INTRODUCTION TO SAP:

What is SAP?

SAP is being a German company, is an acronym for “Syssteme Anwendungen .Producte in der Datenverarbeitung”.This is translated into English as “Systems, Applications, and Products, in Data Processing.”

The SAP system consists of complex integration of different modules or applications, each representing part of the basic business process.

SAP runs on a fourth generation programming language called Advanced Business Application Progarmming (ABAP).

SAP (Systems, Applications, and products in Data Processing) is the leading ERP (Enterprise Resource Planning) software package. SAP was the first to integrate a corporation’s worldwide functions tightly into one application. Five former EBM programmers founded SAP AG in Germany, and released the first version of their software, SAP R/2, in 1979. Its domination of the market occurred during the 1980s, expanding first throughout Europe (early 1980s) and then North America (1988). SAP R/3, an advanced, client-server based versions of the popular r/2 product, was released in 1992 and sparked a stunning takeover of America’s largest businesses –44% of US companies were using it within five years of its expansion. In 1999, SAP introduced its newest major product upgrade. Named mySAP.com to emphasize its shift to an e- business focus, myAP.com builds on the strengths of the SAP r/3 product in a fully Internet enabled architecture. My SAP.com also incorporates Sap’s newest business applications for CRM, supply chain management (SAP APO), and Data Warehousing (Business Information Warehouse or BW). Prior to the introduction of mySAP.com, these applications had been incorporated as add-ons to SAP r/3 and were known as New Dimension products.

Why SAP is used:

Companies both large and small traditionally utilized multiple software applications from various vendors or developed their own applications in-house to process their critical business transactions. Prior to the proliferation of SAP, most companies supported a full staff of program

developers who wrote their necessary business applications from scratch or developed highly complicated interfaces to allow pre-packaged applications from several vendors to pas data back and forth as necessary to complete any full cycle business transaction. This process was extremely costly, time-consuming, and error prone. It also made it very difficult for business managers and executives to get a timely, comprehensive view of how their business was doing at any given time. SAP was the first and, to date, the most successful company to integrate nearly all business processes into one software solution for use in any business in any business in any country in the world. Not only did SAP’s applications reduce the need for complex and redundant in-house development, but it also created new business efficiencies by automating many tasks across a corporation and incorporating business best practices into a updated version of its software. Using AP’s products, companies can now integrate their accounting, sales distribution, manufacturing, planning, purchasing, humnaresources, analysis and other transactions into one application. SAP applications thus provide an environment where “transactions are synchronized throughout the entire systems, meaning a sales-order entry triggers action’s within each application that relates and is relevant to the transaction.”

SAP Company Timeline

1972: SAP AG founded in Germany 1979: SAP R/2 introduced for mainframe computers 1980’s: Europe and N. American expansion 1992: SAP R/3 released as client-server application 1996: SAP R/3 becomes partially Internet enabled 1997: Develops and launches new Dimension product line including

CRM, SCM and Data Warehousing solutions 1999: SAP announces mySAP.com, the next generation of its

Enterprise Application system based on the Internet architecture

What is the R/3 System?

According to June 1995 study by IDC (International Data Corporation), SAP with its R/3 systems the most successful supplier of client/server applications. The r/3 system i9s based on SAP’s more than 20 years of development experience in real –time business applications. “R/3” stands for Real – time System, Version 3. its predecessors, “r/1” and R/2”, were likewise real –time systems, “SAP R/3 SYSTEMS USES THE

CLEINT-SERVER TECHNOLOGY”. It is one of the applications of client-server technology.

History of the R/3 System:

The milestones in the evolution of the R/3 System illuminate the close link between this solution and changes in the Data Processing industry. The R/3 System was developed for computer platforms, which at the beginning of the project had only j7st emerged in the laboratories of hardware manufactures, or which were still only objects of theoretical consideration.

In 1987 May IBM announces the SAA (System Application Architecture) concept for business applications, but SAA failed, because it was limited to only for IBM platforms and did not want to integrate UNIX systems into architecture, its fundamental ideas were nevertheless groundbreaking for future development. Then SAP began to turn thee concepts into the new r/3 though with abrader approach that included open systems.

The first R/3 systems applications are presented at the CeBIT Conference in Hanover, Germany. In October of this year, the first R/3 customer goes live. In April, Microsoft and SAP begin cooperation to integrate PC applications like word, excel, project, and access with the business applications. At this point most R/3 customers already use Windows systems for presentation. The R/3 System experiences overwhelming success in the American market during this year.

In 1994SAP opens a new development center in the USA, for development of new software technology for the R/3 system.

The technical architecture of R/3 system:

Principle of the basis architecture:

The R/3 system is based on software-oriented multiplier client/server architecture. The R/3 system as a modular structure with methods for controlling master –slave relationships between indivi9dual software components

The structure of R/3 system follows a layer model with largely independent function layers connected by interfaces. The main layers are

Basic layer

Application layer

The basis layer contains the middleware of the R/3 system. This middleware makes the applications independent of system, and communication system used and ensures Optimal handling of the business transitions

The application layer sits on the basis layer. The application layer implements the business functions and process of the R/3 system.

The basis layer is written in the C and C++ a program language while the application layer is written4GL language ABAP/4 (Advanced Business Application Programming).

The multiplayer architecture of the R/3 sytem makes possible the decoupling the application logic from the presentation and the data base, which is the prerequisite for load distribution in client/server configurations, even in very large installations with several thousands users. Implementation of separate servers for particular tasks makes optimal use of the performance potential and the different cost structures of available hardware architecture.

Examples of servers that execute particular task are

Database server for the central database. As well as single processor systems, multiprocessor systems and cluster c0nfiguration can be used

Powerful, inexpensive single or multiprocessor computers for the application logic. Application servers need not have monitors or hard disks. The no of computers and processors used can adjusted to meet performance requests

Computers for additional special tasks, for example optical archiving, delivery o0f x400 messages, mail services, or offline back ground processing

Presentation servers under windows operating system/2, UNIX, for implementation of graphical user interface.

The R/3 basis architecture has the following features:

Scalability Portability Interoperability and openness Customizability Graphical user interfaces

Scalability:

The multilayer client/server architecture allows easy adjustment of the installed computer performance, for instance in the case of amended load profiles due to increasing number of users or due to the use of additional application components.

Portability:

The portability of the R/3 system secures the investments of R/3 customers in the application software and in the design of business operations, since the life of the business applications software up to 10 years or more, is considerably longer than the short innovation cycles of hardware components, operation system and databases.

Interoperability and Openness:

The integration of the data and functions of R/3 applications with external applications using open, standardized interfaces like OLE (Object Linking and Embedding.

Graphical User Interface:

SAP has also developed a user interface called SAP graphical user interface (SAPGUI), WHICH RUNS ON windows 3.1/95/98/NT,Motif,OS/2 presentation manager, and Macintosh.

All SAP GUIs look identical, regardless of the operating system on which they are running. This interface varies according to the version of SAP or SAPGUI you are running, however the difference is minimal. The appearance of the screens and menus is configurable. SAP GUI is the standard-oriented graphical user interface of the R/3 system. It is optimized for typical business operations such as those in logistics or accounting.

R/3 configurations:

Different R/3 configurations are

Central configuration Principle configuration Two layer configuration Three or more layer R/3 configuration

In Central Configuration one computer handles all processing tasks.

In principle Configuration this corresponds to conventional mainframe processing with x terminals instead of alphanumeric terminals.

NETWORK COMMUNICATION:

TCP/IP was chosen for communication within R/3 client/server system because it is the standard transport protocol for operating system and it is available on all operating system is supported by the R/3 system.

Connection to the R/3 system to IBM mainframe is achieved through SNA protocol LU6.2. R/3 architecture can be expanded to include additional protocols for example OSI transport protocols, since the independence of R/3 applications from the underlying system interfaces is assured even in network communications.

Services provided by the R/3 system:

The individual program modules of the R/3 system provide different services. The fundamental services are

Presentation services Application services Database services

THE APPLICATION INTEGRATION:

SAP is an enterprise resource planning (ERP) software product of integrating multiple business applications, with each application representing a specific business area. SAP homogeneously produces a product that is capable of great depth in a specific application or area while still being part of the overall bigger picture.

These applications update and process transactions in real time, thus allowing seemingly effortless integration and communication between areas of a business. Thus one can create a sales order and observe the update order values in sales information system (SIS) immediately, without having to wait for day-end or month-end processing.

CUSTOMIZING TOOLS:

The cornerstone of SAP is its ability to be configured to meet the needs of your business. This is done by customizing or adapting the system to your business requirements, which is the process of mapping SAP to your business process. A business process would be, for example, a sales order entry or delivery creation.

This process of mapping SAP to your business process is generally time-consuming and costly, as one need to fully understand the business process procedures, find a solution in SAP to meet these requirements, and then customize the solution within the system. The basis for the book is to teach you how to develop and enhance the sales and distribution module of SAP to its fullest potential using these tools in order for you to effectively meet your business requirements.

Since SAP version 3, the reference implementation guide (IMG) for R/3 customizing has been available. Until this version, customizing had to be done in the menu aths of the system with considerably more hassle. For the purpose of this book, we will be using SAP Version 4.0b as a reference.

This screen is the backbone for SAP and the entries placed in it determine how the system functions. We will be using this screen extensively for the purpose of configuring the SD module.

R/3 Applications Overview:

R/3 applications are categorized into three core functional areas: logistics financial and human resources. Of these three functional areas, there is a further subdivision into applications or modules. In addition to these applications, SAP creates industry-specific solutions (Iss), which are, as the name defines, created tailor-made for a specific industry. A fewer examples of these would be

IS-OIL: - The SAP industry solution for oil companiesIS-T: - The SAP industry solution for telecommunicationsIS-B: - The SAP industry solution for banksIS-Retail: - The SAP industry solution for retail

In addition to these industry solutions of which there are currently 19, standard cross-application components are available, such as the SAP business Workflow. This tool is not dedicated to one unique application components are available, such as the SAP Business Workflow. This tool is not dedicated to one unique application or module; it can be used throughout the system to integrate and automate T/3 processes. The following is a brief description and overview of a few of the major functional areas in SAP.

Financial Applications:

This functional area contains the necessary information on profitability analysis, general ledger accounts, and information on reporting using the executive information system (EIS). This area contains the following modules:

FI Financial AccountingCO ControllingEC Enterprise Controlling

IM Investment ManagementTR Treasury

Human Resources:

This area contains the following modules:PA Personnel AdministrationPD Personnel Development

These modules include support on salary and payroll administration as well as areas such as work schedule models. This core functional area is very country-specific, due to country-related taxes, employee benefits, and employment laws.

Logistics Applications:

Logistics is the largest of the three functional areas. It includes, among others, the following modules:

SD Sales and DistributionMM Materials ManagementWM Warehouse ManagementPP Production PlanningLO General LogisticsQM Quality Management

We will focus on the Sales and Distribution module of SAP, SD. The Sales and Distribution Module (SD)

It cannot be stressed how important this module is or the impact that it has in the structure of SAP. It integrates with every other R/3 application including FL, Co< MM, PP, and so on.

The SD module is made up of multiple components. We will cover all these components and how to configure the majority of them in the system.Here is a brief list of these.

SD-MD Master dataSD-BF Basic functions subdivided into multiple components,

such as pricing, output, and so on

SD-SLS SalesSD-SHP ShippingSD-TBA TransportationSD-FTT Foreign tradeSD-BIL BillingSD-CAS Electronic data interchangeSD-IS Information systems

SAP Basics:

SAP guidelines that can offer instant understanding and promote ease of use. Firstly, all transaction codes are shown with square brackets, such as [SPRO]. When you see this flag next to a paragraph, it denotes a tip or trick. These tips and tricks are fantastic time-savers and have been gathered the hard way. Be sure to make the most of them.

Base Transaction Codes:

Transactions codes are the short path to a specific screen in SAP. They are found by selecting system: Status, as the following example in Figure 1-3 shows.

Here the transaction code is [OVS9], which is the change view for customer groups. By the way, the [SPRO] transaction code is the shortcut for the business IMG.

The standard menu path is always described from the logistics screen (unless specifically stated from the IMG). An example of example of using the menu path to access the Sales and Distribution environment in the systems.

Thus, the menu path to get to the IMG from the Logistics screen, or [S000] as in the example of the SAPGUI, is as follows: Tools, Business engineering, Customizing.

Naturally, there are hundreds of such codes and it would be irrelevant to list them all now; generally, SAP group’s transaction codes into its components. For example [VAOO] will give you the sales overview screen you wish to call up; thus, you will not be able to use the transaction code VA00 list in the IMG As a general rule, you can access every screen from [S000] the logistics screen.

TIP: To save time transferring between screens to call up a transaction, you can utilize the short commands to move quickly around the screens while

calling up a transaction at the same time. For example, here is a list of transaction codes or prefixes.

/N moves you back from any screen into the logistics screen/Nxxxx moves you from anywhere into transaction xxxx.

Code DescriptionVS00 Master dataVC00 Sales supportVA00 SalesVL00 ShippingVT00 TransportationVF00 BillingVX00 Foreign tradeSPRO Enterprise IMG

/NVA00 moves you from anywhere into the Sales screen/O generates a session list./Oxxxx opens transaction code xxxx in a session./OVA00 opens Transaction VA00 in a new session with the

sales front-end screen.TIP: A few other functions crucial to easily using the system are the

function codes:F1 HelpF9 Technical info (used from within the Help screen of the

field or after you have used F1).F4 Possible entries or match code for the field you are

accessing

To briefly explain, a match code is a comparison key.; It enables you to locate the key of a particular database database record by entering a field value contained in the record. The system then displays a list of records matching the specifications for you to select from. An example of this would be searching for the customer number in a sales order. Should you select F4, you would have the option to select a suitable match code to obtain the customer number you are after.

Alternatively, you may select F5 from within this selection screen, which brings up the Search Help Selection screen for you to select a different match code.

These function codes are to be used from a specific field, such as the customer group field. Pressing F1 brings up the screen..

Subsequently pressing the F9 function key or hitting the Technical info button will give you the Technical Information screen.

The Structure of SAP SD Master Data:

Master data forms the basis of the SD Processing. Master data is the responsibility of all modules, as each module has an element of it. However, the SD master data will be accessed by many other modules other than SD, such as PP, FI, and thus it has the largest effect on the standard business process. Master data in SD is divided into three main areas:

Organizational Data:

This is the structure of the company, whereby each area of the business is represented by a hierarchical element. For example, a sales area is constructed of a sales organization, a distribution channel, and a division. The Finance module uses the highest form of master data, which is the “company code.” The SD module integrates with this company code via the sales organization. Thus, due to the link between the sales organization and the company code in Finance , SAP knows which company code to a sales transaction to. This is based on the sales organization in the sales order.

Customer and Material Data:

As goods and services are sold by the company, for which the organizational data has been maintained, we need to represent this material and service data in our system as well as maintain and represent all our different sold-to parties and partners.

Document Master Data:

Business transactions are stored in the form of documents. These SD documents are structured in such a way that all the necessary information is stored in a systematic way.

Global Settings:

This area defines the country keys and currencies. This data is application-independent; however, these settings are a prerequisite for handling all business transactions.

One of the most fundamental principles to grasp when dealing with the SD module of SAP is to understand where information is coming from and at what time in the transaction it is accessed. This information can be found by debugging SAP or running an SQL trace. However, with a little understanding, you can spot issues and narrow investigations to solve problems with little effort.

Generally, SAP looks from the highest level of data to the lowest. Thus when creating a sales order, it will look at the organizational master data first, followed by the customer master data, followed by the material data.

This is a very light overview of tracking master data in SAP. As we go through the configuration of the data, we will automatically cover this in more detail. A rule of thumb would be, “as input is added, it is checked by the system from the highest level of master data to the lowest. “ Thus, if you are in a sales order and enter a material, the system will check organizational data first, followed by customer data (checking for customer material information records). It then checks the material data, perhaps for the minimum order quantity, and finishes with document data, perhaps to determine if this material is valid for this item category in the sales order.

Organizational Data:

You must set the organizational data in SAP before you can process SD transactions. For example, without a sales organization, it is not possible to create a sales order in SAP. This data reflects the structure of your business. Every transaction occurs within this structure. ?the organizational data is like the steel girders in a building, so setting them up correctly is essential to around structure.

The more thought you give to the organizational structure, the easier SAP SD will be to configure and use. You should

understand the business and the SD configuration in order to set up a sound organizational structure.

Summary:

Here you define your sales organizations, distribution channels, sales offices, sales groups, shipping points, loading points, and transportation planning points.

Menu Path:

To follow the path, you go to the IMG Enterprise structure, Maintain structure, Definition. One can see the menu path.

A sales organization is an organizational unit that sells and distributes products, negotiates terms of sale, and is responsible for these transactions. A distribution channel is a channel through which materials or services reach customers. Typical distribution channels include wholesale, retail, and direct sales. You can assign a distribution channel to one or more sales organizations. A customer can be delivered multiple distribution channels. A material master record can be maintained with different sales organization and distribution channel views, allowing different data to be accessed.

A division is a product group that can be defined for wide-ranging spectrum of products. You can make customer-specific agreements for every division, such as partial deliveries, pricing, and terms of payment. Within a division, you can carry out statistical analyses or set up separate marketing. Please note that divisions are utilized in SD but they are defined and maintained in IMG, Enterprise structure, Maintain structure, Definition, Logistics general.

Figure shows a basic organizational structure. In Sales Organization 1000, SD business transactions can be carries out for distribution channel 10 and 20 and division 01 and 02. In Sales Organization 2000, transactions can only be processed through distribution channel 10 and division 01 and 02. Likewise, transactions in Sales Organization 3000 can only be done through distribution channel 10 and division 01.

Sales org.

Organizational Structures in Accounting:

A client can have one or more company codes. Each company code is its own legal entity in finance. One or more sales organizations are assigned to a company code. The data would have the structure.

Organizational Structures in Materials Management

A plant is where stocks of a material are kept. A storage location is, as the name says, a storage area for the stock in a plant. One or more plants are assigned to a company code, and one or more storage locations are assigned to a plant. The data would have the following structure as displayed.

Shipping points are defined in the S.D. organizational master data setup. They are the top levels of the organization in shipping. Deliveries are always initiated from exactly one shipping point. A shipping point is assigned one or more plants and can be subdivided into several loading points.

Assignment of Organizational data

In assignment of organizational data you create the linking that integrates the different modules in the systems.

Master data for the customer

The basic customer master records we create are o The sold to party record

Client

1000 3000 2000

10 20 10 10

01

01 02 01 02

Dist Channel

Div

o The ship to party recordo The bill to party recordo The payer record

SAP Table and Description key EntriesField Name RF02D-KUNNR Customer number Assigned to Customer

Each customer specificRF02D-VKORG Sales organization Assigned per Company

Company code Code specific

Material Master Data:

The material master data is used by the system t o represent the data pertinent to the product or service your company is selling or producing.

Quantity SpecificationsTwo different quantity specifications

Minimum order quantity

The minimum order quantity refers to the minimum quantity the customer must order.Minimum order quantity

The minimum delivery quantity refers to the minimum quantity you must deliver to the customer. This quantity is automatically checked during delivery processing. A warning message appears during delivery processing if you enter a delivery quantity lower than the minimum delivery quantity.

Basic SAP R/3 Tables and fields

Information is stored in SAP R/3 in a sequence of tables and fields.The following tables are often referred to in the SD module.

VBAK order headerVBAP order itemVBEP order schedule lineLIKP delivery headerVBPA partners