ERP / SAP Overview

1. ERP / SAP Overview ERP / SAP Overview

2. Objectives • The participants will be able to: • Recognize the evolution of ERP solutions. • Appraise the concept, benefit and use of ERP solution. • Define the SAP ECC Overview. • Identify the different SAP ECC Functional modules/areas. • Distinguish the components of SAP ECC. • Judge the use of ABAP programming language. ERP / SAP Overview

3. ERP Overview Enterprise Resource Planning ERP / SAP Overview

4. Enterprise Resource Planning ... synchronization of Company functions... Purchase Manufacturing Finance Sales ERP / SAP Overview

5. Enterprise Resource Planning … and extended to the complete value chain... Tier I Component Manufacturer Vehicle OEM Tier II Component Supplier ERP / SAP Overview

6. Enterprise Resource Planning ... delivering administrative and decision support with... Decision support and analysis Processes monitoring & feedback Administrative registration ERP / SAP Overview

7. What is an ERP solution...? …Integrated across the primary and support processes Distribution Manufacturing Marketing Planning and Execution Materials Finance Engineering Sales Human Resources ERP / SAP Overview

8. An integrated suite of business applications, which.. Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money. Enables corporates to readily change their processes to adapt to the ever changing business scenario. Provides expertise in industry specific business processes. Entails Parameterization / Configuration Designing & Customization Testing and Implementation Training The ERP application ERP / SAP Overview

9. Corporate Initiatives Strategic initiatives A requisite capability in a competitive global business Operational initiative A foundation for performance and cost improvement via integration Organizational initiative To initiate a major organizational change within the company Technology IT is making the transition from a supporting operational entity to becoming a strategic competitive tool. Because others are buying it !!! Why clients buy ERP? ERP / SAP Overview

10. Recent business trends favoring ERP growth • Business Process Reengineering ( BPR ) • Most large companies are attempting to cut in-house development costs, improve customer service, and speed products to market by reorganizing their existing business processes. • Software Pricing • Licensing and pricing of mainframe based packaged applications are tied to the size of mainframe system on which the applications run, but now customers are now demanding user-based licensing options and major corporate applications like SAP provide this instead of the conventional platform-based pricing technique. ERP / SAP Overview

11. Recent business trends favoring ERP growth • Globalization • As businesses are becoming more global in scope, people are demanding packaged corporate applications that are available in a variety of languages with support for multiple currencies. • Integration • As more and more companies are going for BPR, there is increase in demand for integrated solution e.g.. different applications sharing a common database and thus enabling data definitions and business rules to be applied across an entire organization with the facility of doing modifications at one location only. ERP / SAP Overview

12. Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer Logistics Logistics and Distribution Sales & Customer Service Business process benefits clients expect from an ERP project • Global process/ Product management • Integrated Supply Chain Management • Leverage purchasing and vendor management • Order cycle time/ customer service improvement • Inventory reductions • Reduced information systems costs on an ongoing basis • Improved business management through worldwide integration and information ERP / SAP Overview

13. Major ERP vendors • SAP ECC • Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier, but are subsets of Oracle now ) • Peoplesoft • JD Edwards • Baan ERP / SAP Overview

14. What results can be expected from an “ERP culture”? • Reduced working capital requirements • Improved customer service • Improved direct labor productivity • Reduced purchase costs • Reduced obsolescence • Reduced overtime • Having the figures to make decisions • Having accountability throughout the organization • Improved quality of life ERP ERP / SAP Overview

15. SAP ECC Overview • Systems Applications & Products ERP / SAP Overview

16. SAP AG – At a Glance • Founded in Germany in 1972 • Market Leader in Industrial Enterprise Application (IEA) • About 56% market share in the ERP market • Worldwide presence in over 50 countries • 18,000+ employees • Trained consultants doubled since 1996 (40,000) • About 20,000 companies in 120 countries • Around 64,500 installations of SAP • Strength lies in its high degree of integration, mainly for large, global corporate enterprises • Significant presence in Global Fortune 500 companies ERP / SAP Overview

17. R/2Basis System SAP R/1 , R/2 • The R/1 system • Developed for ICI Chemical • Released 1972 • Focused on Sales & Distribution and Materials Management • Discontinued after release of R/2 • The R/2 system • Reorganized as leading mainframe software for large multinational corporations • No sales effort planned – reactive only • 4,300 copies worldwide in 1993 • Mainframe-based to replace user legacy software; co-existence and migration strategy underway for R/2 and ECC ERP / SAP Overview

18. SAP ECC : Latest Release ERP / SAP Overview

19. SAP ECC : Latest Release (Contd.) ERP / SAP Overview

20. SAP R3E and mySAP.com ERP / SAP Overview

21. SAP NetWeaver Existing Systems ERP / SAP Overview

22. The Presentation Layer Those SAP ECC software components that specialize in interacting with end-users form the Presentation Layer. The Application Layer Those SAP ECC software components that specialize in processing business applications form the Application Layer. The Database Layer Those SAP ECC software components that specialize in the management , storage and retrieval of data form the Database Layer SAP ECC : 3 Tier Architecture ERP / SAP Overview

23. Application Layer Presentation Layer Database Layer components components components reside in: reside in: reside in: Presentation servers: Application servers: Database servers: Systems capable of Specialized systems Specialized systems providing a graphical multiple CPUs and with fast and large interface. vast amounts of RAM. hard drives. SAP ECC : 3 Tier Architecture ERP / SAP Overview

24. The Application Layer components are installed across one or more high- end servers. The Database Layer components are installed on high-end database server. SAP ECC : 3 Tier Architecture Presentation Layer components are installed across many PCs ERP / SAP Overview

25. SAP ECC Overview FI SD Financial Accounting Sales & Distribution CO MM Materials Mgmt. Controlling PP ECC TR Product Planning Treasury Client/Server ABAP/4 QM PS Quality Mgmt. Project System PM WF Plant Mainte- nance Workflow HR IS Human Resources Industry Solutions ERP / SAP Overview

26. All business processes throughout the supply chain are executed in one system sharing all information SUPPLIER CUSTOMER S A P R / 3 Workflow Procurement Production Distribution MM PP SD Finance and Accounting FI CO Integration ERP / SAP Overview

27. SAP ECC SD: Sales and Distribution Sales & Distribution . . . . . . . . SD SD SD ERP / SAP Overview

28. SD Inquiry Quotation Sales Order Pricing Delivery to Customer Picking Packing Goods Issue Transportation Invoicing SD Overview Purchasing Materials Planning Production Goods Receipt Customer Stock ERP / SAP Overview

29. Receive Payment FI Create Invoice FI/CO/PA - Create pick list - Create trans- portation work list - Create loading work list Issue Goods (Ship Product) FI MM Create Delivery Note Process Chain: Sales Distribution Sales/Distribution Chain Inbound Logistics from Materials Management Outbound Logistics to Customer Sales Order & Distribution Process Support Customer Sales (Customer Info Analysis) - Optional - Process Customer Inquires - Optional - Provide Customer Quotations - Optional - (Documents) - Check credit - Check product availability - Determine pricing - Estimate delivery schedule - Determine conditions of sale Create Sales Order Support Customer Agreements - Optional - FI/CO/PA MM (Activities) PP ERP / SAP Overview

30. Order Entry PP MM FI FI Credit Management Dynamic Availability Check Cash Forecast • ? • OK ? ERP / SAP Overview

31. MM . . . . Picking List • Picking • Packing • Transportation Delivery/Shipment Processing MM WM FI Ship to party: C100 Item Material Qty • Credit Management • Static Availability Check 10 6301 10 20 6412 10 30 1507 25 Delivery Note ERP / SAP Overview

32. Picking/Packing Sales Order Delivery Picking without Picking Confirmation Picking with Picking Confirmation Picking Request Print Picking List Confirm Picking Request Picking Confirmation Goods Issue ERP / SAP Overview

33. Invoicing CO PA Profit Center Accounting/Profitability Analysis Accounts Receivable/General Ledger Cash Forecast CO PCA FI FI • Single Invoices • Collective Invoices • Invoice Lists • Credit/Debit Notes EDI ERP / SAP Overview

34. SAP ECC MM Overview • Materials Management . . MM ERP / SAP Overview

35. MM Material requirement planning Internal procurement Production External procurement Purchasing Goods issue Transfer posting Internal and external accounting Sales and distribution MM Overview (Contd.) Invoice verification Master data Goods receipt Warehouse management Material Batch Vendor Customer G/L Storage bins Inventory management ERP / SAP Overview

36. MM Material requirement planning Internal procurement Production External procurement Purchasing Goods issue Transfer posting Internal and external accounting Sales and distribution MM Overview (Contd.) Invoice verification Master data Goods receipt Warehouse management Material Batch Vendor Customer G/L Storage bins Inventory management ERP / SAP Overview

37. 456 Inventory Purchasing Desc:--------------------- 123 Raw Material - 456 Inventory Quality Sales Information Production Information Desc:--------------------- Product - 123 Material - Central Master “Record” for Logistic ERP / SAP Overview

38. General Data Address Phone and FaxNo. Control Data Account Data Payment Terms Payment Method Accounting Clerk Purchasing Data Terms of Payment Contact Person Minimum Order Value Data in the Vendor Master • Maintenance Level • Client Purchase Organization Company Code • Mandatory maintenance at the • Purchasing Organization Level • Optional Maintenance at the Plant Level, the Vendor Sub-Range Level or a combination of the two ERP / SAP Overview

39. RFQ Quotation Purchase Requisition Outline Agreement Invoice Receipt Goods Receipt External Procurement Environment Requirement Determination Source List Quota Arrangement Source Determination Vendor Selection Price History Purchasing Data Info Record Purchase Order ERP / SAP Overview

40. Inventory Inventory Goods Movement Ad hoc. Goods Receipt Delivery Production Transfer Posting Goods Issue Goods Issue Consumption Samples Sales Order ERP / SAP Overview

41. Vendor invoice Invoice Verification FI CO Orders / Projects /Cost centers G/L accounts / Accounts payable Payment Tolerance Check? Vendor 3 OK ! Blocked Invoice e.g... • Invoice • Verification Release of Blocked Invoice Delivery Invoice Preliminary Posting Automatic Price Update ERP / SAP Overview

42. SAP ECC PP Overview • Production Planning . . PP ERP / SAP Overview

43. Production Planning Cycle PP Sales and Operations Planning Master Data Material Master Bill of Materials Work Centers Routings PRT Master Production Scheduling Sales & Distribution Demand Management MRP Capacity Planning Materials Management Plant Maintenance MRP List Production Order Cycle or Purchase Order Cycle Costing ERP / SAP Overview

44. Production : Process Chain ProductionChain Inbound Logistics from Procurement or Production Chain Outbound Logistics to Materials Management or Sales Chain Manufacturing Process Archive/Delete Order Determine Production Requirements via MRP Output or Manually) Settle Production Order FI Create production order (via conversion of planned order to production order or manually) CO Transfer Produced Goods to Inventory Check material availability (Automatic) FI Confirm production of goods is completed Release Production Order Produce Goods Print shop floor papers (actual work orders) Withdraw materials from inventory (automatic/manual) MM ERP / SAP Overview

45. Production Planning • Production Planning Functionality • Master Data • Sales and Operations Planning & • Demand Management • MRP • Production Order & Capacity Planning ERP / SAP Overview

46. Material Requirements Planning Demands Quantity: 12.000 Stochastic Deterministic Planning Bill of Material Explosion Demands 3. Qrt 4. Qrt Capacity Planning Lot Sizing ProcedureNet Change ERP / SAP Overview

47. MRP - Planning Procedures Planning Procedures Deterministic MRP Consumption-Based Planning Forecast-Based Planning Reorder Point Planning Automatic Reorder Point Manual Reorder Point ERP / SAP Overview

48. MM FI Production Control CO Goods Issue Costs Open Production Order Release Production Order Planned Orders ERP / SAP Overview

49. SAP ECC QM Overview Quality Management . . QM ERP / SAP Overview

50. QM QM Overview • The QM application module is a quality control and information system supporting quality planning, inspection, and control for manufacturing and procurement FI SD Financial Accounting Sales & Distribution CO MM • ECC Materials Mgmt. Controlling PP AM Product Planning Fixed Assets Mgmt. QM PS Quality Mgmt. Project System PM WF Plant Mainte- nance Workflow HR IS Human Resources Industry Solutions ERP / SAP Overview