SCM 4380 Exam 1

Production Process

Warehouse request production, production authorize production, warehouse issue raw materials, production create product, and warehouse receive finished good

Business Process (CH.1)

a set of tasks or activities that produce desired outcomes

Fulfillment Process and Trigger (CH.1)

efficiently processing customer orders. It is triggered by a customer purchase order that is received by the sales department

Goods Issue Data

Organizational data, and master data

Goods Receipt

Organizational data, and master data

Authorize Production Data

Organizational data, master data

Request Production Data

Organizational data, master data

Functional Structure (CH.1)

Organizations are divided into functions, or departments, each of which is responsible for a set of closely related activities.

Assemble-to-order (CH. 7)

(ATO) in which an inventory of components (semifi nished goods) needed to make the fi nished good is procured or produced to stock. The production of the finished goods is triggered by a sales order and therefore uses an MTO strategy.

Finished Goods code and definition (CH.2)

(FERT) are created by the production process from other materials. They are generally not purchased.

Semifinished goods code and definition (CH.2)

(HALB) are typically produced in-house from other materials (e.g., raw materials) and are used in the production of a finished good.

Trading Goods code and definition (CH.2)

(HAWA), like raw materials, are purchased from a vendor. Unlike raw materials, however, these goods are resold to customers.

Raw Materials code and definition (CH.2)

(ROH) are purchased from an external source—a vendor—and used in the production process. Typically, these are not sold to end-customers.

Procurement Process (CH.1)

(buy ) refers to all of the activities involved in buying or acquiring the materials used by the organization, such as raw materials needed to make products.

Lifecycle Data Management Process (CH.1)

(design) supports the design and development of products from the initial product idea stage through the discontinuation of the product.

Production Process (CH.1)

(make) involves the actual creation of the products within the organization. Whereas the production process is concerned with acquiring needed materials internally (by making them), the procurement process is concerned with obtaining needed materials externally (by buying them)

Human Capital Management "HCM" processes (CH.1)

(people) focus on the people within the organization and include functions such as recruiting, hiring, training, and benefits management.

Project Management Processes (CH.1)

(projects) are used to plan and execute large projects such as the construction of a new factory or the production of complex products such as airplanes.

Asset Management & Customer Service Processes (CH.1)

(service) are used to maintain internal assets such as machinery and to deliver after-sales customer service such as repairs.

Inventory and Warehouse "IWM" process (CH.1)

(store) is used to store and track the materials.

Financial accounting (fi) processes (CH.1)

(track-external ) track the financial impacts of process steps with the goal of meeting legal reporting requirements—for example, the Internal Revenue Service (IRS) or the Securities and Exchange Commission ( SEC).

Management Accounting or Controlling "CO" processes (CH.1)

(track-internal ) focus on internal reporting to manage costs and revenues.

Basic principles of Business Process Modeling Notation (BPMN):

-Create and communicate fundamental ideas through diagrams. 1. Write a title...what are we trying to accomplish? 2. Draw swim lanes...who are primary participants? 3. Describe initial trigger...how do we know the process has begun?

Steps to create a flowchart:

1. Determine the boundaries 2. Determine a level of detail 3. Determine the sequence of steps and responsibilities 4. Draw the flowchart using established standard notation (BPMN)

Organizational Data

3 levels... 1) client/enterprise 2) company 3) plant

Company code-to-company code transfer (CH. 7)

A movement of materials between two plants in different company codes

Plant-to-plant transfer (CH. 7)

A movement of materials between two plants within the same company code

Storage location-to-storage location transfer (CH. 7)

A stock transfer between two storage locations within the same plant

Distribution chain (CH. 5)

A unique combination of a sales organization and distribution channel

Scalability

Ability of the system to support an increasing number of users while decreasing costs per user.

Transactional

Associated with process steps Transactions typically have financial impact They result in documentation like: transaction, financial, management, material documents

Procurement, materials management

BUY

Transfer order (TO) def. and trigger (CH. 7)

Common warehouse movements include picking, putting away, and posting changes. The document that is used to execute these movements is the X. The creation of a X is generally triggered either by a transfer requirement or by a posting change notice.

Transfer of requirements (CH. 5)

Data generated by creating a sales order. These data are used by the material planning process to plan materials procurement and production.

Manager do this, NOT ERP systems:

Define the organizations and groups Set goals for org and groups Define competitive business strategies

Partner functions, name all 4 (CH. 5)

Different Roles customers can play. 1. sold-to party 2. ship-to party 3. bill-to party 4. payer.

Three-tier client-server architecture (CH.2)

Enterprise Systems evolved from mainframe applications of 60s-70s into this.

Master Data

Ex: peoplesoft having all your info Types of master data: Customer, vendor, employee, material master data

Online Analytic Processing (CH.2)

For detailed data analysis, SAP ERP includes this environment in the form of information systems. Instead of using detailed transaction data, these systems use information structures to provide analytic capabilities.

ERP system minimized the SILO EFFECT by:

Improving communications channel to support cross-functional process and standardize process using best practice model. It was designed to solve the following problems: -Disparate, stand-alone software system -Outdated, manual and paper processes -Global expansion complicated by software integration issues

Material Master

It is the more complex and extensively utilize in an ERP system

MRP

It takes forecast and current inventories into consideration

Production planning

MAKE

Controlling (CH.1)

Management Accounting, or tracking costs and revenues for internal reporting

Create a PO Data

Master Data

Purchase Req Data

Master Data and Organizational data. Item Category

MRP Data

Master Data, Organizational Data, and Transaction Data

The most used master data

Material Master

Silo Effect (CH.1)

Most organizations are structured FUNCTIONALLY while the processes are designed CROSS-FUNCTIONALLY

3 Types of enterprise system data

Organization, master and transaction

Bill-to party (CH. 5)

Order that indicates that the invoice should be sent to someone else

How the three types of data are related:

Process are execute in the context of organizational levels, involved master data and result in transaction data

Common ERP problems

Processes are specific, stable, expensive, and centralize control

User defined Information Structures (CH.2)

SAP ERP also enables users to define their own structures to meet specific reporting requirements.

Transaction Documents (CH.2)

SAP ERP uses several different types of documents to record transaction data. These documents are created or utilized as the process is being executed. Examples are purchase orders, packing lists, and invoices.

Fulfillment, sales, and disti

SELL

Material Planning Process (CH.1)

Sales and Operation planning create a specific operation plans, take SOP plan and structure it (disaggregation) the demand management translates these specific requirements for individual materials requirements, this requirements are then used by the material requirements planning (MRP) step to generate the final procurement proposals for all materials. These proposals trigger the production or procurement process that make or buy the needed material

Fulfillment Process:

Sales department receive customer purchase order(pre-sales), sales department validates and authorize it creating sales order(sales), warehouse prepared shipment (pick and pack), warehouse send shipment (shipment), accounting create and send invoice(billing), and accounting receive payment(payment)

Client Server or R/3 architecture

Scalability 3 layers: Presentation, application, and data layers

Stock transport order (STO) (CH. 7)

Similar to purchase order, but used for plant to plant movements. When moving materials from one plant to another requires any of these capabilities, the company utilizes a process in which one plant essentially "purchases" the materials and another plant "sells" them.

Strategies for successful ERP implementations

Strategic planning Procedure review Data collection and cleanup Training and testing Go live and evaluation

Enterprise Systems or "ES" (CH.1)

Systems that support end-to-end processes, and they are essential to the efficient and effective execution and management of business process.

Application Suite (CH.2)

The collection of these inter-company systems and the underlying intra-company ERP system

Sold-to party (CH. 5)

The customer who submits the order

Post goods issue (CH. 5)

The final task in shipping. It indicates that the shipment has left the facility. It also results in several outcomes.

Ship-to party (CH. 5)

The order may indicate that the materials should be shipped to a different location

Backward scheduling (CH. 5)

The time needed to complete Sales order Processing steps

Online Transaction Processing (CH.2)

The transactional environment of SAP ERP. As the name suggests, it is designed to capture and store detailed transaction data. The primary function of it is to execute process steps quickly and efficiently; it is optimized for this purpose

Enterprise Resource Planning (CH.2)

These systems are the world's largest and most complex ES. These systems focus primarily on intra-company processes— that is, the operations that are performed within an organization—and they integrate functional and cross-functional business processes.

Customer Relationship Management (CH.2)

These systems connect a company's ERP system to those of its customers. These systems provide companies with capabilities to manage marketing, sales, and customer service.

Product Lifecycle management (CH.2)

These systems help companies administer the processes of research, design, and product management. In effect, these systems help companies take new product ideas from the virtual drawing board all the way to the manufacturing facility.

Organizational Level

Unique to areas: sales, shipping point, and credit control

Procurement Process

Warehouse create purchase req, purchasing create and send purchase order, warehouse receive materials, accounting receive invoice, accounting send payment.

Service-orientated architecture

Web-enabled apps... Link variety of client-server systems together Standardizes the user interface Enables custom capabilities without changing apps

Quotation (CH. 5)

a binding agreement to sell the customer specific products under clearly defined delivery and pricing terms

Transfer requirement def. and trigger (CH. 7)

a document that companies use to plan the movement of materials into and out of bins in a warehouse. In most cases the trigger is either an activity in inventory management or a need to transfer materials within a warehouse.

Business Intelligence (CH.2)

a general term that refers to the overall capabilities a company uses to collect and analyze data from a variety of sources to better understand its operations and make better managerial decisions.

Quant (CH. 7)

a specific quantity of materials that have similar characteristics and are stored in a single bin.

Backflushing (CH. 6)

a technique that automatically records the goods issue when the order is confirmed.

Plant-level purchasing organization (CH. 4)

also known as a plant-specific purchasing organization, in which each plant has its own purchasing organization

Enterprise-level purchasing organization (CH. 4)

also known as the cross-company code purchasing organization, is the most centralized model. There is only one purchasing organization for the overall enterprise and all of the plants within the enterprise.

Company-level purchasing organization (CH. 4)

also known as the cross-plant model, a single purchasing organization is responsible for multiple plants in one company code.

Credit management master record (CH. 5)

an extension of the customer master record that includes data relevant to managing credit for that customer. The data contained in this record are grouped into three segments: general data, credit control area data, and an overview.

Credit control area (CH. 5)

an organizational level that is responsible for customer credit. Specifically, it determines customers' creditworthiness, establishes credit limits, and monitors and manages the actual extension of credit to customers.

Standard Information Structures (CH.2)

are predefined in the SAP ERP system, and they collect the data needed to generate the most commonly used reports.

Information Structures (CH.2)

capture and store specified transaction data in an aggregated and summarized form that enables users to analyze the data as needed

Customer-material information record (CH. 5)

comprised of master data specific to one customer and one material. In contrast to data in a material master, which apply to all customers, and data in a customer master, which apply to all purchases made by a particular customer, data in this record relate to purchases of a specific material by a specific customer.

Document flow (CH. 5)

displays all of the documents associated with the steps that have been completed for a single customer inquiry or order.

Financial Accounting

external reports

BOM selection method (CH. 7)

identifies the criteria the system should use to select the Bill of Material. Examples of criteria are lot size and validity date.

Work Lists (CH. 2)

identify tasks that are scheduled to be completed in a process. In the fulfillment process, for example, once customer orders are recorded in the system by the salespersons, warehouse personnel can retrieve a list of orders that are ready for picking.

ERP systems are designed to

minimize the silo effect and centralize control

Service Oriented Architecture (CH.2)

new technologies that could help link, or integrate, many different client-server systems together in new and valuable ways.

Make to order (CH. 6)

production is triggered by the need to fi ll a specific customer order. In other words, production does not begin until a customer orders a product.

Standard Analysis (CH.2)

provides predefined analytics for data in standard information structures. This type of analysis is sufficient for most analytic requirements.

Transaction Data (CH.2)

reflect the consequences of executing process steps, or transactions. Examples are dates, quantities, prices, and payment and delivery terms. Thus

Application Platforms (CH.2)

serve as a type of "enterprise operating system" for a company's ES landscape by allowing all of the various systems to communicate seamlessly with one another as well as with systems outside the company.

Distribution channel (CH. 5)

the means by which a company delivers its goods and services to its customers.

make to stock (CH. 6)

the production process is triggered by a need to increase inventory. Inventory is typically stored in a warehouse until it is used to fulfill customer orders.

Purchasing organization (CH. 4)

the unit within an enterprise that performs strategic activities related to purchasing for one or more plants. It evaluates and identifies vendors, and it negotiates contracts and agreements, pricing, and other terms. An enterprise may have one or more