ERP and SAP – Part 2
SAP University Alliances
Version
2.01
Sumantra Sarkar
Georgia State University
Robinson College of Business
8rd November, 2011
SAP Components
Finance
Logistics
SD
FI
MM
AM
SAP R/3
PM
SAP PLM
CO
PP
QM
Financial Accounting (“Track”)
Managerial Accounting
Asset Management
Treasury
Client/Server
ABAP
Basis
HR
SAP
SRM
SAP ERP
SAP
CRM
PS
WF
IS
SAP SCM
SAP NetWeaver
Sales & Distribution (“Sell”)
Materials Management (“Buy”)
Production Planning (“Make”)
Plant Maintenance
Quality Management
- Personnel Management
- Benefits
- Payroll
SAP Main Menu
SAP Document Principle
• Each business transaction impacting FI writes data to the SAP database
creating a uniquely numbered electronic document.
• The document number can be used to recall the transaction at a later
date.
• Audit Trail - contains critical and necessary information as:
• Responsible person
• Date and time of the transaction
• Commercial content
• Once written to the SAP database, a financial document (one impacting
the financial position of the company) can not be deleted from the
database.
• The SAP document principle provides a solid and important framework
for a strong internal control system – a requirement of law for
companies that operate in the United States and in most other countries
in the world.
GL Transactions Tracking
S_ALR_87012291 Line item journal from Accounting  General
Ledger  Information system  Document  Line item journal.7
Presentation Overview
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•
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•
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•
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Introduction to ERP
Introduction to SAP
Sales & Distribution
Materials Management
Production Planning
Financial Accounting
Controlling
MM Functionality
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Inventory Management
Purchasing
MRP
Physical Inventory
Valuation
Service Master
Invoice Verification
Product Catalogs
Procure-To-Pay Process
Purchase
Requisition
No financial
impact (FI)
Vendor
Selection
Purchase
Order
Notify
Materials
Payment
Amount
Management
received
owed isand
(MM) Vendor
Payment
and
assigned
Accounts
Financial
and
payable
Accounting
transferred
reduced
(FI)
to
to Vendor
A/P XXXX
vendor
via automatic
accountaccount
payable
Bank XXXX
assignment
Vendor
Invoice
Shipment
Receipt
PO Receipt XXXX
Goods
A/P
XXXX
Receipt
Inventory-RM XXXX
PO Receipt XXXX
GL Transactions Tracking
Receipt of Goods
Inventory-RM XXXX
PO-Receipt
XXXX
Invoice Receipt
PO-Receipt XXXXX
A/P
XXXXX
11
GL Transactions Tracking
Payment to Vendor
A/P
XXXXX
Bank
XXXXX
12
Presentation Overview
•
•
•
•
•
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•
Introduction to ERP
Introduction to SAP
Sales & Distribution
Materials Management
Production Planning
Financial Accounting
Controlling
PP Functionality
• SAP divides production into multiple processes
• Production Planning
• Manufacturing Execution
• Discrete Manufacturing
• Repetitive Manufacturing
• KANBAN
• Production – Process Industries
• Integrated planning tool for batch-orientated process manufacturing
• Design primarily for chemical, pharmaceutical, food and beverage
industries along with batch-oriented electronics
Production Planning & Execution
• Players in the Game
• Strategic Planning
• CEO, COO, CIO,
CFO, Controller,
Marketing
Director
• Detailed Planning
• Line Managers,
Production
Scheduler, MRP
Controller,
Capacity
Planners
• Execution
• Line Workers,
Shop Floor
Supervisors
SIS
Forecasting
Sales & Operations
Planning
CO/PA
Strategic
Planning
Demand
Management
MPS
Detailed
Planning
MRP
Manufacturing
Execution
Order
Settlement
Procurement
Process
Manufacturing
Execution
Forecasting
• Forecasting is the
foundation of a reliable
SOP
• Accurate forecasts are
essential in the
manufacturing sector
• Overstocked &
understocked warehouses
result in the same thing: a
loss in profits.
• Forecasts are ALWAYS
WRONG
Forecasting
• Forecasting Models
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•
Trend
Seasonal
Trend and Seasonal
Constant
• Selecting a Model
• Automatically
• Manually
Sales and Operations Planning (SOP)
• Information
Origination
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Sales
Marketing
Manufacturing
Accounting
Human Resources
Purchasing
• Intra-firm
Collaboration
• Institutional Common
Sense
Material Requirement Planning (MRP)
• In MRP, the system calculates the net requirements
while considering available warehouse stock and
scheduled receipts from purchasing and production
• During MRP, all levels of the bill of material are planned
• The output of MRP is a detailed production and/or
purchasing plan
• Detailed planning level
• Primary Functions
• Monitor inventory stocks
• Determine material needs
• Quantity
• Timing
• Generate purchase or production orders
PP Master Data
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Material
Bill of Materials (BOM)
Routing
Work Center
Product Group
Bill of Materials (BOM) Bicycle Example
• List of components that make up a product or
assembly
 Seat Kit
• Wheel Assembly
•
•
•
•
•
•
Tire
Tube
Wheel
Hex nut
Lock Washer
Socket Head Bolt
• Frame
• Derailleur Gear Assembly
 Handle Bar
 Pedal Assembly
 Chain
 Brake Kit
 Warranty Document
 Packaging
Routing
• Routings enable you to plan the production of
materials (products).
• Routings are used as a template for production
orders and run schedules
• Routing are also used as a basis for product costing.
• Series of sequential steps (operations) that must be
carried out to produce a given product
• Routings contain:
• What, Where, When, How
Work Center
• A location within a plant where value-added work
(operations or activities) are performed
• Work Centers can represent
• People or Groups of People
• Machines or Groups of Machines
• Assembly Lines
• Work center used to define capacities
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Labor
Machine
Output
Emissions
• Capacities used in
• Capacity requirements planning (CRP)
• Detailed scheduling
• Costing
Presentation Overview
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•
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Introduction to ERP
Introduction to SAP
Sales & Distribution
Materials Management
Production Planning
Financial Accounting
Controlling
FI Integration
• Fully integrated with other SAP modules
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Sales and Distribution (SD)
Materials Management (MM)
Production Planning and Execution (PP)
Managerial Accounting (CO)
Goal of Financial Accounting (FI)
• Financial Accounting is designed to collect the
transactional data that provides a foundation for
preparing the standard portfolio of reports.
• In general, these reports are primarily, but not
exclusively, directed at external parties.
• Standard reports include:
• Balance Sheet
• Income Statement
• Statement of Cash Flows
FI Reporting - sample
• Balance Sheet
•
•
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Presentation of an organization’s Assets, Liabilities, and Equity at a point in time
Assets: What the company owns
Liabilities: What the company owes
Equity: The difference between Assets and Liabilities
• Income Statement
• Presentation of an organization’s revenues and expenses for a given period of time
(e.g. monthly, quarterly, or yearly)
• Statement of Cash Flows
• Considers the associated changes, both inflows and outflows, that have occurred in
cash – arguably the most important of all assets – over a given period of time (e.g.
monthly, quarterly, or annually)
Target Audience for reports
• Internal
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Executives
Senior Management
Administrative Staff
Employees
• External
-
Legal Authorities
Banks
Auditors
Shareholders
Insurance
Taxing Authorities
Media
Financial Analysts
Accountants and Audit Trails
• Audit trails allow an auditor to begin with an
account balance on a financial statement and trace
through the accounting records to the transactions
that support the account balance.
• Or ……enables an auditor to trace individual
transactions to the effected account balance(s) on a
financial statement.
FI Master Data
• General Ledger (G/L) Accounts
• The unique combination of Company Code and Chart of Account creates a data
storage area called a General Ledger.
• The General Ledger contains a listing of the transactions effecting each account in
the Chart of Accounts and the respective account balance.
• It is utilized in the preparation of financial accounting statements.
• Customer and Vendor Master Data
• Customer and vendor account balances are maintained in FI through fully
integrated accounts receivable and accounts payable sub-modules.
• Financial postings for customers and vendors are made directly to their respective
individual accounts and accompanied by a concurrent automatic posting to the
General Ledger.
Presentation Overview
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•
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•
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Introduction to ERP
Introduction to SAP
Sales & Distribution
Materials Management
Production Planning
Financial Accounting
Controlling
Goal of Controlling (CO)
• Managerial Accounting – also termed Controlling – is
designed to collect transactional data that provides a
foundation for preparing internal reports that support
decision-making within the enterprise.
• These reports are exclusively for use within the
enterprise and include:
• Cost center performance
• Profit center performance
• Budgets analyses
Target Audience
• Executives
• Senior Management
• Department
Managers
• Controllers
• Cost Accountants
CO Master Data
• Statistical Key Figures
• Provide the foundation for accurate and effective cost allocations between cost
objects
• Utilized to support internal cost allocations involving allocations, assessments, and
distributions
• Examples:
• number of employees
• square footage
• minutes of computer usage
Copy
Center
Activity
(20 Hours)
6 Hours
Executive Offices
10 Hours
Maintenance
Department
4 Hours
IT Department
CO Processes

Posting Secondary Cost Element
Executive Offices
Rent Expense
Debit
Credit
Copy
Center
1,500
Supplies Expense
Debit
1,800
Credit
2,500
Maintenance
Department
1,500
2,500
Sec. Cost Element
3,000
2,000
Information Services
Labor Expense
Debit Credit
2,000
1,200
Questions?