SAP 1 & 2

Vendor Payment

An automatic electronic money transfer which authorities a creditor to automatically withdraw money from your account on a predetermined date. This method of payment requires you to provide a voided check to the creditor.

SAP ERP Core Applications

Logistics Sales & Distribution Materials Management Production Planning Plant Maintenance Quality Management Finance Financial Accounting Managerial Accounting Asset Management Treasury Human Capital Management Personnel Management Benefits Payroll

Data Types in ERP Systems

Organizational Data - company code - plant - storage location - distribution channel - purchase organization Master Data - person - material - customer - vendor - condition Transaction Data - purchase order - invoice - quotation - sales order - transportation order

Functionality

The degree to which a system performs its intended function §Inventory Management §Purchasing §MRP §Physical Inventory §Valuation §Service Master §Invoice Verification §Product Catalogs

SAP Business Suite

The new name for SAP's integrated software platform. Runs on NetWeaver

Procure-To-Pay Process

The processes associated with procuring goods from external vendors - Purchase Requisition - Vendor Selection - Purchase Order - Notify Vendor - Vendor Shipment - Goods Receipt - Invoice Receipt - Payment to Vendor

Products

Trading Goods •Accessories -Safety Gear -Other Raw Materials Semi-Finished Goods Finished Goods Touring Bikes (Deluxe, Professional) in three colors Off-Road Bikes (Men's, Women's)

Enterprise Resource Planning (ERP)

breaks down the traditional barrier that exist within a corporation. For anyone to benefit from ERP, everyone has to contribute, this is the key to ERP survival. There has to be a common agenda throughout the business. To get the commitment from everyone, everyone has to believe their needs and objectives are addressed by the plan, learning the tools and techniques to accomplish this is then relatively easy.

Sap

is the worlds biggest enterprise for firm-comprehensive software and the third biggest independent software supplier. Our firm history is rich in innovation and growth which makes us an actual industrial leader.

Goods Receipt

movement of materials into inventory - Purchase Order - Notify Vendor - Vendor - Shipment - Goods Receipt

Outline Agreement

§ Requisitions can be satisfied through existing longer-term purchasing agreements. § § These agreements are subdivided into: • Contracts - Consists of items defining the individual Materials, Material Groups, or Services with prices and, in many cases, quantities o Quantity o Value • Scheduling Agreements -Total quantity of a Material is spread over a certain time period in a delivery schedule - Consists of line items indicating quantities and planned delivery dates.

Purchase Order

§A Purchase Order can be used for a variety of purposes. §The Item Category (procurement type) defined in the PO will dictate the use of the order and the process the order will follow: •Standard -Stock or Consumption •Services •Subcontracting •Third-Party •Consignment

Purchase Order

§A Purchase Order is a formal request to a Vendor for a specific Material or Service under the stated conditions. §Purchase Orders can be created manually: •Reference a Purchase Order •Reference a Purchase Requisition •Reference a RFQ/Quotation •Without Reference §Purchase Orders can be create automatically.

Source List

§A Source List is a record that specifies the allowed means for procuring a Material for a certain Plant within a given time period. •If the list contains a sole source, the system will assign the Vendor to the requisition. •If several options exist, the system will display a list of Vendors for you to choose from. •If no source has been established, the system will revert to search information records and Outline Agreements.

Purchasing Information Record

§Allows buyers to quickly determine: •Which vendors have offered or supplied specific materials §Info Records contain: •Data on pricing and conditions •Last purchase order •Tolerance limits for deliveries •Specific lead times •Availability periods •Vendor Evaluation data §Serves as default information for Purchase Orders

Global Bike Group

§Background: •Global concern using full ERP capabilities. •Consists of two companies located in the US and in Germany. §History: •John Davis won numerous mountain bike championships in the US. •In 1990, John started his own mountain bike company (Frankenstein Bikes). •Peter Schwarz grew up on road bikes in the Black Forest, Germany. •As a student, he engineered ultra-light composite frames. •In 1993, Peter started his own bike frame company (Heidelberg Composites). •John and Peter met in 2000 •In 2001, they merged to form Global Bike, Inc (GBI).

Payment to Vendor

§Can be done automatically or manually: •Post Outgoing Payment vs. Payment Program §Elements of the Payment Transaction: •Payment Method •Bank from which the Vendor gets paid •Items to be Paid •Calculate Payment Amount •Print Payment Medium §Process will create a Financial Accounting document to record the transaction: •Debit to Accounts Payable (applied to the Vendor's sub-ledger account) •Credit to Bank Account

MM Organizational Structure (Materials Mgmt.)

§Client •An independent environment in the system §Company Code •Smallest org unit for which you can maintain a legal set of books §Plant •Operating area or branch within a company -Manufacturing, distribution, purchasing or maintenance facility §Storage Location •An organizational unit allowing differentiation between the various stocks of a material in a plant

Vendor Master Views

§Client Level •Address •Vendor Number •Preferred Communication §Company Code Data •Reconciliation Account •Terms of Payment •Bank Account §Purchase Org Data •Purchasing Currency •Salesman's Name •Vendor Partners

SAP Architecture

§Client/Server Environment •Client - hardware/software environment that can make a request for services from a central repository of resources. •Server - hardware/software combination that can provide services to a group of clients in a controlled environment. §Three - Tier Structure •User Interface -Graphical User Interface or Web Interface •Application Server -One or more, to help distribute work load •Database Server One single data repository

SAP ERP Business Modules

§Collections of logically related transactions within identifiable business functions. •MM ("Buy") •PP ("Make") •SD ("Sell") •FI and CO ("Track") •HCM ("People") •WM ("Store") •EAM ("Maintain") CS ("Service")

Documents

§Data sets generated when a business transaction is executed. §Is a record of each unique business transaction. §Includes all relevant predefined information from the Master data and organizational entities. §Examples: •Sales Order Document •Purchase Order Document •Material Document •Accounting Document A unique document number is assigned to each transaction when it is saved

Organizational Data

§Defines the enterprise structure by means of legal or respective business usage. §Task is to adopt some functions inside of an enterprise and execute them. §Administrative and Legal entities, Plants, Storage Locations, Sales Organizations, Profit Centers §Examples: •Client -Highest organizational unit -Represents the enterprise which consists of several parts •Company Code -Represents legal entities in an enterprise. -Central organizational unit in external accounting. -Smallest unit at which legal books are prepared. •Sales Organization An organizational unit that executes the sale and distribution of products and offers services.

SAP Enterprise Resource Planning (SAP ERP)

§Enables a company to support and optimize its business processes. §Ties together disparate business functions (integrated business solutions) such as: •Finance (Financial Accounting, Managerial Accounting, Treasury, ...) •Logistics (Sales, Procurement, Production, Fulfillment, ...) •Human Resources, etc. §Helps the organization run smoothly. §Real-time environment. §Scalable and flexible.

Purchasing Information Record

§Framework for Purchase Orders •Contains the relationship between a Vendor and a Material §Can be created: •Manually •Automatically - Quotations •Automatically - Purchase Orders §Reporting •Vendor Evaluation

Goods Receipt

§Goods Movement by which you accept goods into your system. §If Materials are delivered against a Purchase Order, you will reference that Order: •Determine if you got what you ordered •System can purpose data for you from the PO -Material, quantity •Purchase Order History is updated with the receipt -PO Header updates the Status tab -PO Item Detail updates the PO History tab •Updates Physical Inventory Updates Inventory G/L Account

Request for Quotation (RFQ)

§If nothing exists in the system, you may need to submit a Request for Quotation (RFQ) to your Vendors. An RFQ is an invitation to a Vendor by a Purchasing Organization to submit a bid for the supply of Materials or Services •Can perform Quotation Price Comparisons •Allows selection of a Quotation for conversion to a PO •The accepted quotations will generate Purchasing Information Records

Invoice Processing

§Incoming Invoices are referenced against a Purchase Order to verify their content, prices, and arithmetic. §If a discrepancy arises between the Purchase Order or Goods Receipt and the Invoice, the system will generate a warning or an error. •Depending on the system configuration, the difference could cause the system to Block the Invoice.

SAP Net Weaver

§Integration Layers of SAP NetWeaver® are: •People Integration •Information Integration •Process Integration •Application Platform

Purchase Requisition (PR)

§Internal Document instructing the Purchasing department to request a specific good or service for a specified time. §Requisitions can be created two ways: •Directly - Manually -Person creating determines: what, how much, and when needed •Indirectly - Automatically -MRP -Production Orders -Maintenance Orders -Sales Orders

Master Data

§Long term data kept in the system that is not often changed. §Examples: •Sales and Distribution: -Customer Master -Material Master -Condition Master •Material Management: -Vendor Master -Material Master -Condition Master Purchasing Info Records

Purchase Order Input

§Once a Purchase Order has been created, the Vendor needs to be notified. •Print •E-mail •EDI •Fax •XML §There are a variety of forms that aid in the purchasing process and are generated from the Purchase Order: •Purchase Order Output •Order Acknowledgement Forms •Reminders •Schedule Agreements

Requisition Sourcing

§Once the requisition has been assigned a Source of Supply, it can be released for processing. §There are a variety of ways a Purchasing department can process a requisition to determine the appropriate Source of Supply: •Internal Sourcing Requirements •Source List •Outlined Agreement •RFQ

SAP Enhancement Packages

§Optionally installed and activated Software Innovations for SAP ERP 6.0 §Software Innovations are: •UI simplifications •Functional Enhancements •Enterprise Services -SAP Enhancement Packages are built on different Enhancement Packages oContain all preceeding packages. oCan select which modules you want to update. oCan be provided for specific industries to include new processes or regulations. Do not include Support Packages

Process Intergration

§Order-to-Cash Process •Sales and Distribution (SD) •Materials Management (MM) •Financial Accounting (FI) §Order-to-Cash Process •Sales and Distribution (SD) •Materials Management (MM) •Financial Accounting (FI)

Transaction Data

§Process related data that is short-lived and dedicated to certain Master data. §Transactions Include: •Organizational levels •Master data •Situational data §Example: Customer Order •Organizational level : -Client, Company Code, Sales Organization •Master data: -Customer Master, Material Master •Situational data: -Date, Time, Amount, Delivery Schedule §Transactions produce unique document numbers when saved.

MM Organizational Structure (Purchasing)

§Purchasing Organization •The buying activity for a plant takes place at the purchasing organization •Organization unit responsible for procuring services and materials •Negotiates conditions of the purchase with the vendors §Purchasing Group •Key that represents the buyer or group of buyers who are responsible for certain purchasing activities •Channel of communication for vendors

Business Processes

§Sell - Fulfillment (SD) §Buy - Procurement (MM) §Make - Production (PP) §Track - Financial Accounting (FI) Track - Controlling (CO) §People - Human Capital Management (HCM) §Store - Inventory and Warehouse Management (WM) §Maintain - Enterprise Asset Management (EAM) §Service - Customer Service (CRM) §Project - Project Management (PS)

Global Bike Group

§Strategy: •John and Peter are Co-CEOs •John is responsible for (in terms of reporting): -Sales, Marketing, Service and Support, IT, Finance, and Human Resources -Sells products and brings in money •Peter is responsible for: -Research, Design, Procurement, and Manufacturing Groups -Builds products and spends money •GBI is a World-class bicycle company serving both the professional and "prosumer" in touring and off-road racing. •Focus is on: -Quality -Toughness -Performance

Document Flow

§The Document Flow allows the display of the status of a Sales Order at any point in time. §SAP revises the status every time a change in a document takes place.

Purchase Order History

§The Purchase Order Status tab provides data on the current status of the PO: •Quantity Ordered •Quantity Delivered •Invoiced Amounts •Down Payments §The Purchase Order History tab appears when subsequent transactions are related to the PO. •Goods Receipt •Invoice Receipt §Document numbers provide links to display the related document.

Quotation from Vendor

§The quotation received by your company is a legally binding offer, should you decide to do business with the Vendor, containing price's and conditions for the Materials specified in the RFQ for a predefined period of time. •In SAP the RFQ and the Quotation will be become a single document, you will enter the Vendor's bid response in the RFQ you created.

Internal Sourcing

§The requisition for Materials could be satisfied by sources within our company. •It is possible a Plant within your firm could represent a potential Source of Supply for the Material needed. -Centralized warehouse •If an internal source is identified, the requirement is covered by an internal procurement transaction called a Stock Transport Order. -Treated like a Purchase Order from a Vendor.

Vendor Evaluation once Identified

§Vendor evaluation helps Purchasing evaluate Vendors for sourcing, while also enabling the company to monitor Vendor relationships through performance scores and criteria you put in place. •Supports a maximum of 99 main criteria and 20 sub criteria for each main item: -Price oPrice Level oPrice History -Quality oGoods Receipt oQuality Audit oComplaints/Rejection level -Delivery oOn-time delivery performance oQuantity reliability oCompliance with shipping instructions oConfirmation Date •You then must establish a scoring range (1 -100) and determine the weight factors of scores for each criteria.

Material Movements

§When a Goods Movement takes place, it is represented by a Movement Type. •Movement types are three-digit keys used to represent a movement of goods: -101 - Goods receipt into warehouse -103 - Goods receipt into GR blocked stock -122 - Return delivery to vendor -231 - Consumption for a sales order -561 - Initial entry of stock §Destinations for Receipt of Goods •Unrestricted Use Stock -All Materials are available for sale or for Production •Quality Stock -Quality Management holds Materials as an Inspection Lot •Blocked Stock Unusable Materials which are not available for sale or for Production.

Effects of a Good Receipt

§When a Goods Receipt takes place, a series of events occur: •Material Document is created -Records Quantity change •Accounting Document is created -Records Value change •Stock Quantities are Updated -Material Master Accounting 1 view •Stock Values are Updated -G/L Accounts affected: Debit to Inventory Account / Credit to GR/IR Account -Material Master Accounting 1 view •Purchase Order is Updated -Status tab / PO History tab •Output can be generated GR slip / Pallet label

Invoice Processing

§When an Invoice is saved, it applies the liability from the Goods Receipt of our Purchase Order to a Vendor. •Accounts Payable sub-ledger is updated for the Vendor's account §Upon verification the: •Purchase Order is updated -Status tab / PO History tab •Material Master is Updated (MAP) •Accounting Document is created -Credit to Accounts Payable, Debit to GR/IR §Once the Invoice has been posted, the verification process is completed and the payment process is initiated within Financial Accounting.

SAP Portfolio Strength

§World-wide usage §Designed to satisfy the information needs for all business sizes (small local to large all international) •Multi-lingual •Multi-currency •Multi-balance (parallel G/L Accounting) § Designed to satisfy the information needs for all industries; for example: •Automotive •Banking •Retail •Public Sector •Higher Education and Research etc.

Material Master Data

•Contains all the information a company needs to manage a Material •It is used by most components within the SAP system: -Sales and Distribution -Materials Management -Production -Plant Maintenance -Accounting/Controlling -Quality Management •Material Master Data is stored in functional segments called Views

Vendor Master Data

•Contains all the necessary information needed to do business with an external supplier •Used and maintained primarily by the Purchasing and Accounting Departments • •Every Vendor MUST have a Master Record