SAP Knowledge Test #1

Sales Organization

-sells and distributes products -negotiates terms of sales Must be at least one sales organization defined A sales transaction is linked to only one sales org More than one sales organization can be assigned to a company code

Goods Receipt

101: Goods receipt for a purchase order

Most modern ES have ___________ architecture

3 tier client server service-oriented architecture - technical capabilities that allow systems to connect with one another through standardized interfaces called web services

___ World's transactions touch SAP

76%

Billing

A billing document is created by copying information from the sales order and the delivery document into the billing document Used to create invoice Will automatically debit AR and credit revenue Invoice splits can be used to bill for different items like materials and services

Delivery and order

A delivery can be created for every sales order sales order may split into multiple deliveries or a delivery may combine multiple sales orders Combined sales order must have something in common like shipping point etc.

Sales and Distribution

ALWAYS about the sales order process

Key characteristics of information in a supply chain

Accurate, Relevant, Timely, Accessible

Corporate-group-wide purchasing

All plants are under purchasing org

Plant

Central organizational elements of production Can be a centralized distribution or warehouse, not necessarily a manufacturing plant Atleast one plant must be defined Assigned to only one company code Supported by purchasing orgs

PP and MM Organizational Structure

Client, Company Code, Plant, Storage Location

FI/CO Organizational Structures

Client, company code, chart of accounts, and controlling area

SAP Architecture

Client/ Server Environment Client- hardware/software environment that can make request for services for a central repository of resources Server- hardware/software that can provide services to a group of clients in a controlled environment

Accounts Receivable Accounting

Concerned with CUSTOMERS involves reconciliation and sub-ledger accounts

Accounts Payable Accounting

Concerned with VENDORS involves reconciliation and sub-ledger accounts

Database layer

Consists of a central database containing all the data in the system SAP does not manufacture its own database for ECC and previous versions

Application Layer

Consists of application servers and message servers Not all application servers will provide the full range of services - 1 server can serve multiple functions - multiple servers can serve one function

Presentation Layer

Contains software components that make up the SAP GUI Interface between the system and its users

Why is SCM important?

Convenience, sufficiency, speed, and variety

Creating an Order- where is data copied from?

Customer Master, Material Master, Condition Records for Pricing, Tables in Configuration for shipping point and route Data can also be copied from an inquiry or quote

Sales Order Processing

Customers place order Conditions- pricing, discounts, surcharges, may not necessarily be pos/ can also be neg Info is pulled from master data- not manually entered to minimize data entry errors

Bullwhip Effect

Demand distortion further upstream, usually caused by the supply itself and not by customer

What is ERP?

Enterprise Resource Planning It attempts to integrate all departments and functions across a company onto a single computer system that can serve all the different departments' particular needs. Seeks to integrate all resources at the enterprise level,

Goods Issue

Event that could indicate the legal change in ownership of the products Reduces inventory and enters COGS Automatically updates the General Ledger

Disadvantages of SAP ERP

Expensive, complex, lengthy With transactions, not many "delete" options

Finished Product Basic Material

FERT Produced internally, has sales view, no purchasing views

Payment

FINAL STEP -payments are posted against invoice Cycle may not always go as planned

Material availability (backward and forward scheduling)

First uses backward scheduling starting at required delivery data to determine if customer's delivery can be met If delivery date cannot be met, system uses forward scheduling to determine a feasible delivery date

Shipping Point

Fixed location that carries out shipping activities One plant can have multiple shipping points A shipping point can serve multiple plants

Who is SAP?

Founded in Waldorf, Germany in 1972 by 5 IBM engineers World's largest provider of enterprise application software World's third-largest independent software provider

Reconciliation account

G/L accounts that consolidate data from a group of related sub ledger accounts- ex: reconciliation account for customer is accounts receivable Transactions posted to sub ledgers are automatically posted into corresponding reconciliation account and G/L is updated CANNOT BE POSTED TO DIRECTLY.

Semi-Finished Product Basic Material

HALB no purchase or sales view

Distribution channel

Identifies how products and services reach customers One sales can have one or more distribution channels

Advantages of SAP ERP

Integration, standardized process based on successful experiences, non-redundant data, complete audit trails

Management Accounting (or Controlling)

Internal- forward looking - defined by management needs For purpose of planning, controlling and decision making

Purchasing Info Records

Intersection or a combination of material and vendor data Planned Delivery time, conditions, price/unit, discount, last purchase order, vendor, material, purchasing org are all included

What does IT do?

It facilitates the operations and coordination of the supply chain. Involves hardware and software used to gather, analyze, and deliver information. Effective use of IT has a significant impact on supply chain performance which is why we study ERP.

How long does it take to implement SAP? Large Orgs, Value SAP Approach, Smaller Orgs

Large Orgs- 2 to 3 years Value SAP Approach - 6 to 9 months Smaller Orgs- 3 to 4 months

Impact of Lead Time on the Bullwhip Effect

Lead times can multiply variation in demand when inventory is high, lead times increase, which increase inventory in pipeline, so must attempt to reduce lead times

Company Code

Legal entity of Financial accounting for which you draw individual financial statements and manage accounts Organizational unit for which a complete self-contained set accounts can be drawn

General Ledger (G/L) Accounts

List of account balances for a specific company Accounts are defined based on selected Chart of Accounts Comprehensive picture for external accounting, legal financial statements, business transactions

Chart of Accounts

Listing of accounts that are contained in general ledger Orderly definition of accounts in the G/L Must be assigned to every company code but several company codes can use the same chart of accounts

History of ERP - MRP II

MRP involved into MRP II (Manufacturing Resource Planning) in 1970s/ MRP II = MRP + Personnel + Financial Planning Includes capacity planning

Supply Chain Management

Management of flows between and among supply chain stages to satisfy service level requirements while maximizing total supply chain profitability

Data Types

Master and Transaction Data

Differences between Master and Transaction Data

Master is relatively stable- materials, customers vendors Transaction is relatively temporary and is stored at various stages of a business process - customer orders, purchase orders, production orders

Vendor Master Data

Master records must be created for every vendor Contains centralized data with accounting master records (company code data), purchasing master records (price determination), and general data (client-level data) GAP- General, accounting, and purchasing data

Functional Organizational Structure

Most common structure Structure divided into functions or departments with specialized tasks of activities Processes cut across functions

Plant-specific purchasing

One plant for every purchasing org

Types of Chart of Accounts

Operative COA- company code level - required Country-specific COA-enables country-level legal reporting - optional Group COA- corporate group reporting - optional

Data Types in ERP Systems with Examples

Organizational Data- company code, plant, storage location Master Data- person, material, customer, vendor Transaction Data- purchase order, invoice, quotation, sales order

Impact of Information on the Bullwhip Effect

Perfect forecasting does not eliminate the bullwhip effect Always present even if there perfect information about the future

Company-specific purchasing

Plants are under company codes with each purchasing org responsible for a different company code (can have multiple plants under one purchasing org)

3 tier client server architecture

Presentation, Application, and Data or Database Layer

Vendor master data is associated with _______ Customer master data is utilized in _______

Procurement Fulfillment

SAP ERP Modules

Production Planning, Materials Management, Sales and Distribution- all about the sales order, Financial Accounting

Raw Material Basic Material

ROH externally purchased only, no sales view

Difference between general ledger, sub ledger, and reconciliation

Reconciliation account is part of general ledger but subledger is not

Status Messages

Red- Can tell you what error it is if you view details Yellow- usually incorrect date Green- good

Purchasing Organization

Responsible for the procurement of materials and services for one or many plants Flexible bc there are different purchasing structures

The Beer Game

Role-playing game that demonstrates typical coordination problems of traditional supply chain Invented in 1960s by Jay Forrester at MIT

Documentation in material master

SAP system documents all changes to the material master for compliance purposes

SD Organizational Structure

Sales Organization, Distribution Channel, Sales Division, Sales Area, Shipping Point

Pre-sales activities

Sales support & pre-sales documents

History of ERP - MRP

Since 1960s Began with MRP (Material Requirements Planning)- computerized approach to plan and obtain required materials for manufacturing and production Takes no account for capacity

Customer Order Cycle

Starts with pre sales activities -> sales order processing -> inventory sourcing -> delivery -> billing -> payment

Storage Location

Subdivision of a plant where materials are stored and inventory is managed Raw, WIP, and finished goods are stored here

Supply Chain

System of organization, people, activities, information, and resources involved in making a product or service from supplier to customer.

Supply Chain Activities

The transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.

3 Types of distribution channels

Wholesale, retail, direct

Is last purchase order or planned delivery time on a purchasing info record?

Yes

What is a tree structure?

a way of representing the hierarchical nature of a structure in a graphical form Areas where you drill down into specific instructions

Information is ______

basis of SCM and decision making

What are most common shipping points?

centralized warehouses, distribution centers, and cross dock facilities also know railyard and shipyard

Material Type

defines material attributes that classify materials

Inventory Sourcing

determines if product is available and how it will be supplied occurs when an order is created, changed, or delivery doc is created

Fitter Snacker

fictitious company that makes healthy snack bars, no integrated info system Marketing and Sales is focal point Company wide use of transaction data is inefficient Two divisions- wholesale and direct sales Sells snack bars under fitter snacker and also package bars in store brand wrappers

Financial Accounting

heart of the system because it must accurately reflect the financial status of the firm at any given point in time For statutory reporting aka tax reports, balance sheet External- historical looking - defined by laws

Flows in a Supply Chain

information, product and funds

Subledger account

not part of general ledger used to separate accounting for customers, vendors, and assets

Master Data

represents entities associated with various processes Buying materials from vendors Selling materials to customer Most commonly used master data is the material master

Transaction Codes aka T-Codes

shortcuts that allow you to navigate without diving into tree structure

Can a Sales Organization be assigned to more than one company code?

yes