EHP5 for SAP ERP
6.0
June 2011
English
SAP Best Practices for
Chemicals V1.605
Solution Scope Document
SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf
Germany
SAP Best Practices
SAP Best Practices for Chemicals: Solution Scope
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SAP Best Practices
SAP Best Practices for Chemicals: Solution Scope
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Contents
SAP Best Practices for Chemicals – Solution Scope ..................................................................... 7
1
Purpose ................................................................................................................................... 7
2
Supported Business Processes or Scenarios ......................................................................... 7
2.1
Innovation Management ................................................................................................ 7
2.1.1
Internal Order R&D Planning (177) ........................................................................... 7
2.1.2
Internal Order R&D Actual (185) ............................................................................... 7
2.2
Supplier Collaboration ................................................................................................... 8
2.2.1
Quotation for Procurement (128) .............................................................................. 8
2.2.2
Procurement Contract (133) ..................................................................................... 8
2.2.3
Consumable Purchasing (129) ................................................................................. 9
2.2.4
Procurement without QM (130) ............................................................................... 10
2.2.5
Procurement of Batch-Managed Stock Materials (901) .......................................... 10
2.2.6
Procurement of Warehouse-managed Stock Materials (902) ................................ 11
2.2.7
Procurement of Pipeline Materials (903) ................................................................ 11
2.2.8
Procurement of External Services (904) ................................................................. 12
2.2.9
Quality Management in Procurement (905) ............................................................ 12
2.2.10
Procurement and Consumption of Consigned Inventory (139) .............................. 12
2.2.11
Return to Vendor (136) ........................................................................................... 13
2.3
Supply Chain Planning and Execution ........................................................................ 13
2.3.1
Supply and Demand Planning (900) ....................................................................... 13
2.3.2
Tank Trailer Filling (919) ......................................................................................... 14
2.3.3
Outbound Logistics (923) ........................................................................................ 15
2.3.4
Totes Handling (927) .............................................................................................. 15
2.3.5
Vendor-Managed Inventory (928) ........................................................................... 16
2.3.6
Stock Transfer with Delivery (134) .......................................................................... 16
2.3.7
Stock Transfer without Delivery (135) ..................................................................... 17
2.3.8
Physical Inventory / Inventory Count and Adjustment (137) ................................... 17
2.3.9
SAP ERP Reports for Logistics (222) ..................................................................... 18
2.3.10
Lean Warehouse Management (124) ..................................................................... 18
2.4
Manufacturing.............................................................................................................. 18
2.4.1
Stock Handling: Scrap and Blocked Stock (131) .................................................... 18
2.4.2
Bulk Manufacturing without PI Sheets (907)........................................................... 19
2.4.3
Bulk Manufacturing With PI sheets and SAP ODA Integ (908) .............................. 19
2.4.4
Make-to-Stock (Process Industry) with WM (909) .................................................. 20
2.4.5
Make-to-Order (Process Industry) (910) ................................................................. 20
2.4.6
Multiple Product Campaign Run Incl. MQC (911) .................................................. 20
2.4.7
Active Ingredient Processing (912) ......................................................................... 21
2.4.8
Blending (913) ......................................................................................................... 22
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2.4.9
Repackaging (914) .................................................................................................. 22
2.4.10
Relabeling (915) ...................................................................................................... 23
2.4.11
Storage Tank Management (916) ........................................................................... 23
2.4.12
Work-in-Process (WIP) Batch (996) ....................................................................... 24
2.4.13
Process Order with Co-Product and QM (993) ....................................................... 24
2.4.14
Repetitive Manufacturing with QM (992) ................................................................ 25
2.4.15
Subcontracting (Internal) (973) ............................................................................... 26
2.4.16
Subcontracting (External) (918) .............................................................................. 26
2.5
Sales and Marketing ................................................................................................... 27
2.5.1
Presales Activities (920) ......................................................................................... 27
2.5.2
Samples Processing (917) ...................................................................................... 27
2.5.3
Sales Order Processing (incl. PoD and CoA) (921) ............................................... 28
2.5.4
Sales Order Processing with WM (922) .................................................................. 29
2.5.5
Free of Charge Delivery (110) ................................................................................ 30
2.5.6
Credit Management (108) ....................................................................................... 30
2.5.7
Credit Management (incl. Risk Categories) (925)................................................... 31
2.5.8
Rebates Handling (926) .......................................................................................... 31
2.5.9
Sales Order Processing for Prospect (113) ............................................................ 32
2.5.10
Sales Order Processing with Customer Down Payment (201) ............................... 33
2.5.11
Sales of Nonstock Item with Order Specific Procurement (115) ............................ 33
2.5.12
Sales Processing Using Third Party (w. Shipping Notification) (107) ..................... 34
2.5.13
Sales Processing Using Third Party (w/o Shipping Notification) (114) ................... 34
2.5.14
Returns and Complaints (111) ................................................................................ 35
2.5.15
Returns & Complaints (incl. QM and Batch Recall ) (924) ..................................... 35
2.5.16
Credit Memo Processing (204) ............................................................................... 36
2.5.17
Debit Memo Processing (116) ................................................................................ 36
2.5.18
Sales: Period End Closing Operations (203) .......................................................... 36
2.5.19
Swap Sales in Chemical Industry (797) .................................................................. 37
2.6
2.6.1
2.7
Quality Management and Compliance ........................................................................ 38
Engineering Change Management (934)................................................................ 38
Enterprise Management and Support ......................................................................... 38
2.7.1
General Ledger (156) .............................................................................................. 38
2.7.2
Activate Document Splitting for Chemicals (972) ................................................... 39
2.7.3
Accounts Receivable (157) ..................................................................................... 40
2.7.4
Accounts Payable (158) .......................................................................................... 42
2.7.5
Period End Closing Financial Accounting (159) ..................................................... 42
2.7.6
Cash Management (160) ........................................................................................ 44
2.7.7
Asset Accounting (162) ........................................................................................... 44
2.7.8
Asset Acquisition for Constructed Assets (Investment Orders) (164) .................... 45
2.7.9
General Cost Center Planning (175) ...................................................................... 46
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2.7.10
Overhead Cost Accounting - Actual (184) .............................................................. 47
2.7.11
Cost of Sales Accounting (161) .............................................................................. 47
2.7.12
Internal Order for Marketing and Other Overhead Actual (186) ............................. 48
2.7.13
Internal Order for Marketing and Other Overhead Planning (180) ......................... 49
2.7.14
Operational Maintenance (929) .............................................................................. 49
2.7.15
Preventive Maintenance (930) ................................................................................ 50
2.7.16
Investment Management in PM (932) ..................................................................... 50
2.7.17
Time Recording (211) ............................................................................................. 51
2.7.18
Segment Reporting (166)........................................................................................ 51
2.7.19
Period-End Closing Activities (224) ........................................................................ 52
2.7.20
SAP ERP Reports for Accounting (221) ................................................................. 52
2.7.21
Overhaul Management (886) .................................................................................. 52
2.7.22
Refurbishment Management (887) ......................................................................... 53
2.7.23
Work Clearance Management (888) ....................................................................... 54
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SAP Best Practices for Chemicals: Solution Scope
SAP Best Practices for Chemicals – Solution
Scope
1 Purpose
This solution scope provides an overview of the processes and functions covered by SAP Best
Practices for Chemicals. It describes the functions and explains their business purposes.
The solution scope does not provide technical explanations of how to use the
functions. For more information on this topic, see the Business Process
Documentation documents.
2 Supported Business Processes or Scenarios
2.1 Innovation Management
2.1.1 Internal Order R&D Planning (177)
This scenario involves entering costs, activities, and business processes that are incurred during
the life cycle of an order. Can compare plan and actual costs and perform a differentiated
variance analysis.
Process Flow
Various internal projects consume resources and incur costs or expenses. These projects are
usually done for future development of products. The costs of these projects need to be tracked
for various purposes, such as cost control, return on investment calculations, and tax reporting.
This process makes use of SAP's internal order functionality to track costs and status. For every
project undertaken, an internal order is created. Cost planning is carried out on this order. Costs
incurred for the project can then be posted on the order. Periodically, the costs collected on the
order are settled to the assigned R&D cost center or to CO-PA (if CO-PA is activated). When the
project is complete, and fully settled, the order is then closed by setting the appropriate status.

Create R&D internal order

Plan costs for R&D order

Settlement of planned costs
Key Points

Comparison of planned and actual costs on internal orders, and monitoring of costs on
internal orders.
2.1.2 Internal Order R&D Actual (185)
Internal orders are used to monitor costs and provide cost control for an organization, and are
the most detailed operational level of cost controlling.
Process Flow
Various internal projects consume resources and incur costs or expenses. These projects are
usually undertaken for future development of products. The costs of these projects need to be
tracked for various purposes such as cost control, return on investment calculations, tax
reporting, and so on. This process makes use of SAP's internal order functionality to track costs
and status. For every project undertaken, an internal order is created. Cost planning is carried
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out on this order. Costs incurred for the project can then be posted on the order. Periodically, the
costs collected on the order are settled to the assigned R&D cost center or to CO-PA (if CO-PA
is activated). When the project is complete, and fully settled, the order is then closed by setting
the appropriate status.
This scenario consists of the following steps:

Create R&D internal order

Consumable purchasing

Post goods issues to R&D internal order

Settle internal order
Key Points

Transparent view of outstanding orders, shipments, and inventory

Automated efficient processing
2.2 Supplier Collaboration
2.2.1 Quotation for Procurement (128)
In this purchasing process, a purchasing employee requests quotations for a specific material
from different vendors. A quotation comparison list enables the purchasing employee to select
the best source of supply by evaluating the quotations from the vendors. The accepted quotation
is converted into a purchase order, and a rejection letter is sent to the vendors whose quotations
are rejected. Material-specific information including vendor pricing and lead-time from the
quotation is captured within master data records.
Process Flow
This scenario consists of the following steps:

Request for quotation

Quotation processing

Comparison, rejection and selection of vendors

Source list generation
Key Points

Vendor price comparison list

Optional: use of source lists
2.2.2 Procurement Contract (133)
Covers the creation and maintenance of long-term contracts with vendors, and includes the
creation of Purchase Orders against the contract (call-off orders) and the ongoing monitoring of
the contract.
Process Flow
Contracts are agreements with a vendor to supply materials or services under negotiated
conditions, within a certain period. Contracts are differentiated as follows:
Quantity contracts: a contract in which a company orders a certain quantity of a product during a
specified period
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Value contracts: a contract in which the purchase of goods or services up to a total value is
agreed
In source determination, contracts replace the purchasing info records and are assigned in the
source list as the fixed source for MRP. The purchase requisition and purchase order is created
after the contract, if they do not yet exist. Target groups are purchasing managers as well as
buyers.
This scenario consists of the following steps:

Creating a basic agreement (quantity contract)

Creating a purchase requisition

Assigning requisition and creating purchase order

Approval of purchase orders

Contract monitoring

Goods receipt

Invoice receipt by line item

Outgoing payment
Key Points

Upon purchase order creation with reference to a contract, the contract data is used and
purchasing info records are ignored

Reduced procurement costs

Securing of supplies

Transparency of supplier agreements
2.2.3 Consumable Purchasing (129)
Describes purchase order approval, goods receipt of consumables, approval of service entry
sheets and invoice receipts. On goods receipt, the material or service counts as having been
consumed.
Process Flow
This scenario deals with purchase order creation activities during the procurement process. It
describes the additional process steps of a purchase order approval, goods receipt of
consumables, approval of service entry sheets and invoice receipts by line item. The process
also covers the related processing of outgoing payments and period-end plant and period-end
closing.
A short text description is the main characteristic for consumable items (goods and services).
The purchase order is subject to approval based on predefined parameters before being issued
to a vendor.
There is no inventory in the system for consumables. By posting a goods receipt, the value of the
goods is expensed to a cost center or another cost element.
Procurement of a consumable service follows the same general process. The difference is that
the consumable service is not posted by means of a goods receipt, but with a service entry
sheet. The invoice follows the same rules in both cases.
This scenario consists of the following steps:

Purchase order creation for consumable goods

Approval of purchase orders for consumables

Goods receipt of consumables
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
Purchase order creation for services

Service entry sheet creation

Service entry sheet approval

Invoice receipt by line item

Period end plant
SAP Best Practices for Chemicals: Solution Scope
Key Points

Quick, one-time-purchases are possible: material consumption is directly posted, no
posting into storage

Use of service entry sheets as inspection report of performed services
2.2.4 Procurement without QM (130)
In this procurement process, a quotation comparison list enables the purchasing employee to
select the best source of supply by evaluating quotations from vendors.
A purchase requisition is generated either via the material requirements planning (MRP)
process, or manually by a requestor. A buyer validates the accuracy of the purchase requisition
and converts the purchase requisition into a purchase order. The purchase order is subject to
approval based on a predefined amount before being issued to a vendor.
Process Flow
This scenario consists of the following steps:

Display and assign purchase requisitions

Convert assigned requisitions to purchase orders or create purchase order manually

Change purchase orders

Approve purchase orders

Print purchase orders

Receive goods from vendor

Invoice receipt by line item

Outgoing payment
Key Points

Use of integrative data sets such as purchasing info records, source lists, contracts

Automatic assignment of RFQs to purchase orders

Processing of role-specific work lists possible
2.2.5 Procurement of Batch-Managed Stock Materials (901)
This scenario describes the procurement process for batch-managed stock materials.
After a request for quotation (RFQ) is created, a purchase order is created with reference to it.
The purchase order is subject to approval based on a predefined amount before being issued to
a vendor.
During goods receipt, a batch number is generated automatically by the system. This internally
generated ten-digit number follows a certain logic, which is set up in the standard SAP ERP user
exit
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Process Flow
This scenario consists of the following steps:

Create quotation

Create purchase order manually with reference

Post a credit note with invoice reference

Approve purchase order

Posting manual payment

Receive goods from vendor

Invoice receipt by line item
Key Points

Setting up user exit for special batch number generation
2.2.6 Procurement of Warehouse-managed Stock Materials
(902)
Purchasing is a component of Materials Management (MM). It supports all the phases of
materials management: materials planning and control, purchasing, goods receiving, quality
inspection of procured materials, inventory management, warehouse management, and invoice
verification.
This scenario also includes the use of the Warehouse Management component (LE-WM).
Business transactions that are initiated in other SAP components result in corresponding tasks in
Warehouse Management (WM), which activates the physical transfers within the warehouse.
The purpose of this scenario is to procure raw materials, receive the delivered quantity into
inventory, maintain required batch information for production/expiry date, and finally place the
goods into warehouse bin locations
Process Flow

Creation of purchase order (via processing requisitions or manually)

Goods receipt of the ordered material

Posting of material from interim storage type to physical warehouse locations

Invoice verification
Key Points

Integration of Warehouse Management (LE-WM)
2.2.7 Procurement of Pipeline Materials (903)
In the chemical industry, some raw materials (for example gases or liquids) required for the
manufacturing processes are provided via pipeline from the vendor.
Basing on a pipeline material info record the material can be directly issued in the plant. As a
final step, settlement needs to be carried out.
In some cases, Quality Management (QM) inspection might be required for the pipeline material,
for example inspection on a regular basis. This additional business process is described in the
QM in Procurement scenario.
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Process Flow

Goods issue for pipeline material

Automatic pipeline settlement
2.2.8 Procurement of External Services (904)
This scenario describes the procurement of external services using silo cleaning as a typical
example from the chemical industry
Process Flow

Creation of framework order

Maintenance of service entry sheet

Invoice verification
2.2.9 Quality Management in Procurement (905)
Almost all materials that are used within preconfigured procurement processes in SAP Best
Practices for Chemicals are subject to QM as it is common for the chemical industry to have
extensive QM in place.
This scenario describes different QM inspections for different types of materials assuming the
goods receipt was carried out according to other Business Process Documents (exception: Tank
Trailer Procurement).
The main process steps include the creation of the inspection lot (either manually or
automatically), the recording of the inspection results, and the recording of usage decisions.
Key Points

Quality Inspection in Goods Receipt with Inspection Plan

Quality Inspection in Goods Receipt with Inspection Plan - Processing Qualification
model

Quality Inspection in Goods Receipt with Supplier Certificate

Quality Inspection in Goods Receipt for Active Ingredient

Quality Inspection for Pipeline Materials

Quality Inspection for Tank Trailer Procurement
2.2.10
Procurement and Consumption of Consigned
Inventory (139)
In consignment processing, the vendor provides material and stores it on the customer's
premises. The vendor remains the legal owner of the material until material is withdrawn from the
consignment stores. Only then does the vendor require payment. The invoice is due at
predefined intervals, for example, monthly. In addition, customers can also arrange with the
vendor that they take over ownership of the remaining consignment material after a certain
period.
The daily MRP run creates purchase requisitions for parts that are to be procured on a
consignment basis.
Process Flow
This scenario consists of the following steps:

Goods receipt to vendor consignment stock
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
Transfer posting of vendor consigned stock to own stock

Invoice verification

Outgoing payment

G/L: Period-end plant
Key Points

Automatic posting of goods into vendor consignment stock

Fewer manual FI postings required: Upon goods issue from consignment storage, the
relevant invoice data is transferred to FI. Periodic invoicing generates and releases the
vendor invoices.
2.2.11
Return to Vendor (136)
In the return to vendor process, the initial activity is requesting a returns material authorization
(RMA) from the vendor. The RMA number is entered in a text field in the return purchase order.
The buyer then creates a return purchase order in the system.
The return purchase order confirmation goes to the vendor and the return delivery is sent to the
shipping department where the items are picked and shipped back along with a delivery note.
When the shipping department creates the delivery, the items are withdrawn from stock. A credit
memo is generated that transfers liability to the vendor.
Process Flow
This scenario consists of the following steps:

Creating return purchase orders

Delivery due list for purchase orders

Picking confirmations

Goods issue

Manual review of pending credits
Key Points

Goods can be returned with a return reason captured in the document

All information for follow-on FI functions such as invoice reduction, rejection, and
cancellation is provided
2.3 Supply Chain Planning and Execution
2.3.1 Supply and Demand Planning (900)
This Supply & Demand Planning scenario describes an integrated planning process that is
executed on a medium- to long-term basis including the elements of flexible planning, Standard
Operation Procedure (SOP), long-term planning, material requirement planning, and capacity
planning.
The starting point for this scenario is the flexible planning module, where the marketing or sales
department forecasts the expected sales for a given planning period. To support the decision of
the planner, the system provides a statistical forecast and history. The sales forecast provides
the information for determining production quantities in production planning.
Production planning consists of the rough-cut plan and, in the next step, long-term planning,
which is simulated using different inactive versions of the production plan. The active version
defined in the demand program enters the requirement quantities and dates for material
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requirements planning (MRP) to guarantee a later availability of materials through purchasing
and production proposals after the MRP run.
The planning scenario also describes resource planning in the planning scenario for determining
the amounts of the work center capacities and other resources required to meet the production
targets. Capacity planning can be used to support production planning for evaluating the
capacity of single resources available, and for determining and comparing capacity
requirements. In capacity leveling, the system optimally dispatches operations to the time when
sufficient resources are available to cover them.
Furthermore, this scenario can be enriched by using the third-party software Manufacturing
Workbench for SAP ERP. The OR Soft Manufacturing Workbench for SAP ERP provides a
software add-on for detailed scheduling with the necessary SAP ERP plug-in and configuration.
This enables a full and dynamic overview over the supply chain (transparency of the production
process) and enhanced functionality (scheduling and rescheduling of orders with different
planning strategies) without additional infrastructure or data extension. It supports the detailed
production and execution scheduling such as advanced planning and scheduling (APS) and
manufacturing execution system (MES) as well as the planning of the in-house supply chain. It
can be used as a simplified user interface for the SAP ERP system with regard to production
logistics. Additionally, it can be used as a platform for individualization of higher-level functions.
The Manufacturing Workbench for SAP ERP is a preconfigured standard version of
SCHEDULE++, a product of OR Soft Jaenicke GmbH. A wide range of additional scheduling and
simulation functions is available in other standard versions and extensions of SCHEDULE++.
Process Flow
This scenario consists of the following steps:

Demand planning displaying the document journal

Rough-cut production planning

Long term planning

Material requirements planning

Capacity planning
2.3.2 Tank Trailer Filling (919)
Within this scenario, tank trailer processing is used to sell bulk (possibly liquid) materials to the
customer. The bulk product is filled into the truck from the silo according to customer
requirements.
An issue with bulk sales is that the quantities in which the materials are later actually filled and
delivered vary and are therefore not fixed precisely during order entry.
To determine the quantity actually filled, the tank trailer must be weighed before and after
loading.
On creating the delivery for the sales order, the system automatically adjusts the customer
requested delivery quantity by means of the confirmed filling quantity.
Alternatively, a notification type is provided to simplify the process steps of process order
confirmation and creation of the delivery and the goods issue. This allows you to complete these
process steps by selecting items in the action box of the notification.
Process Flow
This building block deals with the following processes:

Sales order processing

Material requirements planning

Process order handling
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
Delivery creation

Billing
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Key Points

Automatic creation of process order

Quality Management

Simplification of process steps by notification
2.3.3 Outbound Logistics (923)
This scenario describes the outbound logistics process. It covers all processes from order entry,
freight cost simulation, delivery with packing, transportation planning with automatic goods issue
posting, shipment cost determination, and invoice creation. The transfer to FI/CO is also
covered. Additionally, the automatic settlement of freight costs with the service provider is
included. The planning and processing of transportation is based on the outgoing shipment
document.
Process Flow
This building block deals with the following processes:

Order entry

Delivery

Packing

Shipment planning

Transportation costs

Invoice creation

Automatic purchase order for carrier settlement
Key Points

Packing

Transportation planning and shipment completion

Shipment costs calculation

Shipment costs settlement

Service agent selection

Management of shipment costs
2.3.4 Totes Handling (927)
In the chemical industry, large quantities of materials are shipped in returnable containers, for
example, totes.
This scenario describes how returnable totes can be handled.
Process Flow
This building block deals with the following processes:

Creation and confirmation of filling orders

Creation of sales orders

Container stock overview
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
Picking and delivery

Billing

Returns

Totes pickup
SAP Best Practices for Chemicals: Solution Scope
2.3.5 Vendor-Managed Inventory (928)
This Vendor Managed Inventory (VMI) scenario describes how customers can be provided with
materials automatically after the stock information has been transferred electronically.
The customer sends the specific stock information periodically using a standard IDoc. In case of
shortages, the replenishment run creates sales orders automatically. In addition, the creation of
the sales order triggers the creation of a purchase order.
Process Flow
This building block deals with the following processes:

Transfer of stock and sales data (simulation)

Creation of customer forecast data

Replenishment run

Creation of sales order
2.3.6 Stock Transfer with Delivery (134)
The stock transfer process begins with a requirement to transfer material from one plant to
another within the same company code. This request, a stock transfer requisition, can be created
automatically by MRP in the procuring plant, or manually by a buyer.
The process also works without MRP. In this case, the buyer creates the stock transport order
directly. The only master data that is needed is the material master to support the stock transfer
process. The material master must exist in both the procuring (receiving) plant and the providing
(issuing) plant. Unlike other purchase orders, stock transfer purchase orders are not subject to
approval. A buyer validates the accuracy of the stock transfer purchase requisition and converts
it into a stock transfer purchase order. Without MRP, the buyer creates the stock transfer
purchase order directly. A warehouse clerk at the issuing plant monitors the materials to be
shipped and creates necessary deliveries. Once a delivery is created, a pick list is generated for
the materials. A warehouse clerk gathers the materials and confirms the picked quantities. Once
the delivery is complete, the delivery quantities are issued, appropriate documentation is
generated, and the shipment is sent, ending the process for the issuing plant. Goods are
received at the receiving plant referencing the delivery number on the shipping documents.
Inventory is received into a location based on fixed parameters proposed from the material
master that can be changed at time of purchase order creation or goods receipt (transactional
data capture).
Process Flow
This scenario consists of the following steps:

Creating stock transport orders

Creating delivery for stock transport orders
Key Points

Supports all required documents for stock transfers with delivery

Supports all required master data aspects such as batch management and serial
numbers
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
Monitors stock in transit

Enables delivery costs to be entered in the stock transport order
2.3.7 Stock Transfer without Delivery (135)
The cross-plant internal procurement of materials can be carried out within one company code
(intercompany) or by using several company codes (cross-company). This process can be dealt
with using standard functions, such as material requirements planning, purchase requisitions,
stock transport orders, transportation planning, and the handling of internal deliveries.
The stock transfer without a delivery can be performed in the following ways:

A one-step transfer posting

A buyer at the receiving plant requests material with a stock transport order
Process Flow
This scenario consists of the following steps:

One-step stock transfer

Creating stock transport order

Posting goods issue for stock transport order

Checking the status of the stock transfer

Receiving transferred materials
Key Points

Processes where delivery is not required can be handled easily: less documents are
generated

Stock-in-transit can be monitored
2.3.8 Physical Inventory / Inventory Count and Adjustment (137)
This scenario shows the periodic process of making necessary adjustments to stock on hand
after a physical count.
The process begins with the generation of the required inventory count sheets. Materials can be
blocked for posting during the physical inventory. Once the inventory sheets are printed out, the
actual physical inventory count is realized for the given materials. Afterwards, the count result is
entered in the system and then any discrepancies against the system quantities are reviewed.
The inventory can be recounted until final counts are accepted and inventory differences are
posted.
Process Flow
This scenario consists of the following steps:

Creating physical inventory documents

Printing PI documents

Executing count and entering the count result in the system

Listing count differences

Posting count differences
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2.3.9 SAP ERP Reports for Logistics (222)
This building block contains the settings and documentation that enable you to use various
reports to successfully monitor and control your company processes in the area of logistics and
production.
2.3.10
Lean Warehouse Management (124)
Lean Warehouse Management provides a warehousing structure in which you can use transfer
orders as pick orders even in warehouses with a simple structure.
Process Flow
This building block provides all generic configuration settings for Lean Warehouse Management
processing in SAP Best Practices packages.
This scenario consists of the following steps:

Create and Assign Warehouse

Define Control Parameters for Warehouse Number

Spool Parameters for Transfer Order Printing

Profile for Sorting during Transfer Order Print Processing

Transfer Order Print Indicators

Print Program per Warehouse Number

Define Number Ranges

Define Number Ranges for WM

Define Storage

Define Difference Indicators

Define Transfer Types

Define Movement Types

Assign Picking Locations Lean-WM

Create Output – Condition Records: Shipping
2.4 Manufacturing
2.4.1 Stock Handling: Scrap and Blocked Stock (131)
This scenario provides processes resulting from customer returns including scrapping and
transfer postings to blocked stock.
Process Flow
This building block deals with the following processes
Returns from customer
Rework from production
Other logistic processes and reasons
Devaluation of material to another material number and then rework of the devaluated material
This scenario consists of the following steps:

Customer returns scrapping – goods issue to CO-PA

General stock scrapping – goods issue to cost center
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
Block material – stock transfer from unrestricted to blocked

Unblock material – stock transfer from blocked to unrestricted

Unblock material – stock transfer from blocked to quality inspection stock
Key Points

Processing of customer returns

Scrapping

Transfer posting to blocked stock
2.4.2 Bulk Manufacturing without PI Sheets (907)
This scenario covers the manufacturing of bulk product (tank or silo products respectively) in the
chemical industry. The material used is the paint SAPcolor CH-3000.
Within this scenario material staging of components with WM as well as the following QM
functionalities are included:

In-process control of the manufactured product with usage decision

Creation of shift confirmation, shift notes and shift reports for process order

Post-process control of the manufactured product with sample management (including
multiple specifications) and usage decision

Recurring inspections
However, the scope of this scenario does not include the creation of the PI sheet.
Process Flow

Creation of process order

Material staging for process order

In-process control

Confirmation of process order

Create shift note

Create shift report

Post-process control

Recurring inspections for materials that have been produced in the past
2.4.3 Bulk Manufacturing With PI sheets and SAP ODA Integ
(908)
This scenario covers the manufacturing of a bulk product (tank or silo products respectively) in
the chemical industry. The material used is the granulate GranuSAP, blue CH-3200.
Within this scenario material staging of components with WM as well as several QM
functionalities such as in-process control of the manufactured product with usage decision and
post-process control of manufactured product with usage decision are included.
Furthermore, this scenario covers the creation and usage of PI sheets. SAP Best Practices for
Chemicals introduces the XML-based PI sheet and a process manufacturing cockpit. This
preconfigured Process Manufacturing Cockpit covers process-order-dependent areas as well as
process-order-independent areas.
In the process-order-dependent area, the PI sheet is placed. The PI sheet contains instructions
for the shop floor employees, dangerous goods symbols, tables where actual process relevant
values can be maintained, and several entry fields. Process steps can be confirmed by system-
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supported digital signatures. In addition, the functionality SAP ODA (OPC for Data Access) is
integrated. This offers the possibility to read out and process sensor values within the PI sheet.
However, this functionality requires the installation of (third party) OPC (demo) server.
In the process-order-independent area additional information is available that might be useful for
the manufacturing process, for example SOP in PDF, video clips, Internet links and jumps to
other SAP ERP transactions. Links to the Internet pages of our development partners are also
available.
Process Flow

Creation of process order

Material staging for process order

Creation of control recipes

Processing XML-based PI sheet

In-process control via jump from PI sheet

Confirmation of process order by process messages

Post-process control

Processing OPC values
2.4.4 Make-to-Stock (Process Industry) with WM (909)
The purpose of this scenario is to describe a standard make-to-stock manufacturing process
including Quality Management and Warehouse Management.
After creation and confirmation of a process order, in-process control and post-process control in
QM is carried out. Finally, the putaway for the manufactured materials into WM is described.
Process Flow

Creation of process order

Confirmation of process order

Recording inspection results

Recording usage decision

Putaway of manufactured materials
Key Point

Integration of warehouse management
2.4.5 Make-to-Order (Process Industry) (910)
The make-to-order manufacturing process is used to sell certain specialty chemicals, which are
filled and packed only after a sales order is received. The filled material is planned to get the
dependent requirement of the bulk material. The MRP run is used to plan the requirements.
According to the results of the MRP run, bulk material is manufactured and kept in stock based
on the dependent requirements of the filled material. On receipt of the sales order for the filled
material, the MRP triggers a planned order for the filled material for the sales order quantity. This
planned order can be converted into a process order to execute the filling process. After process
order confirmation, the finished material can be delivered to the customer.
2.4.6 Multiple Product Campaign Run Incl. MQC (911)
This scenario covers multiple products (color paints) run on a common manufacturing resource.
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The paint manufacturer demands different color paints in Demand Management, which is used
to run MRP. The system checks the plan with the capacity available and the overloads removed.
The confirmed plan or planned orders are then converted to process orders (collective
conversion of planned orders to process orders). During this conversion process, the planned
orders are rearranged (merged or changed or deleted) to create a schedule compatible with the
technique of the color run. The process orders created are the basis for manufacturing.
Material quantity calculation ensures that the solvent quantity is adjusted based on the
proportion of active ingredients specified by a batch selected for additives. The formula defined
for calculating the quantity of the solvent ensures that the solvent to paint ratio is kept to a
maximum at 40 %.
During the final confirmation of the process order, the user is informed that the common resource
needs to be cleaned before the next color paint run can be started. The user is also prompted to
create a cleanout order for accounting the activities involved in the cleaning process. The
common resource cleanout order is confirmed with the activities completed in the cleaning
operation.
Process Flow
The following processes are provided to support the Multiple Product Campaign Run scenario:
Production Planning

Planned independent requirements

MRP run

Evaluation of the stock/requirements list

Capacity planning
Finalizing Execution Plan

Releasing converted process orders

MRP run

Evaluation of the stock/requirements list

Capacity planning
Manufacturing Execution & Control

Process order confirmation

Creating cleanout process order

Cleanout process order confirmation
Key Points

Collective conversion of planned orders to process orders

Material quantity calculations

Process order without materials

User status

User-defined fields in master recipe

User exit - CONFPI05
2.4.7 Active Ingredient Processing (912)
This scenario describes how active ingredients can be sold. The material selected here is a
catalyst. The catalyst is a co-product that results from the repetitive manufacturing of SAPulat.
Since this manufacturing process may affect the quality of the main product, the co-product may
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also vary in its potency. Therefore, the sales unit of the co-product (used catalyst) here is LAI
(pounds active ingredient) instead of LB.
This process includes the valuation of the co-product, filling, and sales. For more information
about active ingredient processing in procurement and how active ingredients influence
manufacturing, see the corresponding scenario documentation.
Process Flow
The following processes are provided to support the Active Ingredient Processing scenario:

Use of catalyst in the repetitive manufacturing process

Repetitive manufacturing of SAPulat

Testing of catalyst by QM

Creating process order for catalyst (packing) in case of demand

Processing process order including confirmation

Sales processing
Key Points

Production supply in warehouse management

Availability check in sales order
2.4.8 Blending (913)
Manufacturing processes in the process industry (especially repetitive manufacturing processes)
may lead to different characteristics of quality for the manufactured product. In-spec batches are
called Grade A, off-spec batches Grade B.
Within this scenario, two batches of colorless granulate SAPulat (one involved batch is in-spec
and the other one off-spec) are mixed in a separate resource to get an in-spec batch of CH-2200
(SAPulat).
Process Flow
The following processes are provided to support the Blending scenario:

Process order creation

Process order confirmation/goods movement posting

Quality Management
Key Points

Availability check

Automatic batch determination
2.4.9 Repackaging (914)
This scenario describes all of the settings necessary for the configuration of repackaging.
This repackaging scenario is useful because customers might have specific requirements (such
as ordering 25LB bags on pallets).
If the standard manufacturing procedure manufactures bigger packing units of, for example, 500
LB bags, they can easily be repacked into the smaller LB bags required to meet customer
requirements.
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Process Flow
The following processes are provided to support the repackaging scenario:

Process order creation

Material staging from warehouse (only if WM is used)

Process order confirmation

Quality management
Key Points

Check of batch derivation

Automatic batch determination
2.4.10
Relabeling (915)
Within this scenario, the relabeling process is used to transfer inventory from the stocked
material (generic label) to a different material, which is labeled according to customer
requirements. Throughout the process, the physical and chemical properties of the material
remain the same, as do the containers and the cans. Only the label-sticker is replaced.
An actual sales order for the relabeled material triggers the process. A relabel process order
transfers the inventory and monitors the process. Upon goods issue of the delivery for the
relabeled material, you can print a certificate of analysis, which contains the inspection results
and the expiry date of the original bulk material.
Process Flow
The following processes are provided to support the Relabeling scenario:

Sales order creation

Process order creation

Process order confirmation

Batch derivation

Outbound delivery creation

Goods issue for outbound delivery

Certificate of analysis
Key Points

Make-to-order (MTO)-process order
2.4.11
Storage Tank Management (916)
In the chemical industry, companies store materials in storage tanks. There are two approaches
for the removal of batch-managed materials from the storage tanks. On the one hand, materials
can be removed according the FIFO principle, assuming that the residue runs out at some point
of time. This does not take into account that there is one homogenous batch of material in the
storage tank.
After introducing the new batch, the materials are mixed. The residue and the new material are
combined to form an additional new batch.
This scenario intends to cover the second possible approach. As no Process Control System is
used, you must manually enter the quantities supposed to be mixed in the storage tank.
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Process Flow
This building block deals with the following processes:

Stock overview for determining quantities

Process order creation for mixing

Process order confirmation after mixing

Use of batch where-used list for evaluation
Key Points

Special material type

Recursive BOMs
2.4.12
Work-in-Process (WIP) Batch (996)
Work-in-Process (WIP) Batch scenario describes the coloring of Polyethylene powder with green
pigment through an extruder. Polyethylene powder is premixed with green pigment in Extruder
feed vessel and later colored through the extruder. The resulting material from extruder is
defined as Green Polyethylene granules. The scenario shows enhanced product traceability and
tracking of WIP inventory between manufacturing operations / phases.
WIP batch in manufacturing represents intermediate status of the product in production at
different stages /operations. It helps to document WIP material being produced between different
steps in production process and also ascertain current properties of the material that is being
produced.
Process Flow
This scenario consists of the following steps:

This building block deals with the following processes

Creation of Process Order

Material Staging for Warehouse Managed Components

Creation of WIP batch (in pre-mixing, mixing and Extrusion Phase)

Goods issue and goods receipt with characteristic value assignments

Batch where used report
Key Points

Work in process tracking on operation / phase level of a production or process order

Documentation of the actual characteristics / status of a product which is in production
2.4.13
Process Order with Co-Product and QM (993)
The scenario covers the manufacturing of co-products and byproducts in the chemical industry.
The process can be started in one of two ways:

Create Independent Requirements manually. You then proceed with the scenario from
the first step, run MRP, and convert your planned order to a process order

Directly create the process order for the co-product process
Regardless of the chosen method, the result is a process order for co-production.
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Bulk material and Catalyst (Grade B) are produced simultaneously. The system creates a
settlement rule on the basis of the apportionment structure and the source structure.
The main production costs are distributed among the most important products, including
production variances or WIP. The entire costs incurred for the process order are collected at the
order header level and distributed to the individual co-products using equivalence numbers and
apportionment structure that was created in the master data and assigned to the production
version.
In-Process control and good receipt control is used for the manufactured product with usage
decision.
Good receipt control is used for the co-product with usage decision.
Process Flow
This scenario consists of the following steps:

Creating Planned Independent Requirements

Material Requirements Planning at Plant Level

Alternative I: Converting Bulk Planned Order and Releasing Process Order

Alternative II: Creating Bulk Process Order

Creating the process order

In-Process control

Confirming the process order

Co-product quality inspection

Preliminary settlement for Co-products
2.4.14
Repetitive Manufacturing with QM (992)
The continuous production business process reflects a production methodology in the process
industry in which a certain product is made without changes over a longer time span (at least
one week and up to several years) on one production line. In the event of requirement
fluctuations, it is possible to switch off the line or parts of it for a certain time.
Consequently this production method means detaching production from sales orders (make to
stock). Raw materials for production are also provided without reference to an order (for
example: pipeline, tank). This results in minimum effort both for planning and controlling the
production process and for raw material requirements planning. SAP Arom. Solvent is produced
by the catalytic alkylation of Benzene with Ethylene. SAP Arom. Solvent is stored in a storage
tank & later shipped to plant. A material (Ethylene & Benzene) is procured by means of
consumption-based material requirements planning.
In-process quality is ensured by drawing samples while operations are in progress. SAP Arom.
Solvent Product quality is ensured by analyzing product for purity and impurity level. Byproduct
SAP Arom. Solvent (Grade B) is also analyzed for product purity.
Process Flow
This scenario consists of the following steps:
o
Displaying Planning Table for Repetitive Manufacturing
o
Inspection Lot Creation, Results Recording, Recording Usage Decision, Control Chart
o
Backflush of Materials
o
QM Inspection for By-Product
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Key Points
The characteristics of continuous production (long runs) are:
o
The product is produced in a continuous process over a long time (in particular singleproduct lines)
o
Component materials are provided constantly, and the finished product is constantly
being completed
o
Production is handled via run schedule headers
o
Rough capacity leveling and continuous planning of consumption are possible by means
of the planning table
o
Summary confirmation of quantities, times and material withdrawals
o
Partial confirmations are used for progress monitoring
2.4.15
Subcontracting (Internal) (973)
This scenario describes subcontracting processing.
In internal subcontracting, our company is provided with non-valuated materials. Using existing
resources and packaging materials, finished materials are sent back.
Process Flow
The following processes are provided to support the Internal Subcontracting scenario:
o
Sales (sales order processing)
o
Goods receipt of the parts provided
o
Manufacturing (creating and confirming process orders)
o
Delivery and goods issue
o
Billing (invoice creation)
2.4.16
Subcontracting (External) (918)
This scenario describes external subcontracting processing. In this scenario, our company
provides a subcontractor with bulk paint in the form of finished (packed) materials. The scenario
describes subcontracting in a purchase order with QM and subcontracting in a process order
with QM.
Process Flow
The following processes are provided to support this scenario:
o
Subcontract order
o
Goods issue of components
o
Goods receipt of ordered materials
o
Invoicing
The following functions are provided to support the External Subcontracting in Process Order
scenario:
o
Forecast and MRP
o
Procurement of Stock
o
Create Process Order (in-house processing OR external processing)
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o
Release Process Order
o
Quality Inspection at Goods Receipt
o
Process Order Confirmation
SAP Best Practices for Chemicals: Solution Scope
Key Points
o
Control key in Process Order for external processing
o
Generating subcontracting info record with material assigned

In-time consumption of components in vendor stock
2.5 Sales and Marketing
2.5.1 Presales Activities (920)
This scenario describes the presales business processes using the functions for inquiries,
quotations, and contracts.
The inquiry is used to enter a request from the customer into the system either to provide the
customer with a sales quotation or to store the inquiry electronically. A quotation presents the
customer with a legally binding offer for delivering a product or providing a service within certain
fixed conditions. A quantity contract is an agreement that your customer will order a certain
quantity of a product from you during a specified period. The contract contains basic quantity and
price information but no schedule of specific delivery dates and quantities.
Process Flow
This building block deals with the following processes:

Inquiry

Quotation with or without reference to the inquiry

Sales order with reference to the quotation

Quantity contract

Sales order with reference to the quantity contract
Key Points

Creation of inquiry with release status and SAP mail to responsible person

Quotation with automatic pricing from inquiry

Sales order with reference to quotation or contracts

Credit limit check
2.5.2 Samples Processing (917)
This scenario covers the manufacturing and sales of sample materials, as well as follow-up
activities.
The sample materials are manufactured prior to sending them to the customer. They are then
sold to domestic customers.
The scenario can be used for:

Solid samples (GranuSAP)

Liquid samples (SAPcolor)
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Process Flow
This building block deals with the following processes:

Manufacturing of sample materials

Sales of sample (sales processing)

Delivery of samples

Billing of samples

Determination of bulk material batch number using the batch where-used list

Block batch of finished materials for other customers
Key Points

Availability check for sample materials

Automatic batch determination

Checking of batch derivation
2.5.3 Sales Order Processing (incl. PoD and CoA) (921)
This scenario describes the standard sales of the chemical products GranuSAP and SAPcolor
blue to domestic customers. The standard sales scenario covers all processes from order entry
and delivery until billing with FI/CO integration.
During sales order entry, the system calculates amounts based on a combination of automatic
procedures and manually entered data. The system automatically transfers pricing data – for
example, information about prices, discounts, and freight surcharges – from the condition
records into sales and billing documents. You can change prices manually during sales order
processing.
When you enter a sales order, you can only confirm the delivery of the goods for the required
delivery date if the goods are available for all of the necessary processing activities, which take
place before delivery. On the deadline date, the availability check can be carried out for
availability of the goods. When you create a delivery, a new availability check is initiated for the
picking date to see whether the order quantity is available and can be delivered. However, the
delivery situation might have changed in the meantime due to unforeseen circumstances
regarding inward and outward movements of goods. The Quality Management (QM) component
supports Sales and Distribution (SD) by processing quality inspections and creating quality
certificates for deliveries. As soon as the goods leave the company, the delivery business activity
is finished by posting goods issue. Shipping (for example picking and packing) and
transportation as further supporting delivery functionalities can be integrated. Billing represents
the final processing stage for a business transaction in Sales and Distribution. The integration
with Accounting consists of forwarding billing data in invoices, credit and debit memos to
Financial Accounting (FI – Accounts Receivable) and Controlling (CO).
Process Flow
This building block deals with the following processes:

Order entry

Delivery

Invoice creation

Free of charge delivery
Key Points

Partner determination
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
Pricing and free goods

Agreements

Tax and account determination

Availability check (ATP)

Route determination

Delivery scheduling

Material determination (for discontinued materials)

Listing and exclusion of products for customers

Batch determination

QM in standard sales: certificates

Proof of delivery

Picking without WM
2.5.4 Sales Order Processing with WM (922)
This scenario describes the standard sales of the chemical products GranuSAP and SAPcolor
blue to domestic customers. The standard sales scenario covers all of the processes from order
entry and delivery to billing with FI/CO integration.
During sales order entry, the system calculates amounts based on a combination of automatic
procedures and manually entered data. The system automatically transfers pricing data – for
example, information about prices, discounts, and freight surcharges – from the condition
records into sales and billing documents. You can change prices manually during sales order
processing.
When you enter a sales order, you can only confirm the delivery of the goods for the required
delivery date if the goods are available for all of the necessary processing activities, which take
place before delivery. The availability check can be carried out on the deadline date for
availability of the goods. When you create a delivery, a new availability check is initiated for the
picking date to see whether the order quantity is available and can be delivered. However, the
delivery situation might have changed in the meantime due to unforeseen circumstances
regarding inward and outward movements of goods.
In this scenario, Warehouse Management (WM) is active. The goods are picked with a WM
transfer order and are confirmed in WM. After a successful WM transaction, the goods issue in
the delivery can be posted. As soon as the goods leave the company, the delivery business
activity is finished by posting the goods issue. Shipping (for example picking and packing) and
transportation as further supporting delivery functionalities can be integrated. Billing represents
the final processing stage for a business transaction in Sales and Distribution. The integration
with Accounting consists of forwarding billing data in invoices, credit and debit memos to
Financial Accounting (FI – Accounts Receivable) and Controlling (CO).
Process Flow
The following processes are provided to support the Sales Order Processing with Warehouse
Management scenario:

Order entry

Delivery

Invoice creation
Key Points

Partner determination
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
Pricing

Tax and account determination

Availability check (ATP)

Route determination

Delivery scheduling

Batch determination

Picking with WM
SAP Best Practices for Chemicals: Solution Scope
2.5.5 Free of Charge Delivery (110)
This scenario describes the process of providing goods to a customer at no charge. A unique
sales order type is created that is non-billing relevant. The order is confirmed based on the
availability of goods. A delivery is then created; the goods are subsequently picked, confirmed,
and delivered to the customer.
Process Flow
This scenario consists of the following steps:

A sales order is created

A delivery is created

The goods issue is posted
Key Points

System integrated free of charge sales order processing
2.5.6 Credit Management (108)
A credit limit check can be carried out when sales documents are created or changed. The check
is carried out by the system within one credit control area. If you change quantities or values in a
document, the check is repeated. A credit control area consists of one or more company codes.
A sales document belongs to one credit control area depending on the allocation of the sales
organization to a company code. The SAP System checks the credit limit that was granted to the
customer in this credit control area. The credit control areas and the credit limit of a customer are
defined in financial accounting and entered in the customer master record. During the check, the
SAP System totals the receivables, the open items, and the net value of the sales order for every
item of a sales document. The open items take into account obligations bound by contract that
are not recorded for accounting purposes but involve expenses through diverse business
transactions. After that, it compares the total with the credit limit. If the limit is exceeded, the
system responds in the way you defined in the configuration menu.
We are using automatic credit control in this solution. During the automatic credit control, you
can configure a system reaction (A: warning, B: error, C: A + value by which the credit limit is
exceeded, D: B + value by which the credit limit is exceeded). When the credit limit is exceeded,
we use option C (warning + value by which the credit limit is exceeded).
The system provides a transaction to list all sales documents that have been blocked for
delivery, with information about what has caused the block. The customer's current credit
situation is manually reviewed by the credit department, and when the sales order is approved,
the delivery block is removed from the sales order. You can jump directly from the list to an
individual document.
Process Flow
This scenario consists of the following steps:

A credit limit is set
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Blocked sales orders are reviewed and released
Key Points

Reduce risk of bad debt

Focus on reliable and profitable customers

Faster credit-worthiness check

Fasten the process of checking a customer credit limit

Identify the overall credit risk of your company
2.5.7 Credit Management (incl. Risk Categories) (925)
The scenario describes the sales order process including credit management. Credit
Management enables you to minimize the credit risk yourself by specifying a specific credit limit
for your customers to identify early warning signs and enhance your credit-related decisionmaking.
Along with the sales document type, the risk category helps to determine which kind of credit
check the system automatically carries out on creating the sales order and delivery. The
automatic credit check can target certain aspects during a check and run at different times during
order processing. Credit checks are defined for valid combinations of the following data:

Credit control area

Risk category

Document credit group (Document credit groups combine order types and delivery types
for credit control purposes.)
Process Flow
This scenario consists of the following steps:

Sales order processing with credit check

Delivery with credit check

Release of credit block

Invoicing
Key Points

Credit control area

Risk class

Customer credit master data
2.5.8 Rebates Handling (926)
This scenario covers both the creation and settlement of a rebate agreement.
A rebate is a special discount, which is paid retroactively to a customer. This discount is based
on the customer's sales volume over a predefined period. A rebate is created either before,
during, or after the period for which it is valid. All invoices that are processed in this period and
that meet the criteria specified in the rebate agreement are considered. The rebate quantity of
each invoice is collected as an accrual in the financial accounting system.
Customer service personnel settle rebates by creating credit notes, which are posted against the
accruals previously collected. As rebates are always paid retroactively, the system keeps track of
all billing documents (invoices, credit and debit memos) that are relevant for rebates processing.
The system can automatically post accruals so that the accumulated value of a rebate is
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recorded for accounting purposes. Rebate payments are made after the end of the agreement
validity period, after all the related billing documents have been processed and posted to
Financial Accounting. A rebate agreement is finally settled when a credit memo is issued to the
customer for the accumulated rebate total.
Process Flow
This building block deals with the following processes:

Rebate agreement

Order entry

Delivery and transport

Packing and shipping

Invoice creation

Rebate settlement
Key Points

Rebate agreement

Rebate Settlement

Accruals

Rebate payments
2.5.9 Sales Order Processing for Prospect (113)
In this scenario, you process sales order documents without first looking up the customer
information.
A dummy customer is used when your sales order processors need to investigate an order
without first looking up the customer's account number. The sales order can be saved but
remains incomplete until a valid customer account number has been entered in the sales order.
This function is particularly useful for companies that take phone orders.
Process Flow
This scenario consists of the following steps:

A sales order is entered with customer-specific material number and a default (dummy)
customer number

A material number is determined automatically

The default (dummy) customer number is replaced by a valid customer number

A delivery is created

The goods issue is posted

The billing is created
Key Points

Sales order processing without the customer's account number

Sales order entry with customer specific material
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2.5.10
Sales Order Processing with Customer Down
Payment (201)
Often in business, especially in a make-to-order environment, customers may be required to pay
some amount in advance before delivery of goods. This process is used to create requests for
down payment, record the receipt of the down payment, and create a final invoice after the
deduction of the down payment received as well as a receipt of the final amount due on the
invoice. The process makes use of the billing plan functionality. The integrated process allows a
proper document flow to be maintained between the sales and financial transactions.
Process Flow
This scenario consists of the following steps:

Sales order with a billing plan is created

Billing block is removed

Down payment request is created

Down payment is posted

Delivery is created

Goods issue is posted

Billing block is removed

Billing is created

Down payment is cleared
Key Points

System integrated sales order processing with customer down payment
2.5.11
Sales of Nonstock Item with Order Specific
Procurement (115)
In this scenario, a customer orders a material that is currently not in stock. The material is
therefore procured from an external supplier.
Process Flow
This scenario consists of the following steps:

A Sales Order is created and a purchase requisition is generated automatically

The purchase requisition is converted into a purchase order

The purchase order is approved

Goods Receipt is posted

Delivery is created

Goods Issue is posted

The billing is created

The vendor invoice is verified and posted
Key Points

Handover of customer requirements directly to external supplier
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
Material is sent from external supplier to trader. The trader remains in charge of the
complete delivery process

Fulfillment of customer requirements despite of material shortage
2.5.12
Sales Processing Using Third Party (w. Shipping
Notification) (107)
In third-party order processing, your company does not deliver the items requested by a
customer. Instead, you pass the order along to a third-party vendor who then ships the goods
directly to the customer and bills you. The standard sales order automatically creates a purchase
requisition for the materials to be delivered by the third-party vendor.
In this scenario, the vendor sends a shipping notification. After that a statistical goods receipt is
posted. The incoming invoice from the vendor updates the billing quantity, so that the customerbilling document can only be created after entering the invoice from the vendor.
Process Flow
This scenario consists of the following steps:

A third-party sales order is created and a purchase requisition is generated automatically

A list of purchase requisitions to be assigned is displayed

The assigned purchase requisitions are converted into purchase orders

The purchase orders are approved

A statistical goods receipt is posted

The vendor invoice is verified and posted

The billing is created
Key Points

Reduce stock and costs, increase efficiency

Handover of customer requirements directly to external supplier

Invoice from trader to customer based on quantities from supplier invoice

Fulfillment of customer requirements despite material shortage
2.5.13
Sales Processing Using Third Party (w/o Shipping
Notification) (114)
In third-party order processing, your company does not deliver the items requested by a
customer. Instead, you pass the order along to a third-party vendor who then ships the goods
directly to the customer and bills you. The standard sales order automatically creates a purchase
requisition for the materials to be delivered by the third-party vendor.
The incoming invoice from the vendor updates the billing quantity, so that a customer billing
document can only be created once the vendor has entered the invoice.
Process Flow
This scenario consists of the following steps:

A third-party sales order is created and a purchase requisition is generated automatically

A list of purchase requisitions to be assigned is displayed

The assigned purchase requisitions are converted into purchase orders

The purchase orders are approved
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
The vendor invoice is verified and posted

The billing is created
SAP Best Practices for Chemicals: Solution Scope
Key Points

Reduce stock and cost, increase efficiency

Handover of customer requirements directly to external supplier

Invoice from trader to customer based on quantities from supplier invoice

Fulfillment of customer requirements despite material shortage
2.5.14
Returns and Complaints (111)
This scenario describes sales order returns processing. The process starts a return sales order
with reference to the original invoice for the goods. An RMA document is printed and forwarded
to the customer to be attached to the incoming goods. The goods are shipped back, a return
delivery is created with reference to the RMA, and the material is received into return stock. The
return stock location is set as non-MRP relevant. The goods are inspected and either selected
for return to stock or scrap. A credit memo is created from the billing run and posted to the
customer's account.
Process Flow
This scenario consists of the following steps:

A return order is created

A return delivery is created

The goods issue is posted

The billing (credit) is created
Key Points

System integrated processing of Customers Returns and Complaints
2.5.15
(924)
Returns & Complaints (incl. QM and Batch Recall )
This scenario describes the complaint processing for the chemical products GranuSAP in big
bags and SAPcolor blue in canisters with domestic customers at SAPChem AG.
Returns, returnables, and claims (complaints) provide all of the necessary activities for complaint
processing. The terms claims, complaints and credit memo are used interchangeably for ease of
description as used by industry professionals.
During returns processing, goods are returned and a quality inspection is made. The goods are
then returned into unrestricted stock or blocked stock. The returnable process consists of the
return of containers, pallets, or any returnable packaging that had accompanied the product. This
inventory appears at the customer inventory. The complaints process focuses on the processing
of credit memos if no goods are sent back.
Process Flow
This building block deals with the following processes:

Complaints without physical material return (credit memo/debit memo)

Returns
o
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o
Returns with Warehouse Management
o
Returnable

Quality notification for customer

Quality Management in Sales: Returns inspection

Quality Management in Sales: Batch recall
2.5.16
Credit Memo Processing (204)
The credit memo process is used to apply a credit to a customer account once you have
determined that a customer has been overcharged because of a pricing or sales tax rate error.
An Invoice Correction Request is then created with the amount to be credited, and placed on a
billing block for review. It must then be released to become billing relevant and appear on the
billing due list. The periodic billing process creates a credit memo to be sent to the customer,
and posts an accounting document.
Process Flow
This scenario consists of the following steps:

A sales order is created and a billing block is assigned automatically.

The billing block is removed.

The billing is created.
Key Points

System integrated credit memo processing
2.5.17
Debit Memo Processing (116)
The Debit Memo process is used for applying a debit to a customer account once a
determination has been made that a customer has been undercharged because of a pricing or
sales tax rate error. An Invoice Increase Request is then created with the amount to be debited,
and placed on a billing block for review. It must then be released to become billing-relevant, and
to appear on the billing due list. Periodic billing process creates a debit memo to be sent to the
customer, and posts an accounting document.
Process Flow
This scenario consists of the following steps:

A Sales Order is created and a billing block is assigned automatically

The billing block is removed

The billing is created
Key Points

System integrated debit memo processing
2.5.18
Sales: Period End Closing Operations (203)
This scenario describes the collection of periodic activities in Sales & Distribution, such as day
ending activities or legal requirements like Intrastat and Extrastat reporting.
Process Flow
This scenario consists of the following steps:

Blocked sales orders are reviewed
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
Incomplete sales orders are reviewed

Sales orders blocked for delivery are reviewed

Sales orders due for delivery are reviewed

Log of collective delivery creation is reviewed

Incomplete SD documents are reviewed

Outbound deliveries for goods issues are reviewed

Sales documents blocked for billing are reviewed

Billing due list is reviewed

Log of collective invoice creation is reviewed

List of blocked billing documents is reviewed

Intrastat / Extrastat is created

Work-in-process calculation is performed (service provider)

Sales orders are settled to Profitability Analysis (service provider)
Key Points

This scenario provides an overview of all periodic activities in Sales & Distribution.
2.5.19
Swap Sales in Chemical Industry (797)
This scenario describes the standard sales of the chemical products GranuSAP and SAPcolor
blue to domestic customers. The standard sales scenario covers all processes from order entry,
delivery until billing with FI/CO integration as well as Proof of Delivery (PoD) and Certificate of
Analysis (CoA).
During sales order entry, the system calculates amounts based on a combination of automatic
procedures and manually entered data. The system automatically transfers pricing data - for
example, information about prices, discounts, and freight surcharges - from the condition records
into sales and billing documents. You may change prices manually during sales order
processing.
When you enter a sales order, you can only confirm the delivery of the goods for the required
delivery date if the goods are available for all of the necessary processing activities that take
place before delivery. On the deadline date, the availability check can be carried out for
availability of the goods. When you create a delivery, a new availability check is initiated for the
picking date whether the order quantity is available and can be delivered. However, the delivery
situation might have changed in the meantime due to unforeseen circumstances regarding
inward and outward movements of goods. The Quality Management (QM) component supports
Sales and Distribution (SD) by processing quality inspections and creating quality certificates for
deliveries. As soon as the goods leave the company, the delivery business activity is finished by
posting goods issue. Shipping (for example: picking & packing) and transportation as further
supporting delivery functionalities can be integrated. Billing represents the final processing stage
for a business transaction in Sales and Distribution. The integration with Accounting consists of
forwarding billing data in invoices, credit and debit memos to Financial Accounting (FI - Accounts
Receivable) and Controlling (CO).
Process Flow
This building block deals with the following processes

Order entry

Delivery

Invoice creation
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Free of charge delivery
Key Points

Partner determination

Pricing and free goods

Agreements

Tax and account determination

Availability check (ATP)

Route determination

Delivery scheduling

Material determination (for discontinued materials)

Listing and exclusion of products for customers

Batch determination

QM in standard sales: certificates

Proof of delivery

Picking without WM
2.6 Quality Management and Compliance
2.6.1 Engineering Change Management (934)
Engineering Change Management is a central logistics function that can be used to change
various aspects of production basic data (for example, BOMs, task lists, materials, and
documents) with history (with date effectivity) or depending on specific conditions (with
parameter effectivity).
In SAP Best Practices for Chemicals, Engineering Change Management is used to have
approved master recipes (bill of materials and production versions respectively). Digital
signatures are also used in this scenario.
Process Flow
This building block deals with the following processes:

Creating change requests

Converting change request to change orders

Perform change to master data objects

Release change orders
2.7 Enterprise Management and Support
2.7.1 General Ledger (156)
Purpose
The central task of G/L accounting is to provide a comprehensive picture of external accounting
and accounts. Recording all business transactions (primary postings as well as settlements from
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internal accounting) in a software system that is fully integrated with all the other operational
areas of a company ensures that the accounting data is always complete and accurate.
The SAP FI General Ledger Accountant has the following features:
o
Free choice of level: corporate group or company
o
Automatic and simultaneous posting of all sub-ledger items in the appropriate General
Ledger Accountant accounts (reconciliation accounts)
o
Simultaneous updating of General Ledger Accountant and cost accounting areas
o
Real-time evaluation of and reporting on current accounting data, in the form of account
displays, financial statements with different financial statement versions and additional
analyses.
Essentially, the General Ledger Accountant serves as a complete record of all business
transactions. It is the centralized, up-to-date reference for the rendering of accounts. Actual
individual transactions can be checked at any time in real-time processing by displaying the
original documents, line items, and transaction figures at various levels such as:
o
Account information
o
Journals
o
Totals/transaction figures
o
Balance sheet/profit and loss evaluations
Process Flow
o
Posting General Ledger Account Documents
o
Displaying the Document Journal
o
Displaying G/L Balances (List)
o
Carrying Out Recurring Entries
o
Account Maintenance: Automatic and Manual Clearing
Key Points
o
Provides a comprehensive picture of external accounting and accounts
o
Records all business transactions in a software system that is fully integrated
o
Ensures that the accounting data is always complete and accurate
o
Automatic and simultaneous posting of all sub-ledger items in the appropriate general
ledger accounts (reconciliation accounts)
o
Simultaneous updating of general ledger and cost accounting areas
o
Real-time evaluation of and reporting on current accounting data
o
Financial statements with different versions and additional analyses
o
Actual individual transactions can be checked at any time in real-time processing
2.7.2 Activate Document Splitting for Chemicals (972)
Document splitting enables a complex display of documents. It ensures that you can draw up
complete financial statements for the selected dimensions at any time.
Using the document splitting procedure, you can also create a segmented display of a (partial)
balance sheet, according to a legal requirement (for example, US GAAP), or according to areas
of responsibility.
The Segment field is a standard field in the totals table for New General Ledger Accounting
(FAGLFLEXT) New FI drilldown reporting functions let you create segment financial statements.
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Document splitting is only relevant for the general ledger; it does not need to be visible from
within the sub ledgers.
The installation of document splitting in Discrete Manufacturing is optional. You have to install
and activate document splitting before you create any transaction data.
Function List
The following functions are provided to support this building block:
o
Passive split: During clearing (during a payment, for example), the account assignments
of the items to clear are inherited to the clearing line items (such as payables line items).
o
Active (rule-based) split: The system splits documents on the basis of (delivered or
custom) document splitting rules. Document splitting rules can be configured.
o
Clearing lines or zero balance formation: the system creates clearing lines automatically
to achieve a split. You can control this process with the zero balance indicator.
Key Points
o
Extensibility and flexibility – to add new fields, you can create management reports,
supplementary balance sheets, and profit–and–loss statement for industry–specific and
enterprise–specific purposes.
o
Increased data quality – the results of the document split are visible in the document
itself. This eliminates the need for additional check steps in alternative lists, and
improves data quality.
o
Accelerated closing – The elimination of additional periodic splitting programs
significantly speeds up the closing process.
2.7.3 Accounts Receivable (157)
Purpose
This component deals with posting accounting data for customers in Accounts Receivable. From
there, the data is sorted by customer and made available to other areas such as the Sales and
Distribution system. When posting data in Accounts Receivable, the system creates a document
and passes the data entered to the general ledger. General ledger (Profit and Loss) accounts
and customer accounts are then updated according to the transaction concerned (receivable,
down payment, credit memo, and so on) customer payment activities. All business transactions
are posted to and managed by means of accounts and for this a customer master records are
created. One time Customers are used for avoiding building up of huge master data volume.
Business Process Accounts Receivable focuses on the following activities:
o
Post down payment request
o
Post down payment manually
o
Post customer invoice
o
Post a credit note with invoice reference
o
Posting Payments Using the Payment Program
o
Posting Manual Payment
o
Maintaining & Posting Lockbox File
o
Automatic Clearing of open items in customer accounts
o
Manual Clearing of open items in customer accounts
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o
Manual Bank Statement Processing
o
Reprocessing an Account Statement
o
Dunning
o
One-Time-Accounts Postings
o
Setting a Credit Limit
o
Credit Control Reporting
SAP Best Practices for Chemicals: Solution Scope
General Business Processes: In this document, you can find some transactions that cover the
following general business processes
o
Displaying an accounting document.
o
Displaying and Changing Line Items
o
Displaying Balances
o
Reversing a Document
o
Reversing a Document – Individual Reversal
o
Reversing a Document – Mass Reversal
Process Flow
o
Post down payment request/ manually
o
Posting customer invoice and
o
Post a credit note with invoice reference
o
Posting payments using the payment program
o
Posting manual payment
o
Maintaining & Posting Lockbox File
o
Automatic clearing of open items in customer accounts
o
Manual clearing of open items in customer accounts
o
Manual bank statement processing
o
Reprocessing an account statement
o
Dunning
o
One-Time-Accounts postings
o
Setting a credit limit and credit control reporting
Key Points
o
When posting data in Accounts Receivable, the system creates a document and passes
the data to the general ledger
o
Profit, Loss and customer accounts are updated according to the transaction concerned
customer payment activities
o
All business transactions are posted to accounts
o
All business transactions are managed by means of accounts and for this customer
master records are created
o
One time Customers are used for avoiding building up of huge master data volume
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2.7.4 Accounts Payable (158)
Purpose
This scenario deals with posting accounting data for vendors in Accounts Payable. From there,
the data is sorted by vendor and made available to other areas such as the purchasing system.
When posting data in Accounts Payable, the system creates a document and passes the data
entered to the general ledger. General ledger accounts and vendor accounts are then updated
according to the transaction concerned (payable, down payment, credit memo, and so on)
vendor payment activities. All business transactions are posted to and managed by means of
accounts and for this a vendor master records are created.
o
Business Process Accounts Payable focuses on the following activities:
o
Down payment request / clearing
o
Post down payments using the payment program
o
Post vendor invoice
o
Enter vendor credit memo
o
Review and Release Blocked Invoices
o
Select invoices to be Paid
o
Review and block invoices for payment as needed
o
Post payment using the payment program
Creation of payment media using Payment Media Workbench (Alternative 1)
Creation of payment media using Classical Payment Medium program( Alternative 2)
o
Manual payment
o
Manual bank statement processing
o
Display of posted documents
Process Flow
o
Post Accounts Payable Documents
o
Manual and automatic clearing of open items
o
Post down payments using the payment program
o
Post manual and automatic outgoing payments.
Key Points
o
When posting data in Accounts Receivable, the system creates a document and passes
the data to the general ledger
o
Profit, Loss and customer accounts are updated according to the transaction concerned
customer payment activities
o
All business transactions are posted to accounts
o
All business transactions are managed by means of accounts and for this customer
master records are created
o
One time Customers are used for avoiding building up of huge master data volume
2.7.5 Period End Closing Financial Accounting (159)
Purpose
Closing operations are periodic tasks and can be subdivided in FI as follows:
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o
Day-end closing
o
Month-end closing
o
Year-end closing
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The closing operations component helps preparing and carrying out the activities required for
day-end, month-end, and year-end closing. For this purpose, the system provides a series of
standard reports that can be used to generate evaluations and analyses directly from all of the
posted account balance. The system helps carrying out the following:
o
Creating the balance sheets and P&L statements
o
Document the posting data
No additional postings are required for day-end closing.
Using the following evaluations for day-end closing and for documenting the posting data is
possible:
o
Compact-Document journal
o
Evaluation of the documents that have not been posted
To carry out the closing operations in G/L accounting, it is necessary to carry out the closing
operations in the sub-ledger accounting areas you are using. These include:
o
Accounts receivable and accounts payable accounting
o
Inventory accounting
o
Asset accounting
Year-end closing is split into two phases:
o
At the beginning of the new fiscal year, you open new posting periods and carry forward
the balances from the previous year
o
You then prepare and create the financial statements and document the business
transactions using the balance audit trail
The SAP System offers a range of reports that can carry forward balances into the new fiscal
year. During this process, the profit and loss accounts are carried forward to one or more
retained earnings accounts. The balances of the balance sheet accounts are simply carried
forward into the new fiscal year. It is not necessary to create special opening financial
statements.
Any postings done in the old fiscal year automatically adjust the relevant carry-forward balance.
Closing the old fiscal year and carrying out the closing postings before opening the new fiscal
year is not necessary.
As with month-end closing, you can create all the external reports required, document the
posting data, and carry out the internal evaluations.
Process Flow
o
day-end closing
o
month-end closing
o
year-end closing
Key Points
o
Updating Exchange Rates
o
Gaps in Document Number Assignment
o
Invoice Numbers Allocated Twice
o
Displaying the compact document journal
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2.7.6 Cash Management (160)
Purpose
Cash Management in SAP ERP Financials provides three basic functions:
o
Quickly and reliably transfers all cash-relevant information from internal and external
sources into the cash management system (inbound data)
o
Performs analysis and reporting of current and future cash flows to help you make cash
management decisions (analysis and decision)
o
Communicates with banks and other business partners based on the results of the
decision process (outbound data)
The cash position overview provides information on the current financial state of the bank
accounts. It is the starting point for cash concentration in which the balances from various bank
accounts are concentrated in one target account, taking minimum balances and payment
optimization into consideration.
Process Flow
o
Cash Management Status Analysis
o
Cash Concentration
Key Points
o
Posting of a vendor invoice in local and foreign currency.
o
Posting of a customer invoice in local currency (from a sales order).
o
Posting of planning items and memo records.
o
Execution of the report showing cash position and the liquidity forecast.
o
After posting a manual bank statement, the flow between the planning levels is
demonstrated.
o
Automatically archiving memo records
o
The cash concentration function identifies the relevant amount and transfers them from
one account to another.
o
Period End Closing Activities
o
Cash Position & Liquidity Forecast
2.7.7 Asset Accounting (162)
Purpose
The functions for Tangible Asset Handling enable illustration and documentation of the
development of fixed assets for accounting purposes.
Asset accounting is a subsidiary ledger of the general ledger and is used to manage and
document in detail fixed asset transactions. In general ledger accounting, it is possible to update
depreciation and changes to asset balance sheet values in asset accounting. It is also possible
also make various account assignments to cost accounting for these transactions.
Because of the integration in SAP ERP, Asset Accounting (FI-AA) transfers data directly to and
from other SAP ECC components, for example posting from the Material Management (MM)
component directly to FI-AA. When purchasing an asset or produce an asset in-house, directly
posting the invoice receipt or goods receipt is possible, or the withdrawal from the warehouse to
assets in the Asset Accounting component. At the same time, you can pass on depreciation and
interest directly to the Financial Accounting (FI) and Cost Accounting (CO) components. From
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the Plant Maintenance (PM) component, maintenance activities that require capitalization to
assets are available.
To handle tangible assets, the business functions of the following system components are
accessible:
Component
Financial
(FI)
Functions
Accounting Integration with the general ledger and other subsidiary ledgers
Asset Accounting (FI- Valuation of fixed assets and settlement of assets under
AA)
construction
Cost Accounting (CO)
Posting cost-accounting depreciation
Process Flow
o
Acquisition from purchase with vendor
o
Acquisition with Automatic Offsetting Entry
o
Retirement with revenue
o
Asset Sale without customer
o
Post-Capitalization
o
Write-Ups
o
Settlement Assets Under Construction
o
Down Payment Request for Assets under Construction
o
Depreciation Posting Run
o
Posting Acquisition and Production Costs Values
o
Depreciation Simulation/Primary Cost Planning
Key Points
o
Entire lifetime of the asset from purchase order or the initial acquisition (possibly
managed as an asset under construction) through its retirement
o
Calculate values for depreciation and interest
o
Depreciation forecast
2.7.8 Asset Acquisition for Constructed Assets (Investment
Orders) (164)
Purpose
Assets under construction (AUC) are a special form of tangible assets. They are usually
displayed as a separate balance sheet item and therefore require a separate account
determination and their own asset classes. During the construction phase of an asset, all actual
postings are assigned to the AUC. Once the asset is completed, a transfer is made to the final
fixed asset.
The recommendation of using Investment orders to capture the costs of AUC assets during the
period and month-end processing will ‘settle’ the costs from the Investment order to the AUC.
This is done so that budget information can be entered for the AUC and tracking of the actual-tobudget can be performed. Once the AUC is completed, the final asset is created in the
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appropriate asset class, and the Investment order is set to ‘complete’ so that the next settlement
transfers the AUC asset value to the completed asset.
Process Flow
o
Create Investment order with asset under construction
o
Create Budget for asset
o
Release Investment order
o
Post invoice to Investment order
o
Monitor order
o
Asset under Construction settlement
o
Complete order
Key Points
o
Transparent view of an asset for acquisition
o
Automated efficient processing
2.7.9 General Cost Center Planning (175)
Purpose
During the annual budgeting process, the managers of non-operational cost centers (such as
sales, marketing, administrative, research and development, and so on) plan the costs for
various cost types/elements for their respective cost centers. The usual starting point for
development of these plans is the actual data for the current/previous year.
In this process, the previous year’s actual expenses for these cost centers are copied into an
AOP (annual operative planning) budget version in cost center accounting. As an alternative, the
previous year’s budget data can also be used as a starting point for the exercise. The data in this
version is downloaded into spreadsheets by each cost element and cost center. The respective
cost center managers review and update the budget values according to their requirements and
plans. Then these plans are uploaded back into SAP. The plans in SAP are reviewed and
finalized.
The planned depreciation on fixed assets is transferred separately to the cost center plan
version. The system calculates the planned depreciation on assets by cost center based on the
asset values posted on the cost centers. In the case of cost centers having machinery, the
depreciation is planned based on cost center and activity type.
Process Flow
o
Copy previous year’s actuals or budget as a basis for planning
o
Transfer planned depreciation from assets
o
Download cost elements to spreadsheet for income/expense budget
o
Update budget values for income and expense excluding operations
o
Upload cost elements for income and expense excluding operations
o
Plan accrual costs, statistical key figures, assessments
o
Confirm non-operating cost center budget
o
Copy AOP version to actual version 0 and lock both versions for planning
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Key Points
o
Copying the previous year’s actual expenses for the cost centers into an AOP budget
version
o
Changing copied data
o
Depreciation transferred separately into AOP
o
Downloading data to spreadsheets by each cost element and cost center
o
Uploading the adjusted data into SAP
o
The cost center planning in SAP is reviewed and finalized (accrued costs, statistical key
figures, assessments)
o
Activating the planned data of the AOP version
2.7.10
Overhead Cost Accounting - Actual (184)
Purpose
This part describes the transaction-based actual postings that are normally used in Overhead
Cost Controlling.
For an explanation of the activities that are generally performed at the end of the period, refer to
the chapter Period-End Closing.
Process Flow
o
Actual posting for a cost center
o
For primary costs the related cost center is posted
o
Cost center update with the correct values
o
Posting of statistical key figures
o
Periodic and year end activities
o
Comparison between the actual and the planned costs for the cost center
o
Allocation of primary and secondary costs using an assessment cost element
o
Posting of accruals for payroll fringe costs on a monthly basis
o
Maintaining the controlling version
o
Lock period
Key Points
o
Process a G/L document for various purposes
o
Necessary steps for preparation of periodic and year end activities
2.7.11
Cost of Sales Accounting (161)
Purpose
Cost of sales accounting compares the sales revenue for an accounting period with the
manufacturing costs of the activity. The expenses are allocated to the commercial functional
areas (manufacturing, sales and distribution, administration, and so on). Expenses and revenues
that cannot be assigned to the functional areas are reported in further profit and loss items,
sorted according to expense and revenue type.
With this type of grouping, cost of sales accounting identifies where costs originate in a
company. It therefore portrays the commercial purpose of the expense.
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Process Flow
o
Functional area in chart of accounts
o
Functional area in posting key
o
Cost center categories
o
Line item reporting (Cost object re-assignment)
o
Balance Sheets and P&L Statements
o
Cost of Sales Accounting – P&L Statements.
Key Points
o
Compares the sales revenue for an accounting period with the manufacturing costs of
the activity
o
Cost of sales accounting identifies where costs originate in a company
o
Cost of sales accounting portrays the commercial purpose of the expense
o
The expenses are allocated to the commercial functional areas (manufacturing, sales
and distribution, administration, and so on).
o
Expenses/revenues that cannot be assigned to functional areas are reported in further
profit and loss items
o
Period End Closing Activities
o
Reposting of unassigned Functional area
2.7.12
Internal Order for Marketing and Other Overhead
Actual (186)
Purpose
Various internal projects consume resources and incur costs or expenses. These projects are
usually undertaken for future development of products. The product lines are generally
determinable for such projects. The costs of these projects need to be tracked for various
purposes such as cost control, return on investment calculations, tax reporting, and so on.
This process makes use of SAP’s internal order functionality to track costs and status.
In case of marketing projects, an internal order is created by using the marketing order type.
Marketing orders are created as statistical orders. This means that costs are posted to the
assigned cost center and additionally as statistical costs to the internal order. The order does not
need settlement since the real costs are assigned to the cost center.
In case of other overhead projects, internal orders can be created by using the overhead order
type. In this case, a responsible cost center is assigned. The internal orders are to be settled to
this cost center.
Process Flow
o
Create internal order
o
Post general ledger account
o
Check settlement rule
o
Check settlement
o
Check actual budget
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Key Points
o
This process makes use of SAP’s internal order functionality to track costs and status.
o
It gives a transparent view of an internal order
o
It allows automated efficient processing
2.7.13
Internal Order for Marketing and Other Overhead
Planning (180)
Purpose
Various internal projects consume resources and incur costs or expenses. These projects are
usually undertaken for future development of products. The product lines are generally
determinable for such projects. The costs of these projects need to be tracked for various
purposes such as cost control, return on investment calculations, tax reporting, and so on.
This process makes use of SAP’s internal order functionality to track costs and status.
In case of marketing projects, an internal order is created by using the marketing order type.
Marketing orders are created as statistical orders. This means that costs are posted to the
assigned cost center and additionally as statistical costs to the internal order. The order does not
need settlement since the real costs are assigned to the cost center.
In case of other overhead projects, internal orders can be created by using the overhead order
type. In this case, a responsible cost center is assigned. The internal orders are to be settled to
this cost center.
Process Flow
o
Creation of internal orders
o
Cost element planning on internal orders
o
Settlement of internal orders (planned costs)
Key Points
o
After creating the internal order, you set a planner profile and plan costs at cost element
level. Revenues can also be planned if the order is with revenues.
o
It is also possible to assign budgets to an internal order. Budgets are lump sums that are
not broken down in cost elements.
o
After checking the settlement rules, you execute the settlement of planned costs to the
receivers.
o
You can use standard reports to confirm correct settlement and the budgets assigned to
the orders.
o
The planned and actual costs of these projects can be tracked for various purposes such
as cost control, return on investment calculations, tax reporting, and so on.
2.7.14
Operational Maintenance (929)
The scenario Operational Maintenance describes the use of the SAP ERP plant maintenance
management (module PM) within a chemical company.
In a chemical company, plant maintenance is not a self-sustaining function. It is one of the most
important support functions as it ensures asset availability and takes care of legal requirements
concerning assets.
Process Flow
The following processes are provided to support the plant maintenance scenario:
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
Technical system structure

Operational maintenance
SAP Best Practices for Chemicals: Solution Scope
Key Points

Technical system management

Breakdown maintenance

Operational maintenance activities

Maintenance budgeting and cost controlling (in combination with business scenario 932)
2.7.15
Preventive Maintenance (930)
This scenario describes the use of SAP Plant Maintenance management (module PM) within a
chemical company.
In a chemical company, preventive maintenance is not a self-sustaining function. It is one of the
most important support functions as it ensures asset availability and takes care of the legal
requirements concerning assets.
Process Flow
This building block deals with the process of preventive maintenance.
Key Points

Technical system management

Maintenance strategies (general scheduling rules)

Task list

Maintenance plan

Maintenance scheduling functions

Deadline monitoring of scheduled tasks and generating work orders automatically

Maintenance budgeting and cost controlling (in combination with the business scenario
Investment Management in PM (932)
2.7.16
Investment Management in PM (932)
The scenario Investment Management describes the use of the SAP ERP functionalities of
investment management (module IM) within a chemical company.
It provides functions to support the planning, investment, and financing processes.
Process Flow
This building block deals with the following processes:

Capital investments, such as the acquisition of fixed assets as the result of internal
production or purchasing

Investments in research and development

Projects that can be primarily considered as overheads, for example, continuing
education of employees or establishing new markets

Maintenance programs
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Key Points

Program structure

WBS elements

Planning and budgeting

Reporting

Fiscal year changing

Fully integrated process of Financials, Asset Accounting, Controlling, and Plant
Maintenance
The term “investment,” therefore, is not only limited to the investments you capitalize on for
bookkeeping or tax purposes. An investment in this context can be any measure that initially
causes costs and that may only generate revenue or provide other benefits after a certain time
period has elapsed (for example, plant maintenance).
2.7.17
Time Recording (211)
The Cross-Application Time Sheet (CATS) is the tool used for recording time worked by an
employee on a certain assignment. Working time can be recorded on a sales order, internal
order, service order, or a project. Additionally you can switch over to travel management for
reimbursement and posting of travel expenses.
Process Flow
This scenario consists of the following steps:

Recording actual working times

Approval of working times

Time sheet: transfer to target components
Key Points

Cross - Application Time Sheet for Time Recording
2.7.18
Segment Reporting (166)
Purpose
The purpose of segment reporting is to make the profit and risk situation of individual enterprise
areas (segments) transparent.
Process Flow
o
Posting G/L Account Documents with different segments
o
Allocation of un-allocable segment at the period end
o
Balance Sheets and P&L Statements
o
Cost of Sales Accounting – P&L Statements
o
Receivables and Payables by segment.
Key Points
o
In accordance with accounting standards, segment reporting is required for productrelated enterprise areas.
o
Making the profit and risk situation of individual enterprise areas transparent.
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SAP Best Practices for Chemicals: Solution Scope
Period-End Closing Activities (224)
This building block provides the means and sequence of period–end closing steps for period–
end closing on a daily, monthly, and yearly basis.
SAP Best Practices covers all different kinds of scenarios with a broad variable implementation
approach. It should be possible to select all required steps depending on the selected solution
scope.
Period-end closing steps are closely related to scenarios and applications. SAP Best Practices
for Baseline structures the period–end closing in two sections.
Section 1: The period–end closing process steps are described in detail in specific Business
Process Documentations. These procedures are application oriented and contain all steps that
are to be done in this regard.
Section 2: The Business Process Documentation does not cover the correct sequence of all
period–end closing steps in one solution. Therefore, an additional description is provided which
contains all steps in a certain sequence. If the step is to be performed, the corresponding step of
the Business Process Documentation should be selected and executed.
Key Points
Business Process Documentation for period–end closing is provided within the SAP Best
Practices Baseline implementation. They are related to certain applications and delivered
separately. The purpose of this scenario documentation is to provide a method to help select
these steps.
2.7.20
SAP ERP Reports for Accounting (221)
The reporting tools and existing reports can be used to satisfy reporting requirements in most
cases. In the area of accounting, various reports can be used to get information about all fields of
financial accounting.
Function List
The reports are provided to support the following fields of financial accounting:

General Ledger

Fixed Assets

Cost Element Accounting

Cost Center Accounting

Internal Orders

Profitability Analysis
Key Points

Covers the reporting requirements for financial accounting in most cases.
2.7.21
Overhaul Management (886)
This scenario describes a typical Overhaul Maintenance (OM) process. During overhaul
maintenance, all the main systems of the industry would be shut down and the maintenance
would be executed according to a predefined project schedule.
Overhaul maintenance is a large scale maintenance project involving allocation of budget to
different project tasks. Various resource requirements need to be identified, scheduled, and
monitored for all OM activities during the period.
Usually, the spare part procurement would be done in advance in material management to avoid
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material shortages during the maintenance activities.
An OM project is created with Work Breakdown Structure (WBS) elements, required networks,
and network activities. Maintenance Orders created due to various pending malfunctions are
linked to the WBS Elements or Network Activities. These malfunctions are fixed during the
overhaul period. The maintenance order collects the costs of the maintenance activities and
settles it to the work breakdown structure of project (WBS).
The scenario involves a maintenance employee, and a project leader who together complete the
whole process for overhaul maintenance.
Process Flow
This scenario consists of the following steps:
o
Create/Change Program Structure
o
Create/Change/Display Measures
o
Assign WBS Element to Functional Location
o
Plan Costs on Project
o
Roll-Up Planned Costs to the Overhaul Maintenance Program
o
Budget Distribution
o
Network Scheduling
o
Releasing Measures
o
Creating a Maintenance Order and Assign to WBS/Network
o
Withdrawing the Material
o
Individual Time Confirmation
o
Technically Completing the Order
o
Settling the Order
o
Closing the Order
o
Confirming Network Activities
o
Determining Project Progress
o
Evaluating Project Progress
o
Period-end Settlement
o
Closing Project
o
Fiscal Year Change of Programs
Key Points
o
Closing Project
o
Editing WBS Cost Planning and Distributing WBS Budget
o
Creating a Maintenance Order and Assign to WBS/Network
2.7.22
Refurbishment Management (887)
The refurbishment of - high value - faulty repairable spares is of considerable economic
importance for the companies and is a core process in Maintenance Processing. It is much more
cost-effective than a brand new purchase.
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In this scenario, the spare part would have different valuation types to represent different values.
Since it is also a high value spare part or critical part, this spare part would be managed with
serial number.
In this scenario, a spare part would be procured and installed in the function location as
equipment. Serial numbers can also be assigned to the procured material. These repairable
spare parts can be identified with different valuation types like New (C1), Repaired (C2), and
Damaged (C3) with corresponding cost assignments.
When there is a malfunction of the installed equipment, it would be dismantled from the
functional location and a spare part / equipment can be withdrawn and installed at the functional
location. The defective equipment would be returned as damaged item to the warehouse
(Valuation type C3). The stock in the warehouse would be automatically updated (Valuation
types) and with corresponding cost.
The maintenance planner would create a refurbishment order. These defective repairable spare
(Valuation class C3) would be withdrawn from the warehouse and would be repaired. When the
refurbishment is finished, the equipment would be returned to warehouse as repaired material
(Valuation type C2) and the cost would be updated accordingly in the material master. After the
settlement of the refurbishment order, the maintenance expense would be settled to the specific
material, and then the moving average price of this spare would be updated in the material
master. So the moving average price of this spare would vary during the different phases of
refurbishment.
Process Flow
This scenario consists of the following steps:
o
Creation of Maintenance Order
o
Removing Defective Equipment
o
Returning Defective material to warehouse
o
Goods Issue for Maintenance Order
o
Activate Equipment
o
Creating the Refurbishment Order for the Defective material
o
Goods Issue for Refurbishment Order
o
Order Confirmation
o
Goods Received for Refurbishment Order
o
Settling the Refurbishment Order
Key Points
o
Removing Defective Equipment
o
Activate Equipment
o
Creating the Refurbishment Order for the Defective material
o
Goods Issue for Refurbishment Order
o
Goods Received for Refurbishment Order
2.7.23
Work Clearance Management (888)
The WCM planner can create work approval from a maintenance order, and then the reference
information in the maintenance order can be copied into work approval automatically. Same
result when creating WCA and Hot Work from WAP, WCD from WCA. Once determines to
activate the WCM process during maintenance process to ensure maintenance staff’s safety, all
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permit must be issued before execution of actual maintenance. Lockout/Tagout consists of
orderly tagging and subsequent untagging of technical objects, so that work and tests on
technical objects can be performed safety. Maintenance employee can create a maintenance
plan to regularly generate maintenance order. All WCM objects could be generated automatically
and link to the maintenance order.
Process Flow
This scenario consists of the following steps:
o
Creating Maintenance Order with WCM Requirement
o
Creating Work Approval (WAP)
o
Creating Work Clearance Application (WCA)
o
Creating additional application Hot Work
o
Creating Operational Work Clearance Document (WCD)
o
Performing Permit Approval process
o
Performing operational cycle of lockout/tagout
o
Releasing Execution for Work Order
o
Performing Test Cycle
o
Creating Maintenance Plan
o
Scheduling Maintenance Plan
o
Running Program RIWC0016 to Generate WCM Objects
Key Points
o
A component with which the safety measures during maintenance work at technical
objects can be controlled and monitored
o
The WCM process is fully integrated with the work order process
o
All permit in WCM objects must be issued before execution of actual maintenance
o
A protection that ensures that a technical object that is managed as an item in an
Operational WCD can only be orderly tagged or untagged from certain Operational
WCDs
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