Identify all of the business processes, at a high-level Define the type of data (in a high-level) that will be maintained in the processes. R SAP America, OS.PPT - 10/13/97, Slide 2 AGENDA High Level Business Process Overview Business Process Project System Production Planning Financial Accounting Controlling Asset Management/Investment Management Materials Management Sales and Distribution Human Resources Define the Business Processes and data in SAP based on the Chico Creek Brewerys Organizational Structure Document the Companys SAP Business Processes Definition of Business Processes R SAP America, OS.PPT - 10/13/97, Slide 3 Project System - Business Processes Creating a project Developing a project Executing a project Analyzing a project Closing a project R SAP America, OS.PPT - 10/13/97, Slide 4 Project System - Components Project Definition Stores master data for the entire project, including overall start and end dates, project owner, project number, and description. Work Breakdown Structure (WBS) The hierarchy that the WBS elements are organized into. Breaks down processes into the smallest components or tasks. WBS elements The building blocks of the project. They represent different phases or parts of the project. Each WBS element is a cost object. All project costs are posted to WBS elements. Network (optional) The activities are linked together to create the network in the form of a PERT chart. SAP can determine the critical path from this. R SAP America, OS.PPT - 10/13/97, Slide 5 Project System - Features Cost Planning (via the WBS) Date Planning and Scheduling Link to Purchasing (Purchases made show up immediately as project costs) On-line Reporting Financial Control Graphic Displays (Network, WBS, Gantt Charts) R SAP America, OS.PPT - 10/13/97, Slide 6 PP-Continuous Process Continuous Process Scenario overview: manages the planning, execution, and control activities for our process-oriented manufacturing of beer. 4 Basic Steps that encompass our brewing process.. R SAP America, OS.PPT - 10/13/97, Slide 7 Step 1 of Continuous Process Begins with the Sales and Operation Planning forecasting tool, ie. used to helps decide specific number of batches of each type of beer that should be made Long-term production plan and Master Schedule are produced using SOP information R SAP America, OS.PPT - 10/13/97, Slide 8 Step 2 of Continuous Process The master flow is computed using the MRP and capacity leveling. Capacity leveling: is determined in step 1 and balances the master schedule and plant capacity Material Requirements are passed to the procurement process R SAP America, OS.PPT - 10/13/97, Slide 9 Step 3 - Continuous Process The process order is created and manages the actual production of the beer process order transforms materials and processes used with the master recipe into actual information that is needed to brew the batches of beer contains master recipe data and workflow instruction master recipe: description of materials needed in one production run (grain, purified water, hops, fermented sugar, barley malt) R SAP America, OS.PPT - 10/13/97, Slide 10 Step 4 - Continuous Process Actual production which is the completed scenario flow Material is received, the resources are used, and the process order is completed and closed out resources: production personnel needed for production (maintenance workers, forklift drivers, line workers, warehouse personnel) R SAP America, OS.PPT - 10/13/97, Slide 11 External Accounting Vendor Processing OTA Vendor Processing Special Purpose Ledgers Processing Consolidation Customer Processing General Ledger Processing Credit Subsidiaries Head Office Process R SAP America, OS.PPT - 10/13/97, Slide 12 General Ledger Processing Generates closing reports as required by law
Structure: company code (CO) business area (not applicable for the CCBC) chart of accounts (each module will give input) R SAP America, OS.PPT - 10/13/97, Slide 13 General Ledger Processing Integrated with: procurement (MM) assets accounting (AM/IM) controlling (CO)
R SAP America, OS.PPT - 10/13/97, Slide 14 Vendor Invoice Processing Connects Purchasing to Accounting Master Record consists of 3 parts general data (addr, telephone, etc.) company code data (payment terms, methods) purchasing organization data (p.o., quotes) most of this information comes from MM and is posted to G/L
R SAP America, OS.PPT - 10/13/97, Slide 15 Vendor Invoice Processing Posted to one of two accounts:
current assets account
fixed assets account (will go to AM)
also posted to G/L R SAP America, OS.PPT - 10/13/97, Slide 16 Customer Processing Mgmt of transactions for standard customers
Credit Management (Sales) closely linked to CO & cash forecasting R SAP America, OS.PPT - 10/13/97, Slide 17 Customer Processing Customer Master Record consists of 3 parts: general data (addr, telephone, etc) company code (form of payment, due dates) sales data (shipping, invoicing, etc. this info is mostly from the sales team all the transactions are posted to the G/L
R SAP America, OS.PPT - 10/13/97, Slide 18 Customer Processing Dunning procedures remind customer that the payment is overdue Info needed from SD: level (# of days overdue) text (strength of language) vendor dunning optional interest & charges print-out of payment (due deadline) R SAP America, OS.PPT - 10/13/97, Slide 19 Functional Areas - CO Chico Creek Brewing Company Conventional cost center accounting typically structures costs by using the companys organizational structure and areas of responsibility (e.g. functions). This shows where costs accrue in the company, but it does not specify what resources were used how.
Company Personnel R & D Marketing Production R SAP America, OS.PPT - 10/13/97, Slide 20 Process-Oriented Structure
Functional Areas: SAP uses a process-oriented view that considers costs on the basis of process organization across functions. Costs are debited to a business process based on its resource usage. The business planning and controlling scenarios in R/3 provide conventional cost center accounting capabilities but supplement these by allocating cost center costs to business processes.
Personnel R & D Marketing Production Business Processes:
Order Process
Product develop.
Customer service
FI Accounting R SAP America, OS.PPT - 10/13/97, Slide 21 Business Scenarios - CO Chico Creek Brewing Company Business Planning and Controlling CO Module 1. Cost Object Controlling 3. Profit Center Accounting 4. OH Cost Management 2. Profitability Analysis R SAP America, OS.PPT - 10/13/97, Slide 22 1. Cost Object Controlling Cost object controlling is a part of product cost accounting that focuses on the economical creation of a product (called cost object).
It supplies key information for planning and monitoring of product costs.
Product cost controlling attributes the costs incurred in a company to its output units. (products, orders)
R SAP America, OS.PPT - 10/13/97, Slide 23 2. Profitability Analysis Profitability analysis carries out a profit analysis. Costs are compared to revenues. This is the last step in the settlement process.
Profitability analysis takes an external viewpoint using actual data, by looking at market segments.
We propose that CCBCs profitability segments are based on product line. (Type of beer, pub, merchandise) Other options could be customers, activity, organization, geographical area, etc.
R SAP America, OS.PPT - 10/13/97, Slide 24 3. Profit Center Accounting The goal here is to have a structure according to profit responsibility. Profit centers can be seen as investment centers. Shows operating results from a management standpoint. It is a statistical package, pulling data from different modules. Data is primarily transferred from FI, SD, AM, and MM. Profit centers can be structured according to products, markets, or functions. We have chosen products. R SAP America, OS.PPT - 10/13/97, Slide 25 FI: Transfer of primary costs and revenues from customer invoice processing SD: Transfer of revenues and sales deductions (freight, discounts) as well as reserves (e.g. from rebate agreements) via invoice transfer. MM: Transfer of all costs from goods movements (consumption postings, materials receipt, invoice receipt, price changes/revaluation, inventory differences) AM: Availability of all profit-related data from the creation, utilization, and sale of capital goods
3. Profit Center Accounting, contd
R SAP America, OS.PPT - 10/13/97, Slide 26 3. Profit Center Accounting, contd R SAP America, OS.PPT - 10/13/97, Slide 27 4. Overhead Cost Management Overhead cost management plans, allocates, controls, and monitors indirect costs. All indirect costs are charged to the cost centers where they were incurred or to the jobs that led to their occurrence.
R SAP America, OS.PPT - 10/13/97, Slide 28 CAPITAL ASSET MANAGEMENT Fixed Asset Processing Leased Asset Processing Planned Plant Maintenance Plant Maintenance due to damage Project- related plant maintenance Budgeting Cash Management R SAP America, OS.PPT - 10/13/97, Slide 29 Fixed Asset Processing Asset master record maintenance: Create Change Retire
Settle AuC Post Capitalization Transfer Posting Write-Up Creation/Transfer of Reserves Reports Inventory Year-End Closing R SAP America, OS.PPT - 10/13/97, Slide 30 AM - Depreciation Planned depreciation is calculated automatically Can be recalculated or changed manually Calculated in multiple depreciation areas (parallel valuation technique) Depreciation values are transferred as planned and actual costs are allocated to cost centers (CO) Depreciation simulation and forecasting available for individual asset or group of assets. R SAP America, OS.PPT - 10/13/97, Slide 31 Asset Master Record Data Elements of an Asset Master Record Historical cost Salvage value Life Insurance information Cost center
R SAP America, OS.PPT - 10/13/97, Slide 32 INVESTMENT MANAGEMENT SCENARIO Budget Approval Budget Distribution Measures Reporting Program Structure Project Planning Roll-Up Corporate Planning Settlement & Capitalization R SAP America, OS.PPT - 10/13/97, Slide 33 IM - AuC to Asset Capital Order (greater than 30 days) Create AuC -Automatically created when investment profile is entered and order is released Settlement -Settles to AuC AuC Depreciation forecast and simulation interest calculation. ASSET R SAP America, OS.PPT - 10/13/97, Slide 34 Treasury - TR Cash Management (TR-CM) Handle all cash related transactions and reporting activities. Distinguishes between actual money and payments in transit Integrated with G/L, A/R, and A/P systems and sales and procurement.
Funds Management (TR-FM)
R SAP America, OS.PPT - 10/13/97, Slide 35 TR-CM G/L A/R A/P Recurring Entries The basic elements needed for managing cash: Where is our cash? What will we receive? What will we pay? What other predictable transactions will occur? R SAP America, OS.PPT - 10/13/97, Slide 36 Funds Management (Budgeting) Functions: Prepare budget Monitor budget by tracking the achievement to targets in each of the budgets divisions To perform these functions the following must be estimated: Cash requirements for operations Cash requirements for CI projects Planned cash receipts R SAP America, OS.PPT - 10/13/97, Slide 37 Materials Management Processing Stock Material Materials Requirement Planning
Reservation processing reserve material plan goods issue Single item MRP Entire MRP Effects SD, QM, PP, FI R SAP America, OS.PPT - 10/13/97, Slide 38 Materials Management Processing Stock Material Requisition Processing to Stock Material
Requirement for material --> Purchase Requisition Source of supply Without a source of supply Input Examples Material Purchasing Information Purchasing Outline Agreement Vendor Effects SD, PP, QM R SAP America, OS.PPT - 10/13/97, Slide 39 Materials Management Processing Stock Material Processing of RFQ Issued to Vendor
- Communicates material/service requirements to potential suppliers - Input Examples Material Purchasing Information Vendor Supply Source Time Effects SD, QM, PP, CO R SAP America, OS.PPT - 10/13/97, Slide 40 Materials Management Processing Stock Material
Vendor Quotation Processing
- Occurs after vendors respond to quotation request - After Vendor information is submitted into system, price comparison is possible - A rejection notice is transferred if quotation is unselected
R SAP America, OS.PPT - 10/13/97, Slide 41 Materials Management Processing Stock Material Purchase Order Processing for Stock Material
- Vendor quotation processing and vendor RFQ processing trigger this step
- Input Examples Purchase Requisition Material Internal Order Customer Order Cost Center
- A Purchase Order includes detailed data such as: type of material, quantity, delivery date and price R SAP America, OS.PPT - 10/13/97, Slide 42 Materials Management Processing Stock Material
Processing Goods Receipt - Begins with the arrival of materials and shipping notification - Material is checked and storage is determined - If order is accepted we adjust purchase order dates and select a valuation type -Effects FI, PP R SAP America, OS.PPT - 10/13/97, Slide 43 Sales and Distribution Business Process Workflow Scenario: Standard Order Handling
R SAP America, OS.PPT - 10/13/97, Slide 44 Master Data Business Partners Customer Vendor (Internal i.e. MM) Beer for tap room, souvenirs Employee in Company (salesperson) Product Proposal Grouping of items to make available for sale (I.e. By a pallet of Pale Ale) If customer frequently purchases from a product proposal, this information can be assigned in Customers Master Data Master Data for SD R SAP America, OS.PPT - 10/13/97, Slide 45 Product
Price
Documents (for shipping, billing, sales)
Sales support
Organizational Structure (shipping points, sales areas,etc.) Master Data continued R SAP America, OS.PPT - 10/13/97, Slide 46 Pats Bar in Calgary
Pat calls CCBC to inquire about products Wants to buy two kegs of Pale Ale and one keg of Hefeweisen to be delivered weekly. Sales Representative gets Pats company name, address, etc. to store in sales support master data. Also determines the distribution channel for his company for correct quotation. Accesses inquiry processing to determine correct prices, a quotation process document is created and sent. Pat agrees to the quotation. Next, standard order processing occurs with reference to the quotation. R SAP America, OS.PPT - 10/13/97, Slide 47 Billing Process Product is determined to be in-stock A credit check occurs and passes resulting in Pats order being released Delivery processing occurs in which is it determined that the delivery is relevant for billing and for shipping. Billing Process determines that the purchase is not relevant for a rebate Billing document is sent Export papers are created and sent Billing document is not released for billing because: Order confirmation is necessary to release billing document R SAP America, OS.PPT - 10/13/97, Slide 48 Shipping Process
Transportation planning occurs Shipment route is determined (stored in Master Data for future reference) From Chico Center to Chico train depot via truck From Chico to Calgary via rail From Calgary train depot to Calgary distribution center via truck From distribution center to customer (Pats Bar is within 100 mile radius) Transportation processing occurs Shipping notification is generated and sent to customer R SAP America, OS.PPT - 10/13/97, Slide 49 Delivery of Goods Quality is checked (by PP, referenced by SD) Order is sent to MM Goods issue is posted Truck is loaded from plant site and sent Upon delivery to Pats Bar, it is determined that one keg of Pale Ale is damaged. Pat signs invoice for acceptance of the one keg of Pale Ale and one keg of Hefeweisen. To accommodate for damaged goods, CCBC will: a) Offer to send Pats Bar a keg through a rush order with no extra cost. Delivery will be rushed b) Offer to give Pats Bar a credit. Signed invoice is given to FI for processing R SAP America, OS.PPT - 10/13/97, Slide 50 Packaging Returns Empty kegs picked up from Pats Bar upon next delivery Returnable packing pick-up process occurs Shipping papers are created Empty kegs loaded onto trailers Trailers loaded onto train to be sent back to Chico center MM processes goods receipt Goods receipt is posted R SAP America, OS.PPT - 10/13/97, Slide 51 Conclusion Pats Bar is now CCBCs business partner, thus is located in our Master Data CCBC can now call him as part of our sales activities or he can call on us. If Pats Bar becomes a frequent customer, CCBC can assign material listing or product proposal to his account making transactions faster. R SAP America, OS.PPT - 10/13/97, Slide 52 Inquiry Quotation Returns Standard Sales Order Delivery Free Of Charge Scheduling Agreement Sales Delivery Transport Shipping Debit Memo Invoice Credit Memo Financial Accounting M a t e r i a l s
M g m t
Billing R SAP America, OS.PPT - 10/13/97, Slide 53 Organizational Management Organizational Plan Processing Job Description Processing of Employee Status for Planning and Development Staffing Personnel Cost Planning
R SAP America, OS.PPT - 10/13/97, Slide 54 Time Management Long Term Daily Work Schedule Flexible Daily Work Schedule Calculate Overtime Incentive Wages R SAP America, OS.PPT - 10/13/97, Slide 55 Payroll Processing Multinational tax, benefit, and garnishment related laws and regulations Automate the workflow system and be flexible enough to adapt itself Automatically transfers data to general ledger and cost accounting systems R SAP America, OS.PPT - 10/13/97, Slide 56 Salary Administration Compensation Structure Structuring and Managing of salary and reward compensation packages Can analyze the effects of salary increases and decreases R SAP America, OS.PPT - 10/13/97, Slide 57 Benefits Administration Administering human resource benefits setting up each benefit plan define cost and coverage options eligibility rules established Step-by-step guides for developing, defining, and maintaining benefit plans Eligibility rules based on predetermined criteria defined and verified by the system