SAP University Alliances Version 2

ERP and SAP – Part 2SAP University Alliances

Version 2.01

Sumantra SarkarGeorgia State University

Robinson College of Businessg8rd November, 2011

SAP Components

Logistics FinanceFinancial Accounting (“Track”)Managerial AccountingAsset Management

SAP PLMSD

MM CO

FI

Treasury

SAP SRM

SAP CRMSAP ERP

PP

QM

AM

PS

SAP R/3Client/Server

ABAPB i

SAP NetWeaver

SAP SCMPM

HR ISWFBasis

Sales & Distribution (“Sell”)Materials Management (“Buy”)

- Personnel ManagementB fitMaterials Management ( Buy )

Production Planning (“Make”)Plant MaintenanceQuality Management

- Benefits- Payroll

SAP Main Menu

SAP Document Principle

• Each business transaction impacting FI writes data to the SAP database creating a uniquely numbered electronic document.

• The document number can be used to recall the transaction at a later date.

• Audit Trail ‐ contains critical and necessary information as:y• Responsible person• Date and time of the transaction• Commercial content• Commercial content

• Once written to the SAP database, a financial document (one impacting the financial position of the company) can not be deleted from the databasedatabase.

• The SAP document principle provides a solid and important framework for a strong internal control system – a requirement of law for companies that operate in the United States and in most other countriescompanies that operate in the United States and in most other countries in the world.

GL Transactions Tracking

Post Goods IssueCOGS XXXX

INV‐FG XXXXX

I i C tInvoice CustomerA/R XXXX

SALES XXXXX

5


Payment ReceivedyBANK XXXX

A/R XXXXX

6


7

S_ALR_87012291 Line item journal from Accounting General Ledger Information system Document Line item journal.

Presentation Overview

• Introduction to ERP• Introduction to SAP• Sales & Distribution• Materials Management• Production Planning• Financial Accounting • Controlling• Controlling

MM Functionality

• Inventory Management• PurchasingPurchasing• MRP• Physical InventoryPhysical Inventory• Valuation• Service Master• Service Master• Invoice Verification• Product Catalogs• Product Catalogs

Procure‐To‐Pay Process

PurchaseRequisition

VendorSelection

No financial impact (FI)

RequisitionPurchase

Order

Selection

P tNotify VendorMaterials Management (MM)Amount owed isPayment received andPayment

to VendorVendor

V d

A/P XXXXBank XXXX

Materials Management (MM) and Financial Accounting (FI)

via automatic account assignment

Amount owed isassigned and transferred to

vendor account payable

Payment received and Accounts payable reduced

VendorShipment

InvoiceReceipt

GoodsReceipt

PO Receipt XXXXA/P XXXX

g

ReceiptA/P XXXX

Inventory-RM XXXXPO Receipt XXXX


Receipt of GoodsInventory‐RM XXXX

PO‐Receipt XXXX

I i R i tInvoice ReceiptPO‐Receipt XXXXX

A/P XXXXX

11


Payment to VendoryA/P XXXXX

Bank XXXXX

12



PP Functionality

• SAP divides production into multiple processes• Production Planning• Manufacturing Execution

• Discrete ManufacturingR titi M f t i• Repetitive Manufacturing

• KANBAN

• Production – Process Industries• Integrated planning tool for batch‐orientated process manufacturing• Design primarily for chemical, pharmaceutical, food and beverage industries along with batch‐oriented electronicsindustries along with batch oriented electronics

Production Planning & Execution

• Players in the Game• Strategic Planning

ForecastingSIS CO/PAg g

• CEO, COO, CIO, CFO, Controller, Marketing Di t

Sales & OperationsPlanning

Strategic Planning

Director• Detailed Planning

• Line Managers, Production

DemandManagement

MPSDetailed PlanningProduction

Scheduler, MRP Controller, Capacity

MRP

Planning

Planners• Execution

• Line Workers,

ManufacturingExecution

Order

ProcurementProcess

ManufacturingShop Floor Supervisors

OrderSettlement

Manufacturing Execution

Forecasting

• Forecasting is the foundation of a reliablefoundation of a reliable SOP

• Accurate forecasts are essential in the manufacturing sector

• Overstocked & understocked warehouses result in the same thing: aresult in the same thing: a loss in profits.

• Forecasts are ALWAYS WRONG

Forecasting

• Forecasting Models• Trend• Trend• Seasonal• Trend and Seasonal• Constant• Constant

• Selecting a ModelSelecting a Model• Automatically• Manually

Sales and Operations Planning (SOP)

• Information OriginationOrigination• Sales• Marketing• Manufacturing• Accounting• Human Resources• Purchasing

• Intra‐firm CollaborationCollaboration• Institutional Common

Sense

Material Requirement Planning (MRP)

• In MRP, the system calculates the net requirements while considering available warehouse stock andwhile considering available warehouse stock and scheduled receipts from purchasing and production

• During MRP, all levels of the bill of material are plannedg , p• The output of MRP is a detailed production and/or

purchasing plan• Detailed planning level

• Primary Functions • Monitor inventory stocksMonitor inventory stocks• Determine material needs

• Quantity• Timing• Timing

• Generate purchase or production orders

PP Master Data

• Material• Bill of Materials (BOM)ill of Materials ( OM)• Routing• Work CenterWork Center• Product Group

Bill of Materials (BOM) Bicycle Example

• List of components that make up a product or assemblyassembly

• Wheel Assembly

Seat Kit

Handle Bar y• Tire• Tube• Wheel

Pedal Assembly

ChainWheel

• Hex nut• Lock Washer• Socket Head Bolt

Brake Kit

Warranty Document

PackagingSocket Head Bolt

• Frame• Derailleur Gear Assembly

Packaging

Derailleur Gear Assembly

Routing

• Routings enable you to plan the production of materials (products)materials (products).

• Routings are used as a template for production orders and run schedulesorders and run schedules

• Routing are also used as a basis for product costing.• Series of sequential steps (operations) that must be• Series of sequential steps (operations) that must be carried out to produce a given product

• Routings contain:Routings contain: • What, Where, When, How

Work Center

• A location within a plant where value‐added work (operations or activities) are performed(operations or activities) are performed• Work Centers can represent

• People or Groups of People• Machines or Groups of MachinesMachines or Groups of Machines• Assembly Lines

• Work center used to define capacities • Labor• Machine• Output

E i i• Emissions

• Capacities used in• Capacity requirements planning (CRP)• Detailed scheduling• Costing



FI Integration

• Fully integrated with other SAP modules • Sales and Distribution (SD)• Sales and Distribution (SD)• Materials Management (MM)• Production Planning and Execution (PP)Production Planning and Execution (PP)• Managerial Accounting (CO)

Goal of Financial Accounting (FI)

• Financial Accounting is designed to collect the transactional data that provides a foundation for preparing the standard portfolio of reports.

• In general, these reports are primarily, but not exclusively, directed at external parties.

• Standard reports include:• Balance Sheet• Income Statement• Statement of Cash Flows

FI Reporting ‐ sample

• Balance Sheet • Presentation of an organization’s Assets, Liabilities, and Equity at a point in time• Assets: What the company owns • Liabilities: What the company owes• Equity: The difference between Assets and Liabilities

• Income Statement • Presentation of an organization’s revenues and expenses for a given period of time

(e.g. monthly, quarterly, or yearly)( g y, q y, y y)

• Statement of Cash Flows • Considers the associated changes, both inflows and outflows, that have occurred in

h bl th t i t t f ll t i i d f ti (cash – arguably the most important of all assets – over a given period of time (e.g. monthly, quarterly, or annually)

Target Audience for reports

• Internal• Executives

• External‐ Legal Authorities• Executives

• Senior Management• Administrative Staff• Employees

g‐ Banks‐ Auditors‐ Shareholders

I• Employees ‐ Insurance‐ Taxing Authorities‐ Media‐ Financial Analysts

Accountants and Audit Trails

• Audit trails allow an auditor to begin with an account balance on a financial statement and traceaccount balance on a financial statement and trace through the accounting records to the transactions that support the account balance.pp

• Or ……enables an auditor to trace individual transactions to the effected account balance(s) on a ( )financial statement.

FI Master Data

• General Ledger (G/L) Accounts • The unique combination of Company Code and Chart of Account creates a data

t ll d G l L dstorage area called a General Ledger.• The General Ledger contains a listing of the transactions effecting each account in

the Chart of Accounts and the respective account balance.• It is utilized in the preparation of financial accounting statements• It is utilized in the preparation of financial accounting statements.

• Customer and Vendor Master Data• Customer and vendor account balances are maintained in FI through fully

integrated accounts receivable and accounts payable sub‐modules.• Financial postings for customers and vendors are made directly to their respective

individual accounts and accompanied by a concurrent automatic posting to the G l L dGeneral Ledger.



Goal of Controlling (CO)

• Managerial Accounting – also termed Controlling – is designed to collect transactional data that provides a foundation for preparing internal reports that support decision‐making within the enterprise.

• These reports are exclusively for use within the enterprise and include:

C t t f• Cost center performance• Profit center performance• Budgets analyses

Target Audience

• ExecutivesS i M t• Senior Management

• Department ManagersManagers

• ControllersC t A t t• Cost Accountants

CO Master Data

• Statistical Key Figures • Provide the foundation for accurate and effective cost allocations between cost

bj tobjects• Utilized to support internal cost allocations involving allocations, assessments, and

distributions• Examples:• Examples:

• number of employees• square footage• minutes of computer usage

6 Hours Executive Offices

Copy CenterActivity

(20 Hours)

10 Hours MaintenanceDepartment

(20 Hours)4 Hours IT Department

CO Processes

Rent ExpenseExecutive Offices

Posting Secondary Cost Element

Debit Credit

1,500

Rent Expense

1,800Copy

Supplies Expense 1,500

Center Maintenance Department

Debit Credit

2,500

Supplies Expense

2,500

2,000

3,000Sec. Cost Element

Debit CreditLabor Expense

1,200

Information Services

2,000,

Questions?

Documents

SAP University Alliances Version 2