© 2009 Eswar Raman1 ERP 201 INTRODUCTION TO SAP ERP OPERATIONS ESWAR RAMAN.

© 2009 Eswar Raman 1

ERP 201INTRODUCTION TO SAP ERP

OPERATIONS

ESWAR RAMAN

© 2009 Eswar Raman 2

INTRO

12 years in ERP Mechanical Engg + MBACertified in Production and

Inventory ManagementCertified Project Management

Professional ESWAR RAMAN

Email: [email protected]

M: 001-630-715-5307

© 2009 Eswar Raman 3

AGENDA

Business and ITClose

© 2009 Eswar Raman 4

BUSINESS AND IT

Information Technology (IT) is a general term that describes any technology that helps to

produce, manipulate, store, communicate, and/or

disseminate information

Companies

Regulations

Ethics

Responsibility

Global competition

Innovation

Obsolescence

Market

TechnologySociety

© 2009 Eswar Raman 5

Goals for ERP implementations - Poll

What is the single most important reason for ERP implementations in 2008?(i) Standardize processes across enterprise(ii) Cost reduction(iii) Improve customer responsiveness(iv) Upgrade technology

Standardize processes

2008 © Aberdeen Research

© 2009 Eswar Raman 6

BUSINESS AND IT

• Information for decisions• Value for Money• Risk Management• Process• Responsiveness• Innovation

© 2009 Eswar Raman 7

ERP System – an introduction

ERP emerged from MRPII MRPII grew from MRP MRPII extended MRP’s focus on

production and inventory to other functions such as Order Processing, Finance etc.

ERP is different from MRPII – replacing legacy apps, managing globalization, handling regulatory requirements and improving integration of functions

© 2009 Eswar Raman 8

SAP ERP System – Architecture

UI

UI

UI

Business Logic resides here

Database layer

Three distinct layers, can exist on separate machines

Can be a laptop, mobile device, a browser etc.

Purchased from db vendors

© 2009 Eswar Raman 9

ERP System – Solution Maps

End-User Service Delivery

AnalyticsStrategic Enterprise

ManagementFinancial Analytics Operations Analytics Workforce Analytics

FinancialsFinancial Supply Chain

ManagementFinancial Accounting Management Accounting Corporate Governance

Human Capital Management

Talent Management Workforce Process Management Workforce Deployment

Procurement and Logistics Execution

Procurement Supplier CollaborationInventory and

Warehouse Management

Inbound and Outbound Logistics

Transportation Management

Product Development and Manufacturing

Production PlanningManufacturing

ExecutionEnterprise Asset

ManagementProduct Development

Life-Cycle Data Management

Sales and ServiceSales Order Management

Aftermarket Sales and Service

Professional-Service Delivery

Foreign-Trade Management

Incentive and Commission Management

Corporate ServicesReal Estate

ManagementProject Portfolio

ManagementTravel Management

Environment, Health and Safety

Quality Management

SAP NetWeaver People Integration Information Integration Process Integration Application Platform

© 2009 Eswar Raman 10

SAP ERP – Procurement and Logistics Execution

Procurement and Logistics Execution

Procurement

Managing Catalog Content (S12)

Self-Service Procurememt (S63)

Service Procurement (S12)

Purchase Order Processing (S64)

Receipt Confirmation (S64)

Service Confirmation (S12)

Invoice Verification (S64)

Supplier Collaboration

Development Collaboration (S63)

Purchase Order Collaboration (S12)

Invoice Processing (S12)

Account and Payment Information (S12)

Inventory and Warehouse Management

Cross Docking (S64)

Warehousing and Storage (S64)

Physical Inventory (S64)

Inbound and Outbound Logistics

Inbound Processing (S64)

Outbound Processing (S64)

Transportation Management

Transportation Execution (S64)

Freight Costing (S64)

SAP Product Available

SAP Product Available with Future Releases

Future Focus

Partner Product Available

Partner Product Available with Future Releases

Collaborative Business Map Available

Sxx, Vxx, Bxx SAP Product & Service

Pxx Partner Product

For more information see: http://www.sap.com

© 2009 Eswar Raman 11

SAP ERP – Product Development and Manufacturing

SAP Product Available

SAP Product Available with Future Releases

Future Focus

Partner Product Available

Partner Product Available with Future Releases

Collaborative Business Map Available

Sxx, Vxx, Bxx SAP Product & Service

Pxx Partner Product

For more information see: http://www.sap.com

Product Development and Manufacturing

Production Planning

Production Planning (S64)

Manufacturing Execution

Manufacturing Execution (S64)

Supervision and Control (S51)

Enterprise Asset Management

Phase-In Equipment (S64)

Maintenance Planning (S64)

Maintenance Execution (S64)

Phase-Out Equipment (S64)

Product Development

Product Development (S62)

Development Collaboration (S63)

Life-Cycle Data Management

Document Management (S62)

Product Structure Management (S62)

Recipe Management (S62)

Specification Management (S62)

Change and Configuration Management (S62)

© 2009 Eswar Raman 12

SAP ERP – Sales and Service

Sales and Service

Sales Order Management

Account Processing (S12)

Internet Sales (S59)

Managing Auctions (S12)

Inquiry Processing (S12)

Quotation Processing (S59)

Sales Order Processing (S12)

Mobile Sales (S12)

Inbound Telesales (S12)

Contract Processing (S59)

Billing (S59)

Returnable Packaging Management (S12)

Consignment (S12)

Aftermarket Sales and Service

Phase-In Equipment (S64)

Phase-Out Equipment (S64)

Asset Scrapping (S64)

Product & Warranty Registration (S12)

Waranty Claim Processing (S12)

Service Contract Processing (S12)

Maintenance Plan Processing (S12)

Mobile Measurement & Counter Reading (S12)

Service Employee Resource Planning (S12)

Service Notification Processing (S12)

Service Order Processing (S12)

Billing (S12)

Returns Processing (S12)

In-House Repair Processing (S12)

Professional-Service Delivery

Project Planning & Scoping (S62)

Project Resource Planning

Quotation Processing (S12)

Sales Order Processing

Project Execution (S62)

Managing Employee Time & Attendance (S12)

Travel Expense Management (S12)

Project Accounting (S12)

Resource-Related Billing

Resource-Related Intercompany Billing

Billing (S12)

Foreign-Trade Management

Sanctioned Party List Screening (S56)

Export Control (S56)

Product Classification (S56, S57, S3)

Customs Value Calculation (S57)

Customs Processing Import (S57)

Presentation to Customs (S57)

Incentive and Commission Management

Incentive Plan Maintenance (S12, S9)

Incentive Processing (S12, S9)

© 2009 Eswar Raman 13

SAP ERP in Enterprise System Landscape

mySAP SCM

mySAP PLM

mySAP SRM

mySAP CRM

mySAP ERPAnalyticsFinancials

Human ResourcesOperations

Corporate Services

Life-Cycle-Data, Project-, Quality- and Asset Management

Inventory & Warehouse Mgmt.Manufacturing & Transportation

Sal

es O

rder

Inte

rnet

Sal

esP

urch

ase Ord

er R

equ

isition

ing

SAP NetWeaver

mySAP Business Suite

© 2009 Eswar Raman 14

ERP System – Sales Processes an example

Purchase order

Purchase order

Order is entered into ERP system

PricingCredit CheckAvailabilityetc

© 2009 Eswar Raman 15

ERP System – Quote to Cash process overview

Pre-Sales Activities

& Quote

Sales Order Processing

Inventory Sourcing

Shipping

Billing

Payment

© 2009 Eswar Raman 16

ERP System – Effects of sales order creation

FI: Customer’scredit

managementaccount

0

20

40

60

80

100

120

1 2 3 4 5 6

CO: Profitability analysis

SD:SD:DeliveryDeliveryworklistworklist

Sales InformationSystem

Order

Orderconfirmation

MM: RequirementsMM: Requirements

Integration toSD, MM, FI, CO & SIS

© 2009 Eswar Raman 17

ERP System – Effects of shipping process

MM: Goodsissue

General businesscosts - production

FI: Customercredit

managementaccount

MM:RequirementsMM:Requirements

Delivery

Sales InformationSystem

Stock

Shippingpapers

xx xx

Integration toMM, FI & SIS

Packing ->Picking -> Delivery ->Delivery due list

Goods issue

© 2009 Eswar Raman 18

ERP System – Effects of billing process

FI: Revenue

x FI:Receivables

x

DeliveryDelivery

0

20

40

60

80

100

120

1 2 3 4 5 6

CO: Profitability Analysis

Invoice

Billing doc

Sales InformationSystem

OrderOrder

FI: Customercredit

managementaccount

Integration toSD, FI, CO & SIS

© 2009 Eswar Raman 19

ERP System – Effects of incoming payment

ReceivablesReceivablesPost Payment

Incoming paymentfrom customer XX XX

© 2009 Eswar Raman 20

ERP System – Audit Trail

Billing doc.Outbounddelivery

Standard order

Accountingdocument

Standard order 6839

. Delivery 80002832

. . WMS transfer order 482

. . GD goods issue: delvy 4900001537

. . Invoice 90005371

. . . Accounting document 100001276

Document

© 2009 Eswar Raman 21

ERP System – Concept of Integration as applied to Sales Process

Sales and Distribution

SalesInformation

System

Data Project Systems

ProductionPlanning

Make to

Order

FinancialAccounting

Materials Management

CO/PAWarehouse Management

Post Goods IssueBilling

Sales Orders PickingRemoval fromstock location

Stock ReservationStock removal

Availability check

© 2009 Eswar Raman 22

POLL QUESTION

What is the inventory accuracy for best-in-class RP users?

(a) 52%(b) 75%(c) 97%(d) 10%

The correct answer is (d) – 97%. The laggards on the hand showed an accuracy of 83%.

© 2009 Eswar Raman 23

BREAK TIME

LET US HAVE BREAK FOR 10 minutes

© 2009 Eswar Raman 24

MADE TO STOCK PROCESS

Forecast,Plandemand

MRP using net change

Confirmproduction

Create Workorders

Procure Raw materials

Release Work orders

Receive salesorder

Ship salesorder

Invoice customer

Receivepayment

© 2009 Eswar Raman 25

COST PER USER PER PERCENTAGE POINT OF FUNCTIONALITY USED

© 2009 Eswar Raman 26

Benefits accruing from an ERP system

Cost reduction , cycle time reduction, productivity improvement, customer service betterment, better management of processes etc.

Better resource management, improved planning and decision making capabilities

Support growth, support alliance, provide platform for innovations, build cost leadership, build linkages to partners, enable e-commerce, expand globally

IT cost reduction, build flexibility for growth and change

Provide catalyst for organizational changes, empower users, improve morale

© 2009 Eswar Raman 27

OVERVIEW OF AN ERP IMPLEMENTATION PROJECT

Various approaches – Big Bang, Franchizing, Slam Dunk and On-Demand increments

Implementation timelines vary – depending upon size of company, complexity of processes and the political desire to customize solutions

Implementation usually needs a well-versed partner who is skillful in configuring the chosen ERP system and is able to guide, coach the company’s employees and understand the company’s processes

Project needs to be blessed by a person at the level CEO or CIO , Change needs to be communicated and followed through

Change management is established and adhered to Typical project sequence is – Gather requirements,

Develop prototype, Test processes, Release to production upon approval, Load into production and Go-live, Review results and adjust as necessary

Go or No-go decisions are made at various QA points during the project

More to be added

© 2009 Eswar Raman 28

SYSTEM DEMO

© 2009 Eswar Raman 29

THANK YOU

THANK YOUPlease proceed to

http://erpcourse.cklrcsi.com/Course_Homepage_files/page0005.htm

, you can register and download material

© 2009 Eswar Raman 30

COPYRIGHT ACKNOWLEDGEMENT ALL RIGHTS RESERVED

This presentation was prepared by Eswar Raman and he holds the copyright. He wishes to acknowledge the following.

Business Value of IT : Managing Risks,Optimizing Performance and Measuring Results

IT Success: Towards a new model for Information Technology Information Technology for Management The Enterprise Resource Planning Decade: Lessons learned and issues for

the future CIO.com article – ERP definitions and solutions SAP.com for solution maps SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP

products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves information purposes only. National product specifications may vary.

Epicor is a registered trademark of Epicor Software Corporation. Infor, Adage is a registered trademark of Infor. Oracle, PeopleSoft, JDE are registered trademarks of Oracle Corporation. Lawson is a registered trademark of Lawson Software Inc. Sage is a registered trademark of Sage Software Inc.