INTRODUCTION TO SAP:
What is SAP?
SAP is being a German company, is an acronym for “Syssteme
Anwendungen .Producte in der Datenverarbeitung”.This is translated into
English as “Systems, Applications, and Products, in Data Processing.”
The SAP system consists of complex integration of different
modules or applications, each representing part of the basic business
process.
SAP runs on a fourth generation programming language called
Advanced Business Application Progarmming (ABAP).
SAP (Systems, Applications, and products in Data Processing)
is the leading ERP (Enterprise Resource Planning) software package. SAP
was the first to integrate a corporation’s worldwide functions tightly into one
application. Five former EBM programmers founded SAP AG in Germany,
and released the first version of their software, SAP R/2, in 1979. Its
domination of the market occurred during the 1980s, expanding first
throughout Europe (early 1980s) and then North America (1988). SAP R/3,
an advanced, client-server based versions of the popular r/2 product, was
released in 1992 and sparked a stunning takeover of America’s largest
businesses –44% of US companies were using it within five years of its
expansion. In 1999, SAP introduced its newest major product upgrade.
Named mySAP.com to emphasize its shift to an e- business focus,
myAP.com builds on the strengths of the SAP r/3 product in a fully Internet
enabled architecture. My SAP.com also incorporates Sap’s newest business
applications for CRM, supply chain management (SAP APO), and Data
Warehousing (Business Information Warehouse or BW). Prior to the
introduction of mySAP.com, these applications had been incorporated as
add-ons to SAP r/3 and were known as New Dimension products.
Why SAP is used:
Companies both large and small traditionally utilized multiple
software applications from various vendors or developed their own
applications in-house to process their critical business transactions. Prior to
the proliferation of SAP, most companies supported a full staff of program
developers who wrote their necessary business applications from scratch or
developed highly complicated interfaces to allow pre-packaged applications
from several vendors to pas data back and forth as necessary to complete any
full cycle business transaction. This process was extremely costly, timeconsuming, and error prone. It also made it very difficult for business
managers and executives to get a timely, comprehensive view of how their
business was doing at any given time. SAP was the first and, to date, the
most successful company to integrate nearly all business processes into one
software solution for use in any business in any business in any country in
the world. Not only did SAP’s applications reduce the need for complex and
redundant in-house development, but it also created new business
efficiencies by automating many tasks across a corporation and
incorporating business best practices into a updated version of its software.
Using AP’s products, companies can now integrate their accounting, sales
distribution, manufacturing, planning, purchasing, humnaresources, analysis
and other transactions into one application. SAP applications thus provide an
environment where “transactions are synchronized throughout the entire
systems, meaning a sales-order entry triggers action’s within each
application that relates and is relevant to the transaction.”
SAP Company Timeline
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1972: SAP AG founded in Germany
1979: SAP R/2 introduced for mainframe computers
1980’s: Europe and N. American expansion
1992: SAP R/3 released as client-server application
1996: SAP R/3 becomes partially Internet enabled
1997: Develops and launches new Dimension product line including
CRM, SCM and Data Warehousing solutions
1999: SAP announces mySAP.com, the next generation of its
Enterprise Application system based on the Internet architecture
What is the R/3 System?
According to June 1995 study by IDC (International Data
Corporation), SAP with its R/3 systems the most successful supplier of
client/server applications. The r/3 system i9s based on SAP’s more than 20
years of development experience in real –time business applications. “R/3”
stands for Real – time System, Version 3. its predecessors, “r/1” and R/2”,
were likewise real –time systems, “SAP R/3 SYSTEMS USES THE
CLEINT-SERVER TECHNOLOGY”. It is one of the applications of clientserver technology.
History of the R/3 System:
The milestones in the evolution of the R/3 System illuminate
the close link between this solution and changes in the Data Processing
industry. The R/3 System was developed for computer platforms, which at
the beginning of the project had only j7st emerged in the laboratories of
hardware manufactures, or which were still only objects of theoretical
consideration.
In 1987 May IBM announces the SAA (System Application
Architecture) concept for business applications, but SAA failed, because it
was limited to only for IBM platforms and did not want to integrate UNIX
systems into architecture, its fundamental ideas were nevertheless
groundbreaking for future development. Then SAP began to turn thee
concepts into the new r/3 though with abrader approach that included open
systems.
The first R/3 systems applications are presented at the CeBIT
Conference in Hanover, Germany. In October of this year, the first R/3
customer goes live. In April, Microsoft and SAP begin cooperation to
integrate PC applications like word, excel, project, and access with the
business applications. At this point most R/3 customers already use
Windows systems for presentation. The R/3 System experiences
overwhelming success in the American market during this year.
In 1994SAP opens a new development center in the USA, for
development of new software technology for the R/3 system.
The technical architecture of R/3 system:
Principle of the basis architecture:
The R/3 system is based on software-oriented multiplier
client/server architecture. The R/3 system as a modular structure with
methods for controlling master –slave relationships between indivi9dual
software components
The structure of R/3 system follows a layer model with largely independent
function layers connected by interfaces. The main layers are
 Basic layer
 Application layer
The basis layer contains the middleware of the R/3 system. This
middleware makes the applications independent of system, and
communication system used and ensures Optimal handling of the business
transitions
The application layer sits on the basis layer. The application
layer implements the business functions and process of the R/3 system.
The basis layer is written in the C and C++ a program language
while the application layer is written4GL language ABAP/4 (Advanced
Business Application Programming).
The multiplayer architecture of the R/3 sytem makes possible
the decoupling the application logic from the presentation and the data base,
which is the prerequisite for load distribution in client/server configurations,
even in very large installations with several thousands users. Implementation
of separate servers for particular tasks makes optimal use of the performance
potential and the different cost structures of available hardware architecture.
Examples of servers that execute particular task are
Database server for the central database. As well
as single processor systems, multiprocessor systems and cluster
c0nfiguration can be used
Powerful, inexpensive single or multiprocessor
computers for the application logic. Application servers need not have
monitors or hard disks. The no of computers and processors used can
adjusted to meet performance requests
Computers for additional special tasks, for
example optical archiving, delivery o0f x400 messages, mail services, or
offline back ground processing
Presentation servers under windows operating
system/2, UNIX, for implementation of graphical user interface.
The R/3 basis architecture has the following features:
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Scalability
Portability
Interoperability and openness
Customizability
 Graphical user interfaces
Scalability:
The multilayer client/server architecture allows easy
adjustment of the installed computer performance, for instance in the case of
amended load profiles due to increasing number of users or due to the use of
additional application components.
Portability:
The portability of the R/3 system secures the investments of
R/3 customers in the application software and in the design of business
operations, since the life of the business applications software up to 10 years
or more, is considerably longer than the short innovation cycles of hardware
components, operation system and databases.
Interoperability and Openness:
The integration of the data and functions of R/3 applications
with external applications using open, standardized interfaces like OLE
(Object Linking and Embedding.
Graphical User Interface:
SAP has also developed a user interface called SAP graphical
user
interface
(SAPGUI),
WHICH
RUNS
ON
windows
3.1/95/98/NT,Motif,OS/2 presentation manager, and Macintosh.
All SAP GUIs look identical, regardless of the operating
system on which they are running. This interface varies according to the
version of SAP or SAPGUI you are running, however the difference is
minimal. The appearance of the screens and menus is configurable. SAP
GUI is the standard-oriented graphical user interface of the R/3 system. It is
optimized for typical business operations such as those in logistics or
accounting.
R/3 configurations:
Different R/3 configurations are
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Central configuration
Principle configuration
Two layer configuration
Three or more layer R/3 configuration
In Central Configuration one computer handles all
processing tasks.
In principle Configuration this corresponds to conventional
mainframe processing with x terminals instead of alphanumeric terminals.
NETWORK COMMUNICATION:
TCP/IP was chosen for communication within R/3 client/server
system because it is the standard transport protocol for operating system and
it is available on all operating system is supported by the R/3 system.
Connection to the R/3 system to IBM mainframe is achieved
through SNA protocol LU6.2. R/3 architecture can be expanded to include
additional protocols for example OSI transport protocols, since the
independence of R/3 applications from the underlying system interfaces is
assured even in network communications.
Services provided by the R/3 system:
The individual program modules of the R/3 system provide
different services. The fundamental services are
 Presentation services
 Application services
 Database services
THE APPLICATION INTEGRATION:
SAP is an enterprise resource planning (ERP) software product of
integrating multiple business applications, with each application
representing a specific business area. SAP homogeneously produces a
product that is capable of great depth in a specific application or area while
still being part of the overall bigger picture.
These applications update and process transactions in real time,
thus allowing seemingly effortless integration and communication between
areas of a business. Thus one can create a sales order and observe the update
order values in sales information system (SIS) immediately, without having
to wait for day-end or month-end processing.
CUSTOMIZING TOOLS:
The cornerstone of SAP is its ability to be configured to meet
the needs of your business. This is done by customizing or adapting the
system to your business requirements, which is the process of mapping SAP
to your business process. A business process would be, for example, a sales
order entry or delivery creation.
This process of mapping SAP to your business process is
generally time-consuming and costly, as one need to fully understand the
business process procedures, find a solution in SAP to meet these
requirements, and then customize the solution within the system. The basis
for the book is to teach you how to develop and enhance the sales and
distribution module of SAP to its fullest potential using these tools in order
for you to effectively meet your business requirements.
Since SAP version 3, the reference implementation guide
(IMG) for R/3 customizing has been available. Until this version,
customizing had to be done in the menu aths of the system with considerably
more hassle. For the purpose of this book, we will be using SAP Version
4.0b as a reference.
This screen is the backbone for SAP and the entries placed in it
determine how the system functions. We will be using this screen
extensively for the purpose of configuring the SD module.
R/3 Applications Overview:
R/3 applications are categorized into three core functional
areas: logistics financial and human resources. Of these three functional
areas, there is a further subdivision into applications or modules. In addition
to these applications, SAP creates industry-specific solutions (Iss), which
are, as the name defines, created tailor-made for a specific industry. A fewer
examples of these would be
IS-OIL: - The SAP industry solution for oil companies
IS-T: The SAP industry solution for telecommunications
IS-B: The SAP industry solution for banks
IS-Retail: - The SAP industry solution for retail
In addition to these industry solutions of which there are
currently 19, standard cross-application components are available, such as
the SAP business Workflow. This tool is not dedicated to one unique
application components are available, such as the SAP Business Workflow.
This tool is not dedicated to one unique application or module; it can be used
throughout the system to integrate and automate T/3 processes. The
following is a brief description and overview of a few of the major
functional areas in SAP.
Financial Applications:
This functional area contains the necessary information on
profitability analysis, general ledger accounts, and information on reporting
using the executive information system (EIS). This area contains the
following modules:
FI
Financial Accounting
CO Controlling
EC Enterprise Controlling
IM
TR
Investment Management
Treasury
Human Resources:
This area contains the following modules:
PA Personnel Administration
PD Personnel Development
These modules include support on salary and payroll
administration as well as areas such as work schedule models. This core
functional area is very country-specific, due to country-related taxes,
employee benefits, and employment laws.
Logistics Applications:
Logistics is the largest of the three functional areas. It includes,
among others, the following modules:
SD
MM
WM
PP
LO
QM
Sales and Distribution
Materials Management
Warehouse Management
Production Planning
General Logistics
Quality Management
We will focus on the Sales and Distribution module of SAP, SD.
The Sales and Distribution Module (SD)
It cannot be stressed how important this module is or the impact
that it has in the structure of SAP. It integrates with every other R/3
application including FL, Co< MM, PP, and so on.
The SD module is made up of multiple components. We will
cover all these components and how to configure the majority of them in the
system.
Here is a brief list of these.
SD-MD
SD-BF
Master data
Basic functions subdivided into multiple components,
such as pricing, output, and so on
SD-SLS
SD-SHP
SD-TBA
SD-FTT
SD-BIL
SD-CAS
SD-IS
Sales
Shipping
Transportation
Foreign trade
Billing
Electronic data interchange
Information systems
SAP Basics:
SAP guidelines that can offer instant understanding and
promote ease of use. Firstly, all transaction codes are shown with square
brackets, such as [SPRO]. When you see this flag next to a paragraph, it
denotes a tip or trick. These tips and tricks are fantastic time-savers and have
been gathered the hard way. Be sure to make the most of them.
Base Transaction Codes:
Transactions codes are the short path to a specific screen in
SAP. They are found by selecting system: Status, as the following example
in Figure 1-3 shows.
Here the transaction code is [OVS9], which is the change view
for customer groups. By the way, the [SPRO] transaction code is the
shortcut for the business IMG.
The standard menu path is always described from the logistics
screen (unless specifically stated from the IMG). An example of example of
using the menu path to access the Sales and Distribution environment in the
systems.
Thus, the menu path to get to the IMG from the Logistics
screen, or [S000] as in the example of the SAPGUI, is as follows: Tools,
Business engineering, Customizing.
Naturally, there are hundreds of such codes and it would be
irrelevant to list them all now; generally, SAP group’s transaction codes into
its components. For example [VAOO] will give you the sales overview
screen you wish to call up; thus, you will not be able to use the transaction
code VA00 list in the IMG As a general rule, you can access every screen
from [S000] the logistics screen.
TIP: To save time transferring between screens to call up a transaction, you
can utilize the short commands to move quickly around the screens while
calling up a transaction at the same time. For example, here is a list of
transaction codes or prefixes.
/N
/Nxxxx
moves you back from any screen into the logistics screen
moves you from anywhere into transaction xxxx.
Code
VS00
VC00
VA00
VL00
VT00
VF00
VX00
SPRO
Description
Master data
Sales support
Sales
Shipping
Transportation
Billing
Foreign trade
Enterprise IMG
/NVA00
/O
/Oxxxx
/OVA00
moves you from anywhere into the Sales screen
generates a session list.
opens transaction code xxxx in a session.
opens Transaction VA00 in a new session with the
sales front-end screen.
TIP: A few other functions crucial to easily using the system are the
function codes:
F1
Help
F9
Technical info (used from within the Help screen of the
field or after you have used F1).
F4
Possible entries or match code for the field you are
accessing
To briefly explain, a match code is a comparison key.; It
enables you to locate the key of a particular database database record
by entering a field value contained in the record. The system then
displays a list of records matching the specifications for you to select
from. An example of this would be searching for the customer number
in a sales order. Should you select F4, you would have the option to
select a suitable match code to obtain the customer number you are
after.
Alternatively, you may select F5 from within this
selection screen, which brings up the Search Help Selection screen for
you to select a different match code.
These function codes are to be used from a specific field,
such as the customer group field. Pressing F1 brings up the screen..
Subsequently pressing the F9 function key or hitting the
Technical info button will give you the Technical Information screen .
The Structure of SAP SD Master Data:
Master data forms the basis of the SD Processing. Master
data is the responsibility of all modules, as each module has an
element of it. However, the SD master data will be accessed by many
other modules other than SD, such as PP, FI, and thus it has the
largest effect on the standard business process. Master data in SD is
divided into three main areas:
Organizational Data:
This is the structure of the company, whereby each area
of the business is represented by a hierarchical element. For example,
a sales area is constructed of a sales organization, a distribution
channel, and a division. The Finance module uses the highest form of
master data, which is the “company code.” The SD module integrates
with this company code via the sales organization. Thus, due to the
link between the sales organization and the company code in Finance ,
SAP knows which company code to a sales transaction to. This is
based on the sales organization in the sales order.
Customer and Material Data:
As goods and services are sold by the company, for
which the organizational data has been maintained, we need to
represent this material and service data in our system as well as
maintain and represent all our different sold-to parties and partners.
Document Master Data:
Business transactions are stored in the form of
documents. These SD documents are structured in such a way that all
the necessary information is stored in a systematic way.
Global Settings:
This area defines the country keys and currencies. This
data is application-independent; however, these settings are a
prerequisite for handling all business transactions.
One of the most fundamental principles to grasp when
dealing with the SD module of SAP is to understand where
information is coming from and at what time in the transaction it is
accessed. This information can be found by debugging SAP or
running an SQL trace. However, with a little understanding, you can
spot issues and narrow investigations to solve problems with little
effort.
Generally, SAP looks from the highest level of data to
the lowest. Thus when creating a sales order, it will look at the
organizational master data first, followed by the customer master data,
followed by the material data.
This is a very light overview of tracking master data in
SAP. As we go through the configuration of the data, we will
automatically cover this in more detail. A rule of thumb would be, “as
input is added, it is checked by the system from the highest level of
master data to the lowest. “ Thus, if you are in a sales order and enter
a material, the system will check organizational data first, followed by
customer data (checking for customer material information records). It
then checks the material data, perhaps for the minimum order
quantity, and finishes with document data, perhaps to determine if this
material is valid for this item category in the sales order.
Organizational Data:
You must set the organizational data in SAP before you
can process SD transactions. For example, without a sales
organization, it is not possible to create a sales order in SAP. This data
reflects the structure of your business. Every transaction occurs within
this structure. ?the organizational data is like the steel girders in a
building, so setting them up correctly is essential to around structure.
The more thought you give to the organizational
structure, the easier SAP SD will be to configure and use. You should
understand the business and the SD configuration in order to set up a
sound organizational structure.
Summary:
Here you define your sales organizations, distribution channels,
sales offices, sales groups, shipping points, loading points, and
transportation planning points.
Menu Path:
To follow the path, you go to the IMG Enterprise
structure, Maintain structure, Definition. One can see the menu path.
A sales organization is an organizational unit that sells
and distributes products, negotiates terms of sale, and is responsible
for these transactions. A distribution channel is a channel through
which materials or services reach customers. Typical distribution
channels include wholesale, retail, and direct sales. You can assign a
distribution channel to one or more sales organizations. A customer
can be delivered multiple distribution channels. A material master
record can be maintained with different sales organization and
distribution channel views, allowing different data to be accessed.
A division is a product group that can be defined for
wide-ranging spectrum of products. You can make customer-specific
agreements for every division, such as partial deliveries, pricing, and
terms of payment. Within a division, you can carry out statistical
analyses or set up separate marketing. Please note that divisions are
utilized in SD but they are defined and maintained in IMG, Enterprise
structure, Maintain structure, Definition, Logistics general.
Figure shows a basic organizational structure. In Sales
Organization 1000, SD business transactions can be carries out for
distribution channel 10 and 20 and division 01 and 02. In Sales
Organization 2000, transactions can only be processed through
distribution channel 10 and division 01 and 02. Likewise, transactions
in Sales Organization 3000 can only be done through distribution
channel 10 and division 01.
Client
Sales org.
1000
2000
3000
10
Dist Channel
10
10
20
01
Div
01
02
01
02
Organizational Structures in Accounting:
A client can have one or more company codes. Each company
code is its own legal entity in finance. One or more sales organizations are
assigned to a company code. The data would have the structure.
Organizational Structures in Materials Management
A plant is where stocks of a material are kept. A storage
location is, as the name says, a storage area for the stock in a plant. One or
more plants are assigned to a company code, and one or more storage
locations are assigned to a plant. The data would have the following
structure as displayed.
Shipping points are defined in the S.D. organizational master
data setup. They are the top levels of the organization in shipping. Deliveries
are always initiated from exactly one shipping point. A shipping point is
assigned one or more plants and can be subdivided into several loading
points.
Assignment of Organizational data
In assignment of organizational data you create the linking that
integrates the different modules in the systems.
Master data for the customer
The basic customer master records we create are
o The sold to party record
o The ship to party record
o The bill to party record
o The payer record
SAP Table and Description
key
Field Name
RF02D-KUNNR Customer number Assigned to
Each customer
RF02D-VKORG Sales organization Assigned per
Company code
Entries
Customer
specific
Company
Code specific
Material Master Data:
The material master data is used by the system t o represent the
data pertinent to the product or service your company is selling or
producing.
Quantity Specifications
Two different quantity specifications
Minimum order quantity
The minimum order quantity refers to the minimum quantity
the customer must order.
Minimum order quantity
The minimum delivery quantity refers to the minimum quantity you
must deliver to the customer. This quantity is automatically checked during
delivery processing. A warning message appears during delivery processing
if you enter a delivery quantity lower than the minimum delivery quantity.
Basic SAP R/3 Tables and fields
Information is stored in SAP R/3 in a sequence of tables and fields.
The following tables are often referred to in the SD module.
VBAK
VBAP
VBEP
LIKP
VBPA
order header
order item
order schedule line
delivery header
partners