Mphasis an HP Company

ERP / SAP Overview 04/19/23

ERP / SAP Overview

2 04/19/23ERP / SAP Overview

Objectives

The participants will be able to: Recognize the evolution of ERP solutions.

Appraise the concept, benefit and use of ERP solution.

Define the SAP ECC Overview.

Identify the different SAP ECC Functional modules/areas.

Distinguish the components of SAP ECC.

Judge the use of ABAP programming language.

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Enterprise Resource Planning

ERP Overview

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Enterprise Resource Planning

... synchronization of Company functions...

Manufacturing

Purchase

Sales

Finance

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Enterprise Resource Planning

… and extended to the complete value chain...

Tier II ComponentSupplier

Vehicle OEM

Tier I Component Manufacturer

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Enterprise Resource Planning

Administrative registration

Processes monitoring & feedback

Decision support and analysis

... delivering administrative and decision support with...

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What is an ERP solution...?

…Integrated across the primary and support processes

MarketingManufacturing

Materials

Distribution

Finance

Engineering Sales

Human Resources

Planning and

Execution

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The ERP application

An integrated suite of business applications, which.. Closely links, monitors, and controls primary enterprise resources like manpower,

machine, material, methods, market and money.

Enables corporates to readily change their processes to adapt to the ever changing business scenario.

Provides expertise in industry specific business processes.

Entails Parameterization / Configuration

Designing & Customization

Testing and Implementation

Training

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Why clients buy ERP?

Corporate Initiatives Strategic initiatives

A requisite capability in a competitive global business

Operational initiative A foundation for performance and cost improvement

via integration

Organizational initiative To initiate a major organizational change within the company

Technology IT is making the transition from a supporting operational entity to becoming a strategic

competitive tool.

Because others are buying it !!!

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Recent business trends favoring ERP growth

Business Process Reengineering ( BPR ) Most large companies are attempting to cut in-house development costs, improve

customer service, and speed products to market by reorganizing their existing business processes.

Software Pricing Licensing and pricing of mainframe based packaged applications are tied to the size of

mainframe system on which the applications run, but now customers are now demanding user-based licensing options and major corporate applications like SAP provide this instead of the conventional platform-based pricing technique.

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Recent business trends favoring ERP growth

Globalization As businesses are becoming more global in scope, people are demanding packaged

corporate applications that are available in a variety of languages with support for multiple currencies.

Integration As more and more companies are going for BPR, there is increase in demand for

integrated solution e.g.. different applications sharing a common database and thus enabling data definitions and business rules to be applied across an entire organization with the facility of doing modifications at one location only.

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Business process benefits clients expect from an ERP project

Global process/ Product management

Integrated Supply Chain Management

Leverage purchasing and vendor management

Order cycle time/ customer service improvement

Inventory reductions

Reduced information systems costs on an ongoing basis

Improved business management through worldwide integration and information

Logistics and Distribution Sales & Customer Service

Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer Logistics

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Major ERP vendors

SAP ECC

Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier, but are subsets of Oracle now )

Peoplesoft

JD Edwards

Baan

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What results can be expected from an “ERP culture”?

Reduced working capital requirements Improved customer service Improved direct labor productivity Reduced purchase costs Reduced obsolescence Reduced overtime Having the figures to make decisions Having accountability throughout the organization Improved quality of life

ERPERP

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SAP ECC Overview

Systems Applications & Products

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SAP AG – At a Glance

Founded in Germany in 1972

Market Leader in Industrial Enterprise Application (IEA) About 56% market share in the ERP market

Worldwide presence in over 50 countries 18,000+ employees Trained consultants doubled since 1996 (40,000)

About 20,000 companies in 120 countries Around 64,500 installations of SAP

Strength lies in its high degree of integration, mainly for large, global corporate enterprises

Significant presence in Global Fortune 500 companies

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SAP R/1 , R/2

The R/1 system Developed for ICI Chemical Released 1972 Focused on Sales & Distribution and Materials Management Discontinued after release of R/2

R/2Basis System

The R/2 system Reorganized as leading mainframe software for large multinational

corporations No sales effort planned – reactive only 4,300 copies worldwide in 1993 Mainframe-based to replace user legacy software;

co-existence and migration strategy underway for R/2 and ECC

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SAP ECC : Latest Release

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SAP ECC : Latest Release (Contd.)

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SAP R3E and mySAP.com

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SAP NetWeaver

Existing Systems

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SAP ECC : 3 Tier Architecture

Those SAP ECC software components that specialize in the management , storage and retrieval of data form the Database Layer

The Database Layer

Those SAP ECC software components that specialize in processing business applications form the Application Layer.

The Application Layer

Those SAP ECC software components that specialize in interacting with end-users form the Presentation Layer.

The Presentation Layer

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SAP ECC : 3 Tier Architecture

Database servers:

Specialized systems

with fast and large

hard drives.

Application servers:

Specialized systems

multiple CPUs and

vast amounts of RAM.

Presentation servers:

Systems capable of

providing a graphical

interface.

Presentation Layer components

Application Layer

componentsDatabase Layer

components

reside in: reside in: reside in:

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SAP ECC : 3 Tier Architecture

The Database Layer

components are installed on

high-end database server.

The Application Layer

components are installed

across one or more high-

end servers.

Presentation Layer components are installed across many PCs

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SAP ECC Overview

Sales &Distribution

SD

MM

PP

QM

PM

HR

FI

CO

TR

PS

WF

IS

MaterialsMgmt.

ProductPlanning

QualityMgmt.

Plant Mainte-nance

HumanResources

FinancialAccounting

Controlling

Treasury

ProjectSystem

Workflow

IndustrySolutions

Client/ServerABAP/4

ECC

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Integration

S

U

P

P

L

I

E

R

C

U

S

T

O

M

E

R

S A P R / 3S A P R / 3

Procurement Production Distribution

Finance and Accounting

MMMM PPPP SDSD

FIFI COCO

All business processes throughout the supply chain are executed in one system sharing all information

Workflow

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SD: Sales and Distribution

SAPECC

SDSDSDSDSD Sales & Distribution . . . . . . . . Sales & Distribution . . . . . . . .

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SD OverviewSDSD

Inquiry

Quotation

Goods Issue

Sales Order

Delivery to Customer

Invoicing

Pricing

Materials Planning

Purchasing

Production

Goods Receipt

Customer Stock

Picking

Packing

Transportation

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Process Chain: Sales Distribution

- Create pick list- Create trans-

portation work list- Create loading work list

- Check credit

- Check product availability- Determine pricing- Estimate delivery schedule- Determine conditions of sale

Inbound Logisticsfrom MaterialsManagement

Inbound Logisticsfrom MaterialsManagement

Outbound Logisticsto Customer

Outbound Logisticsto CustomerSales Order & Distribution

Process

Support Customer Sales(Customer Info Analysis)

- Optional -

Support Customer Sales(Customer Info Analysis)

- Optional -

Process CustomerInquires

- Optional -

Process CustomerInquires

- Optional -

Provide CustomerQuotations- Optional -

Provide CustomerQuotations- Optional -

Support CustomerAgreements- Optional -

Support CustomerAgreements- Optional -

Receive PaymentReceive PaymentFI

Create InvoiceCreate InvoiceFI/CO/PA

Issue Goods(Ship Product)Issue Goods

(Ship Product)FI

MM

Create Delivery NoteCreate Delivery Note

Create Sales OrderCreate Sales OrderFI/CO/PA

MM

PP(Activities)

(Documents)

Sales/DistributionChain

Sales/DistributionChain

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Order Entry

PPMMFIFI FIFI

Credit ManagementCredit Management

Dynamic Availability Check

Cash ForecastCash Forecast

?? ?OK

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Delivery/Shipment Processing

MMWM

MM

PickingPicking

PackingPacking

TransportationTransportation

Ship to party: C100

Item Material Qty

.

.

.

. DeliveryNote

10 6301 1020 6412 1030 1507 25

PickingList

Credit ManagementCredit Management

Static Availability Check

FIFI

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Picking/Packing

Picking RequestPicking Request

Picking Confirmation

Picking Confirmation

Confirm Picking Request

Confirm Picking Request

Goods IssueGoods Issue

DeliveryDelivery

Sales OrderSales Order

Print Picking ListPrint Picking List

Picking with Picking Confirmation

Picking without Picking Confirmation

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Invoicing

FIFICOCO

PCAPCA

Single InvoicesSingle Invoices

Collective InvoicesCollective Invoices

Invoice ListsInvoice Lists

Credit/Debit NotesCredit/Debit Notes

EDIEDI

Profit Center Accounting/Profitability Analysis

Accounts Receivable/General Ledger

Cash Forecast

FIFI

COCOPAPA

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MM Overview

SAPECC

MM Materials Management . . Materials Management . .

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MM Overview (Contd.)

Material requirement planning

External procurementPurchasing

Internal procurementProduction

Invoiceverification

Goodsreceipt

Inventory management

Goodsissue

Transferposting

Warehousemanagement

Internal and external accounting Sales and distribution

Master dataMaterialBatchVendorCustomerG/LStorage bins

MMMM

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MM Overview (Contd.)

Material requirement planning

External procurementPurchasing

Internal procurementProduction

Invoiceverification

Goodsreceipt

Inventory management

Goodsissue

Transferposting

Warehousemanagement

Internal and external accounting Sales and distribution

Master dataMaterialBatchVendorCustomerG/LStorage bins

MMMM

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Material - Central Master “Record” for Logistic

123Inventory

QualitySales Information

Production InformationDesc:---------------------

Product - 123

456Inventory

PurchasingDesc:---------------------

Raw Material - 456

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Data in the Vendor Master

General Data

AddressPhone and FaxNo.Control Data

Purchasing Data

Terms of PaymentContact Person Minimum Order Value

Account Data

Payment TermsPayment MethodAccounting Clerk

Maintenance Level

Client Purchase Organization Company Code• Mandatory maintenance at the

Purchasing Organization Level

• Optional Maintenance at the Plant Level, the Vendor Sub-Range Level or a combination of the two

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External Procurement Environment

RequirementDetermination

Info Record

Price HistoryPurchasing Data

QuotaArrangement

SourceSourceDeterminationDeterminationVendor Vendor SelectionSelection

PurchaseOrder

Source ListSource List

InvoiceReceipt

RFQ

Quotation

PurchaseRequisition

OutlineAgreement

Goods Receipt

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Goods Movement

Ad hoc.

Inventory Inventory

TransferPosting

GoodsIssue

GoodsIssue

Consumption Samples Sales Order

GoodsReceipt

Delivery Production

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Invoice Verification

VendorVendor invoiceinvoiceVendor 3Vendor 3

FIFICOCO

Blocked Invoice

Tolerance Check?

Release ofBlocked Invoice

e.g...

Orders / Projects /Cost centersOrders / Projects /Cost centers

G/L accounts / Accounts payableG/L accounts / Accounts payableVendorVendor invoice invoice

Delivery InvoicePreliminary Posting

Automatic Price Update

PaymentPayment

OK !

InvoiceVerification

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PP Overview

SAPECC

PP Production Planning . . Production Planning . .

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Production Planning Cycle

Sales and Operations Planning

Master Production Scheduling

Demand Management

MRP

MRP List

Production Order Cycle orPurchase Order Cycle

Master Data

Material MasterBill of MaterialsWork Centers

RoutingsPRT

Capacity Planning

Plant Maintenance

Sales & Distribution

Materials Management

Costing

PP

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Production : Process Chain

Production ChainProduction Chain

Outbound Logistics to MaterialsManagement or Sales Chain

Outbound Logistics to MaterialsManagement or Sales Chain

Inbound Logistics from Procurement or Production Chain

Inbound Logistics from Procurement or Production Chain

ManufacturingProcess

Determine Production Requirements via MRP Output or Manually)

Determine Production Requirements via MRP Output or Manually)

Create production order(via conversion of planned orderto production order or manually)

Create production order(via conversion of planned orderto production order or manually)

Check material availability(Automatic)

Check material availability(Automatic)

Release Production OrderRelease Production Order

Print shop floor papers(actual work orders)

Print shop floor papers(actual work orders)

Withdraw materials from Withdraw materials from inventory (automatic/manual)inventory (automatic/manual)

Withdraw materials from Withdraw materials from inventory (automatic/manual)inventory (automatic/manual)

Produce GoodsProduce Goods

Confirm production ofgoods is completed

Confirm production ofgoods is completed

Transfer Produced Goods to Inventory Transfer Produced Goods to Inventory

FI

Settle Production Order Settle Production OrderFI

CO

Archive/Delete OrderArchive/Delete Order

MM

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Production Planning

Production Planning Functionality Master Data Sales and Operations Planning & Demand Management MRP Production Order & Capacity Planning

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Material Requirements Planning

3. Qrt 4. Qrt

Demands

Stochastic

Deterministic Planning

Stochastic

Deterministic Planning

Demands

Bill ofMaterialExplosion

Quantity:12.000

Capacity PlanningLot Sizing ProcedureNet Change

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MRP - Planning Procedures

PlanningProcedures

DeterministicMRP

Consumption-BasedPlanning

Forecast-BasedPlanning

Reorder PointPlanning

AutomaticReorder Point

ManualReorder Point

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Production Control

Planned Orders

Release Production Order

FI CO

Open Production Order

Goods IssueCosts

MM

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QM Overview

SAPECC

QM Quality Management . . Quality Management . .

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QM Overview

Sales &Sales &DistributionDistribution

SDSD

MMMM

PPPP

QMQM

PMPM

HRHR

FIFI

COCO

AMAM

PSPS

WFWF

ISIS

MaterialsMaterialsMgmt.Mgmt.

ProductProductPlanningPlanning

QualityQualityMgmt.Mgmt.

Plant Mainte-Plant Mainte-nancenance

HumanHumanResourcesResources

FinancialFinancialAccountingAccounting

ControllingControlling

Fixed AssetsFixed AssetsMgmt.Mgmt.

ProjectProjectSystemSystem

WorkflowWorkflow

IndustryIndustrySolutionsSolutions

ECECCC

ECECCC

The QM application module is a quality control and information system supporting quality planning, inspection, and control for manufacturing and procurement

QM

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QM in Logistics

History-dependent intensity of quality inspections

Goods receiptGoods receipt

Goods issueGoods issue

ProductionProduction

Inspection during production

Defects recording in QM

Control charts

Quality management in SD (certifies quality)

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PM Overview

SAPECC

PM Plant Plant MaintenanceMaintenance . . . .

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Plant Maintenance - Overview

Create Work Orders

Notifications

PlannedWork Orders

Schedule WO’s

Parts/Supplies

Labor

Preventive/PredictiveMaint. WO’s

Close and Settle WO

Reporting

Special Tools

Pre-defined work steps

Emergencies

External Services Material

Requisitions

ShopPapers

PM

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FI Overview

SAPECC

FI Finance . . Finance . .

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Components of FIFIFI

FI-GLFI-GL

FI-ARFI-AR

FI-APFI-AP

FI-SLFI-SL

FI-LCFI-LC

FI-AAFI-AA

General Ledger

Accounts Receivable

Accounts Payable

Asset Accounting

Special Ledger

Legal Consolidation

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Corporate Structure

FinancialManagement

Area

FinancialManagement

Area

FinancialManagement

Area

ControllingArea

ControllingArea

ControllingArea

ControllingArea

WorkPlace/Job

MaterialProduct

Plant Cost Centers

Company Code (Company)

Corp. Group LevelCorp. Group Level

Legal EntityLegal Entity

Controlling LevelControlling Level

Management UnitsManagement Units

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The Elements of Financial Accounting

Finance Information SystemExecutive Information SystemG/L Information System

Finance Information SystemExecutive Information SystemG/L Information System

Foreign ExchangeManagementForeign ExchangeManagement

BusinessAnalysisBusinessAnalysis

Cash Managementand ForecastCash Managementand Forecast

Multiledger

Bank Accounts

General LedgerPayablesPayables ReceivablesReceivables

Extended General LedgerExtended General Ledger

Consolidation

AccountsPayable

InvoiceInvoiceVerificationVerification

AccountsReceivable

CreditCreditManagementManagement

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The Components of FI

Configuration

Organizational StructuresCompany CodesBusiness Area

Organization of AccountingLedger/Sub-ledger

Chart of Accounts

Credit ControlSetting Credit Limits

Master RecordsG/L AccountsCustomersVendorsBanks

Chart of DepreciationDepreciation AreasAssets

Extended General Ledger

Configuration

Organizational StructuresCompany CodesBusiness Area

Organization of AccountingLedger/Sub-ledger

Chart of Accounts

Credit ControlSetting Credit Limits

Master RecordsG/L AccountsCustomersVendorsBanks

Chart of DepreciationDepreciation AreasAssets

Extended General Ledger

Functionality

Documents/Transactions Fiscal YearPosting AdjustmentsPayment Terms Balance Sheets/Income StatementsForeign Currency ClosingsTaxes On-Line DisplaySpecial G/L Transactions Interest CalculationPlanning CorrespondencePayment Program Fixed Assets

Reporting AnalysisLegal Consolidations

Functionality

Documents/Transactions Fiscal YearPosting AdjustmentsPayment Terms Balance Sheets/Income StatementsForeign Currency ClosingsTaxes On-Line DisplaySpecial G/L Transactions Interest CalculationPlanning CorrespondencePayment Program Fixed Assets

Reporting AnalysisLegal Consolidations

Modules

General Ledger Special LedgerAccounts Payable Legal ConsolidationsAccounts Receivable Credit ManagementAsset Accounting Cash Management and Forecast

Treasury

Modules

General Ledger Special LedgerAccounts Payable Legal ConsolidationsAccounts Receivable Credit ManagementAsset Accounting Cash Management and Forecast

Treasury

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CO Overview

SAPECC

COControlling. . Controlling. .

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Components of CO

CO Configuration

Organization Structures

Master Data

Planning Setup

Criteria and Values

Valuation

CO Configuration

Organization Structures

Master Data

Planning Setup

Criteria and Values

Valuation

CO ModulesCO Modules• Cost Center Accounting

• Order and Project Acctg.

• Transaction-BasedPostings

• Periodic Allocations

• Profit Center Acctg.

• Product Costing

• Activity-Based Costing

• Product Costing

• Budgeting

• Profitability Analysis

• Business Planning& Control

FunctionalityFunctionality• Settlement

• Internal Orders

• Open Item Management

• Profitability Analysis

• Overhead Management

• Planning

• Transaction-BasedPosting

• Periodic Allocations

• Monitoring ActualActivities vs. Planned

CO

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The Elements of Managerial Accounting

Overhead CostControllingOverhead CostControlling

ProfitabilityAnalysisProfitabilityAnalysis

Overhead CostControllingOverhead CostControlling

CostCenters

ReportStructure:

MarketSegmentRegionDivision

Cost of Sales

Cost of Period

PA

PCA

ReportStructure:

ProfitCenter, GLAccounts

ControllingControllingControllingControlling

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Integration within FI/CO

Financial AccountingFinancial AccountingFinancial AccountingFinancial Accounting

AssetAccounting

AssetAccounting

AssetAccounting

InvestmentControlling

PlantMaintenance

Gen. LedgerAccounting

AccountsReceivable

AccountsPayable

CashManagement

Overhead CostControlling

Make toOrder Prod.

Cost CenterControlling

ActualCostingStatic

StandardCosting

Product &ProductionControlling

MassProduction

ContinuousFlow Prod.

BatchProduction

Cost of SalesAccounting

PeriodAccounting

FlexibleStandardCosting

OrderControlling Project

Controlling

Management AccountingManagement AccountingManagement AccountingManagement Accounting

Sales &ProfitabilityControlling

Chart of AccountsChart of AccountsChart of AccountsChart of AccountsFIFI COCO

CentralCentralDocumentsDocuments

CentralCentralLine ItemsLine Items

CentralCentralTotalsTotals

AccountRevenue

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IntegrationPP

MM

FICO

SD

FI

Which modules are involved?

PlannedRequirement

MRP

Requirement on component level

PurchaseOrder

GoodsReceipt

InvoiceVerification

AccountsPayable

PlannedOrder

ProductionOrder

Productioncompleted

OrderSettlement

CustomerOrder

Shipping

Invoicing

AccountReceivable

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SAP ECC : Components

ABAPPrograms

Configuration

Organization Structure

Key Data Elements

Functionality Configurations

ApplicationMaster Data

Transaction Data

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What is Customization ? Customization

The adaptation of application software to customer-specific needs is accomplished in two ways :

Coding

Programming customer-specific code that replaces or complements components of the application

Configuration

Rendering the application appropriate to a specific customer by specifying data on which the application operates

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Organizational Structures in ECC

Cost AccountingCost Accounting

External LogisticsExternal Logistics

AccountingAccounting

Internal LogisticsInternal Logistics(MRP/Production)(MRP/Production)

Inventory ManagementInventory Management

Organizational Units

ClientClient

Controlling AreasControlling Areas

Company CodesCompany Codes

PlantsPlants

SalesSalesOrganizationsOrganizations

PurchasingPurchasingOrganizationsOrganizations

Valuation AreasValuation Areas

Storage Locations/Batches/Special StocksStorage Locations/Batches/Special Stocks

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Organizational Structure in SAP ECC

Human ResourcesHuman ResourcesControllingControllingClientClientClientClient

CompanyCompanyCodeCode

PurchasingPurchasingOrganizationOrganization

PersonnelPersonnelAreaArea

Production PlanningProduction Planning

Sales and DistributionSales and Distribution Materials ManagementMaterials Management

Financial AccountingFinancial Accounting

SalesSalesAreaArea

ControllingControllingAreaArea

PlantPlant

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ABAP Programming

SAP ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System.

ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAP GUI) at presentation level.

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SAP ECC scope

Why do we need ABAP Development ?

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SAP Solution

SAP ECC scope

Specific company requirements

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SAP Solution

SAP ECC scope

Specific company requirements

Non SAPapplications

New FunctionalityDevelopment

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Summary

Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools for forecasting demands and planning according to the forecast.

ERP is an integrated suite of Applications to meet corporate needs. Some major ERP vendors are : SAP ECC, Peoplesoft, Oracle, Baan and JD

Edwards. SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial

Enterprise Application (IEA). The latest SAP R3E Enterprise Architecture, have separate release numbers and

release cycles for each of the 3 layers. There is no R3E release number as a whole.

SAP Web Application Server (6.20) SAP ECC Enterprise Core (4.7) SAP ECC Enterprise Extension Set (1.10)

SAP NetWeaver is a vision, or paradigm, of total integration of : People Information Business Processes Applications

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Summary (Contd.)

SAP has a 3 tier architecture comprising of the Presentation layer, Application layer and the Database layer.

The SAP solution is divided in different areas or Functional Modules like SD, MM, PP, QM, PM, FI, CO etc.

ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System.

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Questions

What is MRP ?

What is ERP ?

When was SAP AG founded ?

What are the 3 layers of the SAP ECC ?

What is SAP Netweaver ?

What is the latest version of SAP ?

What are the different functional modules of SAP ?

What programming language is used for SAP applications ?

Why do we need ABAP developments ?