Mphasis an HP Company

ERP / SAP Overview

ERP / SAP Overview

07/07/16

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

07/07/16

ERP Overview

Enterprise Resource Planning

ERP / SAP Overview

07/07/16

Enterprise Resource Planning

... synchronization of Company functions...

Purchase

Manufacturing

Finance

Sales

ERP / SAP Overview

07/07/16

Enterprise Resource Planning

and extended to the complete value chain...

Tier I Component
Manufacturer

Vehicle OEM
Tier II Component
Supplier

ERP / SAP Overview

07/07/16

Enterprise Resource Planning

... delivering administrative and decision support with...

Decision support and

analysis

Processes monitoring &

feedback

Administrative
registration

ERP / SAP Overview

07/07/16

What is an ERP solution...?

Integrated across the primary and support processes
Distribution
Manufacturing

Materials

Marketing

Planning
and
Execution

Engineering

Sales
Human Resources

ERP / SAP Overview

Finance

07/07/16

The ERP application

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

ERP / SAP Overview

07/07/16

Why clients buy ERP?

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 !!!

ERP / SAP Overview

07/07/16

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.

10

ERP / SAP Overview

07/07/16

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.

11

ERP / SAP Overview

07/07/16

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

Vendors

Inbound
Logistics

Manufacturing

Transportation Distribution

Logistics and Distribution

12

ERP / SAP Overview

Delivery

Customer

Consumer

Sales & Customer Service

07/07/16

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

13

ERP / SAP Overview

07/07/16

What results can be expected from an ERP culture?

14

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 / SAP Overview

07/07/16

ERP

SAP ECC Overview

Systems Applications & Products

15

ERP / SAP Overview

07/07/16

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

16

ERP / SAP Overview

07/07/16

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

R/2
Basis System

17

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

07/07/16

SAP ECC : Latest Release

18

ERP / SAP Overview

07/07/16

SAP ECC : Latest Release (Contd.)

19

ERP / SAP Overview

07/07/16

SAP R3E and mySAP.com

20

ERP / SAP Overview

07/07/16

SAP NetWeaver

Existing Systems
21

ERP / SAP Overview

07/07/16

SAP ECC : 3 Tier Architecture

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
22

ERP / SAP Overview

07/07/16

SAP ECC : 3 Tier Architecture

Presentation Layer
components

23

Application Layer
components

Database Layer
components

reside in:

reside in:

Presentation servers:

Application servers:

Database servers:

Systems capable of
providing a graphical
interface.

Specialized systems
multiple CPUs and
vast amounts of RAM.

Specialized systems
with fast and large
hard drives.

ERP / SAP Overview

reside in:

07/07/16

SAP ECC : 3 Tier Architecture

Presentation Layer components are installed across many PCs

The Application Layer

components are installed
across one or more highend servers.
The Database Layer
components are installed on
high-end database server.
24

ERP / SAP Overview

07/07/16

SAP ECC Overview

FI

SD

Financial
Accounting

Sales &
Distribution
MM
PP

Materials
Mgmt.

Controlling

ECC

Product
Planning

Client/Server
ABAP/4
WF

Human
Resources

ERP / SAP Overview

PS

PM

Plant Maintenance HR

25

TR
Treasury

QM
Quality
Mgmt.

CO

Project
System

Workflow
IS
Industry
Solutions

07/07/16

Integration
All business processes throughout the supply chain are executed in
one system sharing all information

S
U
P
P
L
I
E
R

26

SAP R/3

Workflow

C
U
S

Procurement

Production

Distribution

MM

PP

SD

Finance and Accounting

FI

ERP / SAP Overview

T
O
M
E

CO

07/07/16

SD: Sales and Distribution

SAP
ECC

SD

27

Sales & Distribution . . . . . . . .

ERP / SAP Overview

07/07/16

SD Overview

SD

Inquiry

Quotation

Purchasing
Materials Planning

Sales Order

Production

Pricing
Delivery to Customer

Picking
Goods Receipt

Packing

Customer Stock

Goods Issue
Invoicing
28

ERP / SAP Overview

Transportation

07/07/16

Process Chain: Sales Distribution

Sales/Distribution
Chain

Inbound Logistics
from Materials
Management

Outbound Logistics
to Customer

Sales Order & Distribution

Process
Receive Payment

Support Customer Sales

(Customer Info Analysis)
- Optional -

FI

Create Invoice
- Create pick list
- Create transportation
work list
- Create loading
work list

FI/CO/PA

Process Customer
Inquires
- Optional -

Issue Goods
(Ship Product)

(Documents)

FI
MM

Provide Customer
Quotations
- Optional -

Create Delivery Note

- Check credit

Check product availability

- Determine pricing
- Estimate delivery schedule
- Determine conditions of
sale
(Activities)
-

29

ERP / SAP Overview

Create Sales Order

FI/CO/PA
MM
PP

Support Customer
Agreements
- Optional 07/07/16

Order Entry
FI

PP
MM FI

Credit Management
Dynamic Availability Check
Cash Forecast

OK

30

ERP / SAP Overview

07/07/16

Delivery/Shipment Processing

FI
Ship to party: C100
Item
Material Qty
10
6301
10
20
6412
10
30
1507
25
.
.
.
.

Delivery
Note

MM
Credit Management
Static Availability Check
Picking
List

Picking
Packing
Transportation
31

ERP / SAP Overview

MM
WM

07/07/16

Picking/Packing
Sales
Sales Order
Order

Delivery
Delivery

Picking without Picking

Confirmation

Picking with Picking

Confirmation
Picking
Picking
Request
Request

Print
Print Picking
Picking List
List

Confirm
Confirm Picking
Picking
Request
Request

Goods
Goods Issue
Issue
32

ERP / SAP Overview

07/07/16

Picking
Picking
Confirmation
Confirmation

Invoicing

Profit Center Accounting/Profitability Analysis

CO
PA
CO
PCA

FI

Accounts Receivable/General Ledger

Cash Forecast

Single Invoices
Collective Invoices

EDI

Invoice Lists
Credit/Debit Notes

33

ERP / SAP Overview

FI

07/07/16

MM Overview

SAP
ECC

MM

34

Materials Management . .

ERP / SAP Overview

07/07/16

MM Overview (Contd.)

MM
Material requirement
planning

External procurement
Purchasing

Invoice
verification

Internal procurement
Production

Goods
receipt

Warehouse
management

Inventory
management
Goods
issue

Internal and external accounting

35

ERP / SAP Overview

Transfer
posting

Sales and distribution

07/07/16

Master data
Material
Batch
Vendor
Customer
G/L
Storage bins

MM Overview (Contd.)

MM
Material requirement
planning

External procurement
Purchasing

Invoice
verification

Internal procurement
Production

Goods
receipt

Warehouse
management

Inventory
management
Goods
issue

Internal and external accounting

36

ERP / SAP Overview

Transfer
posting

Sales and distribution

07/07/16

Master data
Material
Batch
Vendor
Customer
G/L
Storage bins

Material - Central Master Record for Logistic

456

123
Inventory
Quality
Sales Information
Production Information
Desc:---------------------

Inventory
Purchasing
Desc:---------------------

Raw Material - 456

Product - 123

37

ERP / SAP Overview

07/07/16

Data in the Vendor Master

Maintenance Level
Client

Purchase Organization
Mandatory maintenance at the
Purchasing Organization Level

Company Code

Optional Maintenance at the Plant

Level, the Vendor Sub-Range
Level or a combination of the two

38

General Data

Purchasing Data

Account Data

Address
Phone and Fax
No.
Control Data

Terms of Payment
Contact Person Minimum
Order Value

Payment Terms
Payment Method
Accounting Clerk

ERP / SAP Overview

07/07/16

External Procurement Environment

Source List

Requirement
Determination

RFQ

Purchase
Requisition

Quotation

Quota
Arrangement

Outline
Agreement

Goods Receipt

39

ERP / SAP Overview

Source
Determination
Vendor
Selection

Purchase
Order

Price History
Purchasing Data
Info Record
Invoice
Receipt

07/07/16

Goods Movement
Ad hoc.
Goods
Receipt

Delivery

Production

Inventory

Inventory
Transfer
Posting

Goods
Issue
Consumption
40

Goods
Issue
Samples

ERP / SAP Overview

Sales Order
07/07/16

Invoice Verification
CO FI

Vendor 3

Vendor
Vendor
invoiceinvoice

Orders / Projects /Cost centers

G/L accounts / Accounts payable

Tolerance Check?

Invoice
Verification

e.g...

Release of
Blocked Invoice

Automatic Price Update

ERP / SAP Overview

OK !

Blocked Invoice

Delivery Invoice
Preliminary Posting

41

Payment

07/07/16

PP Overview

SAP
ECC

PP

42

Production Planning . .

ERP / SAP Overview

07/07/16

Production Planning Cycle

PP

Sales and Operations Planning

Sales & Distribution

Demand Management

Material Master
Bill of Materials
Work Centers
Routings
PRT

Materials Management

MRP

Capacity Planning

MRP List

Plant Maintenance

Master Production Scheduling

Costing

43

Master Data

ERP / SAP Overview

Production Order Cycle or

Purchase Order Cycle

07/07/16

Production : Process Chain

Production Chain
Inbound Logistics from
Procurement or Production Chain

Outbound Logistics to Materials

Management or Sales Chain

Manufacturing
Process

Archive/Delete Order
Settle Production Order
FI
CO

Determine Production Requirements

via MRP Output or Manually)
Create production order
(via conversion of planned order
to production order or manually)

Transfer Produced Goods to Inventory

FI

Check material availability

(Automatic)

Confirm production of
goods is completed

Release Production Order

Produce Goods

Print shop floor papers

(actual work orders)

Withdraw
Withdraw materials
materials from
from
inventory
(automatic/manual)
inventory (automatic/manual)
MM
44

ERP / SAP Overview

07/07/16

Production Planning

45

Production Planning Functionality

Master Data
Sales and Operations Planning &
Demand Management
MRP
Production Order & Capacity Planning

ERP / SAP Overview

07/07/16

Material Requirements Planning

Demands
Quantity:
12.000

Stochastic
Deterministic

Demands
3. Qrt
4. Qrt

Planning

Bill of
Material
Explosion
Capacity Planning
Lot Sizing Procedure
Net Change

46

ERP / SAP Overview

07/07/16

MRP - Planning Procedures

Planning
Procedures

Deterministic
MRP

Consumption-Based
Planning

Forecast-Based
Planning

Reorder Point
Planning

Automatic
Reorder Point

47

ERP / SAP Overview

07/07/16

Manual
Reorder Point

Production Control
MM

FI CO
Goods Issue
Costs
Open

Production Order

Release Production Order

Planned Orders

48

ERP / SAP Overview

07/07/16

QM Overview

SAP
ECC

QM

49

Quality Management . .

ERP / SAP Overview

07/07/16

QM Overview

QM
The QM application module is a quality
FI
information
system supporting
SD control andFinancial
Sales &
Accounting inspection, and control for
Distribution quality planning,
COprocurement
MM
manufacturing and

PP

EC
C

Materials
Mgmt.

Product
Planning

QM

Quality
Mgmt.

HR

Human
Resources

ERP / SAP Overview

AM

Fixed Assets
Mgmt.

PS

PM

Plant Maintenance

50

Controlling

WF

Project
System

Workflow

IS

Industry
Solutions

07/07/16

QM in Logistics
Goods receipt
History-dependent intensity of quality inspections

Production
Inspection during production
Defects recording in QM
Control charts

Goods issue
Quality management in SD (certifies quality)
51

ERP / SAP Overview

07/07/16

PM Overview

SAP
ECC

PM

52

Plant Maintenance . .

ERP / SAP Overview

07/07/16

Plant Maintenance - Overview

Pre-defined
work steps

PM

External
Services

Parts/Supplies

Material
Requisitions

Reporting

Notifications
Create
Work
Orders
Emergencies

53

Labor

ERP / SAP Overview

Schedule
WOs

Planned
Work Orders

Special
Tools

Close and
Settle WO

Shop
Papers
Preventive/Predictive
Maint. WOs

07/07/16

FI Overview

SAP
ECC

FI

54

Finance . .

ERP / SAP Overview

07/07/16

Components of FI
FI

General Ledger
FI-GL
FI-SL

Special Ledger

Accounts Receivable
FI-AR
FI-LC

Legal Consolidation

Accounts Payable
FI-AP

Asset Accounting
FI-AA

55

ERP / SAP Overview

07/07/16

Corporate Structure
Financial
Management
Area

Financial
Management
Area

Financial
Management
Area

Corp. Group Level

Company Code (Company)

Legal Entity
Controlling
Area

Controlling
Area

Plant

Controlling
Area

Controlling
Area

Controlling Level

Cost Centers
Management Units

Work
Place/Job
56

ERP / SAP Overview

Material
Product
07/07/16

The Elements of Financial Accounting

Foreign Exchange
Exchange
Foreign
Management
Management

Finance Information
Information System
System
Finance
Executive Information
Information System
System
Executive
G/L Information
Information System
System
G/L

Business
Business
Analysis
Analysis

Cash Management
Management
Cash
and Forecast
Forecast
and

Multiledger
Accounts
Payable
Invoice
Verification

Bank Accounts

Accounts
Receivable

Receivables
Payables
General Ledger

Extended General Ledger

Credit
Management

Consolidation
57

ERP / SAP Overview

07/07/16

The Components of FI
Functionality
Functionality

Configuration
Configuration
Organizational Structures
Structures
Organizational
Company Codes
Codes
Company
Business Area
Area
Business
Organization of
of Accounting
Accounting
Organization
Ledger/Sub-ledger
Ledger/Sub-ledger
Chart of
of Accounts
Accounts
Chart
Credit Control
Control
Credit
Setting Credit
Credit Limits
Limits
Setting
Master Records
Records
Master
G/L Accounts
Accounts
G/L
Customers
Customers
Vendors
Vendors
Banks
Banks
Chart of
of Depreciation
Depreciation
Chart
Depreciation Areas
Areas
Depreciation
Assets
Assets
Extended General
General Ledger
Ledger
Extended
58

ERP / SAP Overview

Documents/Transactions
Documents/Transactions
Posting
Posting
Payment Terms
Terms
Payment
Foreign Currency
Currency
Foreign
Taxes
Taxes
Special G/L
G/L Transactions
Transactions
Special
Planning
Planning
Payment Program
Program
Payment

Fiscal Year
Year
Fiscal
Adjustments
Adjustments
Balance Sheets/Income
Sheets/Income Statements
Statements
Balance
Closings
Closings
On-Line Display
Display
On-Line
Interest Calculation
Calculation
Interest
Correspondence
Correspondence
Fixed Assets
Assets
Fixed
Reporting Analysis
Analysis
Reporting
Legal Consolidations
Consolidations
Legal

Modules
Modules
General Ledger
Ledger
General
Accounts Payable
Payable
Accounts
Accounts Receivable
Receivable
Accounts
Asset Accounting
Accounting
Asset

Special Ledger
Ledger
Special
Legal Consolidations
Consolidations
Legal
Credit Management
Management
Credit
Cash Management
Management and
and Forecast
Forecast
Cash
Treasury
Treasury
07/07/16

CO Overview

SAP
ECC

Controlling. .
CO

59

ERP / SAP Overview

07/07/16

Components of CO

CO

CO Modules
Modules
CO

CO Configuration
Configuration
CO
Organization Structures
Structures
Organization

Cost Center Accounting

Profit Center Acctg.

Master Data
Data
Master

Order and Project Acctg.

Product Costing

Transaction-Based
Postings

Activity-Based Costing

Planning Setup
Setup
Planning
Criteria and
and Values
Values
Criteria

Product Costing

Periodic Allocations

Budgeting
Profitability Analysis

Valuation
Valuation

Business Planning
& Control

Functionality
Functionality
Settlement

Planning

Internal Orders

Transaction-Based
Posting

Open Item Management

Periodic Allocations

Profitability Analysis

Monitoring Actual
Activities vs. Planned

Overhead Management

60

ERP / SAP Overview

07/07/16

The Elements of Managerial Accounting

Overhead Cost
Cost
Overhead
Controlling
Controlling

Overhead Cost
Cost
Overhead
Controlling
Controlling

Cost
Centers

Profitability
Profitability
Analysis
Analysis
PA

Cost of Sales
PCA

Cost of Period

Controlling
Controlling

61

ERP / SAP Overview

Report
Structure:
Profit
Center, GL
Accounts
07/07/16

Report
Structure:
Market
Segment
Region
Division

Integration within FI/CO

FI
FI
Financial Accounting
Accounting
Financial
Asset
Accounting

Asset
Accounting

Asset
Accounting

Gen. Ledger
Accounting

Investment
Controlling

Accounts
Receivable

Plant
Maintenance

Accounts
Payable

Account
Revenue

Cash
Management

Central
Documents
62

CO
CO

Chart of
of Accounts
Accounts
Chart

ERP / SAP Overview

Management Accounting
Accounting
Management
Overhead Cost
Controlling
Cost Center
Controlling
Actual
Costing
Static
Standard
Costing
Flexible
Standard
Costing
Order
Controlling

Product &
Production
Controlling

Sales &
Profitability
Controlling

Mass
Production

Cost of Sales
Accounting

Continuous
Flow Prod.

Period
Accounting

Batch
Production
Make to
Order Prod.
Project
Controlling
07/07/16

Central
Line Items
Central
Totals

Integration

Planned
Requirement

PP

SD
Customer
Order

MRP

MM
Requirement on
component
level
Purchase
Order

Planned
Order

Shipping

Production
Order

Invoicing

Goods
Receipt

FI

Invoice
Verification
Accounts
Payable

63

ERP / SAP Overview

Account
Receivable

Production
completed

CO
Order
Settlement

FI

Which modules are

involved?
07/07/16

SAP ECC : Components

Application

Master Data
Transaction Data

ABAP
Programs

Organization Structure
Configuration

Key Data Elements

Functionality Configurations

64

ERP / SAP Overview

07/07/16

What is Customization ?
Customization
The adaptation of application software to customer-specific needs is
accomplished in two ways :

Coding
Programming customer-specific code that replaces or complements
components of the application

Configuration
Rendering the application appropriate to a specific customer by specifying
data on which the application operates

65

ERP / SAP Overview

07/07/16

Organizational Structures in ECC

Organizational Units
Cost Accounting

Client

External Logistics

Controlling Areas

Accounting

Company Codes
Sales
Organizations

Internal Logistics
(MRP/Production)

Purchasing
Organizations

Valuation Areas
Plants

Inventory Management
66

ERP / SAP Overview

Storage Locations/Batches/Special Stocks

07/07/16

Organizational Structure in SAP ECC

Production Planning

Financial Accounting

Company
Code

Plant

Controlling

Human Resources

Client

Controlling
Area

Personnel
Area

Sales and Distribution

Sales
Area
67

ERP / SAP Overview

Materials Management

Purchasing
Organization
07/07/16

ABAP Programming
SAP ECC applications are written in the ABAP programming language, and
run within the application layer of the ECC System.
ABAP programs communicate with the database management system of the
central relational database (RDBMS), and with the graphical user interface
(SAP GUI) at presentation level.

68

ERP / SAP Overview

07/07/16

Why do we need ABAP Development ?

SAP ECC scope

69

ERP / SAP Overview

07/07/16

SAP Solution

SAP ECC scope

70

ERP / SAP Overview

Specific company
requirements

07/07/16

SAP Solution

SAP ECC scope

Specific company
requirements

New Functionality
Development

Non SAP
applications

71

ERP / SAP Overview

07/07/16

Summary
Materials Requirement Planning (MRP-I) began as a technique for developing
enterprise-wide business solutions by providing automated tools for forecasting
demands and planning according to the forecast.
ERP is an integrated suite of Applications to meet corporate needs.
Some major ERP vendors are : SAP ECC, Peoplesoft, Oracle, Baan and JD
Edwards.
SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial
Enterprise Application (IEA).
The latest SAP R3E Enterprise Architecture, have separate release numbers and
release cycles for each of the 3 layers. There is no R3E release number as a whole.

SAP Web Application Server (6.20)

SAP ECC Enterprise Core (4.7)
SAP ECC Enterprise Extension Set (1.10)

SAP NetWeaver is a vision, or paradigm, of total integration of :

72

People
Information
Business Processes
Applications

ERP / SAP Overview

07/07/16

Summary (Contd.)
SAP has a 3 tier architecture comprising of the Presentation layer, Application
layer and the Database layer.
The SAP solution is divided in different areas or Functional Modules like SD, MM,
PP, QM, PM, FI, CO etc.
ECC applications are written in the ABAP programming language, and run within
the application layer of the ECC System.

73

ERP / SAP Overview

07/07/16

Questions
What is MRP ?
What is ERP ?
When was SAP AG founded ?
What are the 3 layers of the SAP ECC ?
What is SAP Netweaver ?
What is the latest version of SAP ?
What are the different functional modules of SAP ?
What programming language is used for SAP applications ?
Why do we need ABAP developments ?

74

ERP / SAP Overview

07/07/16