ERP 201

INTRODUCTION TO SAP ERP OPERATIONS

ESWAR RAMAN

© 2009 Eswar Raman 1

INTRO

 12 years in ERP
 Mechanical Engg + MBA
 Certified in Production and Inventory
Management
 Certified Project Management
Professional ESWAR RAMAN
Email: eraman@cklrcsi.com
M: 001-630-715-5307
© 2009 Eswar Raman 2
AGENDA

 Business and IT
 Close

© 2009 Eswar Raman 3

 BUSINESS AND IT
Innovation
Obsolescence

Regulations
Global Technology
competition Ethics
Market Society
Responsibility

Companies

Information Technology (IT) is a general term

that describes any technology that helps to
produce, manipulate, store, communicate, and/or
disseminate information
© 2009 Eswar Raman 4
Goals for ERP implementations - Poll

What is the single most important reason for ERP implementations in 2008?
(i) Standardize processes across enterprise
(ii) Cost reduction
(iii) Improve customer responsiveness
(iv) Upgrade technology

Standardize
processes

2008 © Aberdeen Research

© 2009 Eswar Raman 5

BUSINESS AND IT

• Information for decisions

• Value for Money
• Risk Management
• Process
• Responsiveness
• Innovation

© 2009 Eswar Raman 6

ERP System – an introduction

 ERP emerged from MRPII

 MRPII grew from MRP
 MRPII extended MRP’s focus on
production and inventory to other
functions such as Order Processing,
Finance etc.
 ERP is different from MRPII – replacing
legacy apps, managing globalization,
handling regulatory requirements and
improving integration of functions
© 2009 Eswar Raman 7
 SAP ERP System – Architecture

Can be a
laptop, UI UI UI
mobile
device, a
Three
browser
etc.
distinct
Business Logic resides here layers, can
exist on
separate
machines
Database layer

Purchased from db
vendors
© 2009 Eswar Raman 8
 ERP System – Solution Maps
End-User Service Delivery

Strategic Enterprise
Analytics Financial Analytics Operations Analytics Workforce Analytics
Management

Financial Supply Chain

Financials Financial Accounting Management Accounting Corporate Governance
Management

Human Capital
Talent Management Workforce Process Management Workforce Deployment
Management

Inventory and
Procurement and Inbound and Outbound Transportation
Procurement Supplier Collaboration Warehouse
Logistics Execution Logistics Management
Management

Product Development Manufacturing Enterprise Asset Life-Cycle Data

Production Planning Product Development
and Manufacturing Execution Management Management

Incentive and
Sales Order Aftermarket Sales and Professional-Service Foreign-Trade
Sales and Service Commission
Management Service Delivery Management
Management

Real Estate Project Portfolio Environment, Health

Corporate Services Travel Management Quality Management
Management Management and Safety

SAP NetWeaver People Integration Information Integration Process Integration Application Platform

© 2009 Eswar Raman 9

 SAP ERP – Procurement and
Logistics Execution

Procurement and Logistics Execution

Inventory and Warehouse Inbound and Outbound
Procurement Supplier Collaboration Transportation Management
Management Logistics

Managing Catalog Content Development Collaboration Cross Docking (S64) Inbound Processing (S64) Transportation Execution
(S12) (S63) Warehousing and Storage Outbound Processing (S64) (S64)
Self-Service Procurememt Purchase Order Collaboration (S64) Freight Costing (S64)
(S63) (S12) Physical Inventory (S64)
Service Procurement (S12) Invoice Processing (S12)
Account and Payment
Purchase Order Processing Information (S12)
(S64)
Receipt Confirmation (S64)

Service Confirmation (S12)

Invoice Verification (S64)

SAP Product Available Partner Product Available Sxx, Vxx, Bxx SAP Product & Service
Pxx Partner Product
SAP Product Available with Future Releases Partner Product Available with Future Releases
Future Focus Collaborative Business Map Available For more information see: http://www.sap.com

© 2009 Eswar Raman 10

 SAP ERP – Product Development
and Manufacturing

Product Development and Manufacturing

Production Planning
Production Planning (S64)
Manufacturing Execution
Manufacturing Execution
(S64)
Supervision and Control (S51)
Enterprise Asset
Management
Phase-In Equipment (S64)
Maintenance Planning (S64)
Maintenance Execution (S64)
Phase-Out Equipment (S64)
Product Development
Product Development (S62)
Development Collaboration
(S63)
Life-Cycle Data Management
Document Management (S62)
Product Structure
Management (S62)
Recipe Management (S62)
Specification Management
(S62)
Change and Configuration
Management (S62)

SAP Product Available Partner Product Available Sxx, Vxx, Bxx SAP Product & Service
Pxx Partner Product
SAP Product Available with Future Releases Partner Product Available with Future Releases
Future Focus Collaborative Business Map Available For more information see: http://www.sap.com

© 2009 Eswar Raman 11

 SAP ERP – Sales and Service
Sales and Service
Sales Order Management
Account Processing (S12)
Internet Sales (S59)
Managing Auctions (S12)
Inquiry Processing (S12)
Quotation Processing (S59)
Sales Order Processing (S12)
Mobile Sales (S12)
Inbound Telesales (S12)
Contract Processing (S59)
Billing (S59)
Returnable Packaging
Management (S12)
Consignment (S12)
Aftermarket Sales and
Professional-Service Delivery Foreign-Trade Management
Service
Phase-In Equipment (S64)
Phase-Out Equipment (S64)
Asset Scrapping (S64)
Product & Warranty
Registration (S12)
Waranty Claim Processing
(S12)
Service Contract Processing
(S12)
Maintenance Plan Processing
(S12)
Mobile Measurement &
Counter Reading (S12)
Service Employee Resource
Planning (S12)
Service Notification
Processing (S12)
Service Order Processing
(S12)
Billing (S12)
Returns Processing (S12)
In-House Repair Processing
(S12)
© 2009 Eswar Raman
Incentive and Commission
Management
Project Planning & Scoping Sanctioned Party List Incentive Plan Maintenance
(S62) Screening (S56) (S12, S9)
Project Resource Planning Export Control (S56) Incentive Processing (S12,
Product Classification (S56, S9)
Quotation Processing (S12) S57, S3)
Customs Value Calculation
Sales Order Processing (S57)
Project Execution (S62) Customs Processing Import
Managing Employee Time & (S57)
Attendance (S12) Presentation to Customs
Travel Expense Management (S57)
(S12)
Project Accounting (S12)
Resource-Related Billing
Resource-Related
Intercompany Billing
Billing (S12)
12
SAP ERP in Enterprise System
Landscape

mySAP Business Suite

mySAP PLM
Life-Cycle-Data, Project-,
Quality- and Asset Management

mySAP ERP
Purchase Order
Requisitioning

Internet Sales
Sales Order
mySAP Analytics mySAP
Financials
SRM Human Resources CRM
Operations
Corporate
Inventory Services
& Warehouse Mgmt.
Manufacturing & Transportation

mySAP SCM

SAP NetWeaver

© 2009 Eswar Raman 13

ERP System – Sales Processes an
example

Purchase
Purchase
order
order

Order is
entered into
ERP system

Pricing
Credit Check
Availability
etc

© 2009 Eswar Raman 14

ERP System – Quote to Cash process
overview

Sales Order
Processing

Inventory
Pre-Sales Activities Sourcing
& Quote

Shipping
Payment

Billing

© 2009 Eswar Raman 15

 ERP System – Effects of sales order
creation

Sales Information
Integration to System
SD, MM, FI, CO & SIS
MM:
FI: Customer’s Order Requirements
credit
management
account

Order
CO: Profitability analysis confirmation
120
100
80
60
SD:
40 Delivery
20 worklist
0
1 2 3 4 5 6

© 2009 Eswar Raman 16

ERP System – Effects of shipping
process

Delivery MM:
FI: Customer
Requirements
credit
management
account

MM: Goods Sales Information

issue System

General business Stock Integration to

costs - production
MM, FI & SIS
x x
Shipping
papers

Delivery -> Picking -> Packing -> Goods issue

Delivery due list

© 2009 Eswar Raman 17

ERP System – Effects of billing process

FI: Revenue
FI: Customer Billing doc
FI: x
credit
Receivables
management
account x

Sales Information
CO: Profitability Analysis System
120
100
80
60
40
Delivery
20
0
Order
1 2 3 4 5 6

Invoice
Integration to
SD, FI, CO & SIS
© 2009 Eswar Raman 18
ERP System – Effects of incoming
payment

Post Payment
Receivables
Incoming payment
from customer X X

© 2009 Eswar Raman 19

ERP System – Audit Trail

Standard Outbound Billing doc. Accounting

order delivery document

Document

Standard order 6839

. Delivery 80002832

. . WMS transfer order 482

. . GD goods issue: delvy 4900001537

. . Invoice 90005371

. . . Accounting document 100001276

© 2009 Eswar Raman 20
ERP System – Concept of Integration
as applied to Sales Process

Financial Materials Warehouse

CO/PA
Accounting Management Management

Post Goods Issue Stock Reservation Picking

Sales Orders
Billing Stock removal Removal from
Availability check stock location

Sales Data Project

Sales and
Information Systems
Distribution
System

Make
to Production
Order Planning

© 2009 Eswar Raman 21

POLL QUESTION

What is the inventory accuracy for

best-in-class RP users?
(a) 52%
(b) 75% The correct answer is (d) –
97%. The laggards on the
(c) 97% hand showed an accuracy of
(d) 10% 83%.

© 2009 Eswar Raman 22

BREAK TIME

LET US HAVE BREAK FOR 10 minutes

© 2009 Eswar Raman 23

MADE TO STOCK PROCESS

Forecast,Plan MRP using Procure

demand net change Raw materials

Create Work Release Confirm

orders Work orders production

Receive sales Ship sales Invoice Receive

order order customer payment
© 2009 Eswar Raman 24
COST PER USER PER PERCENTAGE
POINT OF FUNCTIONALITY USED

© 2009 Eswar Raman 25

Benefits accruing from an ERP system

 Cost reduction , cycle time reduction, productivity

improvement, customer service betterment,
better management of processes etc.
 Better resource management, improved planning
and decision making capabilities
 Support growth, support alliance, provide
platform for innovations, build cost leadership,
build linkages to partners, enable e-commerce,
expand globally
 IT cost reduction, build flexibility for growth and
change
 Provide catalyst for organizational changes,
empower users, improve morale
© 2009 Eswar Raman 26
OVERVIEW OF AN ERP
IMPLEMENTATION PROJECT

 Various approaches – Big Bang, Franchizing, Slam Dunk and On-

Demand increments
 Implementation timelines vary – depending upon size of
company, complexity of processes and the political desire to
customize solutions
 Implementation usually needs a well-versed partner who is
skillful in configuring the chosen ERP system and is able to guide,
coach the company’s employees and understand the company’s
processes
 Project needs to be blessed by a person at the level CEO or CIO ,
Change needs to be communicated and followed through
 Change management is established and adhered to
 Typical project sequence is – Gather requirements, Develop
prototype, Test processes, Release to production upon approval,
Load into production and Go-live, Review results and adjust as
necessary
 Go or No-go decisions are made at various QA points during the
project
 More to be added

© 2009 Eswar Raman 27

SYSTEM DEMO

© 2009 Eswar Raman 28

THANK YOU

THANK YOU
Please proceed to
http://erpcourse.cklrcsi.com/Course_Homepage_files/page0005.ht
m
, you can register and download
material

© 2009 Eswar Raman 29

COPYRIGHT ACKNOWLEDGEMENT
ALL RIGHTS RESERVED

 This presentation was prepared by Eswar Raman and he holds the copyright. He
wishes to acknowledge the following.
 Business Value of IT : Managing Risks,Optimizing Performance and Measuring
Results
 IT Success: Towards a new model for Information Technology
 Information Technology for Management
 The Enterprise Resource Planning Decade: Lessons learned and issues for the future
 CIO.com article – ERP definitions and solutions
 SAP.com for solution maps
 SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products
and services mentioned herein as well as their respective logos are trademarks or
registered trademarks of SAP AG in Germany and in several other countries all over
the world. All other product and service names mentioned are the trademarks of
their respective companies. Data contained in this document serves information
purposes only. National product specifications may vary.
 Epicor is a registered trademark of Epicor Software Corporation.
 Infor, Adage is a registered trademark of Infor.
 Oracle, PeopleSoft, JDE are registered trademarks of Oracle Corporation.
 Lawson is a registered trademark of Lawson Software Inc.
 Sage is a registered trademark of Sage Software Inc.
© 2009 Eswar Raman 30