Unit 2 - Power Point Handout(2)

Version 6.1 August 2014

© SAP AG and The Rushmore Group, LLC 2014 1

Materials Management (MM)

- Rules -

Chapter 11

August 2014 © SAP AG and The Rushmore Group, LLC 2014 2

Business Process Integration

Ru

les

MM


Rules

• Defines the parameters for Master Data and Transactions

• Determines functionality for Master Data and Transactions

• Relatively fixed

• Changes as policy changes




Chapter 11 – Overview

• Reservations

• Tolerances

– Purchasing

– Goods Receipt

– Invoice Receipt

• Automatic Account Assignment

• Invoice Verification


Reservations

• A request to have a material ready for issue at a future date for a production order, sales order, etc.

• The purpose of a reservation is to ensure that a material is available when required and not assigned to another use


Purchasing Tolerances

• A tolerance limit is set for allowed variance before a warning/error message is displayed

– Price variance

• Compares the price in the purchase order with the valuation price stored in the material master

– Maximum cash discount • This tolerance limit is set to assure that cash discounts do

not exceed allowable discounts




Goods Receipts Tolerances

• Purchase order price quantity – there are two tolerance levels maintained per item

– The maximum percentage variance before a goods receipt postings is not allowed

– A percent variance that generates a warning message but allows posting

• Moving average price variance – the maximum allowable moving average price change allowed


Invoice Receipts Tolerances

• Many tolerance limits that can be configured for invoice receipts: price, quantity, and blanket purchase orders These tolerances include:– Amount for item with or without order reference

– Form small differences automatically

– Percentage Over/Under Quantity Variance

– Exceed amount: quantity variance

– Blanket purchase order – value and time limit

– Price variance


Automatic Account Assignment

• Automatic account assignment is created to avoid manual postings of financial transactions which follow goods movements to reflect the values of transferred materials

• Automatic account assignment is used across all modules to keep track of the values of materials that are being consumed (e.g., production), or transferred into other valuation areas of the company




Automatic Account Assignment(continued)

• Automatic account assignment is a set of rules and master data which enable the financial tracking of logistics movement


Automatic Account AssignmentComponents

• Components of Automatic Account Assignment

– Chart of Accounts

– Valuation Grouping Code

– Transaction Key

– Modifier for Transaction Key

– Valuation Class


Automatic Account AssignmentValuation Grouping Code

• Valuation grouping code - groups valuation areas together

– Example: valuation area is plant, five plants exist in the company, all five plants use the same accounts.

– Multiple valuation groups are possible




Automatic Account AssignmentValuation Grouping Code

Plant – P004Plant – P001

Grouping CodeG001

Plant – P003

Plant – P002

Grouping CodeG002

Plant – P005


Automatic Account AssignmentTransaction Keys

• Transaction Keys

– The transaction keys are used to determine accounts or posting keys for line items which are created automatically by the system.

– The transaction keys are defined in the system.


Automatic Account AssignmentTransaction Keys

• Transaction Keys– Inventory Postings

• BSX

– Offsetting Entry for Inventory Postings• GBB

– Materials Management Small Differences• DIF

– Cost (price) differences (PPV)• PRD

– Goods receipt / inv. receipt clearing acct• WRX




Automatic Account AssignmentModifier

• Modifier – modifies the transaction key for various movement types– Blank – Goods receipt from purchase order with

account assignment

– VBR – Goods issue to consumption

– VAX – Goods issue to sales – post to cost of goods sold

– AUF – Goods receipt from a production order – post to production settlement

– Etc. – Many others


Material Types & Valuation Classes

• Account category reference:

– Builds the link between material types and the valuation class(es)

0009 – Reference for Finished Products

0005 – Reference for Trading Goods

0002 – Reference for Operating Supplies

0001 – Reference for Raw Materials

Account Category Reference

FERT

HAWA

HIBE

ROH

Material Type

7920

3100

3030/3031

3000/3001/3002/3003

Valuation Class


Material Types & Valuation Classes

Material TypeROH (Raw Material)

Acct Cat. Ref0001 – Raw Materials

Valuation Class3000

(Steel)

Valuation Class3001

(Paper)

Valuation Class3003

(Plastics)




Account790000


Pla

nt P

001

Valuation Class3100 (Trading Good)

Grouping CodeG000

Goods MovementGBB (Goods Issue)

Account ModifierVBR (Iss. To Cons.)

Pla

nt P

002


Grouping CodeG000



Pla

nt P

003


Grouping CodeG001



Account790001



PlantMaterial TypePoints To:

G/L AccountAccount Modifier

Transaction Event Key

Valuation Grouping Code

Valuation Class

Represented By:

Chart of Accounts

Additional Information

Goods MovementValuation AreaMaterial

Where Value is recorded:Why 2:Why 1: Where Valued: What:

Plant – P001HAWAPoints To:

790000VBRGBBG0003100Represented By:

Chart of Accounts -C000

Issued to ConsumptionGood IssuePlant – P001BPEN000

Where Value is recorded:Why 2:Why 1: Where Valued: What:


Goods Receipt

• Materials can be received as stock items or non-stock items

• Receipt is possible from external or internal sources

• Individually / collectively

• Tolerance limits can be set for goods receipt

• Special movement type for initial inventory load




Goods Receipt – (continued)

• Stock items can be received into restricted or unrestricted stock

• Non-stock items are received into orders, projects, cost centers

• Materials that are usually received into inventory can also be received into orders, projects, cost centers


Invoice Verification

• Set parameters for invoice verification

– Quantity, price, receiving date, P/O quantity

– Updates material master if moving average price

– Automatic account assignment for price differences -if allowed

• Verify actual versus target


3-Way Match

Purchase order- Target quantity -

- Target price -

Goods receipt - Actual quantity -

Invoice receipt- Actual price -




Accounts Payable Settlement

Purchase

Order

GoodsReceipt

InvoiceReceipt

Debit Credit

PaymentProgram

Verification


Chapter 11, Group 1 – Exercises

89. Set Default Values for Inventory Management Reservations

90. Maintain Purchasing Tolerance Limits

91. Maintain Goods Receipt Tolerances

92. Maintain Invoice Receipt Tolerances

93. Set (Review) Valuation Control

94. Assign Valuation Area Grouping

95. Define (Review) Valuation Classes



96. Configure Automatic Postings for Goods Movement

97. Configure Automatic Postings for Taxes

98. Set Parameters for Invoice Verification

99. Create Default Values for Invoice Verification



Chapter 12


- Transactions -



MM


Transaction Data

• Includes internal and external exchanges that describe business activities

• Unlike master data, aggregate transactional data is dynamic – each transaction is unique




Procurement Process(Procure-to-Pay)

PurchaseRequisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt

GoodsReceipt

Purchase

Order

3-WayMatch


Basic Procurement Process

• Requirements Determination - Purchase Requisition

• Vendor Selection

• Order Processing - Purchase Order

• Order Tracking

• Goods Receipt and Inventory Management

• Invoice Verification

• Payment


Purchase Requisitions

• Internal document

• Requesting a certain quantity of material or service on a certain date

• Can be created:

– Manually

– Automatically (Materials Requirements Planning (MRP), sales orders, etc.)

• Release approval procedures are optional




Purchase Requisitions Sources

• Manually created by user department– Office supplies

– Projects

– Prototype materials

• Automatically created by– Planning (Material Requirements Planning (MRP),

Master Production Schedule (MPS))

– Plant Maintenance

– Production Orders

– Sales Orders


Purchase Requisitions Processing

• Create purchase requisition (manually or automatically)

• Determine source of supply

• Release procedure (optional)

• Assign vendor and process


Purchase Requisitions Creating

• Default data for line items– Delivery dates, plants, purchasing groups, etc.

• Maintain line item data– Materials, quantities, delivery dates, etc.

• Maintain account assignment (if required)– Cost center, General Ledger accounts, project

number, etc.

• Check data• Save




Purchase Orders

• Purchase Orders are:– A formal request to a vendor to provide materials or

services– An internal planning and tracking tool

• Purchase Orders identify:– Vendor– Material and/or service– Quantity and price– Delivery dates– Terms of payment


Purchase Order StructureHeader

• Header - information specific to the entire purchase order

– Vendor

– Currency

– Payment terms


Purchase Order StructureLine Items

• Line item details

– Account assignment

– Delivery schedule

– Materials or services

– Quantity

– Price

– Description

– Item category




Purchase Order

• Request for Quotations

• Purchase Order

• Order Acknowledgment


Purchase Order – Output Format

• Printed and mailed

• E-mail

• Electronic Data Interchange (EDI)

• Faxed (hardcopy or electronic)

• eXtensible Markup Language (XML)


Goods Receipt

• Goods receipt with reference to a purchase order

– Copy data from purchase order

– Delivery notification

– Invoice verification

– Updates purchase order history

– Inventory update

– Automatic update of General Ledger (G/L) accounts




Goods Receipt (continued)

• You can search for the purchase order number with

– Material number, vendor number, etc.


Goods Receipt – Destinations

• Stock - given a storage location, can be posted to three different stock statuses– Unrestricted-use

– Quality inspection

– Blocked stock (valuated)

• Consumption - can be assigned to a recipient or unloading point

• There is a special Movement Type that allows a goods receipt for blocked stock that updates inventory (quantity), but material is not valuated (no accounting documents are created – a conditional acceptance)


Goods Receipt – Movement Types

• Movement types - stock transactions

– Goods receipt

– Goods issue

– Stock transfer

• Movement type determines which

– Quantity fields are updated

– Stock types are updated

– General Ledger (G/L) stock or consumption accounts are updated

– Fields are displayed during document entry




Goods Receipt – Movement Types (continued)

• 101 - goods receipt for purchase order into warehouse/stores

• 102 - reversal of goods receipt for purchase order into warehouse/stores

• 122 - return delivery to vendor

• 501 - receipt w/o purchase order into unrestricted-use stock


Goods Receipt – Account Postings

• Inventory account is debited at purchase order price times the quantity received

• Goods Receipt/Inventory Receipt (GR/IR) clearing account is credited at purchase order price


Goods Receipt – Effects

• Purchase Order (PO) history and Purchase Order (PO) updated

• Material Master - stock and value updated

• Notification of goods receipt issued (optional)

• Material and financial documents created and/or updated

• Stock and consumption accounts updated




Goods Receipt – Effects (continued)

• Inspection lot is created for Quality Management (QM) – if active

• Transfer requirement is created for Warehouse Management (WM) – if active


Invoice Verification

• Matches the vendor’s invoice to the purchase order

• Matches price and quantity

• Updates the purchase order and its history

• Updates accounting information


Invoice Payment

• Selects invoices for payment based on the payment terms in the vendor master or purchase order

• Generates payment for released invoices

• Updates accounting information




3-Way Match for Payment

Purchase

Order

GoodsReceipt

InvoiceReceipt

Debit Credit

PaymentProgram

Verification


Accounts Payable Settlement Process

• Determines:

– Open items to be paid

– When they will be paid

– Bank from which payment will be made

– Payment medium

– Who will get paid

• Payment process creates a financial accounting document to record the transaction


Goods Receipt / Invoice ReceiptReconciliation Account

Purchase requisition

Purchase orderMaterials Management (MM) and Financial Accounting (FI)

via automatic account assignment

Goods receipt

No impact onFinancial Accounting (FI)

Dr Cr

Inventory

$100

Dr Cr

GR / IR

$100




Goods Receipt / Invoice ReceiptReconciliation Account

Amount owed isassigned and transferred to

vendor account payableInvoice receipt

Dr Cr

Vendor A/P

$100

Dr Cr

GR / IR

$100


Vendor Payment

Amount owed is paid tovendor and account payable

is reducedBank

Dr Cr

Vendor A/P

$100

Dr Cr

Bank

$100


(FI – MM) Integration Points

Invoice Receipt

Payment Program

Goods Receipt

AP (Vendor)

Dr Cr

GR / IR

$100

Bank

Dr Cr

Inventory

$100 $100 $100

Dr CrDr Cr

$100 $100





• Debit posting $100• BSX - inventory

posting to trading goods inventory account 201XXX

• Credit posting $100• WRX goods receipt

posting to GR/IR account 310XXX

Example for a Goods Receipt


Chapter 12 – Exercises

100. Create Purchase Order for Slick Pens

101. Create Purchase Order for Premier Pens

102. Create Purchase Order for Promotions, Ltd.

103. Create Goods Receipts for Purchase Orders

104. Create Invoice Receipts from Vendors

105. Post Payment to Vendors

106. Display Vendor Line Items

Chapter 13


- Transactions -





MM


Transaction Data




Chapter 13 – Overview

• A company may want to establish a long term purchasing relationship with a vendor

• Its is accomplished through a purchasing contract (outline agreement or blanket order)

• Purchases of that material from that vendor are then simplified and streamlined




Buyer/Supplier Relationships

• Antagonistic – parties view each other as the enemy (lose/lose)

• Adversarial – each party attempts to maximize their gain (win/lose)

• Cooperative – parties understand the benefits of working together (win/win)

• Collaborative – parties look for opportunities to create value (win/win)


Buyer/Supplier Relationships

• Long term partnerships are the objective of the supplier evaluation and selection process for contracts

• Traditional purchasing process

– Creates an environment of mistrust and low bidder mentality

– Leads to higher total purchasing costs


Supplier Evaluation and Selection

• Identify need for long term supplier contract

• Determine specific sourcing requirements

• Identify potential suppliers

• Determine method of evaluating suppliers

• Select supplier for contract

• Negotiate and execute contract




Benefits of Managing the Supply Base

• Contract with only world-class suppliers

• The fewer suppliers the lower the purchasing overhead

• Purchasing can pursue strategic sourcing issues, instead of clerical functions

• Streamline the supply chain

• Improved overall quality

• Improved delivery performance


Outline Agreement

• Long-term purchase agreements

• Outline agreements can be subdivided into the following types:

– Contracts

– Scheduling agreements

• Outline agreements can be subject to a release (approval or clearance) procedure


Contract Process Overview

• Step one is to identify and evaluate suppliers

• It may involve supplier development

• The goals are:

– Develop partnerships with good suppliers

– Reduce total cost of purchased materials and services




Contracting Questions

• How will potential suppliers be evaluated and selected?

• What procedures will be required to manage the contracts (and suppliers)?

• How will performance be measured?• How many are too many suppliers?

– Too many suppliers cost money– Supplier integration– Collaborative agreements– Supplier development– Without material production shuts down

• What is the risk?


Contract Management

• Supplier performance metrics– On-time delivery

– Material and/or service quality

– Returned materials

– Expedite issues

– Pricing analysis

• Problem resolution procedures– Improve or else

– Continuous improvement process

• When to end the contract


Creating a Contract

• Is a long-term agreement with a vendor to provide a material or service

– For an agreed upon period of time

– At a negotiated price or quantity

• Can be created manually or with reference to purchase requisition, Request for Quote (RFQ)/quotation etc.




Two Types of Contracts

• Quantity contracts are agreements with a particular vendor to purchase a specific quantity of materials. Example: Target quantity of 50,000 meters of electrical wire at $2/meter. (MK)

• Value contracts are similar to quantity contract except the agreement is to purchase an established monetary value of materials. Example: Target value of $100,000 for electrical wire. (WK)


Quotations/Contracts Process

• Requirement for material is identified

• Process followed to select a vendor

– Request for Quotation (RFQ)

– Maintaining a Quotation

– Comparison of Prices

– Creating a Contract

– Creating a Release Order


Request for Quotation (RFQ)

• Is an invitation to a vendor to indicate their terms and conditions (in particular, their price) for the supply of a material or the provision of a service by submitting a quotation

• Identifies the required material, quantity, and delivery dates




Quotation

• A quotation contains the vendor's pricing and conditions for providing the material or service stated in the Request for Quotation (RFQ)

• In the SAP component Materials Management (MM) Purchasing, the RFQ and quotation are the same document. You enter the vendor's pricing and conditions in the original RFQ.


Maintaining a Quotation

• Enter each vendor's quotation in the associated Request for Quotation (RFQ)

• Compare prices using the price comparison list

• Store the best quote in an info record

• Optionally, send rejection letters to the losing bidders


Comparison of Prices

• You can compare the prices from all quotations from the competitive bidding process using the price comparison list

• The comparison list ranks the quotations by item from lowest to highest price




Creating a Release Order

• Purchase order that references a contract is called a release orders, they specify:

– Number of the contract

– Quantity to be released

– Delivery date

• Release order documentation (open quantity, quantity released to date, total value) is automatically updated against the contract when a release order is created


Creating a Release Order (continued)

• The vendor data, price data, and the delivery terms and conditions are copied directly to the release order

• Release orders can be created from a proposed purchase requisition generated off an Materials Requirement Planning (MRP) run (net requirements)

– Manually

– Automatically



107. Create Purchase Outline Agreement (Contract) for Stock Items

108. Run Materials Requirements Planning – Single Item, Single Level

109. Convert Proposed Purchase Requisition to Release Order

110. Review Outline Agreements

111. Create Goods Receipt

112. Create Invoice Receipt from Vendor

113. Post Payment to Vendor



Chapter 14

Sales and Distribution (SD)

- Organizational Structures -




Organizational Data

• A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions

• Are static data and are rarely changed

• The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured




Components of Sales and Distribution

Sales andDistribution

(SD)

SalesSupport

Sales

CreditMgmt.

ShippingTransport

Billing

ForeignTrade

SalesInformation

System

MasterData


Sales Organization

• Sales Organization

– Sells and distributes products

– Negotiates terms of sales

– Responsible for these business transactions

• Critical organization element to the definition of business markets

• A sales transaction is linked to only one Sales Organization


Sales Organization – (continued)

US SalesS000




Distribution Channel

• Identifies how products and services reach the customer

• Can be assigned to one or more Sales Organizations


Distribution Channel – (continued)

Retail DistChannel (RE)

Wholesale DistChannel (WH)

US SalesS000


Division

• Often times used to define product line distribution

• Organization level to which customer specific information and requirements are maintained (e.g. pricing, partial delivery)

• Assigned to one or more Sales Organizations




Division – (continued)

Medical Division Chemical Division

US SalesS000


Sales Area

• Sales Area comprised of:

– Sales Organization

– Distribution Channel

– Division

• Will be used to link together the organizational aspects of sales to customers

• Used for statistical analysis


Sales Area – (continued)



US SalesS000

MedicalDivision

ChemicalDivision

MedicalDivision

ChemicalDivision




Sales Area – (continued)



US SalesS000

MedicalDivision

ChemicalDivision

MedicalDivision

ChemicalDivision


Internal Sales Organization

• Typically defines a territory or market

• Linked to one or more Sales Areas

• Optional organization structure


Sales Office

Eastern Sales Western Sales

US SalesS000




Sales Group

• Sales Group

– Sub-division of a sales office, territory or market


Sales Person

• Sales Person

– Defined in Human Resources (HR) — Personnel Admin.

– Specifically defines an individual rather than a position (sales rep.) in sales processing


Internal Sales Organization

Eastern Sales Western Sales

US Sales

S000

NortheastSales Group

SoutheastSales Group

NorthwestSales Group

SouthwestSales Group

Salesperson1

Salesperson4

Salesperson3

Salesperson6

Salesperson5

Salesperson8

Salesperson7

Salesperson2




Shipping and Loading Points

• Shipping Point

– Location that performs all delivery related activities

– Assigned a factory calendar

– A delivery can be processed from only one shipping point

• Loading Point

– A subdivision of the shipping point used for more specialized handling


Shipping Organization

PlantP000

Freight DockFD00

Express DockED00

Rail DockRD00

LoadingPoint 3

LoadingPoint 2

LoadingPoint 1

LoadingPoint 4


114. Create Sales Organization 115. Assign Sales Organization to Company Code116. Define Distribution Channels 117. Assign Distribution Channels to Sales

Organization118. Define Division119. Assign Division to Sales Organization120. Setup Sales Areas121. Define Common Distribution Channels122. Define Common Divisions






123. Define Loading Groups

124. Create Shipping Point

125. Assign Plant to Sales Organization and Distribution Channel

126. Assign Shipping Points to Plant

Chapter 15 – Part 1


– Material Master Data –






Master Data

• Master data is relatively fixed

– Material Master Data

– Vendor Master Data

– Purchasing Information Record

– General Ledger Master Data

• Before making the Master Data configurations, you must have completely defined the organizational structures


Master Data Core Elements

Material

Customer

Pricing

Master Data


Material Master – Sales Views

• Sales: sales org. 1

• Sales: sales org 2

• Sales: general/plant

• Foreign trade export

• Sales: text Barrel Pen




Material Master –Sales: Sales Org. 1 View

• General Data– Base Unit of Measure

• The Base Unit of Measure is the unit of measure in which stocks are managed within your company.

– Division• You may enter the Division which your product is in for sales

(defaults if entered in the Basic data screen).

– Material Group• A key that’s used to group several materials or services for

analysis/reporting as well as search by match code.

– Sales Unit• The unit of measure in which the material is sold, if left blank then

uses the base unit of measure.


Material Master –Sales: Sales Org. 1 View (continued)

– Delivering Plant• Plant from which the material is available for sale.

– Cash discount• Indicator used for materials, which allow for a cash discount.

– Conditions• Pricing procedure for the material

• Tax Data

– Tax classification material• The indicator with which the system determines output tax for

the material when processing sales and distribution-specific documents



• Quantity Stipulations– Minimum Order Quantity

• Minimum quantity a customer may order.

– Minimum Delivery Quantity– Minimum quantity that may be delivered to a customer

– Delivery Unit• The delivery unit consists of a number and a unit of

measure. In the case of a delivery unit of 30 pieces, 30, 60, 90, and so on pieces can be delivered, but not, however, 100 pieces.




Material Master –Sales: Sales Org. 2 View

• Grouping Terms– Material Statistics Group

• Determine which data the system updates in the logistics information system

– Material Pricing Group• A way of grouping materials to which you want to apply the

same conditions

– Volume Rebate Group• Group definition used for rebate settlement.

– General Item Category Group• Materials grouping that helps the system to determine item

categories during sales document processing.



• Grouping Terms– Item Category Group

• A grouping of materials that the system uses to determine item categories during the processing of sales documents.

– Commission Group• Commission group to which the material is assigned.


Material Master Sales: General/Plant View

• General Data– Base unit

• The unit of measure in which items are managed in the company

– Gross weight• Used to check storage capacity in warehouse

– Net weight• Weight excluding packaging and extras – this is needed for

sales and distribution

– Avail. Check• Option to do an availability check for orders and MRP




Material Master Sales: General/Plant View (continued)

• Shipping Data (times in days)– Transportation Group

• Group materials that have the same transportation requirements. For example, bulk stock materials

– Loading Group• Loading groups define materials that have the same loading

requirements, such as forklift truck, or crane.


Material Master Sales: General/Plant View (continued)

• Packaging Material Data– Material group Pack Materials

• Materials that require similar packaging materials

• General Plant Parameters– Negative stock

• Indicates if negative stocks of the material are allowed at the plant

– Profit Center• Identifies the profit center in the current controlling area


Material MasterSales: Sales Texts View

• Sales Texts – Exchange of information throughout the logistics

chain– In sales and distribution, this exchange of

information is supported by texts in master records and documents

– You can define as many text types as you require (sales texts, shipping texts, internal notes, supplement texts etc.) for master records and documents




127. Create Sales Views for Trading Goods

128. Create Sales Revenue Account

129. Create Sales Revenue Deduction Account

Chapter 15 – Part 1 – Exercises

Chapter 15 – Part 2


- Customer Master Data -






Master Data

• Master data is relatively fixed

– Material Master Data

– Vendor Master Data

– Purchasing Information Record

– General Ledger Master Data




Material

Customer

Pricing

Master Data


Customer Master

Customer Master Data is created by Sales Area

• Sales Organization • Distribution Channel• Division

US SalesS000

DistributionChannel - RE

Division - 01

Sales Area




Customer Master - (continued)

Customer 43

General Data

Company Code DataFinancial Accounting (FI)

Sales DataSales and Distribution (SD)


Customer Master

• A master record must be created for every customer

• General data, Company Code data (Financial Accounting - FI), and Sales Org. data (Sales and Distribution - SD)

Sales Org. dataSalesShippingBillingPartner Usage

Company Code dataAccount MgmtPayment

transactionsCorrespondence

General dataAddressControl dataPayment

transactions


General Data – Address

AddressCustomer NameSearch TermStreet addressCity, Region Postal codeCountry

CommunicationLanguageTelephone, Fax, E-Mail

Customer Master General Data – Address




Customer Master General Data – Control Data

• Account Control – Vendor– Authorization– Trading partner– Group key

• Tax Information– Tax codes– Fiscal address– Country code– City code

• Reference Data / Area


Customer Master General Data – Payment Transactions

• Bank Details– Country – Bank Key– Account holder– Bank Account– Control Key– Collection


Customer Master General Data – Marketing

• Classification– Nielsen ID– Customer classification– Industry– Industry codes

• Operating Figures– Annual sales– Number of employees– Fiscal year variant

• Sales Prospecting– Legal status




Customer Master General Data – Unloading Point

• Unloading Points– Unloading point– Default– Calendar key– Default Unloading Point – Goods receiving hours


Customer Master General Data – Foreign Trade

• Export Data– Country key– TDO Date (Table of Denial Orders)– SDN Date (Specially Designated Nationals)– Boycott Date

• Usage– Mainly civilian usage– Mainly military usage

• Classification– Biochemical warfare– Nuclear nonproliferation– National security


Customer Master General Data – Contact Persons

• Contact Person– Name– First name– Department– Function




Customer Master Company Code – Acct Information

• Accounting Information– Rec. Account– Sort key– Head office

• Interest Calculation– Interest indicator– Interest cycle – Interest calculation frequency in months– Last interest run

• Reference Data– Previous account number– Buying group


Customer MasterCompany Code – Payment Transactions

• Payment Data– Terms of Payment– Tolerance group

• Automatic Payment Transactions– Payment methods– Payment block– Alternative payer– Grouping key– Lockbox


Customer MasterCompany Code – Correspondence

• Dunning Data– Dunning procedure– Dunning block– Dunning recipient

• Correspondence– Accounting clerk– Acct at customer– Customer user

• Payment Notices To– Customer – Sales– Accounting – Legal




Customer Master Company Code – Insurance

• Export Credit Insurance– Policy Number– Institution Number– Amount Insure– Valid Until– Lead Months– Deductible


Customer MasterSales and Distribution – Sales

• Sales Order– Sales District– Sales Office– Sales Group– Order Probability– Item Proposal

• Pricing / Statistics– Price Group– Customer Pricing Procedure– Price List Type– Customer Statistical Group


Customer MasterSales and Distribution – Shipping

• Shipping– Delivery Priority– Shipping Conditions– Delivering Plant– Order Combination

• Partial Delivery– Complete Delivery Required By Law– Partial Delivery per Item– Max Part Deliveries– Under/Over delivery Tolerances

• General Transportation Data– Transportation Zone




Customer MasterSales and Distribution – Billing

• Billing Section– Subs. Invoice Processing– Rebate– Price Determination– Invoicing Dates

• Delivery and Payment Terms– Incoterms– Payment Terms

• Accounting– Account Assignment Group

• Taxes– Tax Classification


Customer MasterSales and Distribution – Partner Functions

• Partner Functions– Partner Function (PF) – Number – Partner Description

• Sample Listing of Partner Functions Types• SP – Sold-to-party• BP – Bill-to-party• PY – Payer• SH – Ship-to-party


Business Partners

• Defines all of the parties involved in a business transaction

• Differentiates between their roles– Customer– Carrier– Employees– Etc.




Business Partners

• The system will automatically assign a business partner to the customer master and to any transaction

• There are four default business partner – Sold-to– Ship-to– Bill-to– Payer

• They may be the same or different.• More business partners can be added to carry

out additional business transactions


Customer Account Group

• Customer masters are assigned to a customer account group

• Through field status maintenance, account groups can be setup for one-time customers, regional customers, internal …

• The customer account group controls both type and number range assignment for customers


Field Status

• Field status controls the use of each field within the customer master determining whether a field is required, optional, suppressed or display only

• Field status controls are also relevant to a specific activity — create, change, or display




Business PartnersSold-to Party

• Customer who orders• Can default for all partner

functions — sold-to, ship-to, payer, bill-to

• Primary type of business partner

• Independent and cannot be linked to other sold-to partners

Sold-to

Ship-to

Bill-to

Payer


Business Partners Ship-to Party

• Receive delivery

• Can be linked to more than one sold-to address

Sold-to

Ship-to

Bill-to

Payer


Business Partners Bill-to Party

• Partner who is delivered the invoice


Sold-to

Ship-to

Bill-to

Payer




Business PartnersPayer

• Partner who pays the bill


Sold-to

Ship-to

Bill-to

Payer


Single and MultipleShip-to Parties

Single ship-to

Multiple ship-to’sSingle payer

Payer: 10Bill-to: 10Ship-to: 10

Sold-to: 10

Payer: 10Bill-to: 10Ship-to: 10

Sold-to: 10

Ship-to: 11


Business Partners

Sold-to

Bill-to

Payer

Ship-to

Ship-to

Ship-to

Ship-to

Ship-to

Ship-to

Sold-to




130. Review Sold-to, Ship-to, and Bill-to Account Groups

131. Create Customer

132. Create Ship-to Party

133. Assign Ship-to Party to Customer

Chapter 15 – Part 2 – Exercises

Chapter 16


- Pricing Master Data -






Master Data

• Master Data is relatively fixed– Material Master Data– Vendor Master Data– Purchasing Information Record– General Ledger Master Data




Material

Customer

Pricing

Master Data


Pricing

• “World-class” functionality• Easily tailored to meet business needs• Very robust• Various options for pricing materials




Standard Pricing Process

• Standard Pricing– Calculates the gross price– Then applies

– Discounts– Surcharges – Applicable Taxes

– Calculates the final price

• Final price = gross price - discounts + surcharges + taxes


Cost-Plus Pricing Process

• Cost-plus pricing– Captures the base cost– Then applies

– Markup– Discounts– Surcharges– Applicable Taxes

– Calculates the final price

• Final price = cost + markup - discounts + surcharges + taxes


Pricing Components

• Pricing uses tables to match the condition of order to the applicable pricing routine

• These routines can – Add/Subtract amounts, percentages– Give dollar, weight, quantity breaks/additions– Accrue




Pricing Procedure

• Pricing uses one of possibly many procedures based upon – Item– Customer– Order type– Sales Area

• The procedure will then apply– Prices (Gross)– Discounts & Surcharges– Freight– Taxes


Pricing Procedure – (continued)

• Pricing conditions for each item on the order • Pricing condition uses

– Pricing procedure– Access sequence– Conditions type

• Determines adjustments and price


Line Item in

Sales Order

Pricing ProcedureDetermination

Pricing ProcedureContains List ofCondition Types

Condition TypesPoint to

Access Sequence

Access SequenceProvides the Search

Order for Pricing

Sales AreaS000-RE-01

Doc. Pric. Proc.OR=A

Cus. Pric. Proc. 43 = 1

PPEN000

Condition Type PR00 = Price

Access Sequence PR02 = Price10 – Customer/material20 – Price list cat./currency/material

30 – Material

30 – Material Price = $9.50

Pricing Procedure = RVAJUS

Pricing Process




Line Item

Pricing Proced.

Det.

CTyp points to

Access Seq.

Access Seq. points to

Cond. Tbls.

Cond. Tbls. contain the Item Pricing

PPEN000Sales Area

Doc. PPCust. PP

PR00Points to

PR02

PR02Points to

Cond. Tables

Cust. / Mat.Price List / Cur / Mat. Material

N / AN / A

$ 9.50

Pricing Process


Price Agreements

• Standard price agreements– Product– Customer– Customer & material– Customer group &

material group

• Detailed price agreements– Pricing scales– Rebates– Customer expected

price


Credit Limits and Checking

• Define automatic credit limit checks to your company’s requirements

• You can also define at what point the system carries out these checks (order, delivery, goods issue, and so on)

• A credit representative is automatically alerted to a customer’s critical credit situation as soon as order processing starts

• Employees can be automatically notified of critical credit situations via internal mail




Credit Check

• You can use this function at any time within service processing to call up information about the current credit status of a customer

• Credit limit can be checked manually or automatically

• The system generally checks the planned costs without tax

• If a customer has exceeded their credit limit, the system issues a warning


Credit Check – (continued)

• The checks can be carried out at various times during the sales order cycle, from order receipt to delivery

• You can define a credit check for any valid combination of the following data:• Risk category• Document credit group• Credit control area



134. Create Material Prices

135. Create Customer Specific Material Price

136. Create Customer Discount

137. Establish Credit Limit for Customer



Chapter 17


- Rules -



Ru

les

SD


Rules

• Defines the parameters for Master Data and Transactions

• Determines functionality for Master Data and Transactions

• Relatively fixed

• Changes as policy changes




Pricing Procedure Assignment

Pricing Procedure Assignment uses the

combination of:

• Sales Area

• Document Pricing Procedure

• Customer Pricing Procedure

Each combination of these has a pricing procedure assigned


Availability Check

• In determining the material availability date the system can include specific stocks if selected, such as:– Safety stock– Stock in transfer– Quality inspection stock– Blocked stock– Restricted use stock– All movements of stock


Credit Checking

• Static Credit Limit Check – Open Orders– Open Deliveries– Open Billing documents– Open Items (accounts receivable)

• Dynamic credit limit with credit horizon check (future dates)

• Credit check to maximum document value (per order)




Shipping Functions

• Shipping Point Determination– The shipping point is selected for each line item

based on the shipping point determination process– Shipping point based on:

– Shipping condition– Loading group– Delivering plant


Shipping Functions – (continued)

• Route Definition– Delivery method and the transit time – ‘Dummy’ routes can be used to easily define transit

time

• Route Determination– Proposed route is chosen using

– Shipping point– Destination country– Transportation zone – Shipping condition


Revenue Assignment Determination

• Transfers billing values from the Sales and Distribution to Finance

• Used to recognize revenue• Keys used to allocate revenue to the proper

account





• Defines the G/L accounts that billing entries are posted to — revenue, sales deductions, surcharges, freight charges, etc.



138. Assign Sales Areas to Pricing Procedure

139. Define Availability Check for Sales Orders

140. Assign Sales Document to Credit Check

141. Create Shipping Point Determination

142. Create Revenue Account Assignment Key

143. Check Stock Status

Chapter 18


- Transactions -





SD


Transaction Data




Document Types

Inquiry Quotation Returns Contract

Sales Order Cash Sales ConsignmentScheduling

Agreement

Rush Order Debit MemoReturnable

Packaging

Credit

Memo




Order Processing Functionality

• Delivery scheduling

• Availability check

• Transfer of requirements to Material Requirements Planning

• Pricing

• Credit check

• Shipping point and route determination

• Foreign trade and license processing

• Document flow


Delivery Scheduling

• Structure of sales documents

Header

Line Item # 1

Line Item # 2

Schedule Line # 1

Schedule Line # 1

Schedule Line # 2


Delivery Scheduling – (continued)

• Automatic scheduling of essential shipping activities

• Calculated using defined activity times

• Resulting in scheduled activity dates

• Determined using backward and forward scheduling rules




Delivery Scheduling Terminology

• Transportation lead time– Time required to schedule transportation

• Pick/Pack time – Time required for picking and packing

• Load time – Time required to load

• Transit time– Time required to transport goods from shipping point

to ship-to


Backward Scheduling

RequestedDelv. Date

GoodsIssueLoading

Material

Availability

OrderDate

Transp.

Sched.

TransitTime

(2 days)

LoadingTime

(1 day)

Pick & PackTime

(2 days)

Transp.Sched.Time

(1 day)

2nd 3rd 4th 5th 6th1st


Forward Scheduling

TransitTime

(2 days)

LoadingTime

(1 day)

Transp.Sched.Time

(1 day)

NewDelv. Date

1st 3rd 4th 5th 6th 2nd

Pick & PackTime (2 days)

7th

RequestedDelv. Date

GoodsIssueLoading

Material

Availability

OrderDate

Transp.

Sched.




Availability Check

• Determines the material availability date• Considers inward and outward movement of

inventory — customizable• Influences partial deliveries by

– Proposing a quantity that can be delivered on the requested date (complete delivery)

– Determines earliest date for full delivery– Determines the number and dates for partial

deliveries to fulfill the order


Availability Check – (continued)

• In determining the material availability date the system can include specific stocks if selected, such as:

– Safety stock

– Stock in transfer

– Quality inspection stock

– Blocked stock

– Restricted use stock

– All movements of stock


Transfer Requirements toMaterial Requirements Planning

• Ordered quantities are passed to Material Requirements Planning

• Controlled by the schedule line category

• Blocking of documents can affect requirements passing — delivery block




Pricing

• “world-class” functionality

• Easily tailored to meet business needs

• very robust

• Various methods for pricing materials


Credit Check

• Efficient means to implement credit management

• Integrated with Financial Accounting (FI) -- Via credit control area

• Automatically alerts when a credit check fails

• Comprehensive credit management reporting


Shipping Point and Route Determination

• A shipping point is determined for each line item — shipping point determination

• A delivery can only be processed from one shipping point

• Routes - route to be traveled & transit time are determined using customized rules

• Routes can be used to simply define transit time




Foreign Trade and License Processing

• Predefined trade areas — NAFTA, EU

• Automated reporting for trade areas

• Automated controls

– License management

– Embargo lists

– Control by customer, country, product, point in time


Document Flow

• The document flow feature allows you to find the status of an order at any point in time. The SAP system updated the order status every time a change is made to any of the documents created in the customer order management cycle (Order to Cash).



144. Create Sales Order145. Check Stock Status146. Create Delivery Note for Sales Order147. Check Stock Status148. Pick Materials on Delivery Note149. Post Goods Issue150. Check Stock Status151. Bill Customer152. Post Receipt of Customer Payment153. Review Document Flow



Chapter 19


- Transactions -



SD


Transaction Data






Material Listing and Exclusion

• Inclusions or exclusions (availability) of material for a customer or a customer group

• Material Listing — products that can be sold

• Material Exclusion — products that cannot be sold


Product Substitution Material Determination

• Substitution of materials during sales order processing

– Automatic

– Manual

• Examples:

– Substitute a standard product with an appropriate replacement material

– Substitute based on a customer preference

– Substitute based on selection list (manual)


Customer Material Info Record

• Data on a material defined for one specific customer is stored in the customer material information records

– Customer-specific material number

– Customer-specific material description

– Customer-specific data on deliveries and delivery tolerances





154. Create Customer Material Info Record 155. Create Sales Order Using Customer Info

Record156. Create Delivery Note for Sales Order157. Pick Materials on Delivery Note158. Post Goods Issue159. Bill Customer160. Post Receipt of Customer Payment

Chapter 20


- Transactions -



SD




Transaction Data




Scheduling Agreements

• Defines specific product quantities and delivery dates for a customer

• Schedule lines and processed through standard delivery processing

• Availability check is performed during creation and quantities are passed to MRP

• System automatically updates delivered quantities


Scheduling Agreements(continued)

Delivery02/10 150

Delivery05/10 150

Delivery08/10 150

Delivery11/10 300

SchedulingAgreement

Date Qty02/15 15005/15 15008/15 15011/15 300





161. Create Scheduling Agreement

162. Process Deliveries for a Scheduling Agreement

163. Display Scheduling Agreement

164. Check Stock Status

165. Bill Customer

166. Run Customer Credit Check

167. Post Receipt of Customer Payment

Chapter 21


- Transactions -



SDFI MM




Transaction Data




Item Proposal

• Frequently occurring combinations of material and quantities used by a customer

• System can suggest the item proposal during order entry

• Transferred into a sales order document

• Selected from a selection list

• Can be assigned to more than one customer master records



168. Create Item Proposal

169. Assign Item Proposal to Customer

170. Create Sales Order Using Item Proposal

171. Create Sales Order Value Discount

172. Run Material Requirements Planning

173. Create Purchasing Information Record for PPEN

174. Assign Source of Supply

175. Create Purchase Order via Requisition Assignment List

176. Create Goods Receipt

177. Create Invoice Receipt from Vendor

178. Post Payment to Vendor



Chapter 22


- Transactions -



SDFI MM


Transaction Data






Shipping Overview

• Comprehensive functionality to support picking, packing and loading functions

• Work list and deadline monitoring

• Functions with backorder processing

• Tightly coupled to the MM and FI modules

• Facility for transportation management


Shipping Overview – (continued)

OrderCombination

Order 1

Order 2

Order 3

Delivery 8…12

PartialDelivery

Order 4

Delivery 8…13

Delivery 8…14

Delivery 8…15

CompleteDelivery

Order 5

Delivery 8…16



• Delivery creation activities

– checks order and materials to determine if a delivery is possible

– delivery block, incompleteness

– confirms availability

– confirms export/foreign trade requirements

– determines total weight & volume





• Delivery creation activities

– generates packing proposal

– considers partial deliveries

– updates route assignment

– assigns picking location

– determines lot batches

– updates sales order: status, delivery qty


Delivery Notes

• Initiates the delivery process

• Control mechanism for the process

• Changes to delivery are allowable - products, quantities

Picking

Packing

Loading

Post Goods Issue

Delivery Note

Each step in the delivery

process updates the

delivery note status


Delivery Due List

• Produces a work-list of deliveries

• Encompasses deliveries and transfers

• Can be scheduled to run in batch

• Automatically combines deliveries




Picking

• Quantities based on delivery

• Assigned date when picking should begin

• Automated storage location assignment

• Supports serial number tracking and batch management

• Integrated with Warehouse Management (WM)


Packing

• Identifies which packaging is to be used for specified products

• Identifies and updates accounts associated with returnable packaging

• Tracks the packed product by container

• Insures weight/volume restrictions are enforced


Goods Issue

• Event that indicates the change in ownership of the products

• Reduces inventory

• Automatically updates the G/L accounts

• Ends the shipping process and prevents changes to the shipping documents




General Ledger

Goods Issue – (continued)

Cost of Goods Sold

1000

Debit Credit

Inventory

1000

Debit Credit


Billing Overview

• Automated invoicing based on sales orders and/or deliveries

• Functionality for processing credit/debit memos and rebates

• Integration with Financial Accounting (FI) and Controlling (CO)

• Updates customer’s credit data

• Can create pro forma invoices


Billing Overview – (continued)

Sales Invoice

Sold To:Rushmore Group

Sales Org: S001Dist Channel: REDivision: 01

Conditions/Price:$500

General Ledger Account Assignment

Debit CreditCustomer A/R Recon

500

RevenueDebit CreditDebit Credit

500 500




Billing Methods

Collective Invoicing

Delivery based Invoicing

Delivery 8…34

Delivery 8…33

Order 14

Order 9

Delivery 8…56

Invoice 9…68

Order 6Delivery 8…20

Delivery 8…21

Invoice 9…45

Invoice 9…46

SplitInvoicing

Order 32 Delivery 8…86

Invoice 9…92

Invoice 9…91


Billing Plans

• Periodic — total amount for a planned billing period

• Milestone — distributing the total amount over multiple billing dates - typically used with the project system (PS)

• Installment — evenly proportioned amounts and defined payment dates

• Resource related — consumed resources such as service or consulting


Billing Documents

• Explicitly specify documents

• Billing due list — builds a work list of invoices that should be generated

• Automatic posting to Financial Accounting (FI)





179. Run Delivery Due List

180. Pick Materials on Delivery Note

181. Post Goods Issue

182. Run Billing Due List, Invoice Customers

183. Post Receipt of Customer Payment

Chapter 23


- Transactions -



SDFI MM




Transaction Data




Customer Return

Customer ReturnOrder received

GoodsReceipt

CreateCredit Memo

QualityInspection

Paymentto Customer

DeliveryNote


Customer Return – (continued)

1

2

3

Order 14 Delivery 8…56

Return Order Return Delivery

Invoice 9…68

PaymentCredit Memo

QualityInspection

Return to Inventory





• Returns document

– Billing block can be proposed

– Use the Order reason field to identify the reason for the return

– Full access to pricing and ability to re-price

• Return delivery

– Issues a goods receipt to place material into inventory



• Credit memo

– Billing block must be cleared from Return

– Posts to Financial Accounting (FI)

– Can be processed in batch (background)

– Can be processed collectively (grouped)



184. Create Goods Return Order185. Create Delivery Note for Return Order186. Receive Materials from Goods Return Order187. Check Document Flow188. Review Stock Overview189. Transfer Returned Stock to Unrestricted Use190. Post Customer Credit191. Create Billing Document192. Release Billing Document to Accounting193. Check Document Flow194. Post Payment of Customer Refund 195. Check Document Flow



End – Phase I