SAP University Alliances

Version 2.2
Authors Simha R. Magal Introduction to Configuration
Stefan Weidner
Tom Wilder

Product
SAP ERP 6.0 EhP4
Global Bike Inc.

Level
Beginner

Focus
Introduction to Configuration

© SAP AG
 Configuration Agenda

 The GBI 2.x Environment

- Development
- The company / case
- Processes configured
 Configuration Fundamentals
- What is configuration?
- Data in an enterprise systems
- The document concept
 Teaching Environment
- Single company code (SCC)
- Multi company code (MCC)
- Teaching Materials

© SAP AG Page 2
 Configuration Development

 Project Sponsor: SAP University Alliances

 Project Team
- Simha R. Magal, Ph.D., Seidman College of Business, Grand Valley
State U.
- Stefan Weidner, Otto von Guericke University, Magdeburg, Germany
- Jeffrey Word, Ph.D., SAP
 Supported by Interns
- Grand Valley State University ERP Program, Michigan, USA
- Otto von Guericke University, Magdeburg, Germany
 Funding
- West Michigan CIO council
- John Wiley and Sons

© SAP AG Page 3
 Configuration The Global Bike Inc. (GBI) Story

 Two bike enthusiasts join forces

 A mountain biker from the US
 A Road Racer from Germany

© SAP AG Page 4
 Configuration The Company – Background

 Background:
- Global concern using full ERP capabilities
- Consists of two companies located in the US and in Germany
 History:
- John Davis won numerous mountain bike championships in the US
- In 1990, started his own mountain bike company (Frankenstein Bikes)
- Peter Schwarz grew up on road bikes in the Black Forest, Germany
- As a student, he engineered ultra-light composite frames
- In 1993, started his own bike frame company (Heidelberg Composites)
- Both met in 2000
- In 2001, merged to form Global Bike Inc.

© SAP AG Page 5
 Configuration The Company - Strategy

 John and Peter are Co-CEOs

 John is responsible for (in terms of reporting)
- Sales, Marketing, Service and Support, IT, Finance, and Human
Resources
- John sells products and brings in money
 Peter is responsible for
- Research, Design, Procurement, and Manufacturing Groups
- Peter builds products and spends money
 World class bicycle company serving both the professional and
“prosumer” in touring and off-road racing.
 Focus on:
- Quality
- Toughness
- Performance

© SAP AG Page 6
 Configuration The Company – Org. Structure

Enterprise

Companies

Facilities

© SAP AG Page 7
 Configuration The Company – Materials

 Finished Goods (FG)

GBI
 Trading Goods (TG)
BIKE ACCR
 Product Groups (PG) Bicycles Accessories

TOUR ORBK PROT UTIL

Touring Off Road Protective Utilities

DXTR PRTR ORMN 1000

PADS HLMT SHRT 1000
Deluxe touring Professional Men’s
Pads Helmets T-shirt
bike touring bike standard

ORWM 1000 OHMT 1000

DXTR 1000 PRTR 1000 EPAD 1000 RKIT 1000
Women’s Of f road
Black Black Elbow pads Repair kit
standard helmet

DXTR 2000 PRTR 2000 KPAD 1000 RHMT 1000 PUMP 1000
Silver Silver Knee pads Road helmets Air pump

CAGE 1000
DXTR 3000 PRTR 3000
Water bottle
Red Red
cage

BOTL 1000
Water bottle

FAID 1000
First aid kit

© SAP AG Page 8
 Configuration The Company – Materials

 Trading Goods  Raw Materials

© SAP AG Page 9
 Configuration The Company – Materials

 Semi-Finished Goods  Finished Goods

© SAP AG Page 10
 Configuration The Company – Business Partners

 Customers - US  Customers - Germany

Addresses are
SAP offices!

© SAP AG Page 11
 Configuration The Company – Vendors

 Vendors – US  Vendors – Germany

Addresses are
SAP offices!

© SAP AG Page 12
 Configuration Processes Configured

 GBI is a process centric organization

• Procurement (buy)
• Fulfillment (sell)
• Production (make) “Mile wide and inch deep”

• Inventory and Warehouse Management (store)

• Material Planning (plan)
• Enterprise Asset Management (maintain) SAP ERP / TERP 10

• Customer Service (service)

• HCM (people)
• Financial Accounting (track)
• Management Accounting (track)
• Program and Project Management (projects)

© SAP AG Page 13
 Configuration Processes Configured

Processes are
all integrated

© SAP AG Page 14
 Configuration Agenda

  The GBI 2.x Environment

- Development
- The company / case
- Processes configured
 Configuration Fundamentals
- What is configuration?
- Data in an enterprise systems
- The document concept
 Teaching Environment
- Single company code (SCC)
- Multi company code (MCC)
- Teaching Materials

© SAP AG Page 15
 Configuration Configuration vs. Process Execution

 Configuration:
- Getting the system ready to execute processes
- Setting up the enterprise structure
- Defining business rules
- Populating the system with needed master data
- Testing
 Process execution:
- In a previously configured system
- Process steps are executed utilizing the capabilities of the ERP
system

© SAP AG Page 16
 Configuration Configuration vs. Customizing

 Configuration:
- The process of tailoring SAP ERP by selecting specific functionality
available
- Requires no programming; “set the switches”
 Customizing:
- Making changes to the underlying code in the software
- Requires knowledge of ABAP programming
- Used to create or extend capabilities not available in the system
- Use with caution

© SAP AG Page 17
 Configuration Why Teach Configuration?

 Configuration provides a greater understanding of how business

processes are executed in the system
 Knowledge of configuration helps to demystify the software
 Knowledge of configuration is helpful in in trouble shooting

© SAP AG Page 18
 Configuration Data in an ERP System

 Organizational data (levels, elements)

 Master data
 Transaction data
- Associated with process steps

© SAP AG Page 19
 Configuration Organizational Data

 Defines the structure of the enterprise in terms of legal or business

purposes.
- Hierarchy of the organization
- Data rarely change
- Examples:
• Legal entities
• Plants
• Storage areas
• Sales organizations
• Profit centers

© SAP AG Page 20
 Configuration Organizational Data

 Client
- Represents the enterprise; comprised of many companies
 Company Code
- Central organizational element in financial accounting
- Identifies legal entities in an enterprise
- Books are maintained at this level for legal reporting
 Plant
- Performs multiple functions
- Used by many processes
- Represents an area where work is performed: factory, warehouse,
office, distribution center, etc.

© SAP AG Page 21
 Configuration Organizational Data

Enterprise
Client

Companies
Company Code

Facilities
Plant

© SAP AG Page 22
 Configuration Master Data

 Long-term data that typically represent entities associated with

various processes.
- Material, Customer, Vendor
 Typically grouped into segments associated with organizational
level
- General data (across company codes)
- Financial data (CC specific)
- Area-specific data (Sales, Purchasing, Production)
 Enterprise structure must be configured before adding master data

© SAP AG Page 23
 Configuration Business Rules

 Defines how business processes are executed

- How transactions (process steps) are executed
- Based on policies of the organization
• A PO over $10,000 needs approval
• Payment for an order must be received prior to shipment

 Some business rules are included in master data

- Terms, pricing, communication methods
- Planning methods, lot sizing, availability check

© SAP AG Page 24
 Configuration Transaction Data

 Data generated during execution of process steps

 Requires
- Organizational data
- Master data
- Situational data
 Example: Sales order creation
- Organizational elements: Client, Company Code, Sales Area
- Master Data: Customer, Material
- Situational data: Who, What, When, Where
• date, time, location, person, quantity

© SAP AG Page 25
 Configuration Documents

 Electronic record of transactions

- Transaction documents
• Requisition, purchase order, invoice, delivery document, etc.
- FI documents
• Record the impact on financial accounting
- CO documents
• Record the impact on management accounting
- Material documents
• Record the impact on material status (value, location)

© SAP AG Page 26
 Configuration Agenda

  The GBI 2.x Environment

- Development
- The company / case
- Processes configured
  Configuration Fundamentals
- What is configuration?
- Data in an enterprise systems
- The document concept
 Teaching Environment
- Single company code (SCC)
- Multi company code (MCC)
- Teaching Materials

© SAP AG Page 27
 Configuration Enterprise Structure

Enterprise
Client

Companies
Company Code

Facilities
Plant

© SAP AG Page 28
 Configuration Enterprise Structure

Client Common

Company US00 US01 US##

Code

Plant DL00 MI00 SD00 DL01 MI01 SD01 DL## MI## SD##

Other
Elements

Single Company Code (SCC) Multi Company Code (MCC)

 1000 copies of all master  Only the 000 instance of

data exist in SCC master data exist in MCC
 Common general ledger  Unique general ledger

© SAP AG Page 29
 Configuration Materials: Finished Goods
GBI

BIKE ACCR
Naming convention Bicycles Accessories
AAAA N###
To support 1000 TOUR ORBK PROT UTIL
users Touring Off Road Protective Utilities

DXTR PRTR ORMN 1000

PADS HLMT SHRT 1000
Deluxe touring Professional Men’s
Pads Helmets T-shirt
bike touring bike standard

ORWM 1000 OHMT 1000

DXTR 1000 PRTR 1000 EPAD 1000 RKIT 1000
Women’s Of f road
Black Black Elbow pads Repair kit
standard helmet

DXTR 2000 PRTR 2000 KPAD 1000 RHMT 1000 PUMP 1000
Silver Silver Knee pads Road helmets Air pump

CAGE 1000
DXTR 3000 PRTR 3000
Water bottle
Red Red
cage

BOTL 1000
Water bottle
 1000 copies of all master data exist in SCC
 Only the 000 instance of master data exist in MCC FAID 1000
First aid kit

© SAP AG Page 30
 Configuration Materials: Finished Goods

Numbering
AAAAN###

 1000 copies of all master data exist in SCC

 Only the 000 instance of master data exist in MCC
© SAP AG Page 31
 Configuration Materials: Trading Goods

Numbering
AAAAN###

 1000 copies of all master data exist in SCC

 Only the 000 instance of master data exist in MCC

© SAP AG Page 32
 Configuration Customers: US

Numbering
NN[N]###

 1000 copies of all master data exist in SCC

 Only the 000 instance of master data exist in MCC
© SAP AG Page 33
 Configuration Vendors: US

Numbering
NN[N]###

 1000 copies of all master data exist in SCC

 Only the 000 instance of master data exist in MCC
© SAP AG Page 34
 Configuration Process Execution Courses
Single Company Code (SCC)
 Infrastructure
- One company code: US00
- Common general ledger
- Unique master data: ###
(1000 copies)
 Exercises
- Student identifier: ###
- Master Data: Review
- Processes: Execute
- Financial impact: Limited
understanding
© SAP AG
Multi company Code (MCC)
 Infrastructure
- 99 company codes (01 – 99):
US##
- Unique general ledger
- Unique master data” 000 ->
0##
 Exercises
- Student identifier: ##
- Master data: Review and
Create
- Processes: Execute
- Financial impact: More
complete understanding
Page 35
 Configuration Configuration Courses

 Single Company Code (SCC)

- 00 enterprise structure already exists
• Some configuration already completed
- Exercises
• Student identifier: ##
• Configure / create enterprise structure (##)
• Configure business rules
• Create master data
• Test

© SAP AG Page 36
 Configuration Teaching Materials

 Core processes
- Phase I: Financial Accounting
- Phase II: Procurement
- Phase III: Fulfillment
- Phase IV: Production
- Phase V: Material Planning
- Phase VI: Warehouse Management
 Extended Processes
- Management Accounting
- Enterprise Asset Management
- Customer Service
- Human Capital Management
- Etc.

© SAP AG Page 37
 Configuration Teaching Materials

 Each phase is divided into

- Enterprise Structure
- Rules and Parameters
- Master Data
- Process Execution (Testing)
 Instructor materials
- Includes screenshots
 Planned
- Embedded questions
- Common problems and solutions
- Projects

© SAP AG Page 38
 Configuration Agenda

  The GBI 2.x Environment

- Development
- The company / case
- Processes configured
  Configuration Fundamentals
- What is configuration?
- Data in an enterprise systems
- The document concept
  Teaching Environment
- Single company code (SCC)
- Multi company code (MCC)
- Teaching Materials

© SAP AG Page 39