: [email protected]
M: 001-630-715-5307
© 2009 Eswar Raman 4
BUSINESS AND IT
Information Technology (IT) is a general term that describes any technology that helps to
produce, manipulate, store, communicate, and/or
disseminate information
Companies
Regulations
Ethics
Responsibility
Global competition
Innovation
Obsolescence
Market
TechnologySociety
© 2009 Eswar Raman 5
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 6
BUSINESS AND IT
• Information for decisions• Value for Money• Risk Management• Process• Responsiveness• Innovation
© 2009 Eswar Raman 7
ERP System – an introduction
ERP emerged from MRPII MRPII grew from MRP 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 8
SAP ERP System – Architecture
UI
UI
UI
Business Logic resides here
Database layer
Three distinct layers, can exist on separate machines
Can be a laptop, mobile device, a browser etc.
Purchased from db vendors
© 2009 Eswar Raman 9
ERP System – Solution Maps
End-User Service Delivery
AnalyticsStrategic Enterprise
ManagementFinancial Analytics Operations Analytics Workforce Analytics
FinancialsFinancial Supply Chain
ManagementFinancial Accounting Management Accounting Corporate Governance
Human Capital Management
Talent Management Workforce Process Management Workforce Deployment
Procurement and Logistics Execution
Procurement Supplier CollaborationInventory and
Warehouse Management
Inbound and Outbound Logistics
Transportation Management
Product Development and Manufacturing
Production PlanningManufacturing
ExecutionEnterprise Asset
ManagementProduct Development
Life-Cycle Data Management
Sales and ServiceSales Order Management
Aftermarket Sales and Service
Professional-Service Delivery
Foreign-Trade Management
Incentive and Commission Management
Corporate ServicesReal Estate
ManagementProject Portfolio
ManagementTravel Management
Environment, Health and Safety
Quality Management
SAP NetWeaver People Integration Information Integration Process Integration Application Platform
© 2009 Eswar Raman 10
SAP ERP – Procurement and Logistics Execution
Procurement and Logistics Execution
Procurement
Managing Catalog Content (S12)
Self-Service Procurememt (S63)
Service Procurement (S12)
Purchase Order Processing (S64)
Receipt Confirmation (S64)
Service Confirmation (S12)
Invoice Verification (S64)
Supplier Collaboration
Development Collaboration (S63)
Purchase Order Collaboration (S12)
Invoice Processing (S12)
Account and Payment Information (S12)
Inventory and Warehouse Management
Cross Docking (S64)
Warehousing and Storage (S64)
Physical Inventory (S64)
Inbound and Outbound Logistics
Inbound Processing (S64)
Outbound Processing (S64)
Transportation Management
Transportation Execution (S64)
Freight Costing (S64)
SAP Product Available
SAP Product Available with Future Releases
Future Focus
Partner Product Available
Partner Product Available with Future Releases
Collaborative Business Map Available
Sxx, Vxx, Bxx SAP Product & Service
Pxx Partner Product
For more information see: http://www.sap.com
© 2009 Eswar Raman 11
SAP ERP – Product Development and Manufacturing
SAP Product Available
SAP Product Available with Future Releases
Future Focus
Partner Product Available
Partner Product Available with Future Releases
Collaborative Business Map Available
Sxx, Vxx, Bxx SAP Product & Service
Pxx Partner Product
For more information see: http://www.sap.com
Product Development and Manufacturing
Production Planning
Production Planning (S64)
Manufacturing Execution
Manufacturing Execution (S64)
Supervision and Control (S51)
Enterprise Asset Management
Phase-In Equipment (S64)
Maintenance Planning (S64)
Maintenance Execution (S64)
Phase-Out Equipment (S64)
Product Development
Product Development (S62)
Development Collaboration (S63)
Life-Cycle Data Management
Document Management (S62)
Product Structure Management (S62)
Recipe Management (S62)
Specification Management (S62)
Change and Configuration Management (S62)
© 2009 Eswar Raman 12
SAP ERP – Sales and Service
Sales and Service
Sales Order Management
Account Processing (S12)
Internet Sales (S59)
Managing Auctions (S12)
Inquiry Processing (S12)
Quotation Processing (S59)
Sales Order Processing (S12)
Mobile Sales (S12)
Inbound Telesales (S12)
Contract Processing (S59)
Billing (S59)
Returnable Packaging Management (S12)
Consignment (S12)
Aftermarket Sales and Service
Phase-In Equipment (S64)
Phase-Out Equipment (S64)
Asset Scrapping (S64)
Product & Warranty Registration (S12)
Waranty Claim Processing (S12)
Service Contract Processing (S12)
Maintenance Plan Processing (S12)
Mobile Measurement & Counter Reading (S12)
Service Employee Resource Planning (S12)
Service Notification Processing (S12)
Service Order Processing (S12)
Billing (S12)
Returns Processing (S12)
In-House Repair Processing (S12)
Professional-Service Delivery
Project Planning & Scoping (S62)
Project Resource Planning
Quotation Processing (S12)
Sales Order Processing
Project Execution (S62)
Managing Employee Time & Attendance (S12)
Travel Expense Management (S12)
Project Accounting (S12)
Resource-Related Billing
Resource-Related Intercompany Billing
Billing (S12)
Foreign-Trade Management
Sanctioned Party List Screening (S56)
Export Control (S56)
Product Classification (S56, S57, S3)
Customs Value Calculation (S57)
Customs Processing Import (S57)
Presentation to Customs (S57)
Incentive and Commission Management
Incentive Plan Maintenance (S12, S9)
Incentive Processing (S12, S9)
© 2009 Eswar Raman 13
SAP ERP in Enterprise System Landscape
mySAP SCM
mySAP PLM
mySAP SRM
mySAP CRM
mySAP ERPAnalyticsFinancials
Human ResourcesOperations
Corporate Services
Life-Cycle-Data, Project-, Quality- and Asset Management
Inventory & Warehouse Mgmt.Manufacturing & Transportation
Sal
es O
rder
Inte
rnet
Sal
esP
urch
ase Ord
er R
equ
isition
ing
SAP NetWeaver
mySAP Business Suite
© 2009 Eswar Raman 14
ERP System – Sales Processes an example
Purchase order
Purchase order
Order is entered into ERP system
PricingCredit CheckAvailabilityetc
© 2009 Eswar Raman 15
ERP System – Quote to Cash process overview
Pre-Sales Activities
& Quote
Sales Order Processing
Inventory Sourcing
Shipping
Billing
Payment
© 2009 Eswar Raman 16
ERP System – Effects of sales order creation
FI: Customer’scredit
managementaccount
0
20
40
60
80
100
120
1 2 3 4 5 6
CO: Profitability analysis
SD:SD:DeliveryDeliveryworklistworklist
Sales InformationSystem
Order
Orderconfirmation
MM: RequirementsMM: Requirements
Integration toSD, MM, FI, CO & SIS
© 2009 Eswar Raman 17
ERP System – Effects of shipping process
MM: Goodsissue
General businesscosts - production
FI: Customercredit
managementaccount
MM:RequirementsMM:Requirements
Delivery
Sales InformationSystem
Stock
Shippingpapers
xx xx
Integration toMM, FI & SIS
Packing ->Picking -> Delivery ->Delivery due list
Goods issue
© 2009 Eswar Raman 18
ERP System – Effects of billing process
FI: Revenue
x FI:Receivables
x
DeliveryDelivery
0
20
40
60
80
100
120
1 2 3 4 5 6
CO: Profitability Analysis
Invoice
Billing doc
Sales InformationSystem
OrderOrder
FI: Customercredit
managementaccount
Integration toSD, FI, CO & SIS
© 2009 Eswar Raman 19
ERP System – Effects of incoming payment
ReceivablesReceivablesPost Payment
Incoming paymentfrom customer XX XX
© 2009 Eswar Raman 20
ERP System – Audit Trail
Billing doc.Outbounddelivery
Standard order
Accountingdocument
Standard order 6839
. Delivery 80002832
. . WMS transfer order 482
. . GD goods issue: delvy 4900001537
. . Invoice 90005371
. . . Accounting document 100001276
Document
© 2009 Eswar Raman 21
ERP System – Concept of Integration as applied to Sales Process
Sales and Distribution
SalesInformation
System
Data Project Systems
ProductionPlanning
Make to
Order
FinancialAccounting
Materials Management
CO/PAWarehouse Management
Post Goods IssueBilling
Sales Orders PickingRemoval fromstock location
Stock ReservationStock removal
Availability check
© 2009 Eswar Raman 22
POLL QUESTION
What is the inventory accuracy for best-in-class RP users?
(a) 52%(b) 75%(c) 97%(d) 10%
The correct answer is (d) – 97%. The laggards on the hand showed an accuracy of 83%.
© 2009 Eswar Raman 24
MADE TO STOCK PROCESS
Forecast,Plandemand
MRP using net change
Confirmproduction
Create Workorders
Procure Raw materials
Release Work orders
Receive salesorder
Ship salesorder
Invoice customer
Receivepayment
© 2009 Eswar Raman 26
Benefits accruing from an ERP system
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 27
OVERVIEW OF AN ERP IMPLEMENTATION PROJECT
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 29
THANK YOU
THANK YOUPlease proceed to
http://erpcourse.cklrcsi.com/Course_Homepage_files/page0005.htm
, you can register and download material
© 2009 Eswar Raman 30
COPYRIGHT ACKNOWLEDGEMENT ALL RIGHTS RESERVED
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 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, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver 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, PeopleSoft, 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.