Day 1 - PS General Overview [Compatibility Mode]1

1Material Requirements Planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule.

Following this route new software systems called Manufacturing Resources Planning (MRP II) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements. MRP II included areas such as shop floor and distribution management, project management, finance, human resource and engineering.

ERP systems first appeared in the late 1980s and the beginning of the 1990s with the power of enterprise-wide inter-functional coordination and integration.

In the 1960s, the concept of ERP was limited to the fact that Organizations wished to integrate all departments and functions in order to increase revenues. The emphasis was initially on inventory control and inventory management. During the 1970s the focus shifted to Material Requirement. Gradually, the concept of ERP was introduced to Distribution Management activities during the 1980s. It was in the 1990s that efforts were made to integrate all functions of an Organization. This stemmed from the fact that businesses were becoming increasingly complex and77the concept of ERP had to be evolved to meet business needs.

In 1972, five managers from IBM left to start a company that is known today as SAP (Systems, Applications and Products). SAP eventually became the first company to develop and implement ERP specific software and applications. Today, SAP is one of the leaders in ERP software.

While there is no doubt that ERP has improved and evolved over the past years, its concept and purpose have remained the same. One can however expect the design of ERP to keep on evolving in the coming years.

8All business processes throughout the supply chain are executed in one system sharing all information121315The picture here illustrates a typical R/3 system.Multiple presentation layers from multiple computers communicate with the application servers over the local or wide area network.For a single R/3 system, there may be multiple application servers in order to balance the operational load.All these application servers interact with a single database server.And as the picture illustrates, the database server acts as the interface between the external RDBMS and the application servers.A single database, the R/3 database server that accesses it and the set of one or more application servers and their processes, that govern the business administration and the data sent and received from the database server all these components that constitute a logically single R/3 system, is called as an R/3 instance.17The presentation server is simply a GUI (Graphical User Interface) that is running at the users workstation. It is a very light component, called as a thin client in common terminology. It is capable of sending requests to the application server, receiving the requests back and displaying the screen back to the user.Multiple instances of presentation servers can execute in the same work station.And generally the presentation layers are, to a good extent, downward compatible with the application servers, in terms of the version. For e.g., A 4.6 C version GUI would be able to communicate with a 4.5 B version application server.The messages exchanged between the presentation layer and the application server are in a SAP proprietary format. The presentation layer is capable of accepting the screen information sent from the application server, format and generate the screens appropriately for the platform it is running on.The database server, as we saw earlier, acts as an interface between the application server and the RDBMS.As we know already, the R/3 system does not include the RDBMS. In other words, R/3 is independent of the RDBMS. R/3 is operational on a number of commercial RDBMSs.The vendor specific DB driver resides in the database server.18In the R/3 system architecture, the application, presentation and database server are separated out. This fulfills the prerequisite for distributing load into several application servers for client-server configurations. Hence in terms of database, the system can be distributed at different levels.This architecture enables the host services can be adjusted without any issues i.e. scalability, in cases where the loads on the system changes comprehensively as a result of increase in the user numbers or because of components has been added.This displays that the R/3 system has the flexibility while choosing hardware or software.1921The SAP R/3 system consists of application modules that support business transactions and are integrated real-time

Because of integration, a change in one application module will result in an automatic update of the data in the other application modules involved

All application modules have common2222architecture and user interface (same look & feel and navigation).Accelerated SAP is a comprehensive solution for the implementation of the R/3 System, comprising a proven methodology, tools and a range of services for the rapid implementation and ongoing optimization of R/3 installationsIt provides a standard implementation "how-to guide" that fills in the gaps of diverse methodologies and varying individual implementation skills and experiences.It is essential that you create a project plan when starting your ASAP implementation project.25Integration allows SAP, as a tool, to support all phases of project management by communicating with sales and distribution, materials management and accounting in a real time environment.26The Project System is an integrated solution that helps you perform all of the tasks in a project - no matter which sector of industry you are active in.It includes the functions you need in all project phases.27The slide shows the percentage of SAP PS customers distributed among the different industry sectors.28Projects are tasks with specific characteristics:They are usually complex, unique, and involve a high degree of risk.They have precise targets which are agreed between the contractor and the sold-to party.They are limited in duration, and are cost and capacity intensive.Several departments are involved in a project.They are subject to specific quality requirements.They are of mostly strategic significance for the business carrying them out.Projects are usually an integral part of a business's commercial processes. Before you can control all the tasks involved in a project, you need a project- specific organization which should be independent of the user departments involved.29Project enviorment and constraintsThe definition of project is not specific to any particular industry and hence covers different types of plans such as R&D projects, make to order production, engineering projects, investment plans, maintenance, IT projects etc.Projects are executed and act as balancing between different demands and bottlenecks like availability of limited resources, costs framework has been predefined. Hence projects can involve a high degree of risk for a company because costs are generally high and completion of projects are not guaranteed.

Currencies in the Project SystemWhile handling international projects for multinational companies, day-to-day business transactions occur in different currencies and therefore planning, budgeting and execution also to be considered with the usage of different currencies.

Project system manages three different currencies in parallel for all currency- dependent data:

Controlling area currency (consistent within a project, based on the controlling area in the project definition)3030Object currency (local currency of the respective company code)Transaction currency (currency of the business transaction)

To convert and save the amount in all three currencies in the database, All currencies indicator in the controlling area should be set.

Reports can be generated in any other currencies that are in the business information system other than the mentioned above also.Projects have following characteristics:Hierarchy of project parts Projects are given an appropriate structure for better controlling and monitoring purposes.Planning and controlling projects provide better control to plan and control of costs, resources, budget, dates and payments.Cross department Many departments like sales and distribution, Accounting, Purchasing and Production work on a common project.Complex and unique Each Project is unique in its own way for example, application, customer, design etc.31The project itself comprises several phases. While planning and coordinating large and complex projects, a high degree of precision is required. For project flow planning, one will do the followings:Schedule deadlinesSchedule datesResources availabilityAllocation of funds.

PS module helps in all these phases of the projectsThe various phases depicted above represent an ideal project flow. In your own specific project, you can omit certain phases, overlap phases with other phases, or allow certain phases to run in parallel to each other.During the initial phase of the project, objects must be specified and defined like, specific dates and defined resources and must be available and financing must be provided.A project is structured according to view points which are structure and process.32Project Definition: The project definition contains information, such as project name, project number, start and finish dates and organizational information, that is binding for the entire project. A project definition is required for all projects.Work Breakdown Structure Element (WBS Element): WBS elements describe the components/tasks of the project to be accomplished. They can be used for basic scheduling, cost planning, cost budgeting, and cost collection.Project Planning: Project planning is performed from the bottom up. Planned costs roll up from the lowest level WBS element. Project cost planning can be performed at the cost element level or WBS element level.Project Budgeting: The budget assures fiscal control and accountability for project spending. The budget is distributed from the top down. Project budgeting is performed at the WBS element level.Networks: The steps in project planning are determining what activities are required, their durations, their relationships, and resource availability.33Milestones: Milestones are events of particular significance, and/or trigger pre- defined functions, such as billing. Milestones are used to indicate, or mark, points of transition from one phase of the project to the next.Standard Project: Ex. A company may want to create a standard project for each type of project they have.Standard Project Definition: It is the framework for all the components (WBS elements) that are created within the standard project.Standard Work Breakdown Structure: Planning, budgeting, and cost collection cannot be performed on a standard work breakdown structure34Investment project example: Projects which are executed by companies which does not have revenue involved. Cost related aspects are more important as the project is executed.Following important steps are carried out during the execution:Create WBS structure, plan Basic dates and costs manuallyBudget the WBS elements and enter actual dates & assign various documents.Calculate overhead head costs and carry out settlement as period end closing procedure.38The Project System offers various ways of planning dates.Set of Dates: For planned dates, we can use Basic Dates and Forecast dates and Actual dates are also shown in this.Check Dates: The dates in the project structure can be checked for their consistency with/without taking activities into account.Inherit: The dates in the WBS element can be inherited by child WBS.Extrapolate: This function can be used to calculate the dates for higher level WBS elements.Shift: All the planned dates or just the dates which come in the sub hierarchy can be shifted.Planning Different Calendars: A different factory calendar can be used for each WBS element or Activity.Scheduling: This function calculates the dates for Networks and Activities.Planning Form: In the planning form, basic dates can be extrapolated from lower to higher level WBS element, or inherited from higher to lower level WBS element27Dates can be manually planned in WBS hierarchy which does not have networks. This can be done in project planning board by dragging the mouse for the respective WBS element.Also, in structure planning, one can enter the dates in table.The Basic dates flows in WBS hierarchy as top-down from higher levels to lower levels or extrapolated from lower levels to superior WBS element.The basic dates consistency can be checked with in the WBS structure.While executing the project, the actual dates can be set in project planning board or information system structure by dragging the respective WBS element bar and compare the actual dates with basic dates.There are several planning forms to plan basic dates on WBS element, like Top down (Inherited from to top to down), Bottom up (extrapolated from bottom to top level), Free planning and Strict bottom up.For assigning actual dates, which is Assigned during execution phase, by dragging mouse in project planning date, and one can compare actual and plan basic dates.28In the case of projects with assigned networks, network scheduling functionality automatically derives the dates for activities and WBS elements.This can be using project planning board where you can select WBS elements and assigned network activities.Scheduling parameters determines the scheduling of networks i.e. forward or backward scheduling (forward scheduling determines earliest dates and backward scheduling determines latest dates).The difference between two dates (earliest and latest dates) are called as Float which can be negative or zero and signifies that the network path is (or activities from start of network to the end of the end of network) is critical.The scheduled dates of the WBS elements are the wrap-up dates of the assigned activities which are displayed as thin time bars in project planning board.These scheduled dates can be copied in basic dates of the WBS elements and extrapolate them to the superior WBS elements in the project hierarchy.

Settings of scheduling parameters:Indicators network scheduling and adjust basic dates set.Assignment of scheduling type in scheduling parameters.29Scheduling can be used to derive dates for activities/WBS elements. Networks are always scheduled forward and backwards.The scheduling type determines the original direction in which scheduling takes place. It can be carried out in two ways: Top-Down and Bottom-Up scenarios.The dates schedule in WBS structure can be copied to the basic dates of the WBS elements for the purpose of extrapolating them up the project hierarchy.30Scheduling uses the quantity structure of network activities to derive dates in an automated way.Single network schedules all activities of the network. If it is connected to other networks by relationships, their dates are treated like constraints.In overall network scheduling, the system schedules all networks connected by relationships.WBS scheduling schedules all activities which are assigned to selected WBS elements.

Network can be scheduled:Individually (Network Scheduling)Overall (Scheduling of Overall network)WBS scheduling

The activity data, activity relationships and date restrictions form the basis for determining the dates automatically.

In Projects with assigned networks, the dates of WBS Elements and Activities can be derived by scheduling. Here, WBS Element transfers the date to higher level99elements and Extrapolate it.In WBS with assigned networks, the basic dates for the WBS element can be planned in order to determine that certain part of the project has to be completed within a fixed period of time.Scheduling parameter: They determine scheduling. These are created for specific plants and network types.Adjust basic dates: It determines that after the scheduling run, the scheduled dates are copied to the basic dates of the network header.Scheduling Type: It determines the type of scheduling being carried out. For e.g. forward first and then backward scheduling.Start in the past: It determines how much time back was the start date. If its more than the days mentioned, scheduling is done from current date.Automatic Scheduling: Scheduling is carried out when saving is carried out.Log Automatic: If log is generated, it is displayed automatically.Break Spec. Scheduling: The exact time at which a break is scheduled.Shift Order: During scheduling. It determines how the system deals with partially completed activities.Latest material dates: based on latest and earliest dates, the requirements dates for a material is determined.Reduction type: Either all activities or only those in the critical path are reduced.Maximum reduction level: There are up to 6 levels in reduction strategy. The highest level is displayed.Rescheduling: After scheduling run is done, it determines how the system is1010allocating work in Work Force planning(WFP)11Scheduling Type: Determines type of scheduling being carried out.Start in the past: It determines how much time back was the start date. If its more than the days mentioned, scheduling is done from current date.Scheduling form: It specifies as in on what basis is the scheduling being carried out WBS element or Network header.Adjust basic dates: It determines that after the scheduling run, the scheduled dates are copied to the basic dates of the network header.Log Automatic: If log is generated, it is displayed automatically.Shift Order: During scheduling, it determines how the system deals with partially completed activities.Schedule when saving: Scheduling is done on saving.Latest material dates: based on latest and earliest dates, the requirements dates for a material is determined.Maximum reduction level: There are up to 6 levels in reduction strategy. The highest level is displayed.Reduction type: Either all activities or only those in the critical path are reduced.121.132.3.4.Every time a network is scheduled, forward and backward scheduling is carried out by the system; and if activated it determines float and capacity requirements for activities, reduction level used to schedule the network, earliest and latest dates for the relationship.Forward scheduling determines the earliest dates. Backward scheduling determines the latest dates.Float: If earliest dates are not same as latest dates, then float occurs.The Scheduling results are:Scheduled start and finish for the network.Earliest start and finish dates (earliest dates) and the latest start and finish dates (latest dates) for activities and earliest and latest dates for relationships.Reduction levels used to reduce the network and float times (total and free float) for activities.And capacity requirements for activities.Other influencing factors in scheduling:Internal processing: the normal Duration maintained in the activity is used by the system for scheduling internally processed activity.External processing: Planned delivery time or normal Duration (explicitly to be activated in control key) will be used by system for scheduling externally processed activity.General costs activity: DurationRelationship: Time interval: Fixed or as a percentage.

The work centers can be maintained in internally or externally processed activity and in relationships, and work centers contains following information's:Formulas for calculating duration of activitiesFactory calendar and operating time for each workday.14A network must and always scheduled forwards and backwards and scheduling type specifies whether forward scheduling or backward scheduling is carried out first.Forward scheduling calculates the earliest start and finish dates for all activities, and the scheduled finish date of the network. A start activity is an activity in a network that does not have a predecessor.Backward scheduling calculates the latest start and finish dates for an activity (latest dates) and the scheduled start date of the network. A target activity is an activity in a network that does not have a successor.When forward scheduling is performed first, the date from which scheduling starts is the basic start date in the network header. When forward scheduling is performed after backwards scheduling the start date is calculated from backward scheduling.When backward scheduling is performed first, the base date from which scheduling starts is the basic start date in the network header. When backwards scheduling is performed after forward scheduling the finish date is calculated from forward scheduling.Start dates are at the beginning of the day (00:00). Finish dates are at the end of the day (24:00).15Scheduling Assembly Networks:Overall Network Scheduling can be performed for a sales order item.This function schedules the network assigned to the sales order item and all other networks with relationships to it (total network scheduling).The function leads to an update of all items in the sales order with assignments to the total network.

Overall Network Scheduling with Selection Options:This function is used along with selection criteria to specify which network/sub- network are to be taken into account as part of overall network scheduling.A prerequisite for the use of the Overall network scheduling with selection options function is that suitable levels are defined beforehand for the project system and network types and number intervals are assigned to it.16Activity Element & PRT DatesThe system calculates dates for activity elements with reference to the start or finish dates of the activity. You maintain a time interval for the start and a time interval for the finish.

Material Requirements DateThe system calculates the requirements date for components with reference to the start or the finish date of the activity. With the network type you can control whether the earliest or latest start date is used as the requirements date in the network.If the requirements date is before or after the start date of the activity, you can enter a corresponding lead time offset.You can set a manual requirements date for components.17You can maintain constraints for the start and finish of activities and / or (offsets for) activity elements.Constraints can be relevant for both the earliest and the latest dates. You can maintain constraints for basic and forecast sets of dates.18Legend:ES = earliest start EF = earliest finish LS = latest start LF = latest finish TF = total floatFF = free floatFloats supply information about time reserves available for individual activities and one can use floats calculated in scheduling, for example in capacity leveling, to shift activities between their earliest and latest dates or to extend their duration.

Total float: The amount of time an activity can be shifted from its earliest dates into the future without affecting the latest dates of its successor. (Total float: = LS-ES or LF-EF)Free float: The amount of time an activity can be shifted from its earliest dates into the future without affecting the earliest dates of its successor. (Free float = ES successor EF activity)19The slide describes the calculation of total floats and free floats:The total float can be calculated as the difference between the earliest and latest start of an activity.In the above example:Day 6 (0:00) - Day 5 (0:00) = 1 Day.The free float of an activity can be calculated as the difference between the earliest start of the successor and the earliest finish of the activity.In the above example:Day 9 (0:00) - Day 7 (24:00) = 1 Day.20Reduction:Reduction can be used when the time period within which activities are scheduled is not enough for processing all the activities.This reduces the scheduled duration of internally-processed activities and for which reduction strategy has been maintained.Up to six reduction levels can be defined for each reduction strategy. The percentage reduction required can be entered for each reduction level.21 3-4 Cost Planning1) Based on the resource and material planning using WBS and networks, as described above, the system can automatically calculate planned costs for the procurement and the consumption of resources and material. This form of cost planning is referred to as network costing, If you only use work breakdown structures for mapping projects,you manually plan costs on the WBS element level for the later performance of the individual project parts.

2)Two important criteria for a cost planning's level of detail are the characteristics by cost element and. by date.

Cost planning by cost elementIf a cost planning references one or several cost elements, this type of cost planning is referred to as a planning by cost element. Cost elements are defined in the Cost Element Accounting of Controlling and correspond to cost-relevant chart of accounts items. Using cost elements, you can structure and classity the consumption of production factors that is valuated with regard to the business purpose. Using cost element reports (see Section 7.2.2) or hierarchy reports (see Section7.2.1) Use - detailed planning ,Unit costing , Easy cost planing

Date Planning If a cost planning references the period of the projected cost , this type of cost planning is referred to as being period based. Cost plannings by date allow you to analyze planned costs specificallyfor a period (e.g., monthly) in Reporting and to compare them to the actual costs incurred during a period. Use - detailed planning (see Section 3.4.3) and network costing , Easy Cost Planning is only conditionally date-specific

Note -the other cost planning forms in SAP Project System are period independent or only reference fiscal years, but not individual periods of a fiscal year.

Sales Project Projects which have the recognition of revenue at the starting or during the course of the project execution. When activities are assigned to WBS elements, the dates and costs defined in the individual activities are totaled up (aggregated) at the WBS level, and can be evaluated. Activity funds already assigned are checked against the budgets of the WBS elements.Following important steps are carried out during the execution:Customer inquiry is created and assigned to the project.Plan dates, materials, costs, and resourcesCreate sales pricing and sales order.Enter confirmations, Purchase materials & Services. Post revenues.Calculate overhead, carry out result analysis and execute settlement.

The above steps are discussed further in the course.39You define the company using company codes and business areas (Accounting view) and controlling areas, profitability segments and profit centers (Controlling view).The operating concern is the organizational unit for which the market is uniformly segmented.The controlling area is the organizational unit within the company used to represent an internal system for cost accounting purposes.The company code is the balance sheet unit in Financial Accounting. Company codes can be assigned to the controlling area in an N:1 or 1:1 ratio (company-code-specific cost accounting). In the Customizing settings for the controlling area, you can specify whether company-code-specific cost accounting is possible. This setting should be considered carefully and made when you create the controlling area.The financial management area is the organizational unit within which you plan, control, and monitor funds and budgets.In the Project System module, it is sufficient to assign the company code to one financial management area. In Funds Management, you have to assign the financial management area to the controlling area.You use the business area for calculating balances internally.40The Project System module has no organizational units of its own.Depending on the project type and configuration, the organizational units from a wide range of areas are used (sales and distribution, purchasing, production, accounting, controlling, personnel, and so on).418All business processes throughout the supply chain are executed in one system sharing all information121315The picture here illustrates a typical R/3 system.Multiple presentation layers from multiple computers communicate with the application servers over the local or wide area network.For a single R/3 system, there may be multiple application servers in order to balance the operational load.All these application servers interact with a single database server.And as the picture illustrates, the database server acts as the interface between the external RDBMS and the application servers.A single database, the R/3 database server that accesses it and the set of one or more application servers and their processes, that govern the business administration and the data sent and received from the database server all these components that constitute a logically single R/3 system, is called as an R/3 instance.17The presentation server is simply a GUI (Graphical User Interface) that is running at the users workstation. It is a very light component, called as a thin client in common terminology. It is capable of sending requests to the application server, receiving the requests back and displaying the screen back to the user.Multiple instances of presentation servers can execute in the same work station.And generally the presentation layers are, to a good extent, downward compatible with the application servers, in terms of the version. For e.g., A 4.6 C version GUI would be able to communicate with a 4.5 B version application server.The messages exchanged between the presentation layer and the application server are in a SAP proprietary format. The presentation layer is capable of accepting the screen information sent from the application server, format and generate the screens appropriately for the platform it is running on.The database server, as we saw earlier, acts as an interface between the application server and the RDBMS.As we know already, the R/3 system does not include the RDBMS. In other words, R/3 is independent of the RDBMS. R/3 is operational on a number of commercial RDBMSs.The vendor specific DB driver resides in the database server.18In the R/3 system architecture, the application, presentation and database server are separated out. This fulfills the prerequisite for distributing load into several application servers for client-server configurations. Hence in terms of database, the system can be distributed at different levels.This architecture enables the host services can be adjusted without any issues i.e. scalability, in cases where the loads on the system changes comprehensively as a result of increase in the user numbers or because of components has been added.This displays that the R/3 system has the flexibility while choosing hardware or software.1921The SAP R/3 system consists of application modules that support business transactions and are integrated real-time

Because of integration, a change in one application module will result in an automatic update of the data in the other application modules involved

All application modules have common2222architecture and user interface (same look & feel and navigation).Accelerated SAP is a comprehensive solution for the implementation of the R/3 System, comprising a proven methodology, tools and a range of services for the rapid implementation and ongoing optimization of R/3 installationsIt provides a standard implementation "how-to guide" that fills in the gaps of diverse methodologies and varying individual implementation skills and experiences.It is essential that you create a project plan when starting your ASAP implementation project.25Integration allows SAP, as a tool, to support all phases of project management by communicating with sales and distribution, materials management and accounting in a real time environment.26The Project System is an integrated solution that helps you perform all of the tasks in a project - no matter which sector of industry you are active in.It includes the functions you need in all project phases.2785