Project report on sales and billing systems in SAP

Project Report On

“SALES AND BILING SYSTEMS” IN SAP

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TABLE OF CONTENTS 1. Preface 2. Acknowledgment 3. Declaration 4. Abstract 5. Company profile 6. Introduction to ERP concepts 6.1 What is ERP ?

6.2 Benefits of the ERP software 7. SAP Concepts 7.1 SAP-Company and Software Package 7.2 SAP R/3 Client Server Architecture 7.3 SAP database organization 7.4 Application Modules of SAP 7.5 Advantages of SAP 8. Introduction to PP Module 8.1 What is PP? 8.2 Enterprise Structure 8.3 Customization 9. Define plant 10. Define company code 11. Define MRP Controller 12.Production Planning 13.Bibliography

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PREFACE I am the student of Sikkim manipal university, Ludhiana studying in 4th semester. As a part of 2-year MBA course, I have undergone a project as a Major project Work on “Introduction to SAP PP Module & SALES AND BILLING SYSTEM” to facilitate them with an automated software besides the error prone manual work.

Enterprise Resource Planning is that growing segment of information technologies that fulfill needs of the enterprises like quality, time to market, customer satisfaction, performance and profitability very effectively and efficiently.

The aim of the project is to provide an integrated environment to an enterprise with SAP software with all its advantages over the manual system. All the operations of the company can be integrated into an overall system for planning, controlling and monitoring.

The work done in this project has been done using the SAP ECC4.7 tool. SAP R/3 SD module is a very effective tool for SALES AND BILLING SYSTEM . This report provides the knowledge regarding the technology used in the project.

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ACKNOWLEDGEMENT

To matter what accomplishment we achieve somebody helps us. For every accomplishment we need the cooperation and help of others. As knowledge advances by steps not by leaps so, ability advances by encouragement and guidance.

First of all would like to thank ICMHRD for providing an opportunity to create this project. Then I would like to thank OSWAL GROUP Ltd, Ludhiana for providing such working environment.

I express my deep sense of gratitude and feeling of indebtedness to OSWAL for providing all the facilities and its staff. I

also express my gratitude to

Mr.

SIDDHARTH SHARMA (PP Consultant) my project guide, for their bold attention in this particular time of the project and guide me as per according to progress of my project work on “SALES AND BILLING SYSTEM of PP Module in SAP”.

HARJINDER SINGH Sikkim Manipal university

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DECLARATION

This is to certify that this project entitled “Billing System in SAP” submitted as the partial fulfillment of the requirement for degree of MBA. in sikkim manipal university, submitted to the Institute is authentic record of our own work carried out at the end of third semester Ludhiana, has been approved by the project in charge after an oral examination on the same, in collaboration with an Head of I.T Department .

HARJINDER SINGH Above statements by the candidate are true to the best of our knowledge.

Signature

Signature

(Head of I.T Department)

(Advisor)

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ABSTRACT This report covers the introductory concepts about the ERP software.

The ERP software used is SAP Software. Enterprise Resource Planning, a software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise.

Enterprise Resource Planning, a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. ERP had its origins in manufacturing and production planning. In the mid -90’s it was extended to other backoffice functions such as financial management and human resource management. More recently these systems have addressed applications specific to higher education such as student systems and grants management.

SAP is an ERP software product capable of integrating multiple business applications, with each application representing a specific business area. These applications update and process transactions in real time mode.

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This report covers the pp Module in SAP for a new enterprise. The customization includes the customization of the Master Data as well as that of the transaction Data. After this, the enterprise would be ready to run SD Module in SAP.

Systems DEPARTMENTS

I am undergoing training in the Systems Department, which is well equipped with the latest software technologies. There are around 250 workstations. The Application Implementation is done in SAP R/3 with database in Oracle. The company has SAP R/3 4.7 application, which enables the effective and streamlined operations of the department, in an online integrated way.

The staff skills are enhanced through proper training and deploying the appropriate resources of the company to get the maximum result.

The team members are highly motivated and professionals, who have been the most helpful to me. They are always open to any queries and problems that I face during the course of my training and guide me suitably. I am very impressed by their style of functioning and feel very privileged at being here in such a professional atmosphere, which shall help me, a lot in guiding and shaping my future in the industry.

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The Systems Department Team Mr. Nitesh kumar

General Manager, IT

Mr. Narinder Singh

Manager, IT

Mr. Sunish Gupta

ABAP Consultant

Mr. Adhish Prabhakar

ABAP Consultant

Mr. Siddharth Sharma

pp

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2. Project Review 2.1 EVOLUTION OF ERP

Automation was a magic word in the beginning. The focus then shifted to computers and the trends were to replace the human power with the microprocessor power, pink slip the employee and hopefully the faults and the costs will come down. From then onwards, automation was considered the panacea for all ills of business. But there was much that was wrong with this approach. As these automation packages use to come in different forms and in a non-integrated fashion, loading too much Information Technology on to these in- efficient processes and packages that leads to double entendre.

Actually confusion was that companies developed separate computer applications to satisfy the needs of their particular functional segment. e.g. Accounts, Purchase, Inventory and Planning. Such systems grew as inconsistent islands of information, and hence their consolidation was not possible which lead to numerous organizational problems and data inconsistencies are likely to occur. As a result the decision-makers were denied of access to timely information for making urgent business decisions. This gave rise to the need of an integrated system (ERP) that would address the information requirements of the entire enterprise.

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DEFINE ERP

Enterprise Resource Planning, a software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise.

Fig 3:- Enterprise Resource Planning

Short for Enterprise Resource Planning, a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. As the ERP methodology has become more popular, software applications have emerged to help 10

Business managers implement ERP in business activities such as inventory control, order tracking, customer service, finance and human resources.

ERP had its origins in manufacturing and production planning . In the mid -90’s it was extended to other back-office functions such as financial management and human resource management. More recently these systems have addressed applications specific to higher education such as student systems and grants management .

Enterprise Resource Planning software, or ERP, doesn't live up to its acronym. Forget about planning—it doesn't do much of that—and forget about resource, a throwaway term. But remember the enterprise part. This is ERP's true ambition. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs.

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SCOPE OF ERP The various areas that can be covered under the concept of Enterprise Resource Planning (ERP) are discussed below:-

Fig4:-Areas covered under ERP  Customer Relations o Sales Support o Delivery o Billing o Credit  Logistics o

Procurement

o

Production

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o

Materials Mgt.

 Human Resources o

Payroll

o

Organization

o

Hiring

 Treasury o

Commitments

o o

Investments Currencies

.

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2.2 EXPLORING ERP’S BENEFITS Integrated, uniform, relevant and up-to-date information is vital for the existence for the enterprise. ERP brings together people who work on share tasks within the same enterprise. Some of the tangible benefits of ERP are

 Reduction of lead-time by 60%  99% on time shipments  Doubled business  Increase of inventory turns to over 30%  Manufacturing of single bicycle time reduced to 80%  Better customer satisfaction  Improved vendor performance  Increase flexibility  Reduced quality cost  Improved workflow and efficiency.  Improved access to information.  Improved controls and program alerts.  Improved resource utility  Improved information accuracy  Improved decision making capability

Another reason to consider ERP is to improve workflow and efficiency. As an example, online requisitions can be completed and workflow processes can forward the form along the approval path more rapidly than with traditional paper processes.

Another reason to consider ERP is the ability to improve controls and to program

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alerts. Alerts, for example, can be programmed to warn budget managers about budgets that are in danger of running out of funds and to implement controls that prevent individuals from overspending budgets.

SHORTCOMINGS OF ERP Problems with ERP systems are mainly due to inadequate investment in ongoing training for the involved IT personnel - including those implementing and testing changes - as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and the ways in which it is used.

Disadvantages •

Customization of the ERP software is limited.

•

Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

•

ERP systems can be very expensive leading to a new category of "ERP light" solutions

•

ERP’s are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure.

•

Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications.

•

Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.

•

Some large organizations may have multiple departments with separate, independent resources, missions, chains-of-command, etc, and consolidation into a single enterprise may yield limited benefits.

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2.3INTRODUCTION TO SAP R/3 - ENTERPRISE SOFTWARE

•

Integrated software that supports the information flows among the processes in the supply chain.

•

Sap R/3 is an ENTERPRISE SOFTWARE.

Fig5:- Flow of information in Enterprise Software •

Enterprise software is integrated software that facilitates the flow of information among all the processes of an organization’s supply chain.

•

A supply chain describes the chronological and logical relationships of business transactions from original supply to final consumption.

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•

A value chain encompasses those activities in the supply chain that add value to a product or service of an organization.

•

A value chain views all the business events from the receipt of a customer order to the delivery of that order. For example, value is added when the production process takes raw materials and transforms them into a finished product, when the product is sold to the customer. A company is profitable if the price consumers are willing to pay for a product exceeds the costs of creating value.

THREE -TIER CLIENT/SERVER ARCHITECTURE

The R/3 Basis is the business operating system software that resides on the database server, the application server, and the clients of the end user of the R/3 installation.

The SAP R/3 Basic system is a multi-tier client/server system. The classic configuration of a SAP R/3 System contains the following software layers:



Presentation Layer



Application Layer



Database Layer

 PRESENTATION LAYER Presentation Layer contains the software components that make up the SAPGUI (Graphical User interface). This layer is the interface between the SAP R/3 Systems and its users. The SAP R/3 system uses the SAPGUI to provide an intuitive

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graphical user interface for entering and displaying data. The presentation layer sends the users input to the application server, and receives data from it.  APPLICATION LAYER The application layer consists of one or more application servers and a message server. Each application server contains a set of services used to run in the SAP R/3 System.

Theoretically, you only need one application server to run a SAP R/3 System. In practice, the services are distributed across more than one application server. This means that not all application servers will provide the full range of services. The message server is responsible for communication between the application servers. It passes requests from one application server to another within the system. It also contains information about application server groups and the current load balancing within them. It uses this information to choose an appropriate server when a user logs onto the system.  DATABASE LAYER The database layer consists of a central database system containing all of the data in the SAP R/3 System. The database system has two components - the database management system (DBMS), and the database itself. SAP does not manufacture its own database. Instead, the SAP R/3 System supports the following database systems from other suppliers: ADABAS D, DB2/400 (on AS/400), DB2/Common Server, DB2/MVS, INFORMIX, Microsoft SQL Server, ORACLE, and ORACLE Parallel Server.

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The database does not only contain the master data and transaction data from your business applications, all data for the entire SAP R/3 System is stored there. For example, the database contains the control and Customizing data that determine how your SAP R/3 System runs. It also contains the program code for your applications.

Applications consist of program code, screen definitions, menus, function modules, and various other components. These are stored in a special section of the database called the SAP R/3 Repository, and are accordingly called Repository objects. You work with them in the ABAP Workbench.

The following diagram depicts the whole scenario -

Fig 6:- Software layers of R/3 system

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FEATURES OF 3-TIER ARCHITECTURE

 SCALABILITY Adding more applications or more users to the system. When more users are added to the system, another application server may be added to handle the additional processing demands of those users.

 FLEXIBILITY The number of application modules may be increased without changing the Basis System software that runs on the application servers and the database server.

 ON-GOING MAINTENANCE

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Business functions included in the system may be removed and replaced by other functions that better match current business practices. Also, changes in organization structure can be made using the R/3 Reference Model and does not require changes in the Basis Software system.

2.4 ADVANTAGES OF SAP R/3

Fig 7:- Advantages of SAP R/3 The SAP R/3 software helps in providing the various functions in the system

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 SECURITY THROUGH INTEGRATION It helps in providing full-fledged integration of the various data transfers and high quality reports can be made easily.  SAVING TIME WITH INTEGRATION The consolidation software helps to shorten the time needed to close the books, The financial transactions in the ledger are integrated with the consolidation database and helps in getting the required information at any time.  AUTOMATION OF CONSOLIDATION PROCEDURE It helps in reducing the time and expenses to manually enter all the documents especially in the area of consolidation investments.

 COST EFFECTIVE AUDITS The system generates printed audit reports and allows the auditor to perform interactive analysis of special detailed information directly on the screen.  CUSTOMIZING THE SOFTWARE AS PER THE NEEDS It is helpful in making new programs as per the requirements.  PRE-FIGURED FOR THE FAST IMPLEMENTATION System comes with a variety of useful consolidations, which can be put to use immediately or can be employed after minimal adjustments. The system includes several industry-related plans.  EASY TO LEARN AND USE

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The system is user friendly and context-sensitive help functions and extensive online documentation allows learning the system easily.  ACCOUNTING AUTONOMY Running your consolidation on a separate computer increases the accounting department’s autonomy. This is very helpful during the closing period when there is lot of workload.  INFORMATION SYSTEM The controlling component includes versatile reporting functions. Exception reporting and interactive navigation through the database enhances the preparation of information.

APPLICATION MODULES

SAP has several layers. The Basis System is the heart of the data operations and should be not evident to higher level or managerial users. Other customizing and implementation tools exist also. The heart of the system from a manager’s view point is the application modules.

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Fig 8:- R/3 Core business processes These modules may not all be implemented in a typical company but they are all related and are listed below:  FI Financial Accounting-designed for automated management and external reporting of general ledger, accounts receivable, accounts payable and other subledger accounts with a user defined chart of accounts. As entries are made relating to sales production and payments journal entries are automatically posted. This connection means that the "books" are designed to reflect the real situation. 

CO Controlling--represents the company's flow of cost and revenue. It is a management instrument for organizational decisions. It too is automatically updated as events occur.

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

AM Asset Management--designed to manage and supervise individual aspects of fixed assets including purchase and sale of assets, depreciation and investment management



PS Project System--is designed to support the planning, control and monitoring of long-term, highly complex projects with defined goals.

 WF Workflow--links the integrated SAP application modules with crossapplication technologies, tools and services  IS Industry Solutions--combine the SAP application modules and additional industry-specific functionality. Special techniques have been developed for industries such as banking, oil and gas, pharmaceuticals, etc.



HR Human Resources--is a complete integrated system for supporting the planning and control of personnel activities.



PM Plant Maintenance--In a complex manufacturing process maintenance means more than sweeping the floors. Equipment must be services and rebuilt.

These tasks affect the production plans.

 MM Materials Management--supports the procurement and inventory functions occurring in day-to-day business operations such as purchasing, inventory management, reorder point processing, etc.

 QM Quality Management--is a quality control and information system supporting quality planning, inspection, and control for manufacturing and procurement.

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 PP Production Planning--is used to plan and control the manufacturing activities of a company. This module includes; bills of material, routings, work centers, sales and operations planning, master production scheduling, material requirements planning, shop floor control, production orders, product costing, etc.

 SD Sales and Distribution--helps to optimize all the tasks and activities carried out in sales, delivery and billing. Key elements are; pre-sales support, inquiry processing, quotation processing, sales order processing, delivery processing, billing and sales information system.

2.5 MODULES IMPLEMENTED AT HERO The ERP package implementation at Hero Cycles covers the following seven modules :-

1. Cost Controlling 2. Sales and Distribution 3. Material Management 4. Production Planning & Control 5. Plant Maintenance 6. Quality Management 7. Financial Accounting

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3.1 SAP CONFIGURATION

Oswal Group has implemented SAP R/3 having following features: •

SAP R/3 release 4.7 Enterprise

•

SAP version 4.7 Enterprise upgrade from 4.0B as Front-end.

•

Currently supporting 150 users

All the departments work under the environment of •

IBM AIX with RS/6000 SP Server, IBM P630 Server.

•

Oracle 8.0.6 upgraded to Oracle 9.2.0.4 as Backend RDBMS for R/3 system.

•

ABAP/4 as application programming language.

•

Windows 98 as client operating system.

•

Three-tier architecture

•

Class B IP addressing

•

Core Builder 9000 (switch from 3COM) is used to provide networking (Client Server) connections to various department within organization.

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3.2 TRAINEE SERVER (IDES) SAP IDES – the "Internet Demonstration and Evaluation System" in the R/3 System, represents a model company. SAP IDES is a normal R/3 but with lots of DEMO data. It is purely for education .It is a training server, used to give training to users. When sap is implemented in company, first IDES is installed so that users become familiar with different screens and transaction codes. It is simple to use and has a variety of master and transaction data, and is used for demos, online/classroom training, and presentations. IDES uses easy-to-follow business scenarios to show you the comprehensive functions of the R/3 System. The focal point of IDES, however, is not the functionality itself, but the business processes and their integration. SAP regularly updates the IDES data (master data, transaction data, and customizing). Above all, IDES shows you the possibilities of the integrated applications in the SAP System. IDES cover all aspects of a business enterprise, including Human Resources, Financial Accounting, Product Cost Planning, Overhead Management, Profitability Analysis, Planning, Sales and Distribution, Materials Management, Production and much more.

System Requirement to install IDES For installing IDES 46C on a Laptop, you need:• • •

Windows server 160 GB HDD 512 MB RAM

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INTRODUCTION TO (PRODUCTION PLANNING)

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3.3 PHASES OF IMPLEMENTATION OF SAP Accelerated SAP (ASAP) is an approach specifically developed by SAP to help customers implement the SAP software as quickly and efficiently as possible.

The Accelerated SAP Roadmap consists of the following phases • Project Preparation • Business Blueprint • Realization • Final Preparation

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•Go-Live&Support

Fig9:-various phases for implementing sap

1. Project Preparation It consists of identifying team members and development strategy as how to go.

AS – IS (Existing Process followed, requirements) TO – BE (Requirement analysis and best process recommended) Difference between (AS – IS) & (TO – BE) is GAP analysis 2. Business Blueprint

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It is a legal documentation between client and the company (implementer/service provider) .We has to understand the current business process of client and analyzing the business and prepare documentation. It is a detailed documentation for the client.

3. Realization This phase is used to implement or migrate the entire business of client from NonSAP environment to SAP environment.

4. Final Preparation (Preparation for Production Use) This phase is used for testing and end user training. After successfully completion of this phase client is ready to run business in SAP R/3.

5. Go-Live & Support In this phase we deliver the project end date and end user training at client site.

4.1 ENTERPRISE STRUCTURE In enterprise structure we learn how to portray the specific organizational structure of our company in r/3 system. First we analyze the structures and procedures in our company and then match them to the SAP structures .To help us portray our structures various organizational elements are defined as eg. In standard version .Normally these would not cover all our needs thus we extend the elements and define them as

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required .as soon as our organizational units are ready; access is located so that no other changes can be made.

The enterprise structure consists of: DEFINE:•

Controlling area

•

Company

•

Company code

•

Plant

•

Storage location

•

Purchase organization

•

Sales area

•

Sales organization

•

Distribution Channel

•

Division

Company:A Company is an organizational unit in accounting which represents a business organization according to the requirements of commercial law in a particular country.

Company code:A company code is a smallest independent accounting unit that represents an individual company.

Plant:A Plant is an organizational unit where we can manufacture the goods, store goods, sale our goods, and we can also provide services & we can do purchasing also.

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Storage Location:It is a place where products before and after manufacturing are stored.

Purchasing Organization:Organizations that discuss with Vendor terms and conditions of purchase.

Sales organization:Sales organization is an organizational unit which is responsible of certain product and liability of that product. A company code can have several sales organizations Distribution channel:Distribution channel is the way in which products or services reaches the customers.

Division: - Division is the way of grouping materials, products or services. This represents company’s product line like nature of material. It tells about spectrum of products.

Controlling area:-It is the highest organization with reference to costing material.

Just like the company itself, each company code in a company has a controlling area.

Sales area:- It comprises of sales org , distribution channel & division.

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4.2 FLOW CHART OF ENTERPRISE STRUCTURE

PURCHASING

COMPANY

CONTROLLING AREA

ORGANIZATION

COMPANY CODE 3 COMPANY CODE 1

COMPANY CODE 2

PLANT 1

PLANT 2

PLANT3

PLANT MAINTENANCE

PLANT 1

PLANT 2

Sales area SL 2

SL 2

SL 1

SALES ORGANIZATION

DISTRIBUTION CHANNEL

DIVISION

Fig10:-Flow chart of Enterprise Structure

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SNAPSHOTS OF ENTERPRISE STRUCTURE

LOGON SCREEN OF SAP When we double click the sap logon icon on the desktop the following screen appears which prompts you to logon on following servers – 1. IDES (Internal Demonstration Evaluation Server):-Purely for educational purposes 2. Production Server:– The checked project are used here with the live data.

Double click on ides server

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USER AUTHENTICATION CHECK

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Fields entered are:1. User name 2. Password

SAP WELCOME SCREEN

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The SAP Easy Access screen is where you will start every session, and is the primary user navigation area.

ENTERPRISE STRUCTURE TRANSACTION CODE – SPRO INITIAL SCREEN

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1. DEFINE COMPANY

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Company:- A Company is an organizational unit in accounting which represents a business organization according to the requirements of commercial law in a particular country.

Menu

Path:

PRO

Enterprise

Structure

Definition

Accounting Define Company

After following this path then execute (dbl click ) then go to New Entries

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Financial

Details of Added Entries

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44

Fields Entered are:Company:- 4444 Company name:- G & G Enterprises Country:- IN (India) Language Key:- EN (English) Currency:- INR (Indian Rupee)

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Prompt for Creation of Request

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To save your entries click on save. Then a request number is generated .This request number is stored on the main server and thus later with the help of this number we can trap the transaction performed.

Always write down the SAP document number. If you need to view a document in the future, using the document number is the easiest way to find to it.

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View of Created Company

Our Company 4444- G & G Enterprises is added in the list.

Thus after generation of request our company is added in the list of existing companies

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DEFINING COMPANY CODE Company code:-A company code is a smallest independent accounting unit that represents an individual company.

Menu Path:- Enterprise Structure Definition Financial AccountingEdit, Copy, Delete Company Code Edit Company Code Data

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After navigating through the above menu path the list of already existing company codes is displayed. To define your own company code click on new entries and make the above shown entries

Details Of Added Entries

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Request generated

After making required entries, click on save a request code is generated and our company code is added in the list of existing company codes.

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DEFINE PLANT Plant: - A Plant is an organizational unit where we can manufacture the goods, store goods, sale our goods, and we can also provide services & we can do purchasing also.

Menu Path:- Enterprise Structure Defination Logistic General Define, Copy, Delete, Check Plant Define Plant

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After that go to New Entries

Details of added Entries

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Fields Entered are:City Code:- 0001 Factory calendar:- 01

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Editing Plant

In this screen we add additional information about the plant like who is running this plant.

Fields Entered are:Title:- Ms. Name:- Gurpreet Country:- IN (India) Language:- EN (English) After making required entries, click on save a request code is generated and our plant is added in the list of existing company codes.

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Customizing of Plant Parameters Menu Path:- Spro Production MRP Plant Parameters Carry Out Overall Maintenance

We need to do all these customizing so that Enterprise Structure we create should support all the planning & scheduling functions we need to perform.

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Maintenance of Number Range

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Maintenance of MRP Controller

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Details of MRP Controller:-

In this details we add Plant Name, MRP Controller, Telephone no. , Recipient Name, Business Area, Recipient Type. These are some of the mandatory fields which we have to fill so that we can see all the details at the end report.

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Maintenance of Floats

It specify extra time to be allowed for Production Fields Entered:1.

Schedule Margin Key:-000

2.

Opening Period:-003

3.

Float Before Period:-003

4.

Float After Production:-005

5.

Release Period:-010 60

Maintenance Of Conversion

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Conversion of Planned Order to Production Order on clicking on this we get

Fields Entered:Production order: PP01 (Standard Production Order (Int no.))

Process order:

PI01 (Process Order (Internal Number Assignment))

After this click on save button & then go back to conversion screen so that we can maintain second option in same way.

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Maintenance of BOM/Routing Selection

Fields Entered:Plant:-

4447

BOM select Id:Routing select Id:-

01 01

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Maintenance of Param: Detailed Scheduling

For this we have to enter following Fields which we have to define by our own:Plant 4447 Production Scheduler

420

Name of Production Scheduler ABC Production Profile

111111

Name of Production Profile

PP Scheduling

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After maintaining all Parameters

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DEFINE STORAGE LOCATION Storage Location:- It is a place where products before and after manufacturing are stored.

Menu Path:- Enterprise Structure Definition Material Management Maintain Storage Location

Now we have to enter Work area or plant where we work i.e. 4447

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Details of Added Entries

Fields Entered are:Storage Location No. :- SL1 Description:- Storage Location

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After making required entries, click on save a request code is generated and our Storage Location is added in the list of existing Storage locations.

DEFINE PURCHASING ORGANIZATION Purchasing Organization:-Organizations that discuss with Vendor terms and conditions of purchase.

Menu Path:- Enterprise Structure Definition Material Management Maintain Purchasing Organization

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Details of Added Entries

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Fields Entered are :Purchasing Organization:- 4445 & 4446 Purchasing Organization Description:- Product Purchasing After making required entries, click on save a request code is generated and our Purchasing Organization is added in the list of existing Purchasing Organizations.

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DEFINE SALES ORGANIZATION Sales organization:-Sales organization is an organizational unit which is responsible of certain product and liability of that product. A company code can have several sales organizations Menu Path:-Enterprise Structure Definition Sales & Distribution Define, Copy, Delete Sales Organization

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Details of Added Entries

After making required entries, click on save a request code is generated and our Sales Organization is added in the list of existing Sales Organizations.

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DEFINE DISTRIBUTION CHANNEL

Distribution channel:- Distribution channel is the way in which products or services reaches the customers.

Menu Path:-Enterprise Structure Definition Sales & Distribution Define, Copy, Delete Check Distribution Channel Define Distribution Channel

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Details of Added Entries

Fields Entered are:Distribution Channel:- 42 & 43 Description:- Product Distribution & For Billing After making required entries, click on save a request code is generated and our Distribution Channels is added in the list of existing Distribution Channels.

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DEFINE DIVISION Division: - Division is the way of grouping materials, products or services. This represents company’s product line like nature of material. It tells about spectrum of cts.

Menu Path:- Logistic Material Master Settings for keyfields Define Divsion

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Details of Added Entries

Fields Entered are:Division:- D0 & D2 Description:- Product & Electricity

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After making required entries, click on save a request code is generated and our Distribution Channels is added in the list of existing Distribution Channels

DEFINE CONTROLLING AREA Controlling area:-It is the highest organization with reference to costing material.

Just like the company itself, each company code in a company has a controlling area.

MenuPath:- Enterprise Structure Definition Controlling Maintain Controlling Area Maintain Controlling Area

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Details of Added Entries

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Fields Entered are:Controlling Area:- 4445 Currency Type:- 10 Chart of Accounts:- INT (Integer) Fiscal Year Variant:- K4 After making required entries, click on save a request code is generated and our Controlling Area is added in the list of existing Controlling Area.

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ASSINGMENTS The Process of Assignment builds Relationships among plant, Storage location, Purchasing Organization, Sales Area.

Assignment of Company Code to Company Menu Path:- Enterprise Structure Assignment Financial Accounting Assign Company Code to Company

After this we have to enter Company i.e4444 against Company code i.e4445. Then we have to save after that request will generate which will result in final screen.

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Final Screen

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Now your Company Code has been assigned to your Company.

Assignment of Controlling Area to Company Menu Path:- Enterprise Structure Assignment Controlling Assign Company Code to Controlling Area

82

After this we have to click on Assignment of Company Code to Controlling Area, then on NEW ENTRIES.

Details of Added Entries

83

Final Screen

84

Now your Company Codes has been assigned to your Controlling area.

85

Assignment of Plant to Company Code Menu Path:- Enterprise Structure Assignment Logistic(General) Assign Plant to Controlling Area

86

Company Code 4445 get selected

87

Now click on your Company Code then a list of plant will appear & then select Your Plant which you have to assign to your Company Code.

List of Plants

88

Now click on Continue, then a request will be generated and then and your plant i.e plant1 get assigned to your Company Code 4445.

Final Screen

89

90

Assignment of purchasing Organization to Company Code Menu Path:- Enterprise Structure Assignment Material Management Assign Purchasing Organization to Company Code

After going through the above path then a list of Company code screen will be opened & then we have to select our Company code & then click on that so that a list of Purchasing Organizations will be opened.

91

List of Purchasing Organizations

Now we have to select our Purchasing Organization i.e4446 so that it could be assigned to Company Code. After that we have to save & a request will be generated and then Purchasing Organization will be assigned to Company Code.

92

Final Screen

93

Assignment of purchasing Organization to Plant Menu Path:- Enterprise Structure Assignment Material Management Assign Purchasing Organization to Plant

After going through the above path then a list of Purchasing Organization screen will be opened & then we have to select our Purchasing Organization & then click on that so that a list of Plant will be opened.

94

List of Plants

Now we have to select our plant i.e4447 so that it could be assigned to Purchasing Organization. After that we have to save & a request will be generated and then Plant will be assigned to Purchasing Organization.

95

Final Screen

96

Assignment of Sales Organization to Company Code Menu Path:- Enterprise Structure Assignment Sales & Organization Assign Sales Organization to Company Code

After going through the above path then a list of Company Code screen will be opened & then we have to select our Company Code & then click on that so that a list of Sales Organization will be opened.

97

List of Sales Organizations

Now we have to select our Sales Organization i.e4449 so that it could be assigned to Company Code. After that we have to save & a request will be generated and then Sales Organization will be assigned to Company Code.

98

Final Screen

99

4.4 PRODUCTION PLANNING MODULE

SAP PP is the Production Planning module of the SAP ERP software package from SAP AG. Production Planning is integrated with other modules such as SD, MM and QM. Production Planning is looks after planning part in industry.

The production planning is concerned with the planning and programming of materials and equipment, start & ending dates of activities undertaken in industry, procurement of materials (Raw materials, Semi Finished goods), Storage and inventory control, goods recipt, goods transfer from one location to other location.

Production Planning is one of the functional modules in SAP. It is the branch of logistics that deals with the tangible components of a supply chain interdependent collection of organizations that supply materials. Specifically, production planning covers the Planned Independent Requirements, Production orders, Production requisitions of different materials present in the storage location.

SAP PP is all about Planning & scheduling. These resources include man, manpower and materials. The main functionality within PP includes Planned Independent Requirement(PIR), Material Requirement planning(MRP),Planned Order, Production Order, Confirmation, Goods receipt.The module has important 100

master data – material master, Bill of material, Routing & Work Center. Broadly, the various levels that can be defined for a SAP PP implementation are: Company, Company Code, Plant, Storage Location and Purchasing Organization, Controlling area, Sales Organization.

DATA IN SAP There are two types of data in SAP:1.

Master data

2.

Transaction data

1. Master data:These data can not change frequently and are basic for execution of trasaction.eg:Material master, BOM , Routing and Work center etc.

Master Data in PP Module are as Follows:o

Material Master

o

Bill Of Material (BOM)

o

Work Center

o

Routing

2. Transaction data:-

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There are perpetual data which can change, generated with time and generated from transaction e.g. planned order, production order, purchase requisition order etc.

MATERIAL MASTER Businesses related information is maintained in material master. The information of material is arranged in logically view depending upon business function. There is a transaction code for creating, editing, displaying and deleting.

It include Various Views:⇒

Basic View

⇒

MRP View

⇒

Workscheduling View

⇒

Accounting View

⇒

Quality View

⇒

Sales View

⇒

Costing View

Table3:-T-codes for Material Master Create Change Display Display Changes Set Deletion Flag MM01 MM02 MM03 MM04 MM06 MINIMUM REQUIREMENT TO CREATE A MATERIAL MASTER

102

1.

Industry sector

2.

Material type

3.

Base unit of measurement or stock keeping unit

4.

Material description

5.

Material number

MATERIAL TYPES There is a standard material type in sap. We can create our material type. It can be done in customizing using transaction code :- SPRO. Standard material types are:•

Finished goods- FERT

•

Semi finished- HALB

•

Raw material- ROH

•

Non value aided materials- UNBW

•

Services- DIEN

•

Non stocked material-NLAG

•

Configurable material- KMAT

Extending and copying the material master:We can extend and copy the various materials .In extended material master we can add different views that are created by different department.

Transaction code for extending the material master- mm50

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Copy of material master- mm01.

Material status:It controls for which application the material can be used. Messages can be sent in material status for each application.

1.

No messages (green)

2.

Warning messages (yellow)

3.

Error messages (red)

SCREEN FOR CREATING MATERIAL MASTER Material master is a file which contains information of a particular material depending upon the views selected from the user department Transaction Code-MM01

104

105

CREATE MATERIAL – INITIAL SCREEN

Fields Entered Are:1.

Industry Sector- M (Mechanical engineering)

2.

Material Type- FERT (Finished product) Hit enter

106

SELECT VIEW SCREEN

SELECTED VIEWS: Basic Data 1  Basic Data 2  Purchasing  MRP 1  MRP 2  MRP 3  MRP 4  Work Scheduling  Accounting  Costing

107

Organizational Level

Fields Entered:Plant:- 4447 Storage Location:- SL1

108

Basic Data 1

Fields Entered:Material Description:-Fan Base Unit of Measure:-pc Material Group:-00120

109

Base Data 2

110

Purchasing Screen

Fields Entered:-

111

Purchasing Group :- 000

MRP 1 Screen

112

Fields Entered:MRP Type:- PD( Planned) MRP Controller:- 111 Lot Size:- EX(lot for lot Order Quantity)

MRP 2 Screen

113

Fields Entered:Procurement Type:- X(Internal as well as External procurement) Special Procurement:- 11 In-house Production:- 10 days Goods Receipt processing:- 10 days Planned Delivery Time:- 5 days Schedule Margin Key:- 000

MRP 3 Screen

114

Fields Entered:Period Indicator:- M Strategy Group:- 10 Availability Check:- 01

MRP 4 Screen

115

Work Scheduling

116

Fields Entered:Production Scheduler:- 420 Production Scheduler Profile:- 111111

Accounting 1 Screen

117

Fields Entered:Valuation Class:- 7920 Price Control:- S(Standard Price) Standard Price:- 100

Costing 1 Screen

118

After this we will save & then FERT Material will be created by giving a message ie. Material 1798 created like this we can create other material also.

119

Bill of Material(BOM) Components used in making a product and quantity of components. It can be at one level not multiple level. There is a transaction code of creating, editing, and displaying the BOM.

Transaction codes : Creation- CS01 Change- CS02 Display- CS03 Minimum requirement to create BOM 1.

Material code

2.

Plant code that is for which plant, which create BOM usage

3.

BOM usage/type NOTE:-

• BOM can be created for in-house produced products, finished/semi finished products but not for the raw material.

• One material can have multiple BOM.

Structure of BOM:Header:For which material/product BOM is created. In this, we mention: • Base quantity: For how much quantity, BOM is being created.

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• Administrative data: who has created and date of creation.

Item overview :- List of components used in BOM. Sub Item :- It is the Installation point of item in the BOM. BOM status :- It tells us whether BOM is active or inactive for particular application. It is mentioned in BOM Header.

Types of BOM category:• Production BOM: • Sales BOM • Functional Location BOM • Engineering/Design BOM • Universal BOM BOM Group:Several BOM can be groups together in BOM group using head of material .We can create BOM by using variant BOM .They should be in same plant.

Group BOM:If a BOM is created without maintaining a plant ,then group BOM is created. Later this BOM is required for allocation of plant.Using plant transaction ,Group BOM is allocated to plant.Group BOM can be allocated to any number of plants.

T code for plant allocation of Group BOM:CS07

Variant BOM:-It is created for different material where most of the component of the material are same, only few vary. Variant BOM of material is created as a 121

variant of already created material .Variant BOM and Multiple BOM are mutually exclusive to each other.

Customizing of BOM Menu Path:- SPRO Logistics- General Material Master Basic Settings Material Types Define Attributes of Material Types

122

Screen For Creating of Bill of Material(BOM) Transaction Code:- cs01 Menu Path :- Logistics Production Master Data Bill of Material Bill of Materials Material BOM CS01(Create)

123

CREATE BOM – INITIAL SCREEN

Fields Entered Are:Plant :- 4447 BOM Usage :- 1 Hit enter

124

Components Added to BOM

Fields Entered Are:-

125

Component:- 1793, 1799 Quantity:- 5, 5 Hit Enter After this click on save a request will be generated and the BOM will be created.

WORK CENTER Work center is a place where operation is carried out. It is created at plant level.In this, we have to maintain an External No. Transaction code :Create :- CR01 Change :- CR02 Display :- CR03 Work center Category:It is a mandatory entry while creating work center, which contrasts the maintenance of fields default Value of the fields in work center.

Views in Work Center: o Basic Data o Default views for Operation. (Values set in this will get copied in the Routing automatically) o Capacity o Scheduling o Costing

126

Standard Value Key: • It activates which activity is to be consumed at the work center • If reference indicator is set, then the value of control key cannot be changed in routing • In Work center, we assign the cost center • Many work centers can be assigned to one cost center. But the same work centers can't be assigned to another cost center keys • Max. 6. can be maintained, for more activities Two work centers can be with divided activities.

Control Key: It is a mandatory entry for an operation which controls: •

Whether the operation is relevant to Scheduling

•

CRP i.e. Capacity Requirement Planning

•

Inspection Characteristics.

•

Auto G.R. (Goods Received)

•

Rework, (Work Again For Improvement)

•

Costing.

•

Standard Text Key.

Pooled Capacity:It is the capacity category which is shared by Several Work centers.

E.g. One man- many M/c's

127

made

Back flush is present in.

-Material Master. (In MRP2, View) -Work center -Routing -Production order

Customizing of Work Center

128

129

Screen for Creating of Work Center Transaction Code:- CR01 Menu Path:- Logistics Production Master Data Work Centers WorkCenter CR01(Create)

130

CREATE WORK CENTER – INITIAL SCREEN

Fields Entered Are:Work Center:- 1555 Work Center Category:- 0001 Hit enter

131

Basic Data

Fields Entered Are:Person Responsible:- 777 Usage:- 009

132

Default Value

Fields Entered are:Control Key:- PP01 Setup:- MIN (Minute) Machine:- MIN (Minute) Labor:- MIN (Minute) Hit Enter

133

Capacities

Fields Entered Are:Setup Formula:- SAPR05 Processing Formula:- SAPR06 Teardown Formula:- SAPR03 Hit Enter

134

Scheduling

Fields Entered Are:Capacity Category:- 001 Setup Formula:- SAP001 Processing Formula:- SAP002 Teardown Formula:- SAP007 Hit Enter

135

Costing

Fields Entered Are:Cost Center:- 4220 Activity Type:- 4221, 4220, 4223 After this we have to save and then Work Center is created.

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ROUTING Sequence of operations to create a material is called routing.

VARIOUS OPERATIONS PERFORMED:Sampling:We take particular of material, we inspect it and AQL (Acceptance Quality level) is made by R& D department.AQL means which parameters are to be used i.e.

Mechanical, chemical Parameters etc and these are defined in SAP as Inspection characteristics.

Supply Chain:Customer  Plant  Vender SCM (Supply Chain Mgt.) Components: ⇒

SAP R/3

⇒

mySAP SCM.  APO ( Advance Planning Optimizer  ICH ( International Collaborated Hub)  EM (Event Mgmt.)

⇒

SAP BW (Business Info Warehouse) Routing:Work centers are used in Routing.

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ADVANTAGES:1.

We know process of Production.

2.

Scheduling

3.

Capacity Planning

4.

Costing

5.

To book the Production Task List:Different Types of Task list (we call Routing as Task list) 1. Routing (N) 2. Reference Operation set (s):-These are used in Discrete Mfg. 3. Rate Routing (R) 4. Reference Rate Routing Operation Set (m):- Used in Repetitive mfg.

5. Standard N/W (0):-Used in Project System 6. Inspection Plant (Q):- Used in quality mfg 7. Master Recipe:-Used in Process Industries Reference Operation set:-It is a kind of task list which is created without maintaining a material.

Structure of Routing:Header Materials with Group No &Group Counter

Sequence Operation

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Work Center PRT Component allocation key

Inspection characteristics

Control

Screen For Creating Routing Transaction Code:- CA01 Menu Path :- Logistics Production Master Data Routing Routings Standard Routing CA01(Create)

139

CREATE ROUTING – INITIAL SCREEN

140

Fields Entered Are:Usage :- 1 (Production) Status:- 4 (Released) Hit enter and then click on Operation so that we assign Work Centers to different Operations.

141

Assigning of Work Centers

Fields Entered Are:Work Centers:- 1555, 1556 Standard Key :- 46, 47 Hit Enter then save your Routing will be saved.

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4.5 FLOW OF PP For Discrete Manufacturing PIR/SO

MRP

Planned Orders

Production Orders

Confirmation

GR

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Planned Independent Requirement Planned Independent Requirement (PIR):PIR is used for maintaining the requirement which could be week wise, monthly wise or yearly wise. For estimating the requirement forecasting is done.

T code for PIR is: MD61 T code for changing PIR is: MD62 Planned order:A request created in the planning run for a plant to trigger the procurement of a plant material for a certain quantity for a specific date.

Initial Screen for Creating PIR

Hit Enter 144

Creating Requirement

After this we have to Enter and to see the requirement we have to run MRP MRP:-Material requirement Planning: -MRP is the planning coverage of shortage with the suitable receipt element.

T Code for MRP: MD02 MRP contain the following steps: •

NRC(Net Requirement Calculation)

•

PQC(Procurement Quantity Calculation)

145

•

Procurement Type

•

Scheduling

•

BOM explosion MRP Procedures:Whether and how material is planned.

-MRP—PD--- planning will take place.

•

Consumption Base Planning.

•

Reorder point lavel planning.

•

Forcast based planning.

•

Time based planning.

-Master production scheduling -MRP in external procurement -GR Processing time.

Execution in MRP:(1) Total Planning:-

•

All Material are planned, it can be run online or background.

T Code is: MD01

(2) Single item Planning:Only selected material are planned.

•

Single item single level planning T Code is: MD02

•

Single item multi level planning T Code is: MD03

146

•

Single item iterative planning T Code is: MD43

Customizing of MRP

147

Stock Requirement List

To change this requirement to Planned Order we have to run Single Item Multiple Level MRP.

148

MRP Screen

149

Planned Order

Now we have to Double click on planned order so that we can change that into Production Order.

150

Stock Requirement List

Now we have to Dbl click on Production Order to convert planned order to production order.

151

Customizing of Production Parameters Menu Path:- Production Shop floor control Master Data Order Define Order Type Dependent Parameter

152

Production Order

153

Production Order:- These are used in Discrete Manufacturing scenario where product Stability is less it is basically the order given by MRP Controller to the Shop floor people to start production.

154

Customizing of Release Production Order Menu Path:- Production Shop Floor Control Operation Avail Check Define Checking Control

155

Production Order after Release

156

Confirmation Confirmation:- Declaring completion of an operation consumption of an activity is called confirmation. It can be at order level or at operation level. Confirmation is saved against already created confirmation.

-Even if full Qty. Confirmed, then also PCNF status will come, if partial confirmation is selected during CNF. -Even if partial is confirmed, then also CNF status will come if final confirmation is selected during CNF. -In automatic conformation, system itself selects the status i.e. PCN for CNF. Types of Confirmation

T Code

1.

Time Ticket Confirmation

CO11n

2.

Time Even Confirmation

CO19

3.

Collective Confirmation

CO12

4.

Progressive Confirmation

CO1f

Effects of confirmation:1. Order gets updated 2. Capacity Requirement gets required (In capacity Planning in orders) 3. Actual costs gets debited 4. HR data gets posted.

5. Material document may get (if auto GR is done. Then it will be posted, otherwise not).

Note:-When confirmation is posted 6. GI of back flush component takes place.

7. GR of header material takes place if auto GR is set

157

Customizing of Confirmation Parameter Menu Path:- Production Shop Floor Control Master Data Operations Confirmation Define Confirmation Parameters

158

Stock before Confirmation

159

Time Ticket Confirmation

160

After Confirmation Production Order

Here we can check the status of Production Order.

GMPS:- Goods Moment Posted.

It means final Confirmation has been done.

161

Goods Receipt Goods Issued:- Goods can be issued with codes T Code:MB1A Movement Type:1.

201- Goods issued against cost center.

2.

202- For Reversal.

3.

261- Goods issued to product.

4.

262- For Reversal

5.

551- Goods issued for Scrap Goods Received (GR) – MBIC. Movement Types:1.

101- Goods Received from Production order Purchase Order.

2.

102- For Reversal.

3.

501- GR without Purchase Order.

4.

502- Reversal.

5.

521- GR without Production Order.

6.

522- Reversal

7.

131- GR for Repetitive Mfg.

8.

132- For Reversal.

9.

103- GR to Inspection.( Quality Chick will be there)

162

10.

104- Reversal.

11.

105- GR from Inspection.

12.

106-Reversal.

13.

561- Initial Stock Update.

Transfer Posting to Stock Transfer:- MB1B

1.

311- For stock transfer from storage location to Storage location.

2.

312-Reversal of 311.

3.

301-Transfer from Plant to Plant

4.

302-Reversal of 301.

5.

309-Transfer from Material to Material.

6.

310-Reversal of 309.

7.

313-Removal of stock from one Storage Location.

8.

314- Reversal of 313.

9.

315- Placement of Stock in another Storage Location.

10.

316- Reversal of 315.

163

Customizing of Goods Receipt Menu Path:- Material Management Inventory Management Plant parameters

164

Goods Receipt

165

Stock after Confirmation

166

167

5. FUTURE SCOPE

In SAP PP Planning is done through MRP or MPS, but there is a limitation in PP that the planning is not done across supply chain i.e. vendor ,plants and customers so its advanced version is APO(Advanced Planning and Optimizing), in this planning is done across the supply chain. In APO there are many planning tools i.e.:• DEMAND PLANNING:-It is based on historical data which is taken from BW (Information warehouse).

• GATP (Global Available to Promise):- IT is checking the availability/feasibility to meet sales order quantity while creating sales order.

• SNP (Supply Network Planning):- It is mid to long term planning across the supply chain. It is finite planning.

• PPDS (Production Planning and Detailed Scheduling):- This is the detailed Production Planning with the location in shorter horizon.

• TVPS (Transport Planning Vehicle Schedule):-IT means to select the shortest path for transportation so that the transportation cost is reduced.

The limitations of the PP module are overcome by the advanced version APO.

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6. Appendix Account

Key indicating whether an item is to be assigned to an auxiliary

assignment

account (such as a cost center). The account assignment category

category

determines which account assignment data (e.g. cost center, account number, etc.) is required for the item.

Account group

The account group determines: •

The data that is relevant for the master record

•

A number range from which numbers are selected for the master records

An account group must be assigned to each master record.

Base unit of

Unit of measure in which the stock of a material is managed.

measure The system converts all quantities entered in other units into the base BOM explosion

unit of measure Function for determining all the components of a bill of material and listing them.

You can explode a BOM to show the structure of the product or to show the total quantity of each component

BOM explosion

Defines date to be used for selecting the bill of material.

date BOM select ID

Indicator determines which BOM is to be used and with which

Document

priority for BOM selection.

An electronic record of a transaction. In addition, several documents

169

can be created from one single action in the R/3 system. For example, when an "Invoice" is entered into R/3, which references a Purchase Order document in R/3, an Accounting document is also automatically created. Each document is linked to the other and provides different pieces of information. In R/3, each document has it's own unique document number that is Company Code and Fiscal External

Year dependent.

Procurement of raw materials, operating supplies (MRO items),

Procurement

trading goods/merchandise or services from an external supplier for the organizational units within a firm that need such items.

Floats after

Number of workdays allocated to this order as a safety margin after

production Floats before

production.

Number of workdays allocated to this order as float before

production Goods Issue

production.

- It is goods movement in which material withdrawal is posted for

(GI):

consumption or for customer. A GI posted in system will leads to

Goods

decrease in stock.

It is a process in which transaction resulting change in stocks. It is

movement:

further sub-divided into three categories 1. Goods Receipt (GR) 2. Goods Issue (GI) 3. Transfer Posting (TP)

Goods Receipt

It is a goods movement in which receipt of goods is posted for vendor

(GR): -

or for production. A GR posted in the system will leads to increase in stock. No Concept of Price or value

GUI

Graphical User Interface. Windows like feel and look. User friendly screens to develop and use are provided. The user can simply point

170

IDES

the cursor and click the mouse to operate International Demonstration and Education System. A sample application provided for faster learning and implementation

IMG

Implementation Guide Hierarchical structure reflecting the R/3 component hierarchy and contains all configuration activities

Industry

When you create a material master record, you are required to

Sectors

classify the material according to industry sector and material type.

Industry sectors have control functions in the R/3 System. For example, it is factor determining the screen sequence and field selection in a material master record. Once you have assigned an industry sector to a material, you cannot change the industry sector again afterwards. The standard R/3 System contains the following industry sectors. The ID used to identify the industry sector internally appears in parentheses.

Plant engineering and construction (A) Chemical industry (C) Mechanical engineering (M) Pharmaceuticals (P)

Invoice:

Invoice is a document, which is issued to a buyer (Company) from the supplier (vendor) for the payment. The following information is maintained in invoice Invoice date, Posting date, Invoice ref number, tax amount, amount, tax code, terms of payments, vendor address, banking accounting information etc

171

Lot size

Quantity to be produced or to be procured.

Material

Text of up to 40 characters that briefly describes a material. You may

Description

have only one description for each material, but it may exist in as many different languages as you like.

Material group

Grouping of materials and services according to their characteristics.

Material type

Groups together materials with the same basic attributes, for example, raw materials, semi finished products, or finished products.

When creating a material master record, you must assign the material

Moving average

to a material type Price that changes in consequence of goods movements and the entry

price

of invoices, and which is used to valuate a material. The moving average price is calculated by dividing the value of the material by the quantity of material in stock. It is recalculated automatically by the system after each goods movement or invoice entry.

Movement

- It is a three-digit code, which plays a role of important control

Type: -

function in inventory management. It acts as a central role in automatic account determination. It determines which stock account or consumption account is updated in financial accounting.

MRP controller.

The person responsible for a group of materials within MRP in a plant or company. Any material that takes part in material MRP type

requirements planning must be assigned to an MRP controller Key that controls the MRP procedure (MRP or reorder point) to be used for planning a material. It contains additional control parameters, for example, for using the forecast for the materials 172

planning, for firming procurement proposals and so on.

Number

Number ranges are maintained for each & every document, Posted in

Ranges:

the SAP System. The maximum numbers of digit allowed are 18digits (99, 9999, 9999, 9999, and 9999).

Two types of number ranges: Internal number ranges - System will automatically define numbers to all documents External number ranges - User has to give doc number externally

Opening period

while creating document Number of workdays subtracted from the order start date ,to

Price control

determine the creation date Indicator determining the procedure used for material valuation.

Two procedures are available in the standard system: •

Valuation at standard price

•

Valuation at moving average price or (if the material ledger has been activated) periodic unit price

Procurement

Classification determining whether a material is produced in-house,

type

procured externally, or both.

Purchase

Request or instruction to Purchasing to procure a certain quantity of a

requisition

material or a service so that it is available at a certain point in time.

Purchasing

(MM) A Purchasing Group is a grouping of departments or areas that

group

purchase in R/3 used for assigning Purchase Requisition approval rules. The Purchasing Group field is a required field on a Purchase Requisition and is assigned to each authorized R/3 user that is part of 173

that Purchasing Group. For example, several users from the same department or area may use the same Purchasing Group.

Purchasing

Time that purchasing department requires to convert a purchase

procurement

requisition into a purchase order

time Purchasing

Key defining the valid reminder days and tolerance limits applicable

value key

to this material for the purchasing department.

The purchasing value key serves as an entry aid.

Reconciliation

G/L account, to which transactions in the subsidiary ledgers, (such as

account

in the customer, vendor or assets areas), are automatically updated. It is generally the case that several sub ledger accounts post to a common reconciliation account. This ensures that the developments in the sub ledger accounts are accurately reflected in the general ledger (i.e. in line with balance sheet conventions).

Release period

Number of workdays between the planned start date of the production order and the date for releasing the order. If the order release indicator is set, the production order is released by a background program that takes all dates into account.

Reservation: -

It stores requisition created from particular cost center to particular department for issuing the material reservation posted in the system.

It leads to decrease in stock.

R/3

R/3 is an ERP system offered by the SAP company. The R/3 stands for real-time / three-tiered architecture, defined as follows: The "R" in R/3 = real time. During real-time processing, data is

174

processed immediately, the moment the data is entered into the system. This is different than a "batch mode", in which data is stored and all transactions are processed together, at a later time.

The "3" in R/3 = A three-tier computer architecture comprised of three operational layers as outlined below. The SAP R/3 system uses a special type of client/server architecture consisting of three wellScheduling

defined and separate processes, each running on a different platform Outline agreement on the basis of which materials are procured at a

Agreement

series of predefined points in time over a certain period.

Schema Group

It allows to group together the purchasing organizations, which uses the same calculation schema.

Schema Group

The main function of it is to identify or to pick the right process and

Vendor

conditions for a particular vendor

Special

An indicator in the material master record that defines external

procurement

procurement or in-house production of the material more precisely.

type

Stock Transfer

It is method of removal of material from one location and transferring

(ST):

it to another location. This process is performed between two plants

Stock types

and two storage locations.

The different stock types are 1. Unrestricted use stock 2. Quality inspection stock 3. Blocked stock 4. Warehouse stock

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Transfer

- It is a general term of stock transfer that changes the stock type or

Posting (TP): -

stock categories. The difference between transfer posting and stock transfer is: TP is logical stock transfer and ST is a physical stock transfer.

VALUATION

THE VALUATION AREA SETTING IS USED TO CALCULATE TOTAL

AREA Valuation Class

STOCK VALUE.

It is used to determine which stock account is updated during the goods movement of a material. It is maintained in Accounting 1 view in material master record

SAP TRANSACTIONS For performing any kind of task in the SAP R/3 ERP system, a transaction is used.

SAP provides a standard set of transactions to manipulate i.e. insert, update, delete and display data in the system. A transaction code is a four-character command that tells the system location of a task. Each SAP screen has a unique transaction code. A transaction code may contain only letters such as zstm or a combination of letters

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and numbers such as me51. In SAP, you can use transaction codes as a shortcut or alternative to using the navigation path to get to a system task.

Listed below are the commands used in combination with the transaction codes.

Command + Trans Description Code /n + Transaction code

End current system task and go to new system task Create a new session and go to new system task without closing

/o + Transaction code prior session /o

List open sessions

/i or /nend

Log off

BIBLIOGRAPHY BOOKS:•

SAP PP ( FUNCTIONALITY AND TECHNICAL CONFIGURATION)

BY MARTIN

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SAP ONLINE LIBRARY HELP

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WEBLINKS:•

www.sap.com

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www.sapinfo.com

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www.sapzone.com

•

www.sap-img.com

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www.sapgenei.com

•

www.help.sap.com

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