Global Bike Inc. (GBI) 2.0 - Advanced Business Processes

Global Bike Inc. (GBI) 2.0: Advanced Business ProcessesSimha R. Magal, Ph.D.Professor of Management (MIS) and Director, ERP ProgramSeidman College of Business, Grand Valley State UniversityGrand Rapids, MI, USA

SAP UNIVERSITY ALLIANCES ACADEMIC CONFERENCEINDIA July 16-17,2010

Agenda

GBI 2.0Development processThe companyTeaching materials

GBI ProcessesCore processesAdditional processes

Discussion

GBI 2.0

GBI 2.0: Development

Project Sponsor: SAP UAP

Project TeamSimha R. Magal, Ph.D., Seidman College of Business, Grand Valley State U.Stefan Weidner, Otto von Guericke University, Magdeburg, GermanyJeffrey Word, Ph.D., SAP

Supported byInterns

Grand Valley State University ERP ProgramOtto von Guericke University

FundingWest Michigan CIO councilWiley


ObjectivesEngineer a teaching environment to facilitate two levels of learning

Beginner level– realistic single-company code enterprise with multiple master dataAdvanced level– multi-company code teaching environment with single master data

Create stable, flexible, and extensible foundation for future SAP UA curriculaGBI 2.1………GBI 3.0

Provide extensive background material, figures and examples to allow “almost real-life”business experience for studentsCover all SAP ERP modules and processes included in the TERP 10 certification academy

and later other SAP solutions


Development processExtensive research on industry, products, processes, etc.Systems and transports

Sandbox systemDevelopment systemProduction system

Master data importsLSMWeCatts


DocumentationEnterprise structure configurationProcess ConfigurationSAP transport requestsMaster Data Configuration and Import filesUCC System/Client/Request Import Document

TestingGlobal testing

Expansion (3.0 +)Additional processes and capabilitiesAdditional systems

GBI 2.0: The Company

NarrativeJohn Davis

Grew up on trail bikes in the Rocky mountains of the USWon numerous championshipsUnhappy with available bikes; built his own in his basement1990: started making bikes for othersStarted Frankenstein Bikes

Peter SchwarzGrew up on road bikes in the Black Forest region of GermanyEngineer: designed ultra light bike frame from carbon composite materialStarted Heidelberg CompositesPartnered with a local company to manufacture frames

Both shared a passion for performance and an obsession with bicycle designTwist of fate

Met in 2000Recognized shared passion and complementary business modelsMerged to form Global Bike, Incorporated in 2001

Extendable!


StrategyJohn and Peter are Co-CEOsGBI is a process centric organizationJohn is responsible for (in terms of reporting)

Sales, Marketing, Service and Support, IT, Finance, and Human ResourcesJohn sells products and brings in money

Peter is responsible forResearch, Design, Procurement, and Manufacturing GroupsPeter builds products and spends money

World class bicycle company serving both the professional and “prosumer” in touring andoff-road racing. Focus on:

QualityToughnessPerformance


Global Bike Inc.

Co-CEO John Davis

Co-CEO Peter Schwarz

Global Bike US Global Bike DE

Dallas Miami San Diego Hamburg Heidelberg

Organizational Structure


GBI

BIKEBicycles

TOURTouring

DXTRDeluxe touring

bike

DXTR 1000Black

DXTR 2000Silver

DXTR 3000Red

PRTRProfessionaltouring bike

PRTR 1000Black

PRTR 2000Silver

PRTR 3000Red

ORBKOff Road

ORMN 1000Men’s standard

ORWM 1000Women’sstandard

ACCRAccessories

PROTProtective

PADSPads

EPAD 1000Elbow pads

KPAD 1000Knee pads

HLMTHelmets

OHMT 1000Of f roadhelmet

RHMT 1000Road helmets

UTILUtilities

SHRT 1000T-shirt

RKIT 1000Repair kit

PUMP 1000Air pump

CAGE 1000Water bottle

cage

BOTL 1000Water bottle

FAID 1000First aid kit

Products

Naming conventionAAAA N###

To support 1000 users

GBI 2.0: The CompanyCustomerNumber Customer Name Street City Stat

e

1000 Rocky Mountain Bikes Fiddler's GreenCircle Denver CO

2000 Big Apple Bikes Morton ST New York City NY

3000 Philly Bikes West Chester Pike Philadelphia PA

4000 Peachtree Bikes Summit Boulevard Atlanta GA

5000 Beantown Bikes Van de Graaff Drive Boston MA

6000 Windy City Bikes Highland Parkway Chicago IL

7000 Furniture City Bikes W Fulton Grand Rapids MI

8000 Motown Bikes One Towne Square Detroit MI

9000 SoCal Bikes Von Karman Ave Irvine CA

10000 Silicon Valley Bikes Hillview Ave Palo Alto CA

11000 DC Bikes Pennsylvania Ave WashingtonDC DC

12000 Northwest Bikes 108th Ave Seattle WA

Customers

Addresses areSAP offices!

NumberingNN###


Vendors

VendorNumber Vendor Name Street City State

101000 Olympic Protective Gear Summit Boulevard Atlanta GA

102000 Boomtown Tire & Wheel Walnut ST Cincinnati OH

103000 Dallas Bike Basics N O'Connor Blvd Irving TX

104000 Lightbulb Accessory Kits Thornall St Edison NJ

105000 Space Bike Composites Richmond Ave Houston TX

106000 Night Rider Aluminum Products S Front St LaCrosse WI

107000 Spy Gear Greensboro Dr. McLean VA

108000 Rapids Nuts n Bolts Eagleview Blvd Grand Rapids MI

109000 Green Blazers Seats 68th Parkway SW Portland OR

110000 Fun n the Sun Seats n Bars Blue Lagoon Dr. Miami FL

111000 Sunny Side Up Tire N. Scottsdale Road Scottsdale AZ

112000 Redwood Kits Palomar Airport Rd. Carlsbad CA

Addresses areSAP offices!

NumberingNNNNN###


Information ArchitecturePrior 2009

GBI divisions running multiple, independent IT environments2009

GBI integrated shared services for all IT functions in the Dallas OfficeAll ERP Functions centralizedPrimary Objectives:– Reduce Costs– Deliver Best-in-Class Technology to all divisions


Key ProcessesProcurement (buy)Fulfillment (sell)Production (make)Inventory and Warehouse Management (store)Material Planning (plan)Enterprise Asset Management (maintain)Customer Service (service)HCM (people)Financial Accounting (track)Management Accounting (track)Lifecycle data Management (design)Program and Project Management (projects)BI / SEM

SAP ERP / TERP 10

“Mile wide and inch deep”


Source: Magal and Word, Integrated Business Processeswith ERP Systems, Wiley, 2010

© 2010 John Wiley and Sons

Processes areall integrated


Enterprise StructureFinancial

Client GBIOperating Concern (global) GL##

CA Europe EU##CA North Am. NA## CA Asia AS##

Chart of Accounts (global) GL##

CoA US##

CC US##

CA## CoA DE##

CC DE##

GB## AU## JP##

Business Area – Bicycles BI##

Extendable!


Client GBICC US##

DallasDL##

MiamiMI##

S. DiegoSD##

CA##

TorontoTO##

SP DL##

SLocRM##

MI## SD## HD## HH##

AU##

PerthPE##

Central Purchasing Organization (global) GL##

Purchasing Org. US##

CC DE##

Heidelb.HD##

HamburgHH##

SF##

FG##

MI##

TG##

FG##

MI##

TG##

FG##

MI##

TG##

FG##

MI##

RM##

SF##

FG##

MI##

TG##

FG##

MI##

TO##

TG##

FG##

MI##

PE##

CA##

Purchasing Group North AmericaN##

PO DE##

PGr EuropeN##

AU##

AsiaAS##

Enterprise StructureLogistics

Extendable!


Credit Control Area (global) GL##

CC US##

SO EastUE##

SO WestUW##

CC CA##

SO EastCE##

SO WestCW##

CC DE##

SO SouthDS##

SO NorthDN##

CC GB##

SO SouthGS##

SO NorthGN##

CC AU##

SO SouthAS##

SO NorthAN##

Distribution Channel Wholesale WH

Distribution Channel Internet IN

Enterprise StructureSales and Distribution

Extendable!


Enterprise StructureHCM (US)

Client GBI

Company Code US##

Personnel Area Dallas DL##

PersonnelSubarea

Miami MI##

MaterialsManagement

MM##

SD##

EmployeeSubgroup

Employee Group 1Active

Employee Group 2Retiree

Employee Group 9External

11Hourly Wage

12Salary scale

13Executive

91Senior Consultant

10Intern

90Junior Consultant

21Honorary

20Pensioner

GBI 2.0 Teaching Material

Single Company Code

InfrastructureOne company code

US00 / DE 00Common general ledgerUnique master data

### (1000 copies)

ExercisesMaster Data

ReviewProcesses

ExecuteFinancial impact

Limited understanding due to common GL

Multi company Code

Infrastructure99 company codes (01 – 99)

US## / DE##Unique general ledgerUnique master data

000 -> 0##

ExercisesMaster data

ReviewCreate

ProcessesExecute

Financial impactMore complete understanding due to unique GL

Available:January 2011

Available:August 2010!

GBI 2.0 Teaching Material

One company / One client / One story (on UA Portal on SCN)

Multiple options for teaching material

UAP materials (UA Portal on SCN)ExercisesSolutions (to exercises)Case studiesInstructor notes (for case studies)

Wiley materialsText book

Explanation of conceptsReal world ExamplesGBI examples / scenariosDemos

ExercisesMaster dataProcess executionVariations and extensions

Supporting materialsIM, power point, test bank,solutions to exercises)

Available:August 1, 2010

Available:August 2010

(Prelim version)

CORE PROCESSES

Core Processes

Financial Accounting (G/L accounting)

Procurement (Materials Management)

Fulfillment (Sales and Distribution)

Production (Production Planning and Execution)

Management Accounting (cost center accounting, internal orders)

Financial Accounting

Create GLentries

Reviewfinancials

ScenarioInvest in GBIPurchase assets andconsumablesPay mortgage

AssumptionNot tied to any process

Procurement

Createpurchaserequisition

Create andsend purchase

order

Receive goodsfrom vendor

Receiveinvoice from

vendor

Send paymentto vendor

ScenarioPurchase trading goodsProcure to stock

AssumptionWe know how much to buy

Fulfillment

Pre-salesactivity

Processcustomerales order

Pick, pack,ship goods to

customerSend invoiceto customer

Receivepayment from

customer

ScenarioSell what was purchasedSell from stock

Assumption:We have what enough ininventory

Production

Create plannedorder

Createproduction

order

Issue materialto production

order frominventory

Produce andconfirm

production

Receivematerials fromproduction to

inventory

ScenarioProduce a bikeMake to stock

Assumption:We know how many tomakeWe have needed rawmaterials in inventory

CO – Cost Center Accounting

Create anassessment

cycle

PostExpense toCost Center

ProcessCost Center

ReportCarry Out

Assessment

ProcessCost Center

Report

ScenarioAllocate accumulatedcosts to cost objects

CO – Internal Orders

Create InternalOrder

CommitmentManagement

VerifyCommitment

Post GoodsReceipt

View Effects ofGoods Receipt

Settle Order toCost Center

Check Balanceof Internal

Orders

ScenarioAllocate costs associatedwith temporary activity(picnic)

ADDITIONAL PROCESSES

Additional Processes

Warehouse Management

Material Planning

Integrated Processes

Customer Service

Enterprise Asset Management

Financial Accounting (Asset accounting)

Human Capital Management (Recruitment and Hiring)

Management Accounting (Profitability analysis, profit center accounting, product,cost accounting)

Warehouse Management - 1

CreatePurchase

Order

Receivegoods from

vendor

Createtransfer

requirement

CreateTransferOrder

ConfirmTransferOrder

Receiveinvoice from

Vendor

MakePayment to

Vendor

ScenarioPurchase for delivery toSan Diego WH


Create StockTransportOrder (DL)

Pick, Pack,Ship goods

(DL)

Receivegoods (SD)

CreateTransfer

Requirement

CreateTransferOrder

ConfirmTransferOrder

ScenarioTransfer from Dallas plantto San Diego WH


Create SalesOrder

CreateOutboundDelivery

CreateTransfer

Requirement

CreateTransfer

Order

ConfirmTransfer

Order

Ship Goods(GoodsIssue)

Send invoiceand receive

payment

ScenarioFill customer order fromSan Diego WH

Material Planning

Create Salesand Operations

(SOP) Plan

DisaggregateSOP

Transfer data toDemand

ManagementComplete MPSand MRP runs

Deal withplanned ordersand purchaserequisitions

ScenarioPlan production of FGPlan production of SFGPlan procurement of RM

Integrated ProcessesFulfillment + Procurement +Production

Source: Magal and Word, Essentials of Business Processesand Information Systems, Wiley, 2009

© 2009 John Wiley and Sons

ScenarioMake to orderProcure to orderCustomer ordertriggers fulfillmentLack of inventoryof bikes triggersproductionLack of inventoryof RM triggersprocurement

Assumption:Assumptionsabout availabilityof materials isremoved

Integrated Processes

Three ScenariosFulfillment + Production + Procurement (previous slide)Fulfillment + Production + Procurement + Warehouse ManagementFulfillment + Production + Procurement + WM + Material Planning

Customer Service

CreateService

Notification

Create &Release

Service Order

IssueMaterials to

Order

ConfirmIssuedService

TechnicallyComplete

Service Order

Settle Costs

BusinessComplete

Service Order

ScenarioRepair bicycle underwarrantyCosts will be settled to aninternal cost center

Additional ScenarioRepair bicycle out ofwarrantyBill the customer forrepairs

Enterprise Asset Management

CreateMaintenance

Request

CreateMaintenance

Order

ReleaseOrder

WithdrawalMaterial for

Order

CompletionConfirmation

TechnicallyComplete

Settle Cost

BusinessComplete

ScenarioPlanned maintenanceReplace an air filter on aventilation fanAccumulate labor andmaterial costsSettle costs to an internalcost center

FI – Asset Accounting

PurchaseAsset

Complete aDepreciation

RunReview

Financials

ScenarioPurchase and depreciatean assetAutomobile for one of theCEOs

HCM - Recruiting

CreatePosition

Create anadvertisement

CreateApplicants

Perform ProfileMatchup

Select and hire

TransferEmployee

Data

ScenarioRecruit for an openpositionSelect a suitable candidateHire the candidate

Discussion

Questions?

Comments?

Suggestions?

Ideas?

Criticisms?

Praise?

Global Bike Inc. (GBI) 2.0 - Advanced Business Processes

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