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Corporate Structure 2 Chapter 2

Corporate Structure
Organizational Units
Retail Enterprise Model
Every retail company has its own particular strengths, which are reflected in the
companys organization. However, the basic organizational structure underlying
all companies is amazingly similar.
The SAP enterprise model takes this into account. It enables you to make full use
of the flexibility offered by the R/3 System and does not force you to adapt your
organizational structures to suit a restrictive system.
Each of the main areas in the R/3 System has its own way of viewing the organ-
izational structure of a company, and its own organizational units. For example,
company code is the central organizational unit in Finance, while Logistics uses
purchasing organization, distribution channel, and site. Human Resources uses
organizational plan. These structures allow you to define the levels at which data
is maintained and to control the related functions.
Flexible Structures
The SAP enterprise model provides you with a particularly high level of flexibil-
ity, since you can link the organizational units to each other and group them to
mirror the areas in your company. This gives you a fully integrated model of your
company in the system.
Do I need to reorganize my company?
The R/3 enterprise model is flexible and does not require you to reorganize your
company. It allows you to take positive action today to meet the challenges of
tomorrow. Experience has shown that companies need to constantly reevaluate
and adapt to new situations.
Keeping an eye on the future needs of your organization enables you to shape the
SAP units in the most effective way. SAPs accelerated methodology (ASAP) pro-
vides you with an extremely useful implementation tool to achieve this.
Who are the key players in the retailing process?
Business Partners
in the Forefront
As a retail company, you work with both vendors and customers. Logistic and
financial data is stored in the system for both these sets of business partners, and
is used in many SAP Retail functions. In SAP Retail you use partner functions for
maximum flexibility in modeling the data relating to your business partners.
In the retail sector, a customer is either a consumer or a wholesale customer.
Consumers are not necessarily completely anonymous. For example, if you have
an online store on the Internet, you need to know customer data such as addresses
or credit card numbers.
Site as Customer and Vendor
Many organizations consist of a number of different types of sites. A store is a site
that sells goods to consumers. A distribution center is a site that delivers goods to
stores or wholesalers. An online store is a virtual site.
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If you look at the way a store and distribution center are related to each other, they
also assume the function of customer and vendor in the supply chain. Using the
enterprise model, you can view the store as a customer and, if necessary, a vendor.
Fig. 2-1: Organizational Units
Business Strategies
Are my business strategies important for system implementation?
Do you plan to include an online store in your business to supply consumers
directly? Will you use other methods of distribution, such as a separate network
of stores operated by franchisers or wholesale customers? Do you intend to make
your product assortment more flexible by handing over certain areas to service
agents?
You can use your knowledge about your companys strategies to define organiza-
tional structures that take into account future developments. You can take full
advantage of links and hierarchy levels to define exactly where your company is
now and where you want it to be tomorrow.
Do I have to choose between central and decentralized management?
SAP Retail does not restrict you to one single management philosophy, either on
the level of personal responsibilities or at the organizational structure level.
SAP Retails functions enable you to carry out business processes. How you carry
out these processes does not depend on whether they are the responsibility of
central or local management.
Benefit from the Architecture
You can use the SAP Business Framework Architecture to your advantage. With
the R/3 System installed throughout the company, you can use application link
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Corporate Structure 2
enabling (ALE) to distribute functions among various computer systems in differ-
ent locations.
To assist you in this, SAP has developed scenarios that describe in detail which
processes and functions are distributed among which computers, and which data
must be exchanged.
Fig. 2-2: Infrastructure
How can I use the infrastructure to control business processes?
From a financial perspective, a company is divided into smaller areas that keep
independent accounts. In SAP Retail you assign a company code to each of these
areas, but you, not the computer system, determine the size of the area. You can
use a single code for the whole company, or you can assign a different code to
each distribution channel or each site. How you split the company is often dictat-
ed by national legislation.
Purchasing Power Drawn
Together in the Purchasing
Organization
The organizational unit for purchasing can operate for the whole company or be
restricted to a single company code. You use purchasing organizations to define
which vendor supplies a particular item of merchandise, but also to fix cost prices
and other conditions. The activity of purchasing itself is undertaken by purchas-
ing groups, which you can group together to form purchasing areas for statistical
purposes.
Distribution Chains as the
Route to the Customer
You define your product offering and sales prices at the distribution chain level.
Individual stores that deviate from the norm still can manipulate this basic data
for their own specific needs.
Can I specify employee responsibilities?
Encourage Individual
Responsibility
You can assign employees job titles and attach a particular level of responsibility to
these titles. You can then assign the functional areas and individual functions to a
particular job title. You can also specify the workflow tasks that a person receives.
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You have control over who is allowed to access particular functions and data. The
options are also very flexible employees logging on to the system can access
only those functions specifically required to do their jobs.
To what extent can I structure my sites?
You divide your company into a number of departments, which are defined by
the merchandise categories they contain. Receiving points for deliveries are de-
fined for these departments.
Layout for Displaying
Product Assortment
How you present your merchandise to your customers is defined in a layout. You
can split the layout into layout groups, which is particularly useful when defining
the layout of a store.
While a store is seen as a single storage location for the purposes of inventory
management, a distribution center usually has to be divided up into smaller units.
Picking Areas that
Reflect Reality
You can assign separate areas in a storage location for standard and promotional
goods, or you can divide up a storage location according to logistics-based fac-
tors. If necessary, you can use the Warehouse Management (WM) component to
manage your stocks at the storage bin level. With this method, you divide the
warehouse up into areas with specific functions, such as the goods receipt area,
picking area, or high-rack storage area. Storage bins are defined in these areas so
that your system accurately reflects the situation in your warehouse.
What are my options regarding goods ownership?
Inventory managed in SAP Retail does not necessarily have to belong to your
company or be managed by you.
Integration of External
Service Agents
You can treat franchisers as stores in the system at the logistics level and at the
same time model them as external companies. You can offer these external compa-
nies a number of services, from inventory management to complete financial ac-
counting.
From a stores point of view, rack jobbers are vendors whose goods are only en-
tered in the system as received once they have actually been put on the shelves.
You can then manage the goods as your own stock until they are sold, or you can
manage them as vendors stock.
Integration
Which basic conditions are important for effective integration?
In view of the variety and complexity of structural elements used in SAP Retail, it
is important to retain an overview of the whole company at all times.
Open SAP Architecture
From a technical point of view, the R/3 System is an extremely open system that
provides you with a company overview by enabling you to link up with external
systems, such as a point-of-sale system, or communicate with partners through
EDI. You simply determine the processes needed to conduct this type of commu-
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nication and the mechanisms needed to implement it. SAP provides a range of
options in this area, such as business application programming interfaces (BAPIs)
or intermediate documents (IDocs).
Is there a preferred sequence of events for implementation?
SAP does not mandate a particular implementation strategy. Depending on the
existing system environment and the particular requirements of your company,
you implement either one complete function after another, or implement a whole
process at once for a small range of merchandise.
Use Existing Scenarios
The best way of integrating existing systems into SAP Retail is to use interfaces
that have already been set up for long-term use. In particular, SAP has a range of
ALE scenarios, which are not only used to distribute a whole system among var-
ious R/3 System components, but also to integrate existing systems.
Adapting other areas to get the most out of SAP Retail
The structural units defined in retailing cannot be seen in isolation. A department
in a store is not merely used to handle logistics-related concerns, such as the de-
fining of receiving points. It also has significance for Financial Accounting. If inte-
grated with Financial Accounting, you can also define the department as a cost
center.
The R/3 Systems Controlling (CO) component with Activity-Based Costing (CO-
ABC) also offers considerable advantages. It provides transparency for logistics
processes, particularly those in a distribution center, and helps reduce costs con-
siderably.
Restructuring
How does the system support company growth?
Integrating New Sites
SAP Retails highly flexible copy function makes it easy for you to integrate a new
store or distribution center into the existing system.
The system also provides you with functions for restructuring existing units. How-
ever, if you do restructure, cumulative statistics may no longer be comparable.
You must also ensure that you continue to meet basic legal requirements. The
Information System offers copy tools that enable you to implement changes with-
out difficulty.
Can changes to my management structure be made easily?
Providing the
Right Information
As a rule, the higher the level of responsibility, the more information is available
to a person or group. The flexible reporting options offered by the various Infor-
mation Systems, and in particular the Retail Information System (RIS), provide
your employees with the right tools to obtain all the information they require.
As levels of responsibility for people and groups are defined in the system by
providing authorization to access certain parts of the system, changes can be made
at any time.