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Project Name: Development of New FMCG Products

Spectrum

SAP Project Systems

FMCG Project

Team Members Signature

ZettaMine Team
PS Consultant R. Naga Mahesh
Project Manager
Spectrum Team
Project Manager J. Suresh
BPO
Core Team

Version – 1.0

REVISION HISTORY

# Version Date Remarks

1. 1.0 25.06.2019 Initial version

2.
3.
4.
5.

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Table of Contents

SAP PS Business Blue Print for New FMCG Products

Table of Contents2
1 3
2 3
3 10
4 10
5 11
5.1 11
5.1.1 11
5.1.2 12
5.1.3 14
5.1.4 14
5.1.5 14
5.1.6 15
5.1.7 15
5.1.8. 15
6 15
7 16
8 16

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Business Requirement Definition

CI Number 001
Process FMCG Product development
Applicable Companies Spectrum
Applicable Location Hyderabad

1 Requirements/Expectations
A brief definition of the process and its requirements.
Spectrum would like to develop the FMCG product using the following list of conditions:
1. R&D to develop new products to the market.
2. Timeline for project is about 6 months.
3. Process engineering done by internal teams.
4. Equipment design and supplies are outsourced to 3rd party vendors located at Chennai.
5. Payment to the materials supplies vendors is based on Milestones and progress made by them
on the basis of 3 pre-defined milestones.
The expectations from the successful operation will be
1. 30% market share for FMCG product across India (maggi noodles).
2. To get profitability for the Company from the developed product.

2 General Explanations
Any general explanations on the process that relate to the customers business process. This typically
does not include any SAP specific terms, where it should relate purely to the business rules.
Spectrum ProductsInc was established in 1959 in Germany. Its annual sales is 47.96
billion Euros in 2018.
 Spectrum Products is market leader in FMCG products globally.
 Spectrum companyalso manufactures state-of-the-art, high cost
Packaging Equipments.
 Spectrum Company is also into International Trading.
Spectrum Products has decided to go for SAP for their global operations totally.
Their existing legacy systems will be sunset after SAP project is started.
Global sales is focused and independent in following major geographies.

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 Americas (20% of sales)

 Europe including UK (35% of sales)
 India (15% of sales)
 Asia Pacific (20% of sales)
 Rest of the World (ROW) (10% of sales)
Currencies:
 Americas -- USD
 Europe including UK – EUR
 India – INR
 Asia Pacific – SGD (Singapore Dollars)
 Rest of the World (ROW) – AED (UAE Dirham)

Spectrum Products Inc. is having their Manufacturing Plants in following

countries.
 Germany (3 locations)
 Spain
 Mexico
 Brazil
 Argentina
 India (4 locations)
 Bangladesh (2 locations)
 China (7 locations)
 Australia
 South Africa (3 locations)
 Canada

Spectrum Products Inc. is having their R&D Plants in following countries.

 Switzerland (2 locations)
 India
 USA

Products range of Spectrum Group:

FMCG Products:

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 Processed Foods - such as breakfast cereal.

 Beverages - Packaged beverages such as fruit juice and bottled
water.
 Dry Goods - include things such as coffee, tea, sugar sachets
 Cosmetics - such as hairstyling products, Perfumes.
 Toiletries - such as toothpaste, Soaps, Shampoos.

 Cleaning Products – such as washing powder, floor cleaner

 Frozen Foods - such as meat, ice cream, dairy products, baked
goods that require a temperature-controlled supply chain.
 Office Supplies - Consumable office supplies such as paper, pens, file
folders, Post-it notes, toner or ink cartridges

Different terms used in SAP for overhead expense related projects are provided below:

Project Definition:
Projects are tasks with special characteristics:
 They are generally complex, unique, and involve a high degree of risk.
 They have precise goals which are agreed on by you and the ordering party.
 They are limited in duration and are cost and capacity intensive.
 They are subject to certain quality requirements.
 They are mostly of strategic importance for the company carrying them out.

Work Breakdown Structure:

The main objectives of the WBS are to split the project into manageable units, define basic dates, and determine its
costs.
The WBS divides the project step-by-step into structure elements. The elements are called work breakdown
structure elements (WBS elements) in the Project System. Each WBS element is the result of this splitting.

Network:
A network consists of the following:
 Activities
 Activity elements
 Relationships

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The following graphic shows you a network with activities and the different types of relationships.

Network Activity:
The German standard DIN 69 900 describes activities as "components of a process " with the following
characteristics:
 They have a duration.
 They have a defined start and a defined finish.
 They are processed without interruption.
 Resources are needed to execute them.
 They incur costs.
The Project System distinguishes between the following types of activity:
 Internally processed activities
 Externally processed activities
 General costs activities
You can break down the activities into activity elements for more detail.

Milestones:
In general milestones are used to mark the transition between various phases or departments. You can also
use Milestones for other tasks and functions in the Project System .
You can create milestones for activities and WBS elements.

WBS, Network Activity and Milestones are provided in Annexure 1

Revenues:
Especially in customer projects, it is important to compare costs and revenues ton get an idea early on the project
result (profit or loss).

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Costs:
You use this component to plan, monitor, and control project costs, thereby achieving comprehensive cost
accounting.

Status Management:
The current status of a project or an object in a project determines which business transactions can be executed.
Statuses document the current processing stage of an object. Status management differentiates between system
statuses and user statuses.

Standard structures
By defining standard projects and networks you can standardize project management in your company by referring
back to data that has been derived from existing projects.
Standardization is one method of ensuring in the initial phase that projects are structured efficiently and
economically.
A further advantage of standardizing project structures is that it makes the processing of projects more transparent,
enables the comparison of projects and subsequently facilitates project controlling.
In the Project System there are several different standard structures that you can use as templates to create
operative structures.
 Standard networks for creating networks
 Standard project definitions for creating project definitions
 Standard work breakdown structures for creating work breakdown structures
 Standard milestones for creating milestones in networks

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Fig. 2.1. Project structure along with different elements (Business Area is optional)

Budget Management for Projects

The budget is the approved cost structure for a project,
and differs from the cost plan in that it is binding. Having estimated the costs as accurately as possible using the
different tools during the planning phase, you then prescribe the funds available for your order in the form of a
budget. The budget is the device by which management approves the expected development of order costs over a
given timeframe.

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Note: Budget planning will be done from Bottom up and Distribution will be done from Top down.
The following different budget types exist in the project system:
 Original budget The original budget is the originally allocated budget. After a point in time that you
specify, this budget can only be corrected using budget updates.
 Budget Updates Unforeseen events, additional requirements, for example, price rises for external
activities, and so on. This may mean you need to update the original budget, in the form of:
 Supplements
 Returns
 Transfers
 Current budget The current budget is derived from:

Original budget

+ Supplements

- Returns

+/- Transfers

= Current budget

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3 Explanations of Functions and Events

For any special functions or events (This may include process triggers etc.)
The functions that drive new products development are as follows:
From the market perspective

 High volumes
 Low contribution margins
 Extensive distribution networks
 High inventory turnover
 High Marketing expenses

From the consumer perspective

 Frequent purchases
 Low engagement (little or no effort to choose the item)
 Relatively Low prices compared to Consumer Durables like TV, Refrigerators,
Microwave Owen etc
 Rapid consumption

By considering the above factors, Spectrum would like to introduce the new products frequently and push into
Markets.

4 Special Organizational Considerations

If there are any special organizational considerations. Where in the organization a particular process
exists or if it is unique to a business division or if there are exceptions made to individual employees.

Packaging is critical for FMCGs. To become successful in the highly dynamic and
innovative FMCG segment, a company not only has to be acquainted with the
consumer, brands, and logistics, but also, it has to have a sound understanding of
packaging and product promotion. The packaging has to be both hygienic and
customer-attracting. Logistics and distribution systems often require secondary and
tertiary packaging to maximize efficiency. Unit or primary packaging protects products
and extends shelf life while providing product information to consumers.

The profit margin on FMCG products can be relatively small, but they are generally sold
in large quantities; thus, the cumulative profit on such products can be substantial.

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Product group-wise profitability is needed on a monthly basis with trend analysis.

5 Process List
5.1 Process name: ASPL Overhead Cost Projects
5.1.1 Process Diagrams
Provide links to all related process maps or diagrams

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Fig. 5.1.Process Map for Projects

5.1.2 Solution in SAP

Describe how this process will be addressed in the product.

Project Execution steps

S Frequ-
N Description Dept ency User Tcode Role
1 Program Inputs and Additions Offline
2 Create a Project CJ20N
3 Change / Add Project Elements CJ20N
4 Project structure CN41N

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5 Budget Preparation CJ40 / IMPCC3

6 Budget Approval CJ30
7 Budget Release CJ32
Over Head Cost Project Overview
8 Report CN41N
9 Materials Master Creation MM41
10 Service Master Creation AC01
11 PR for Materials / Services CJ20N
Over Head Cost Project Overview
12 Report CN41N
13 SCM 1: Project Procurement Cycle ME21N
14 Commitment Details S_ALR_87013537
15 Goods Receipt at Site MIGO
16 IR Posting MIGO
17 Service Entry Sheet ML81N
18 Vendor Invoice MIRO
19 Vendor Payment F110
Project Elements Settlement to
20 WBS CJ88
21 Cash Payment at Site F-53
22 Supplement CJ37
23 Budget Adjustments CJ34 / CJ35
Budget Transfer as Year end
24 process CJ34
25 Budget Updates S_ALR_87013560
Over Head Cost Project Overview
26 Report CN41N
27 New Actual costs and revenues CJI3N
Budget/ Actual / Commitment/ Rem
28 Plan / Assigned S_ALR_87013558
29 Commitment Details S_ALR_87013537
30 Budget Updates S_ALR_87013560
31 Project Completion TECO CJ20N
32 Inventory Adjustments MIGO
Project Final Settlement to cost
33 center CJ88
34 Project Closure CJ20N

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5.1.3 Changes to Existing Organization processes

Change management issues as appropriate.

There is no existing system used to track the work progress.

There is an introduction of mile stone for billing purpose.
There is an introduction of cost center structure to manage cost within the organization.
AS-IS process details as well.

5.1.4 Description of Improvements

It is important to outline where the business will realize benefits of implementation. Both in its use of
software, and streamlined business processes.

Easy to get the reports based on process followed in the system.

To have better understanding and decision making by cost estimates of the projects.
Easy to propose budget based on expense incurred previously.
Easy to bill for the customers.

5.1.5 Description of Functional Deficits / SAP solution fitment

Where appropriate, identify any gaps (SAP solution fitment). This section is important when assessing
risk, as well as estimating the need for ABAP (or similar) resources. Following are the indicators to
mention in the SAP solution fitment:

 Possible
 Possible with work around
 Possible with ABAP
 Not in scope / Not possible
 Explore and confirm

 There is no possibility of system to reschedule automatically.

 System will not provide or trigger work flow or mail from projects because of 3 months delay

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5.1.6 Approaches to Covering Functional Deficits

Documentation of any work-around or assumptions that have been made when outlining functional
deficits.

The user must do reschedule once the project is delayed for more than 3 months.
The user must frequently must go and check the project reports to know the Project delay.

5.1.7 Integration considerations

Specify what integration you need with other modules / sub modules

 PR will be created by adding materials within the projects.

 Release strategy will be managed by SCM team – Point to be discussed further.
 Payments are done using FI module.
 Settlement is done by FI team.
 Materials / Service masters must be created by MDM team.
 Budget will be released by Finance team.
 Bills will be raised by the sales team.

5.1.8. Reporting Requirements

Document the various reports that you would require.

CN41N Project overview

CN25N Activities list
CN47N Activity report
CJI3N New Actual costs – Line items

Note: Reporting requirements will be considered once sample reports are received from core team. Also
the available reports are shown in the system for their confirmation before considering them for
development.

6 Authorization Requirements
Document the level of authorizations that you need for each process in the system
Role TCode (s) Objects Remarks
Admin Executive CJ20N
SCM Executive MM01, AC03
Controller CJ88, CJ20N,
Stores Executive MIGO, ML81N

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Admin Manager CJ40, CJ20N, ML81N

Accountant MIRO
Controller CJ88, CJ30, CJ32

7 File Conversion / Interface Consideration

Documents file conversion/interface requirements. Where the information is to come from, what data is
to be converted manually/automatically and at what point of time. This is critical information is used later.

There is no interface required for this project implementation.

8 Workflow Requirement
Document workflow requirement in this process including the levels of approval required. Mention who
will initiate the workflow and who all will be the recipients of the work item.

Work Flow is required for PR and Budget process approval purpose with reference to values
Proposed activities are to be shared using work flow.

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