Right Solution, Right Time, Right Price

R/3 Overview

Purpose of Overview

Provide an introduction to the SAP R/3 system

Explain the system’s functionality

Introduce SAP R/3’s approach to business processes

SAP R/3 Pre-Configured Client (PCC)

R/3R/3Client / ServerClient / Server

FIFIFinancialFinancial

AccountingAccounting

COCOControllingControlling

AMAMFixed AssetsFixed Assets

Mgmt.Mgmt.

PSPSProjectProjectSystemSystem

WFWFWorkflowWorkflow

ISISIndustryIndustry

SolutionsSolutions

MMMMMaterialsMaterials

Mgmt.Mgmt.

HRHRHumanHuman

ResourcesResources

SDSDSales &Sales &

DistributionDistribution

PPPPProductionProductionPlanningPlanning

QMQMQuaityQuaity

Manage-mentManage-ment

PMPMPlant Main-tenancePlant Main-tenance

SAP R/3 Application Modules

The SD application module helps to optimize all the tasks and activities carried out in sales, delivery, and billing.

Sales and Distribution (SD)

Quotation processingSales order processing Delivery processingBillingReporting

SAP R/3 Application Modules

The MM application module supports the procurement and inventory functions occurring in day-to-day business operations.

Materials Management (MM)

Material procurement Reorder point processing Inventory managementInvoice verificationMaterial valuation

SAP R/3 Application Modules

The PP application module is used to plan and control the manufacturing activities of a company.

Production Planning (PP)

Bills of Material (BOM)RoutingsWork centres Master Production Scheduling (MPS)Material Requirements Planning (MRP)Production Planning ExecutionProduction ordersProduct costingRepetitive manufacturing

The FI application module is designed for automated management and external reporting of general ledger, accounts receivable, accounts payable, and other sub-ledger accounts with a pre-defined chart of accounts.

SAP R/3 Application ModulesFinancial Accounting (FI)

General ledgerAccounts payableAccounts receivableSpecial Purpose Ledger

SAP R/3 Application Modules

The CO application module represents the company’s flow of cost and revenue

CO is a management instrument for organizational decisions

Controlling (CO)

Cost centre accountingInternal ordersProduct costing analysisProfit centre accounting

SAP R/3 Application Modules

The AM application is designed to manage and supervise individual aspects of fixed assets

Asset Management (AM)

Traditional asset accountingAsset replacement DepreciationCapital orders

•Integrated

SAP

Benefits of the system

SAP and IntegrationThe value of Integration:Integrated systems enable simplified business processes, standard data definition, and a common business languageSimplified business processes enhance productivity to allow focus on value added activitiesData has to be entered only once and all related information is updated automaticallyIntegrated applications instill confidence in information and eliminates need for redundant analysis and reconciliation

PurchaseOrder

GoodsReceipt

ProductDelivery

MM, FI,CO, PP

MM, FI,CO, QM

MM, FI, CO,

MM, SD,FI, CO

Integrated & Process Driven

Manufacture

•Enterprise-Wide

SAP

This means that if fully implemented, it is able to “run” the business, all processes and procedures. Even if your business is geographically spread out, SAP is able to operate across the physical distance seamlessly.

•Best Business Practices

SAP

SAP utilizes known and proven business and industry practices to achieve its goals. The developers have tried to include as many generic processes that would cover the entire business cycle that a company may require in all of its day-to-day operations.

SAP•Multi-Currency

SAP is able to use different currencies at the same time. SAP uses a table of currency rates that may be updated by the firm at any time, as often as required, to translate transactions entered in one currency to another. Once a company is set up, it is given a “home” currency in which it stores its amounts. Other currencies may be used in the entering of business transactions (eg. invoice entry), but they are translated internally automatically into the “home” currency. Any changes in currency valuation are also picked up and the necessary gain or loss on currency valuation accounts updates automatically.

SAP•Multi-Lingual

SAP is multi-lingual ie. you can have different users logged onto the same system in different languages all at the same time.eg. A SAP system implemented in Montreal, Toronto and Mexico City can be used simultaneously in French, English and Spanish. The system has a built-in language translator that will translate items into the desired language, automatically. When logging onto the system, a user is asked which language he/she would like to work in. A default language is normally set when the system is installed.

SAP•Secure Information

The SAP system uses different levels of security to ensure that its data is kept secure. User sign-on and passwords are the first level. Authorizations allowing entry into only certain screens and the type of access onto certain screens form the next tier. eg. a user may have entry access to the invoice screens, but he may only display invoices and not add, change or delete invoices. Users with like access requirements are grouped together using profiles. Profiles themselves may be grouped together forming composite profiles. The third level of security is field level security. Various screens can be customized to allow access to certain fields where data can be entered and other fields that are display only.

SAP GUI: Graphical User InterfaceOperates on the WYSIWIG principal (What you see is what you get). It is a point & click system.

Concepts and Features

System-wide Concepts

System-wide Features are used to logically, safely, and flexibly organize the data a business uses

• Organizational Elements

• Master Data

• Security

Organizational StructureThe fundamental data and functional architecture of the R/3 system...

Defines the legal and organizational structure of a company from different points of viewIncludes flexible organizational units for creating a comprehensive company structureLinks different application areas in the R/3 system to create an integrated company structure

The different points of view include: Financial Accounting, Materials Management, and Sales and Distribution.The process of determining the organizational structure is critical to the SAP implementation project. Everything depends on the hierarchy decisions that are made.

Master DataCustomer Master

Material Master

?

Purchasing

Vendor

RFQ

Quotation

Vendor Master

Chart of AccountsB

Chart of AccountsA

Company Codes

Client

Currency CAD

Line itemDisplay X..

CC 0003

Currency USD

Line itemDisplay X..

CC 0001

G/L Account BANK

Bal sheet acct X

Account group FIN...

G/L Account Master

The Material Master

Inventory Management

Production Planning

Invoice Verification

Sales Order

Processing

Purchasing

SAP R/3

Material Master Record

Central repositoryof material data for allareas within logistics:Finished ProductsSemi-finished productsRaw materialsConsumablesMarketing Materials

1998

Profiles

Objects

Authorization

System-wide FeaturesSecurity:Security:

Objects describe various business and system-related groupings such as accounting documents, customer and vendor accounts.

Profiles are a collection of objects used to control system access privileges.

Security authorizations assign profiles to users to determine what privileges they have within an object or group of objects.

You choose relevant profiles for your users from the delivered SAP profiles. Users may access only the objects assigned to them.

Authorization GroupsThere are pre-defined authorization groups which have been established for the PCC.The pre-defined authorization groups are based on roles and responsibilities.They are for unit and integration testingThey can be modified to meet your needs (new hires, responsibility etc.)

SAP Reporting

SAPStandard Reports?

Business Process Overview

Material RequirementsMaterial RequirementsPlanningPlanning

PlannedOrders

PurchasingRequisitions

ProductionOrders

PurchaseOrders

GoodsReceipt

Finished GoodsReceipt

DependentRequirements

Warehouse

ForecastForecast

PurchasePurchaseOrdersOrders

ProductionProductionOrdersOrders

IndependentRequirements

DemandDemand

SalesProcessing

Capacity Req.Capacity Req.PlanningPlanning

Raw Mat.Goods Issue

ACCOUNTING

1

2

3 4

5

ERP : Overall picture by computerized functions

MANUFACTURINGACCOUNTING

DISTRIBUTION

HUMAN RESOURCE

Business Process Versus Computerized Functions

Material RequirementsMaterial RequirementsPlanningPlanning

PlannedOrders

PurchasingRequisitions

ProductionOrders

PurchaseOrders

GoodsReceipt

Finished GoodsReceipt

DependentRequirements

Warehouse

ForecastForecast

PurchasePurchaseOrdersOrders

ProductionProductionOrdersOrders

IndependentRequirements

DemandDemand

SalesProcessing

Capacity Req.Capacity Req.PlanningPlanning

Raw Mat.Goods Issue

ACCOUNTING

SD

MRP

CRP

POPP

IMIM

FI&CO

Expected Benefits of ERP

• Top Management– Simulate the Future before making a

Decision– Operate on One Game Plan– Improved Performance Reporting

• Engineering– A Simple way to tie Engineering and Manufacturing Priorities

– Improved Design Control

•Sales and Marketing– Better Customer Deliveries through

Improved Planning

– More Accurate Delivery Promises

• Manufacturing– A way to Have All the Facts when

faced with though decisions

– A way to plan ahead, rather than expedite a losing battle

• Purchasing– A way to reduce expediting , and

concentrate on sourcing and negotiating

– Improved request control and approval

Expected Benefits of ERP

• Finance– Integrated Operating and Accounting Data.

– Improved Data Accuracy

• Personnel– A way to reduce on-the-job frustrations

associated with constant expediting

– A Chance for everyone to see their efforts count

– A move away from numbers posting to a setting of achievable plans

Expected Benefits of ERP

MANUFACTURING (Material Requirement Planning,Capacity Requirement Planning, Shop Flor Control, etc)

ACCOUNTING(General Ledger,

Account Payables,Account Receivables,

Asset,etc)

DISTRIBUTION(Sales, Distribution,

Inventory Purchase, etc)

HUMAN RESOURCE

ERP : Overall picture by computerized functions

Main SAP Modules and Integration

- Sales & Distribution

R/3Client / Server

ABAP/4

FIFinancial

Accounting

COControlling

AMFixed Assets

Mgmt.

PSProjectSystem

OCOffice CommIS

IndustrySolutions

MMMaterials

Mgmt.

HRHuman

Resources

PPProductionPlanning

QMQualityMgmt. PM

PlantMaintenance

SDSales &

Distribution

SAP R/3 Functionality - Sales and Distribution

Business View - Sales Cycle

Sales OrderSales Order

Receive PaymentReceive Payment Credit Check Goods IssueGoods Issue

Billing DocumentBilling Document

Competitors Sales activities Direct mailing campaigns

Customer inquiry Customer quotation Order processing

– Orders– Scheduling agreements– Contracts

Picking Packing Transportation

Single invoice Collective invoice Invoice list Credit/debit memo

Business partners

Material Bills of materialProduct proposals

Customer-material- info record

Equipment

Classification

Texts

Conditions

Sales taxes

Statistics

Master data

Sales

Sales Support

Shipping

Billing

SALES

INFO

SYSTEM

CO

PM

FI

PS

FI

CO

Materials ManagementProduction PlanningPlant MaintenanceControllingFinancial AccountingProject System

Inventory ManagementCreditworthinessWarehouse Management

Accounts ReceivableControllingProfitability analysis

PP

MM

MM

FI

PA

WM

SAP R/3 Functionality - Sales and Distribution

Quotation

Inquiry Order DeliveryGoods issue

Billing document

SD Business Process Flows in SAP Order Processing

SD

SAP R/3 Functionality – Sales and Distribution Integration

Update demand

Management

Run MPS/MRP

Inventory

Management

Update

Financials

Sales orders ATP

PP

MM

FI/CO

Update

Main SAP Modules and Integration

- Material Management

R/3Client / Server

ABAP/4

FIFinancial

Accounting

COControlling

AMFixed Assets

Mgmt.

PSProjectSystem

OCOffice CommIS

IndustrySolutions

HRHuman

Resources

PPProductionPlanning

QMQualityMgmt. PM

PlantMaintenance

SDSales &

Distribution

MMMaterials

Mgmt.

SAP R/3 Functionality - Material Management

Business View - Procurement Cycle

Goods ReceiptGoods Receipt

Purchase Purchase RequisitionRequisition

Invoice ReceiptInvoice Receipt

Purchase OrderPurchase OrderVendor PaymentVendor Payment

Request ForRequest ForQuotationQuotation

From Consignment Stores

From Warehouse

Consumption Issue

Sample

Scrap

SalesSales

AssetAsset

Cost CentreCost Centre

Goods IssueGoods Issue

-----

Business View - Goods Issue

Vendor data

Material Material typesBills of materialProduct proposals

Equipment

Classification

Texts

Conditions

Purchasing info records

Master data

LOGISTICS

INFO

SYSTEM

Financial Acctg.

Production PlanningControlling

Fixed Assets Mgmt.

CO

FI

AM

PP

Production Planning

Sales & Distribution

PP

SD

Quality Mgmt.QM

Financial Acctg.

Production Planning

FI

PP

Purchasing

MRP

Warehouse mgmt.

Inventory mgmt.

Receiving

Requisition Order Creation Invoice verification

QA Inspection

Cycle counting Physical inventory Movements Valuation

BOM Lot-sizing

SAP R/3 Functionality - Material Management

Financial Acctg.

Production Planning

ControllingCO

FI

PP

Quality Mgmt.QM

PurchaseOrder

RFQ(Request For Quotation)

Goods Receipt

Purchase Requisition

ManualCreation

Invoice Verification

PlannedOrder

MRPMRP

Update Financial(see the Example slides)

SAP R/3 Functionality – Material Management Integration : Purchasing

Material Master

Material

Production

MaterialRequirements

Planning

QualityManagement

InventoryManagement

on a Quantity &Value Basis

ProductionPlanning

PlantMaintenance

Sales &Distribution

Purchasing

InvoiceVerification

ProductCosting

SAP R/3 Functionality – Material Management Integration : Material Master

Stock quantityConsumption statistics...

Stock quantityConsumption statistics...

ReservationReservation

Point of Consumption (CO Module):Cost centreOrder...

Point of Consumption (CO Module):Cost centreOrder...

G/L accounts (GL Module):Stock accountConsumption accnt.

G/L accounts (GL Module):Stock accountConsumption accnt.

AccountingDocument

MaterialDocument

MaterialMaterial

----- ------ ------------ - ----- --

------- ------- ---------

MateriaL

Posting ofPosting ofGoods IssueGoods Issue

SAP R/3 Functionality – Material Management Integration : Goods Issue

Inventory80.00

Consumption80.00

Main SAP Modules and Integration

- Production Planning

R/3Client / Server

ABAP/4

FIFinancial

Accounting

COControlling

AMFixed Assets

Mgmt.

PSProjectSystem

OCOffice CommIS

IndustrySolutions

MMMaterials

Mgmt.

HRHuman

Resources

QMQualityMgmt. PM

PlantMaintenance

SDSales &

Distribution

PPProductionPlanning

SAP R/3 Functionality - Production Planning

Business View - Production Cycle

Production Production ControlControl

Production Production PlanningPlanning

(Material, Capacity)(Material, Capacity)

Finished Goods Finished Goods Issued for SalesIssued for Sales

Material IssuedMaterial Issued from storefrom store

Finish Goods Finish Goods Received to StoreReceived to Store

Sales OrderSales Orderor Sales Forecastor Sales Forecast

Material

Bills of material

Work centers

Routings

Documents

Production resources/Tools(PRTs)

Inspection plan/characteristics

Master data

PRODUCTION

INFO

SYSTEM

Sales & Operations Planning

Capacity Planning

MRP

Production Activity (Shop Floor) Control

Production Planning/MPS

Sales & DistributionSD

SAP R/3 Functionality - Production Planning

Product Group Sales Plan

Master Production Scheduling

BOM Material Requirement

Planning

Capacity Evaluation Capacity Dispatching and leveling

Production Order Creation Production Order Confirmation

Product Costing

Financial Acctg.Inventory ManagementWarehouse Management

ControllingCO

FI

MM

Quality Mgmt.QM

Production Planning in SAP R/3Production Planning in SAP R/3

Organization Structure for Production Planning

Client“ Holding

Company”Company

Code“Legal

Reporting”

Plant“Productio

n Site”

Storage Location“Inventory

Management”

Basic Data

Acc.Data

MRP DATA

StorageData

Production Planning Data

Material Master Bill of Material (BOM) Routings Work Centers Production Resources/Tools

(PRT) Capacity Engineering Change

Management (ECM) Classification Product Costing Material Requirements

Planning Manufacturing Resources

Planning

SIS

ForecastManual

Manual

COPA

External Procurement

PaymentInvoice

Verification

InvoiceReceipt

GoodsReceipt

FIFI

FIFI

FIFI

Purchaseorder

COCO

Vendorselection

SourceDetermination

Planned orderPurchase req.

RFQ

Order settlementArchive/Delete

COCO FIFI

Completionconf.

Orderprocessing

Withdrawal Material

Inward Stock Mvt.

Shop Floor Paper Printing

FIFI

Planned Order“Order Proposal”

Order creationAvailability

check Order Release

MMMM

MMMM

COCO

MMMMMMMM

FIFI SDSD

COCO

Manual/Automatic

Costs Calc.Time Tickets

Withdrawal Slips

Back FlushingYes/No?

Load in the WCStock Items

Costs SettledMPSMPS

Demand Demand Mgmt.Mgmt.

SOPSOP

Sales Plan

Production Plan Manual

ForecastCons.

History

COCO

MMMM

SDSDPlanned

Order

Rough Cut Planning

Transfer

Transfer

Sales Order

Make to Order

SDSD

MMMMMRPMRP

Transfer

Purchase Requisition

MRP MRP ListList

COCO

Information contained in this chart is not all-inclusive.

Partial/Milestone

Stock Updating

Reservation

Net Price Comparison

Quotations

Manual/Automatic

StockRequirements

Overview

SAP R/3 Functionality – Production Planning Integration

(See MM module)

In-house Production(See next

Page)

MaterialMaster

Order settlement

Archive/Delete

COCO FIFI

Completionconf.

Orderprocessing

Withdrawal Material

Shop Floor Paper Printing

FIFI

Planned Order“Order Proposal”

Order creation

Availability check Order

Release

MMMM

MMMM

COCO

MMMMMMMM

FIFI SDSD

COCO

In-house Production

Costs Calc.

Time Tickets Withdrawal

Slips

Back FlushingYes/No?

Load in the WCStock Items

Costs Settled

COCO

Stock Updating

Manual/Automatic

Partial/Full

Inward Stock Mvt.

Reservation• FI

– Account Postings

• CO – Order Cost

Calculation– Order

Settlement

SAP R/3 Functionality – Production Planning Integration : In house Production

• MM– Material

Availability Check

– Goods Movements

• SD– ATP Quantity

SAP R/3 Functionality – Production Planning Integration : In house Production

Order settlement

Archive/Delete

COCO FIFI

Completionconf.

Orderprocessing

Withdrawal Material

Shop Floor Paper Printing

FIFI

Planned Order“Order Proposal”

Order creation

Availability check Order

Release

MMMM

MMMM

COCO

MMMMMMMM

FIFI SDSD

COCO

In-house Production

Costs Calc.

Time Tickets Withdrawal

Slips

Back FlushingYes/No?

Load in the WCStock Items

Costs Settled

COCO

Stock Updating

Manual/Automatic

Partial/Full

Inward Stock Mvt.

Reservation

Main SAP Modules and Integration

- Financial Accounting and Asset Management

R/3Client / Server

ABAP/4

COControlling

PSProjectSystem

OCOffice CommIS

IndustrySolutions

MMMaterials

Mgmt.

HRHuman

Resources

PPProductionPlanning

QMQualityMgmt. PM

PlantMaintenance

SDSals &

Distribution

FIFinancial

Accounting

AMFixed Assets

Mgmt.

SAP R/3 Functionality - Financial Accounting and Asset Management

Financial Statements Account Analysis Multi-currency Taxation

Account Analysis (I/C) Payments History

Chart of Accounts

Company Codes

Business Areas

Credit Control Areas

Assets

Depreciation Areas

Master data

Accounts Payable

Cash Plan Cash Forecasting

Cash Management

EXECUTIVE

INFO

SYS

General Ledger

Accounts Receivable Account Analysis (I/C) Credit

Asset Values Depreciation Forecast Additions Retirements

Asset Management

Materials ManagementControllingSales and Distribution

CO

PurchasingControllingFinancial ReportingProject System

FI

Inventory ManagementVendor PaymentsIntercompany Reconciliation

MM

PP

FI

PS

CO

MM

SD

MM

FI

Inventory ManagementCustomer BillingCredit WorthinessIntercompany Reconciliation

MMSD

SAP R/3 Functionality - Financial Accounting and Asset Management

Main SAP Modules and Integration

- Controlling

R/3Client / Server

ABAP/4PS

ProjectSystem

OCOffice CommIS

IndustrySolutions

MMMaterials

Mgmt.

HRHuman

Resources

PPProductionPlanning

QMQualityMgmt. PM

PlantMaintenance

SDSals &

Distribution

FIFinancial

Accounting

AMFixed Assets

Mgmt.

COControlling

SAP R/3 Functionality - Controlling

Financial Statements Management Account Analysis Multi-currency

Cost Center Expense Planning Budgeting

Controlling Areas

Profit Centers

Cost Centers

Operating Concerns

Profitability Segments

Master data

Cost Center Accounting

Profitability

EXECUTIVE

INFO

SYS

Profit Center Accounting

Profitability Analysis

Internal Orders

Project Tracking Planning Budgeting

Materials ManagementSales and Distribution

MM

SD

MM

FI

Inventory ManagementAllocations Fixed Asset Management

CO

MM

AM

AllocationsProject SystemFixed Asset ManagementProfitability Analysis

PS

PA

Sales and DistributionProject SystemInternal OrdersCost Center Accounting

PS

CO

CO

SD

SAP R/3 Functionality - Controlling

R/3Client / Server

ABAP/4

FIFinancial

Accounting

COControlling

AMAssetMgmt.

PSProjectSystem

OCOffice CommIS

IndustrySolutions

MMMaterials

Mgmt.

HRHuman

Resources

SDSales &

Distribution

PPProductionPlanning

QMQualityMgmt. PM

PlantMaintenance

Summary - SAP ERP : R/3 Product Suite

Enterprise Portals Enterprise Portals

Enterprise Portals Enterprise Portals

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Strategic Enterprise Management (SEM)

Business Information Warehouse (BW)

Analytical Application (AA)

Product Life Cycle Management (PLM)Enterprise Resource Planning (R/3)

E – ProcumentEnterprise Buyer

APOSupply Chain

Management

E - Marketing

CRMCustomer

Relationship Management

Supplier

Customer

My SAP Business Suite