Billing Project Report

SALES AND BILLING IN SAP (PRODUCTION PLANNING)
SUBMITTED BY : MADHURI R

ROLL NUMBER: 13P35Y0019

SUBMITTED TO : GEMS B SCHOOL
YEAR OF SUBMISSION: 2014

TABLE OF CONTENTS
Preface
1. Acknowledgment

2. Declaration

3. Abstract

4. Company profile

5. Introduction to ERP concepts

6.1 What is ERP?
6.2 Benefits of the ERP software
7. SAP Concepts
7.1 SAP-Company and Software Package
7.2 SAP R/3 Client Server Architecture
7.3 SAP database organization
7.4 Application Modules of SAP
7.5 Advantages of SAP
8. Introduction to PP Module
8.1 What is PP?
8.2 Enterprise Structure
8.3 Customization
9. Define plant
10. Define company code
11. Define MRP Controller
12.Production Planning
13.Bibliography

PREFACE

I am the student of GEMS B SCHOOL ( BHARATHI AR
UNI VERSI TY), Bangalore studying in

2nd semester. As a part of 2-year MBA course, I have undergone a
project as a Major project Work on I ntroduction to SAP PP Module
& SALES AND BI LLI NG SYSTEM to facilitate them with an
automated software besides the error prone manual work.
Enterprise Resource Planning is that growing segment of information
technologies that fulfill needs of the enterprises like quality, time to
market, customer satisfaction, performance and profitability very
effectively and efficiently.
The aim of the project is to provide an integrated environment to an
enterprise with SAP software with all its advantages over the manual
system. All the operations of the company can be integrated into an
overall system for planning, controlling and monitoring.
The work done in this project has been done using the SAP ECC4.7
tool. SAP R/3 SD module is a very effective tool for SALES AND
BI LLI NG SYSTEM. This report provides the knowledge regarding
the technology used in the project.

ACKNOWLEDGEMENT

For every accomplishment we need t h e cooperation and hel p o f
others. As knowledge advances by s t e p s not by l e a p s so, a b i l i t y
advances by encouragement and guidance.
First of all would like t o thank GEMS B SCHOOL f o r providing an
opportunity to create this project. Then I would like t o thank OSWAL
GROUP Ltd, B a n g a l o r e for providing such working environment.
I express my deep sense of gratitude and feeling of indebtedness to
OSWAL for providing all the facilities and its staff. I also express my
gratitude to my project guide, for their bold attention in this particular
time of the project and guide me as per according to progress of my
project work on SALES AND BILLING SYSTEM of PP Module
in SAP.

MADHURI R
GEMS B SCHOOL
(BHARATHIAR UNIVERSITY)

DECLARATION

This is to certify that this project entitled Billing System in SAP
submitted as the partial fulfillment of the requirement for degree of
MBA. in GEMS B SCHOOL ( BHARATHIAR UNIVERSITY),
submitted to the Institute is authentic record of our own work carried out
at the end of third semester Bangalore, has been approved by the project
in charge after an oral examination on the same, in collaboration with an
Head of I.T Department .

5

ABSTRACT

This report covers the introductory concepts about the ERP software.
The ERP software used is SAP Software. Enterprise Resource Planning,
a software solution that addresses the enterprise needs taking the process
view of an organization to meet the organizational goals tightly
integrating all functions of an enterprise.

Enterprise Resource Planning, a business management system that
integrates all facets of the business, including planning, manufacturing,
sales, and marketing. ERP had its origins in manufacturing and
production planning. In the mid -90s it was extended to other back-
office functions such as financial management and human resource
management. More recently these systems have addressed applications
specific to higher education such as student systems and grants
management.

SAP is an ERP software product capable of integrating multiple
business applications, with each application representing a specific
business area. These applications update and process transactions in
real time mode.

This report covers the pp Module in SAP for a new enterprise. The
customization includes the customization of the Master Data as well as
that of the transaction Data. After this, the enterprise would be ready to
run SD Module in SAP.

Systems DEPARTMENTS

Application Implementation is done in SAP R/3 with database in Oracle. The
company has SAP R/3 4.7 application, which enables the effective and streamlined
operations of the department, in an online integrated way.
The staff skills are enhanced through proper training and deploying the
appropriate resources of the company to get the maximum result.
The team members are highly motivated and professionals, who have been the
most helpful to me. They are always open to any queries and problems that I face
during the course of my training and guide me suitably. I am very impressed by their
style of functioning and feel very privileged at being here in such a professional
atmosphere, which shall help me, a lot in guiding and shaping my future in the
industry.

The Systems Department Team

Mr. Nitesh kumar General Manager, IT
Mr. Narinder Singh Manager, IT
Mr. Sunish Gupta ABAP Consultant
Mr. Adhish Prabhakar ABAP Consultant
Mr. Siddharth Sharma pp

2. Project Review

2.1 EVOLUTION OF ERP

Automation was a magic word in the beginning. The focus then shifted to computers
and the trends were to replace the human power with the microprocessor power,
pink slip the employee and hopefully the faults and the costs will come down. From
then onwards, automation was considered the panacea for all ills of business. But
there was much that was wrong with this approach. As these automation packages
use to come in different forms and in a non-integrated fashion, loading too much
Information Technology on to these in- efficient processes and packages that leads
to double entendre.

Actually confusion was that companies developed separate computer applications to
satisfy the needs of their particular functional segment. e.g. Accounts, Purchase,
Inventory and Planning. Such systems grew as inconsistent islands of information,
and hence their consolidation was not possible which lead to numerous
organizational problems and data inconsistencies are likely to occur. As a result the
decision-makers were denied of access to timely information for making urgent
business decisions. This gave rise to the need of an integrated system (ERP) that
would address the information requirements of the entire enterprise.

DEFINE ERP

Enterprise Resource Planning, a software solution that addresses the enterprise
needs taking the process view of an organization to meet the organizational goals
tightly integrating all functions of an enterprise.

Fig 3:- Enterprise Resource Planning

Short for Enterprise Resource Planning, a business management system that
integrates all facets of the business, including planning, manufacturing, sales, and
marketing. As the ERP methodology has become more popular, software applications
have emerged to help

Business managers implement ERP in business activities such as inventory control,
order tracking, customer service, finance and human resources.

ERP had its origins in manufacturing and production planning . In the mid -90s it
was extended to other back-office functions such as financial management and human
resource management. More recently these systems have addressed applications
specific to higher education such as student systems and grants management .
Enterprise Resource Planning software, or ERP, doesn't live up to its acronym. Forget
about planningit doesn't do much of thatand forget about resource, a throwaway
term. But remember the enterprise part. This is ERP's true ambition. It attempts to
integrate all departments and functions across a company onto a single computer
system that can serve all those different departments' particular needs.

SCOPE OF ERP

The various areas that can be covered under the concept of Enterprise

Resource

Planning (ERP) are discussed below:-

Fig4:-Areas covered under ERP

Customer Relations

o Sales Support

o Delivery

o Billing

o Credit

Logistics

o Procurement

o Production

o Materials Mgt.

Human Resources

o Payroll

o Organization

o Hiring

Treasury

o Commitments

o Investments
o Currencies

.

2.2 EXPLORING ERPS BENEFITS

Integrated, uniform, relevant and up-to-date information is vital for the existence for
the enterprise. ERP brings together people who work on share tasks within the same
enterprise. Some of the tangible benefits of ERP are

Reduction of lead-time by 60%

99% on time shipments

Doubled business

Increase of inventory turns to over 30%

Manufacturing of single bicycle time reduced to 80%

Better customer satisfaction

Improved vendor performance

Increase flexibility

Reduced quality cost

Improved workflow and efficiency.

Improved access to information.

Improved controls and program alerts.

Improved resource utility

Improved information accuracy

Improved decision making capability

Another reason to consider ERP is to improve workflow and efficiency. As an
example, online requisitions can be completed and workflow processes can forward
the form along the approval path more rapidly than with traditional paper processes.

Another reason to consider ERP is the ability to improve controls and to program
alerts. Alerts, for example, can be programmed to warn budget managers about
budgets that are in danger of running out of funds and to implement controls that
prevent individuals from overspending budgets.

SHORTCOMINGS OF ERP

Problems with ERP systems are mainly due to inadequate investment in ongoing
training for the involved IT personnel - including those implementing and testing
changes - as well as a lack of corporate policy protecting the integrity of the data in
the ERP systems and the ways in which it is used.

Disadvantages

Customization of the ERP software is limited.

Re-engineering of business processes to fit the "industry standard"
prescribed by the ERP system may lead to a loss of competitive
advantage. ERP systems can be very expensive leading to a new
category of "ERP light" solutions
ERPs are often seen as too rigid and too difficult to adapt to the
specific workflow and business process of some companiesthis
is cited as one of the main causes of their failure.
Many of the integrated links need high accuracy in other
applications to work effectively. A company can achieve
minimum standards, then over time "dirty data" will reduce the
reliability of some applications.
Resistance in sharing sensitive internal information between
departments can reduce the effectiveness of the software.

15

Some large organizations may have multiple departments with
separate, independent resources, missions, chains-of-command, etc,
and consolidation into a single enterprise may yield limited benefits.

2.3INTRODUCTION TO SAP R/3 - ENTERPRISE
SOFTWARE

Integrated software that supports the information flows among the processes in
the supply chain.

Sap R/3 is an ENTERPRISE SOFTWARE.

Fig5:- Flow of information in Enterprise Software

Enterprise software is integrated software that facilitates the flow of
information among all the processes of an organizations supply chain.

16

A supply chain describes the chronological and logical relationships of
business transactions from original supply to final consumption.

A value chain encompasses those activities in the supply chain that add value to a product or
service of an organization.

A value chain views all the business events from the receipt of a customer order
to the delivery of that order. For example, value is added when the production
process takes raw materials and transforms them into a finished product, when
the product is sold to the customer. A company is profitable if the price
consumers are willing to pay for a product exceeds the costs of creating value.

THREE -TIER CLIENT/SERVER ARCHITECTURE

The R/3 Basis is the business operating system software that resides on the database
server, the application server, and the clients of the end user of the R/3 installation.

The SAP R/3 Basic system is a multi-tier client/server system. The classic
configuration of a SAP R/3 System contains the following software layers:

Presentation Layer

Application Layer

Database Layer

PRESENTATION LAYER

Presentation Layer contains the software components that make up the SAPGUI
(Graphical User interface). This layer is the interface between the SAP R/3 Systems

and its users. The SAP R/3 system uses the SAPGUI to provide an intuitive
graphical user interface for entering and displaying data. The presentation layer
sends the users input to the application server, and receives data from it.

APPLICATION LAYER

The application layer consists of one or more application servers and a message
server. Each application server contains a set of services used to run in the SAP R/3
System.

Theoretically, you only need one application server to run a SAP R/3 System. In
practice, the services are distributed across more than one application server. This
means that not all application servers will provide the full range of services. The
message server is responsible for communication between the application servers. It
passes requests from one application server to another within the system. It also
contains information about application server groups and the current load balancing
within them. It uses this information to choose an appropriate server when a user
logs onto the system.

DATABASE LAYER

The database layer consists of a central database system containing all of the data in
the SAP R/3 System. The database system has two components - the database
management system (DBMS), and the database itself. SAP does not manufacture its
own database. Instead, the SAP R/3 System supports the following database systems
from other suppliers: ADABAS D, DB2/400 (on AS/400), DB2/Common Server,

DB2/MVS, INFORMIX, Microsoft SQL Server, ORACLE, and ORACLE Parallel

Server.

The database does not only contain the master data and transaction data from your
business applications, all data for the entire SAP R/3 System is stored there. For
example, the database contains the control and Customizing data that determine how
your SAP R/3 System runs. It also contains the program code for your applications.
Applications consist of program code, screen definitions, menus, function modules,
and various other components. These are stored in a special section of the database
called the SAP R/3 Repository, and are accordingly called Repository objects. You
work with them in the ABAP Workbench.
The following diagram depicts the whole scenario -

Fig 6:- Software layers of R/3 system

FEATURES OF 3-TIER ARCHITECTURE

SCALABILITY
Adding more applications or more users to the system. When more users are added
to the system, another application server may be added to handle the additional
processing demands of those users.

FLEXIBILITY
The number of application modules may be increased without changing the Basis

System software that runs on the application servers and the database server.

ON-GOING MAINTENANCE

Business functions included in the system may be removed and replaced by other
functions that better match current business practices. Also, changes in organization
structure can be made using the R/3 Reference Model and does not require changes
in the Basis Software system.

2.4 ADVANTAGES OF SAP R/3

Fig 7:- Advantages of SAP R/3

The SAP R/3 software helps in providing the various functions in the system

SECURITY THROUGH INTEGRATION

It helps in providing full-fledged integration of the various data transfers and
high quality reports can be made easily.
SAVING TIME WITH INTEGRATION

The consolidation software helps to shorten the time needed to close the books,
The financial transactions in the ledger are integrated with the consolidation
database and helps in getting the required information at any time.
AUTOMATION OF CONSOLIDATION PROCEDURE

It helps in reducing the time and expenses to manually enter all the documents
especially in the area of consolidation investments.

COST EFFECTIVE AUDITS

The system generates printed audit reports and allows the auditor to perform
interactive analysis of special detailed information directly on the screen.
CUSTOMIZING THE SOFTWARE AS PER THE NEEDS

It is helpful in making new programs as per the requirements.

PRE-FIGURED FOR THE FAST IMPLEMENTATION

System comes with a variety of useful consolidations, which can be put to use
immediately or can be employed after minimal adjustments. The system
includes several industry-related plans.
EASY TO LEARN AND USE

The system is user friendly and context-sensitive help functions and extensive
online documentation allows learning the system easily.
ACCOUNTING AUTONOMY

Running your consolidation on a separate computer increases the accounting
departments autonomy. This is very helpful during the closing period when
there is lot of workload.
INFORMATION SYSTEM

The controlling component includes versatile reporting functions. Exception
reporting and interactive navigation through the database enhances the
preparation of information.

APPLICATION MODULES

SAP has several layers. The Basis System is the heart of the data operations and
should be not evident to higher level or managerial users. Other customizing and
implementation tools exist also. The heart of the system from a managers view
point is the application modules.

Fig 8:- R/3 Core business processes

These modules may not all be implemented in a typical company but they are all
related and are listed below:

FI Financial Accounting-designed for automated management and external
reporting of general ledger, accounts receivable, accounts payable and other sub-
ledger accounts with a user defined chart of accounts. As entries are made
relating to sales production and payments journal entries are automatically
posted. This connection means that the "books" are designed to reflect the real
situation.

CO Controlling--represents the company's flow of cost and revenue. It is a
management instrument for organizational decisions. It too is automatically
updated as events occur.

AM Asset Management--designed to manage and supervise individual aspects
of fixed assets including purchase and sale of assets, depreciation and
investment management

PS Project System--is designed to support the planning, control and monitoring
of long-term, highly complex projects with defined goals.

WF Workflow--links the integrated SAP application modules with cross-
application technologies, tools and services

IS Industry Solutions--combine the SAP application modules and additional
industry-specific functionality. Special techniques have been developed for
industries such as banking, oil and gas, pharmaceuticals, etc.

HR Human Resources--is a complete integrated system for supporting the
planning and control of personnel activities.

PM Plant Maintenance--In a complex manufacturing process maintenance
means more than sweeping the floors. Equipment must be services and rebuilt.
These tasks affect the production plans.

MM Materials Management--supports the procurement and inventory
functions occurring in day-to-day business operations such as purchasing,
inventory management, reorder point processing, etc.

QM Quality Management--is a quality control and information system
supporting quality planning, inspection, and control for manufacturing and
procurement.

PP Production Planning--is used to plan and control the manufacturing
activities of a company. This module includes; bills of material, routings, work
centers, sales and operations planning, master production scheduling, material
requirements planning, shop floor control, production orders, product costing,
etc.

SD Sales and Distribution--helps to optimize all the tasks and activities carried
out in sales, delivery and billing. Key elements are; pre-sales support, inquiry
processing, quotation processing, sales order processing, delivery processing,
billing and sales information system.

2.5 MODULES IMPLEMENTED AT HERO

The ERP package implementation at Hero Cycles covers the following seven
modules :-

1. Cost Controlling

2. Sales and Distribution

3. Material Management

4. Production Planning & Control

5. Plant Maintenance

6. Quality Management

7. Financial Accounting

3.1 SAP CONFIGURATION

Oswal Group has implemented SAP R/3 having following features:
SAP R/3 release 4.7 Enterprise
SAP version 4.7 Enterprise upgrade from 4.0B as Front-end.

Currently supporting 150 users

All the departments work under the environment of

IBM AIX with RS/6000 SP Server, IBM P630 Server.

Oracle 8.0.6 upgraded to Oracle 9.2.0.4 as Backend RDBMS for R/3 system.

ABAP/4 as application programming language.
Windows 98 as client operating system.
Three-tier architecture

Class B IP addressing

Core Builder 9000 (switch from 3COM) is used to provide networking (Client

Server) connections to various department within organization.

3.2 TRAINEE SERVER (IDES)

SAP IDES the "Internet Demonstration and Evaluation System" in the R/3

System, represents a model company. SAP IDES is a normal R/3 but with lots of
DEMO data. It is purely for education .It is a training server, used to give training to
users. When sap is implemented in company, first IDES is installed so that users
become familiar with different screens and transaction codes. It is simple to use and
has a variety of master and transaction data, and is used for demos, online/classroom
training, and presentations. IDES uses easy-to-follow business scenarios to show
you the comprehensive functions of the R/3 System. The focal point of IDES,
however, is not the functionality itself, but the business processes and their
integration. SAP regularly updates the IDES data (master data, transaction data, and
customizing). Above all, IDES shows you the possibilities of the integrated
applications in the SAP System. IDES cover all aspects of a business enterprise,
including Human Resources, Financial Accounting, Product Cost Planning, Overhead
Management, Profitability Analysis, Planning, Sales and Distribution, Materials
Management, Production and much more.

System Requirement to install IDES
For installing IDES 46C on a Laptop, you need:-
Windows server
160 GB HDD
512 MB RAM

INTRODUCTION TO
PRODUCTION PLANNING

3.3 PHASES OF IMPLEMENTATION OF SAP

Accelerated SAP (ASAP) is an approach specifically developed by SAP to help
customers implement the SAP software as quickly and efficiently as possible.

The Accelerated SAP Roadmap consists of the following phases

Project Preparation

Business Blueprint

Realization

Final Preparation

Go-Live&Support

Fig9:-various phases for implementing sap

1. Project Preparation

It consists of identifying team members and development strategy as how to go.
AS IS (Existing Process followed, requirements)
TO BE (Requirement analysis and best process recommended)
Difference between (AS IS) & (TO BE) is GAP analysis
2. Business Blueprint

It is a legal documentation between client and the company (implementer/service
provider) .We has to understand the current business process of client and analyzing
the business and prepare documentation. It is a detailed documentation for the client.

3. Realization

This phase is used to implement or migrate the entire business of client from Non-
SAP environment to SAP environment.

4. Final Preparation (Preparation for Production Use)

This phase is used for testing and end user training. After successfully completion of
this phase client is ready to run business in SAP R/3.

5. Go-Live & Support

In this phase we deliver the project end date and end user training at client site.

4.1 ENTERPRISE STRUCTURE

In enterprise structure we learn how to portray the specific organizational structure
of our company in r/3 system. First we analyze the structures and procedures in our
company
and then match them to the SAP structures .To help us portray our structures various
organizational elements are defined as eg. In standard version .Normally these
would not cover all our needs thus we extend the elements and define them as

required .as soon as our organizational units are ready; access is located so that no
other changes can be made.
The enterprise structure consists of:

DEFINE:-

Controlling area
Company
Company code
Plant
Storage location
Purchase organization
Sales area
Sales organization
Distribution Channel
Division

Company:-

A Company is an organizational unit in accounting which represents a business
organization according to the requirements of commercial law in a particular
country.
Company code:-

A company code is a smallest independent accounting unit that represents an
individual company.
Plant:-

A Plant is an organizational unit where we can manufacture the goods, store goods,
sale our goods, and we can also provide services & we can do purchasing also.

Storage Location:-

It is a place where products before and after manufacturing are stored.

Purchasing Organization:-

Organizations that discuss with Vendor terms and conditions of purchase.

Sales organization:-

Sales organization is an organizational unit which is responsible of certain product
and liability of that product. A company code can have several sales organizations
Distribution channel:-
Distribution channel is the way in which products or services reaches the customers.
Division: - Division is the way of grouping materials, products or services. This
represents companys product line like nature of material. It tells about spectrum of
products.
Controlling area:-It is the highest organization with reference to costing material.
Just like the company itself, each company code in a company has a controlling
area.
Sales area:- It comprises of sales org , distribution channel & division.

4.2 FLOW CHART OF ENTERPRISE STRUCTURE

CONTROLLING
AREA

COMPANY
PURCHASING

ORGANIZATION

COMPANY CODE 1 COMPANY CODE 2
COMPANY CODE 3

PLANT
MAINTENANCE

area

PLANT 1 PLANT 2
PLANT 1 PLANT 2 PLANT3

Sales

SL 2
SL 1
SL 2

SALES
ORGANIZATION

DISTRIBUTION
CHANNEL

DIVISION

Fig10:-Flow chart of Enterprise Structure

SNAPSHOTS OF ENTERPRISE STRUCTURE

LOGON SCREEN OF SAP

When we double click the sap logon icon on the desktop the following screen
appears which prompts you to logon on following servers
1. IDES (Internal Demonstration Evaluation Server):-Purely for educational
purposes

2. Production Server: The checked project are used here with the live
data.

Double click on ides server

USER AUTHENTICATION CHECK

USER AUTHENTICATION CHECK

New password
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Fields entered are:-

1. User name

2. Password

SAP WELCOME SCREEN

The SAP Easy Access screen is where you will start every session, and is the primary
user navigation area.

ENTERPRISE STRUCTURE

TRANSACTION CODE SPRO
INITIAL SCREEN

1. DEFINE COMPANY

Company:- A Company is an organizational unit in accounting which represents a
business organization according to the requirements of commercial law in a
particular country.
Menu Path: PRO Enterprise Structure Definition Financial

Accounting Define Company

After following this path then execute (dbl click ) then go to New Entries

I

Fields Entered are:-
Company:- 4444
Company name:- G & G Enterprises

Country:- IN (India)

Language Key:- EN (English)
Currency:- INR (Indian Rupee)

To save your entries click on save. Then a request number is generated .This request
number is stored on the main server and thus later with the help of this number we
can trap the transaction performed.
Always write down the SAP document number. If you need to view a document
in the future, using the document number is the easiest way to find to it.

View of Created Company

Our Company 4444- G & G Enterprises is added in the list.

Thus after generation of request our company is added in the list of existing
companies

DEFINING COMPANY CODE

Company code:-A company code is a smallest independent accounting unit that
represents an individual company.
Menu Path:- Enterprise Structure Definition Financial Accounting Edit,
Copy, Delete Company Code Edit Company Code Data

After navigating through the above menu path the list of already existing company
codes is displayed. To define your own company code click on new entries and
make the above shown entries

Details Of Added Entries

Request generated

After making required entries, click on save a request code is generated and our
company code is added in the list of existing company codes.

DEFINE PLANT

Plant: - A Plant is an organizational unit where we can manufacture the goods, store
goods, sale our goods, and we can also provide services & we can do purchasing
also.
Menu Path:- Enterprise Structure Defination Logistic General Define,
Copy, Delete, Check Plant Define Plant

After that go to New Entries

Details of added Entries

City Code:- 0001
Factory calendar:- 01

Editing Plant

In this screen we add additional information about the plant like who is running this
plant.

Title:- Ms.
Name:- Gurpreet
Country:- IN (India)
Language:- EN (English)
plant is added in the list of existing company codes.

Customizing of Plant Parameters

Menu Path:- Spro Production MRP Plant Parameters Carry Out

Overall Maintenance

We need to do all these customizing so that Enterprise Structure we create should
support all the planning & scheduling functions we need to perform.

Maintenance of Number Range

Assign Number Ranges
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4447 Plant1

Number ranges/
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Planned orders To maint

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Reserv./depend.reqmts
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Purchase requisitions
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Details of MRP Controller:-

In this details we add Plant Name, MRP Controller, Telephone no. , Recipient

Name,

Business Area, Recipient Type. These are some of the mandatory fields which we
have to fill so that we can see all the details at the end report.

Maintenance of Floats

It specify extra time to be allowed for Production
Fields Entered:-

1. Schedule Margin Key:-000

2. Opening Period:-003

3. Float Before Period:-003

4. Float After Production:-005

5. Release Period:-010

Maintenance Of Conversion

Conversion

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4447 Plant!
Conversion /
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Conversion of Planned Order to Production Order on clicking on this we get

Fields Entered:-

Production order: PP01 (Standard Production Order (Int no.))

Process order: PI01 (Process Order (Internal Number Assignment))

After this click on save button & then go back to conversion screen so that we can
maintain second option in same way.

Maintenance of BOM/Routing Selection

Fields Entered:-

Plant:- 4447

BOM select Id:- 01

Routing select Id:- 01

Maintenance of Param: Detailed Scheduling

For this we have to enter following Fields which we have to define by our own:-
Plant 4447
Production Scheduler 420

Name of Production Scheduler ABC
Production Profile 111111
Name of Production Profile PP Scheduling

After maintaining all Parameters

DEFINE STORAGE LOCATION

Storage Location:- It is a place where products before and after manufacturing are
stored.
Menu Path:- Enterprise Structure Definition Material Management

Maintain Storage Location

Now we have to enter Work area or plant where we work i.e. 4447

Details of Added Entries


Storage Location No. :- SL1

Description:- Storage Location


Storage Location is added in the list of existing Storage locations.

DEFINE PURCHASING ORGANIZATION

Purchasing Organization:-Organizations that discuss with Vendor terms and
conditions of purchase.
Menu Path:- Enterprise Structure Definition Material Management

Maintain Purchasing Organization


Fields Entered are :-

Purchasing Organization:- 4445 & 4446

Purchasing Organization Description:- Product Purchasing


Purchasing Organization is added in the list of existing Purchasing Organizations.

DEFINE SALES ORGANIZATION

Sales organization:-Sales organization is an organizational unit which is
responsible of certain product and liability of that product. A company code can
have several sales organizations
Menu Path:-Enterprise Structure Definition Sales & Distribution

Define, Copy, Delete Sales Organization

1



Sales Organization is added in the list of existing Sales Organizations.

DEFINE DISTRIBUTION CHANNEL

Distribution channel:- Distribution channel is the way in which products or
services reaches the customers.
Menu Path:-Enterprise Structure Definition Sales & Distribution
Define, Copy, Delete Check Distribution Channel Define Distribution
Channel



Distribution Channel:- 42 & 43

Description:- Product Distribution & For Billing


Distribution Channels is added in the list of existing Distribution Channels.

DEFINE DIVISION

Division: - Division is the way of grouping materials, products or services. This
represents companys product line like nature of material. It tells about spectrum of
cts.
Menu Path:- Logistic Material Master Settings for keyfields Define

Divsion


Division:- D0 & D2
Description:- Product & Electricity


Distribution Channels is added in the list of existing Distribution Channels

DEFINE CONTROLLING AREA

Controlling area:-It is the highest organization with reference to costing material.
Just like the company itself, each company code in a company has a controlling
area.
MenuPath:- Enterprise Structure Definition Controlling Maintain

Controlling Area Maintain Controlling Area

Details of Added
Entries

Controlling Area:- 4445
Currency Type:- 10

Chart of Accounts:- INT (Integer)
Fiscal Year Variant:- K4

Controlling Area is added in the list of existing Controlling Area.

ASSINGMENTS

The Process of Assignment builds Relationships among plant, Storage location,
Purchasing Organization, Sales Area.
Assignment of Company Code to Company

Menu Path:- Enterprise Structure Assignment Financial Accounting

Assign Company Code to Company

After this we have to enter Company i.e4444 against Company code i.e4445. Then
we have to save after that request will generate which will result in final screen.

Final Screen

Change View "Assignment: Company Code-> Company": Ovetview
'ji> [IDCil

Position.. =r Entry 43 of 211

Now your Company Code has been assigned to your Company.

Assignment of Controlling Area to Company

Menu Path:- Enterprise Structure Assignment Controlling Assign

Company Code to Controlling Area

After this we have to click on Assignment of Company Code to Controlling Area,
then on NEW ENTRIES.


Final Screen

Now your Company Codes has been assigned to your Controlling area.

Assignment of Plant to Company Code

Menu Path:- Enterprise Structure Assignment Logistic(General) Assign

Plant to Controlling Area

Company Code 4445 get selected

87

Now click on your Company Code then a list of plant will appear & then select

Your Plant which you have to assign to your Company Code.

List of Plants

Now click on Continue, then a request will be generated and then and your plant i.e
plant1 get assigned to your Company Code 4445.

Final Screen

Allocation of Plants->Company Code:Overview

Assign Analyze error(s) Delete

Company code
Plants

4300 India

4400 Thailand
E._G & 61 enterpri ces
4447 Pla nt1

4446 G & 62 enterpri ces

L4448 Pl ant3

4500 IDES Canada for 4500

4510 SAP Plant - E.as.tern Canada
4520 SAP Plant - Central Canada
4530 Vancouver
4540 Red Deer Fac111ty

4518 US Company

L4514 Fort Wort h

4520 Canadian 2 Company

4600 Mal a ysi a

4700 Indonesia

4800 Phil;pp;nes

4801 KL Knitwears

Assignment of purchasing Organization to Company Code

Menu Path:- Enterprise Structure Assignment Material Management

Assign Purchasing Organization to Company Code

After going through the above path then a list of Company code screen will be
opened & then we have to select our Company code & then click on that so that a
list of Purchasing Organizations will be opened.

List of Purchasing Organizations

Now we have to select our Purchasing Organization i.e4446 so that it could be
assigned to Company Code. After that we have to save & a request will be generated
and then Purchasing Organization will be assigned to Company Code.

Final Screen

Purchasing Organizations -> Company Code: Ovetview

Assign Analyze error(s) Delete Select/Deselect Move Deselect

Company code
Purchase Organizations

4000 IOES Canada

4009 mi crosoft company

4100 Korea

4200 Taiwan

4300 India

4400 Thailand
E._G & 61 enterpri ces
4445 product purchasing

4446 G & 62 enterpri ces

L4446 product purchasing

4500 IDES Canada for 4500

4500 SAP Canadian Company
4510 Eastern Purch Org
4520 Central Purch Org
4530 Western Purch Org

US Company

L_4514 Fort Wort h Purch Org

4520 Canadian 2 Company

Assignment of purchasing Organization to Plant

Menu Path:- Enterprise Structure Assignment Material Management

Assign Purchasing Organization to Plant

After going through the above path then a list of Purchasing Organization screen
will be opened & then we have to select our Purchasing Organization & then click
on that so that a list of Plant will be opened.

List of Plants

Now we have to select our plant i.e4447 so that it could be assigned to Purchasing
Organization. After that we have to save & a request will be generated and then
Plant will be assigned to Purchasing Organization.

Final Screen

Plants >Purchasing Organization: Overview

Assign Analyze error(s) Delete SelectiDeselect Deselect

Purch. organi zation
Plants

3050 LIDES UK
L 3D50 UK
3111 OEM US

4000 IDES Ca nada

4000 Toronto
4100 Plant 4100

4202 fabric purchasing

L4200 plant nahar1

4203 f abri c purchasi ng2

L4201 pla nt 1

4444 IDES puchasing org.

PL1 product1on house
PL2 product1on house new

product pu rchasing

L4447 Pl ant1

4446 product purchasing

L4448 Pl a nt3

4500 SAP Canadian Company
I

Assignment of Sales Organization to Company Code

Menu Path:- Enterprise Structure Assignment Sales & Organization

Assign Sales Organization to Company Code

After going through the above path then a list of Company Code screen will be
opened & then we have to select our Company Code & then click on that so that a
list of Sales Organization will be opened.

List of Sales Organizations

Now we have to select our Sales Organization i.e4449 so that it could be assigned to
Company Code. After that we have to save & a request will be generated and then
Sales Organization will be assigned to Company Code.

Final Screen

4.4 PRODUCTION PLANNING MODULE

SAP PP is the Production Planning module of the SAP ERP software package from
SAP AG. Production Planning is integrated with other modules such as SD, MM and
QM. Production Planning is looks after planning part in industry.

The production planning is concerned with the planning and programming of
materials and equipment, start & ending dates of activities undertaken in industry,
procurement of materials (Raw materials, Semi Finished goods), Storage and
inventory control, goods recipt, goods transfer from one location to other location.
Production Planning is one of the functional modules in SAP. It is the branch of
logistics that deals with the tangible components of a supply chain interdependent
collection of organizations that supply materials. Specifically, production planning
covers the Planned Independent Requirements, Production orders, Production
requisitions of different materials present in the storage location.
SAP PP is all about Planning & scheduling. These resources include man,
manpower and materials. The main functionality within PP includes Planned
Independent Requirement(PIR), Material Requirement planning(MRP),Planned
Order, Production Order, Confirmation, Goods receipt. The module has important

master data material master, Bill of material, Routing & Work Center. Broadly,
the various levels that can be defined for a SAP PP implementation are: Company,
Company Code, Plant, Storage Location and Purchasing Organization, Controlling
area, Sales Organization.

DATA IN SAP

There are two types of data in SAP:-

1. Master data

2. Transaction data

1. Master data:-

These data can not change frequently and are basic for execution of trasaction.eg:-
Material master, BOM , Routing and Work center etc.

Master Data in PP Module are as Follows:-

o Material Master

o Bill Of Material (BOM)

o Work Center

o Routing

2. Transaction data:-

There are perpetual data which can change, generated with time and generated from
transaction e.g. planned order, production order, purchase requisition order etc.

MATERIAL MASTER

Businesses related information is maintained in material master. The information of
material is arranged in logically view depending upon business function. There is a
transaction code for creating, editing, displaying and deleting.
It include Various Views:-
Basic View
MRP View
Workscheduling View
Accounting View
Quality View
Sales View

Costing View

Table3:-T-codes for Material Master

Create Change Display Display Changes Set Deletion Flag
MM01 MM02 MM03 MM04 MM06

MINIMUM REQUIREMENT TO CREATE A MATERIAL MASTER

1. Industry sector

2. Material type

3. Base unit of measurement or stock keeping unit

4. Material description

5. Material number

MATERIAL TYPES

There is a standard material type in sap. We can create our material type. It can be
done in customizing using transaction code :- SPRO.
Standard material types are:-

Finished goods- FERT
Semi finished- HALB
Raw material- ROH
Non value aided materials- UNBW
Services- DIEN
Non stocked material-NLAG
Configurable material- KMAT

Extending and copying the material master:-

We can extend and copy the various materials .In extended material master we can
add different views that are created by different department.
Transaction code for extending the material master- mm50

Copy of material master- mm01.

Material status:-

It controls for which application the material can be used. Messages can be sent in
material status for each application.
1. No messages (green)

2. Warning messages (yellow)

3. Error messages (red)

SCREEN FOR CREATING MATERIAL MASTER

Material master is a file which contains information of a particular material
depending upon the views selected from the user department

Transaction Code-MM01

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CREATE MATERIAL INITIAL SCREEN

Fields Entered Are:-

1. Industry Sector- M (Mechanical engineering)

2. Material Type- FERT (Finished product)
Hit enter

SELECT VIEW SCREEN

SELECTED VIEWS:-
Basic Data 1
Basic Data 2
Purchasing
MRP 1
MRP 2
MRP 3
MRP 4
Work Scheduling
Accounting
Costing

Organizational Level

Fields Entered:-
Plant:- 4447
Storage Location:- SL1

Basic Data 1

Fields Entered:-

Material Description:-Fan
Base Unit of Measure:-pc
Material Group:-00120

Base Data 2

Purchasing Screen

Fields Entered:-
Purchasing Group :- 000

MRP 1 Screen

Fields Entered:-

MRP Type:- PD( Planned)
MRP Controller:- 111
Lot Size:- EX(lot for lot Order Quantity)

MRP 2 Screen

Fields Entered:-

Procurement Type:- X(Internal as well as External procurement)
Special Procurement:- 11
In-house Production:- 10 days
Goods Receipt processing:- 10 days
Planned Delivery Time:- 5 days
Schedule Margin Key:- 000

MRP 3 Screen

114

Fields Entered:-
Period Indicator:- M
Strategy Group:- 10
Availability Check:- 01

MRP 4 Screen

115

Work Scheduling

Fields Entered:-

Production Scheduler:- 420

Production Scheduler Profile:- 111111

Accounting 1 Screen

Fields Entered:-
Valuation Class:- 7920
Price Control:- S(Standard Price)
Standard Price:- 100

Costing 1 Screen

After this we will save & then FERT Material will be created by giving a message
ie. Material 1798 created like this we can create other material also.

119

Bill of Material(BOM)

Components used in making a product and quantity of components. It can be at one
level not multiple level. There is a transaction code of creating, editing, and
displaying the BOM.

Transaction codes :

Creation- CS01

Change- CS02

Display- CS03

Minimum requirement to create BOM

1. Material code

2. Plant code that is for which plant, which create BOM usage

3. BOM usage/type

NOTE:-

BOM can be created for in-house produced products, finished/semi
finished products but not for the raw material.
One material can have multiple BOM.

Structure of BOM:-
Header:-

For which material/product BOM is created. In this, we mention:

Base quantity: For how much quantity, BOM is being created.

Administrative data: who has created and date of creation.

Item overview :- List of components used in BOM.

Sub Item :- It is the Installation point of item in the BOM.

BOM status :- It tells us whether BOM is active or inactive for particular
application. It
is mentioned in BOM Header.

Types of BOM category:-
Production BOM:
Sales BOM
Functional Location BOM
Engineering/Design BOM
Universal BOM

BOM Group:-

Several BOM can be groups together in BOM group using head of material .We can
create BOM by using variant BOM .They should be in same plant.

Group BOM:-

If a BOM is created without maintaining a plant ,then group BOM is created. Later
this BOM is required for allocation of plant.Using plant transaction ,Group BOM is
allocated to plant.Group BOM can be allocated to any number of plants.
T code for plant allocation of Group BOM:CS07

Variant BOM:-It is created for different material where most of the component of
the material are same, only few vary. Variant BOM of material is created as a
variant of already created material .Variant BOM and Multiple BOM are mutually
exclusive to each other.

Customizing of BOM

Menu Path:- SPRO Logistics- General Material Master Basic

Settings Material Types Define Attributes of Material Types

Screen For Creating of Bill of Material(BOM)

Transaction Code:- cs01

Menu Path :- Logistics Production Master Data Bill of Material Bill
of Materials Material BOM CS01(Create)

CREATE BOM INITIAL SCREEN

Plant :- 4447

BOM Usage :- 1

Hit enter

Components Added to BOM

Component:- 1793, 1799
Quantity:- 5, 5

Hit Enter

After this click on save a request will be generated and the BOM will be created.

WORK CENTER

Work center is a place where operation is carried out. It is created at plant level.In
this, we have to maintain an External No.
Transaction code :-
Create :- CR01
Change :- CR02

Display :- CR03

Work center Category:-

It is a mandatory entry while creating work center, which contrasts the maintenance
of fields default Value of the fields in work center.

Views in Work Center:

o Basic Data

o Default views for Operation. (Values set in this will get copied in the
Routing automatically)
o Capacity

o Scheduling

o Costing

Standard Value Key:

It activates which activity is to be consumed at the work center

If reference indicator is set, then the value of control key cannot be
changed in
routing
In Work center, we assign the cost center

Many work centers can be assigned to one cost center. But the same
work centers can't be assigned to another cost center keys
Max. 6. can be maintained, for more activities Two work centers can be
made with divided activities.

Control Key:

It is a mandatory entry for an operation which controls:
Whether the operation is relevant to Scheduling
CRP i.e. Capacity Requirement Planning
Inspection Characteristics.
Auto G.R. (Goods Received)

Rework, (Work Again For Improvement)
Costing.
Standard Text Key.

Pooled Capacity:-

It is the capacity category which is shared by Several Work centers.
E.g. One man- many M/c's

Back flush is present in.

-Material Master. (In MRP2, View)

-Work center

-Routing

-Production order

DisplayiMG
g I Existing BC Sets BC Sets for Activity Activated BC Sets for Activity lUI Release Notes I Change Log Where Else L

I> @!II Quality Management
0
o

I> Plant Maintenance and Customer Service B
I> Customer Service
"" Production
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I> Bill of Material
"" Work Center
<7 GeneralData
Define work center category
Define Fi3ld Selection
Define ta>k list usage
1> Standard Value
Determine person responsible
. . ove t1me matnx
G Activity ubsystems
Define default work center
I> Routing Dat<
I> Capacity Planning

Set up work center screen sequence G

Define graphics profile B
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Screen for Creating of Work Center

Transaction Code:- CR01

Menu Path:- Logistics Production Master Data Work Centers

WorkCenter CR01(Create)

CREATE WORK CENTER INITIAL SCREEN

Work Center:- 1555
Work Center Category:- 0001

Hit enter

Basic Data

Person Responsible:- 777
Usage:- 009

Default Value

Control Key:- PP01
Setup:- MIN (Minute)
Machine:- MIN (Minute)
Labor:- MIN (Minute)
Hit Enter

Capacities


Setup Formula:- SAPR05

Processing Formula:- SAPR06

Teardown Formula:- SAPR03

Hit Enter

Scheduling

Capacity Category:- 001
Setup Formula:- SAP001

Processing Formula:- SAP002

Teardown Formula:- SAP007

Hit Enter

Costing

Cost Center:- 4220
Activity Type:- 4221, 4220, 4223

After this we have to save and then Work Center is created.

ROUTING

Sequence of operations to create a material is called routing.

VARIOUS OPERATIONS PERFORMED:-
Sampling:-
We take particular of material, we inspect it and AQL (Acceptance Quality level) is
made by R& D department.AQL means which parameters are to be used i.e.
Mechanical, chemical Parameters etc and these are defined in SAP as Inspection
characteristics.

Supply Chain:-

Customer Plant Vender

SCM (Supply Chain Mgt.) Components:
SAP R/3
mySAP SCM.

APO ( Advance Planning Optimizer

ICH ( International Collaborated Hub)

EM (Event Mgmt.)

SAP BW (Business Info Warehouse)

Routing:-

Work centers are used in Routing.

ADVANTAGES:-

1. We know process of Production.

2. Scheduling

3. Capacity Planning

4. Costing

5. To book the Production

Task List:-

Different Types of Task list (we call Routing as Task list)

1. Routing (N)

2. Reference Operation set (s):-These are used in Discrete Mfg.

3. Rate Routing (R)

4. Reference Rate Routing Operation Set (m):- Used in Repetitive mfg.

5. Standard N/W (0):-Used in Project System

6. Inspection Plant (Q):- Used in quality mfg

7. Master Recipe:-Used in Process Industries

Reference Operation set:-It is a kind of task list which is created without
maintaining a material.

Structure of Routing:-

Header Materials with Group No &Group Counter

Sequence

Operation

Work Center PRT Component allocation Inspection characteristics Control
key

Screen For Creating Routing

Transaction Code:- CA01

Menu Path :- Logistics Production Master Data Routing Routings

Standard Routing CA01(Create)

CREATE ROUTING INITIAL SCREEN

Usage :- 1 (Production)
Status:- 4 (Released)
Hit enter and then click on Operation so that we assign Work Centers to different

Operations.

Assigning of Work Centers


Work Centers:- 1555, 1556

Standard Key :- 46, 47

Hit Enter then save your Routing will be saved.

4.5 FLOW OF PP For
Discrete Manufacturing

PIR/SO

MRP Planned
Orders Production
Orders
Confirmation
GR

Planned Independent Requirement

Planned Independent Requirement (PIR):-

PIR is used for maintaining the requirement which could be week wise, monthly
wise or yearly wise. For estimating the requirement forecasting is done.
T code for PIR is: MD61

T code for changing PIR is: MD62

Planned order:-

A request created in the planning run for a plant to trigger the procurement of a plant
material for a certain quantity for a specific date.
Initial Screen for Creating PIR

Hit Enter

Creating Requirement

After this we have to Enter and to see the requirement we have to run MRP

MRP:-Material requirement Planning:

-MRP is the planning coverage of shortage with the suitable receipt element.
T Code for MRP: MD02

MRP contain the following steps: NRC(Net
Requirement Calculation)
PQC(Procurement Quantity Calculation)

Procurement Type

Scheduling

BOM explosion

MRP Procedures:-

Whether and how material is planned.

-MRPPD--- planning will take place.

Consumption Base Planning.
Reorder point lavel planning.
Forcast based planning.
Time based planning.

-Master production scheduling

-MRP in external procurement

-GR Processing time.

Execution in MRP:-

(1) Total Planning:-

All Material are planned, it can be run online or background.
T Code is: MD01

(2) Single item Planning:-

Only selected material are planned.

Single item single level planning

T Code is: MD02

Single item multi level planning

T Code is: MD03

Single item iterative planning

T Code is: MD43

Customizing of MRP

Stock Requirement List

To change this requirement to Planned Order we have to run Single Item Multiple

Level MRP.

MRP Screen

Planned Order

Now we have to Double click on planned order so that we can change that into

Production Order.

Stock Requirement List

Now we have to Dbl click on Production Order to convert planned order to
production order.

Customizing of Production Parameters
Menu Path:- Production Shop floor control Master Data Order

Define Order Type Dependent Parameter

Production Order:- These are used in Discrete Manufacturing scenano where
product Stability is less it is basically the order given by l'viRP Controller to the
Shop floor people to start production.

20 PC Scrap portion
ExpectYieldVar
0 .00

BasicDates Scheduled Confirmd
Finish 23.04.2009 24 00 23 .04.2009 24:00
Start
Release
23.04.2009 00 00 23.04.2009 00:20
23.04 .2009
00 00

Scheduling
Type
Reduction
Note

Priority

2 Backwards
No reduction carri ed out
No scheduling note

Scheduling margin 000
Float bef.prod
Float after pro
Release period

Workdays
Workdays
Workdays

Customizing of Release Production Order

Menu Path:- Production-+ Shop Floor Control-+ Operation-+ Avail Check-+
Define Checking Control

DisplayiMG
g I Existing BC Sets BC Sets for Activity Activated BC Sets for Activity lUI Release Notes I Change Log Where Else L

Structure

I> Pru u"liuu Pluuiuy G
I> Capacity Requirements Planning B
I> Material Requirements Planning
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I> Master Data
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l> Task List Selection
l> Bill of Material Selection
<7 Availability Check
Define Checking Group
Define Checking Rule
Define Scope of Check
cieiirie.ci1eci<fr19.ciii1iriii
"o8tiiie.ctieci<iiiiiR.uie"io; Backorder Processing
Stock and Batch Determination for Goods Mo,ement
l> Scheduling
l> Capacity Requirements Planning
l> Change Management for Production Orders (DCM)
l> Confirmation
Define Print Control G
l> Schedule Background Jobs G

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Order 60003449 Type

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data text m inistration

Totalquant 20 PC portion
Delivered ExpectYieldVar

Scheduled o
Finish 23 04 2009 24:00 23 04 2009 24 00
Start 2009 00 00 2009 00:20 23.04 2009 09
Release 2009 23.04 2009

c
Type Backwards margin 000
Reduction No carried out prod 0
No note Float pro 0
period 0
Priority
OVR
r; 1 26

Production Order after Release

;;JI Production order Display: Header
I

l

Confirmation

Confirmation:- Declaring completion of an operation consumption of an activity is
called confirmation. It can be at order level or at operation level. Confirmation is
saved against already created confirmation.
-Even if full Qty. Confirmed, then also PCNF status will come, if partial
confirmation is selected during CNF.
-Even if partial is confirmed, then also CNF status will come if final
confirmation is selected during CNF.
-In automatic conformation, system itself selects the status i.e. PCN for CNF.

Types of Confirmation T Code

1. Time Ticket Confirmation CO11n

2. Time Even Confirmation CO19

3. Collective Confirmation CO12

4. Progressive Confirmation CO1f

Effects of confirmation:-

1. Order gets updated

2. Capacity Requirement gets required (In capacity Planning in orders)

3. Actual costs gets debited

4. HR data gets posted.

5. Material document may get (if auto GR is done. Then it will be posted, otherwise
not).
Note:-When confirmation is posted

6. GI of back flush component takes place.

7. GR of header material takes place if auto GR is set

Customizing of Confirmation Parameter

Menu Path:- Production Shop Floor Control Master Data

Operations Confirmation Define Confirmation Parameters

Stock before Confirmation

Time Ticket Confirmation

After Confirmation Production Order

Here we can check the status of Production Order.
GMPS:- Goods Moment Posted.
It means final Confirmation has been done.

Goods Receipt
Goods Issued:- Goods can be issued with codes

T Code:MB1A

Movement Type:-

1. 201- Goods issued against cost center.

2. 202- For Reversal.

3. 261- Goods issued to product.

4. 262- For Reversal

5. 551- Goods issued for Scrap

Goods Received (GR) MBIC.

Movement Types:-

1. 101- Goods Received from Production order Purchase Order.


3. 501- GR without Purchase Order.

4. 502- Reversal.

5. 521- GR without Production Order.

6. 522- Reversal

7. 131- GR for Repetitive Mfg.


9. 103- GR to Inspection.( Quality Chick will be there)

10. 104- Reversal.

11. 105- GR from Inspection.

12. 106-Reversal.

13. 561- Initial Stock Update.

Transfer Posting to Stock Transfer:- MB1B

1. 311- For stock transfer from storage location to Storage location.

2. 312-Reversal of 311.

3. 301-Transfer from Plant to Plant


5. 309-Transfer from Material to Material.


7. 313-Removal of stock from one Storage Location.

8. 314- Reversal of 313.

9. 315- Placement of Stock in another Storage Location.

10. 316- Reversal of 315.

5. FUTURE SCOPE

In SAP PP Planning is done through MRP or MPS, but there is a limitation in PP
that the planning is not done across supply chain i.e. vendor ,plants and customers
so its advanced version is APO(Advanced Planning and Optimizing), in this
planning is done across the supply chain. In APO there are many planning tools
i.e.:-

DEMAND PLANNING:-It is based on historical data which is taken
from BW (Information warehouse).
GATP (Global Available to Promise):- IT is checking the
availability/feasibility to meet sales order quantity while creating sales order.
SNP (Supply Network Planning):- It is mid to long term planning across
the supply chain. It is finite planning.
PPDS (Production Planning and Detailed Scheduling):- This is the
detailed Production Planning with the location in shorter horizon.
TVPS (Transport Planning Vehicle Schedule):-IT means to select the
shortest path for transportation so that the transportation cost is reduced.

The limitations of the PP module are overcome by the advanced version APO.

A ount

ass gn nt

category
Key indicating whether an item is to be assigned to an auxiliary

account (such as a cost center). The account assignment category
determines which account assignment data (e.g. cost center, account
number, etc.) is required for the item.
Account group The account group determines:

The data that is relevant for the master record

A number range from which numbers are selected for the
master records

An account group must be assigned to each master record.
as un t of

measure
Unit of measure in which the stock of a material is managed.

The system converts all quantities entered in other units into the base
unit of measure
BOM explosion Function for determining all the components of a bill of material and

listing them.

You can explode a BOM to show the structure of the product or to
show the total quantity of each component
xp os on

d
Defines date to be used for selecting the bill of material.
BOM select ID Indicator determines which BOM is to be used and with which

priority for BOM selection.

6. Appendix

Document An electronic record of a transaction. In addition, several documents

can be created from one single action in the R/3 system. For example,
when an "Invoice" is entered into R/3, which references a Purchase
Order document in R/3, an Accounting document is also
automatically created. Each document is linked to the other and
provides different pieces of information. In R/3, each document has
it's own unique document number that is Company Code and Fiscal
Year dependent.
n

Procurement
Procurement of raw materials, operating supplies (MRO items),

trading goods/merchandise or services from an external supplier for
the organizational units within a firm that need such items.
oats

production
Number of workdays allocated to this order as a safety margin after

production.
oats b

production
Number of workdays allocated to this order as float before

production.
oods Issu

(GI):
- It is goods movement in which material withdrawal is posted for
consumption or for customer. A GI posted in system will leads to
decrease in stock.
oods

nt:
It is a process in which transaction resulting change in stocks. It is

further sub-divided into three categories

1. Goods Receipt (GR)

2. Goods Issue (GI)

3. Transfer Posting (TP)
oods R pt

(GR): -
It is a goods movement in which receipt of goods is posted for

vendor or for production. A GR posted in the system will leads to
increase in stock. No Concept of Price or value
UI Graphical User Interface. Windows like feel and look. User friendly

screens to develop and use are provided. The user can simply point

the cursor and click the mouse to operate
ID S International Demonstration and Education System. A sample

application provided for faster learning and implementation
IMG Implementation Guide Hierarchical structure reflecting the R/3

component hierarchy and contains all configuration activities

Industry
Sectors

When you create a material master record, you are required to classify
the material according to industry sector and material type. Industry
sectors have control functions in the R/3 System. For example, it is
factor determining the screen sequence and field selection in
material master record. Once you have assigned an industry sector o
material, you cannot change the industry sector again afterwards.
The standard R/3 System contains the following industry sectors. The
ID used to identify the industry sector internally appears in
parentheses.
Plant engineering and construction (A)
Chemical industry (C)
Mechanical engineering (M)
Pharmaceuticals (P)
Invoice: Invoice is a document, which is issued to a buyer (Company) from

the supplier (vendor) for the payment. The following information is
maintained in invoice
Invoice date, Posting date, Invoice ref number, tax amount, amount,

tax code, terms of payments, vendor address, banking accounting

information etc
Lot size Quantity to be produced or to be procured.

Description
Text of up to 40 characters that briefly describes a material. You may

have only one description for each material, but it may exist in as
many different languages as you like.
Material group Grouping of materials and services according to their characteristics.
Material type Groups together materials with the same basic attributes, for

example, raw materials, semi finished products, or finished products.

When creating a material master record, you must assign the material
to a material type
ng

price
Price that changes in consequence of goods movements and the entry

of invoices, and which is used to valuate a material. The moving
average price is calculated by dividing the value of the material by
the quantity of material in stock. It is recalculated automatically by
the system after each goods movement or invoice entry.
nt

yp : -
- It is a three-digit code, which plays a role of important control

function in inventory management. It acts as a central role in
automatic account determination. It determines which stock account
or consumption account is updated in financial accounting.
R on . The person responsible for a group of materials within MRP in a
plant or company. Any material that takes part in material
requirements planning must be assigned to an MRP controller
MRP type Key that controls the MRP procedure (MRP or reorder point) to be

used for planning a material. It contains additional control

parameters, for example, for using the forecast for the materials

planning, for firming procurement proposals and so on.
Numb

Ranges:
Number ranges are maintained for each & every document, Posted in

the SAP System. The maximum numbers of digit allowed are

18digits (99, 9999, 9999, 9999, and 9999).
Two types of number ranges: -
Internal number ranges - System will automatically define numbers
to all documents
External number ranges - User has to give doc number externally

while creating document
Opening period Number of workdays subtracted from the order start date ,to

determine the creation date
Price control Indicator determining the procedure used for material valuation.
Two procedures are available in the standard system:
Valuation at standard price

Valuation at moving average price or (if the material ledger
has been activated) periodic unit price
u nt

type
Classification determining whether a material is produced in-house,

procured externally, or both.
u has

requisition
Request or instruction to Purchasing to procure a certain quantity of a

material or a service so that it is available at a certain point in time.
u has ng

group
(MM) A Purchasing Group is a grouping of departments or areas that
purchase in R/3 used for assigning Purchase Requisition approval
rules. The Purchasing Group field is a required field on a Purchase

Requisition and is assigned to each authorized R/3 user that is part of

that Purchasing Group. For example, several users from the same
department or area may use the same Purchasing Group.
u has ng

p u nt

time
Time that purchasing department requires to convert a purchase

requisition into a purchase order
u has ng

u k y
Key defining the valid reminder days and tolerance limits applicable

to this material for the purchasing department.
The purchasing value key serves as an entry aid.
R on on

account
G/L account, to which transactions in the subsidiary ledgers, (such as

in the customer, vendor or assets areas), are automatically updated. It
is generally the case that several sub ledger accounts post to a
common reconciliation account. This ensures that the s
n the sub ledger accounts are accurately reflected in the general
ledger (i.e. in line with balance sheet conventions).
Release period Number of workdays between the planned start date of the

production order and the date for releasing the order. If the order
release indicator is set, the production order is released by a
background program that takes all dates into account.
Reservation: - It stores requisition created from particular cost center to particular

department for issuing the material reservation posted in the system.
It leads to decrease in stock.
R/3 R/3 is an ERP system offered by the SAP company. The R/3 stands

for real-time / three-tiered architecture, defined as follows:

The "R" in R/3 = real time. During real-time processing, data is
processed immediately, the moment the data is entered into the
system. This is different than a "batch mode", in which data is stored
and all transactions are processed together, at a later time.
The "3" in R/3 = A three-tier computer architecture comprised of
three operational layers as outlined below. The SAP R/3 system uses
a special type of client/server architecture consisting of three well-
defined and separate processes, each running on a different platform
S h du ng

Agreement
Outline agreement on the basis of which materials are procured at a

series of predefined points in time over a certain period.
Schema Group
It allows to group together the purchasing organizations, which uses

the same calculation schema.
Schema Group
Vendor
The main function of it is to identify or to pick the right process and

conditions for a particular vendor
Sp

p u nt

type
An indicator in the material master record that defines external

procurement or in-house production of the material more precisely.
S k ans

(S ):
It is method of removal of material from one location and
transferring it to another location. This process is performed between
two plants and two storage locations.
Stock types The different stock types are

1. Unrestricted use stock

2. Quality inspection stock

3. Blocked stock

4. Warehouse stock
ans os ng

(TP): -
- It is a general term of stock transfer that changes the stock type or

stock categories. The difference between transfer posting and stock
transfer is: -
TP is logical stock transfer and ST is a physical stock transfer.
VALUATION A THE VALUATION AREA SETTING IS USED TO CALCULATE TOTAL STOCK .
Valuation Class It is used to determine which stock account is updated during the
goods movement of a material. It is maintained in Accounting 1 view
in material master record

SAP TRANSACTIONS

For performing any kind of task in the SAP R/3 ERP system, a transaction is used.
SAP provides a standard set of transactions to manipulate i.e. insert, update, delete
and display data in the system. A transaction code is a four-character command that
tells the system location of a task. Each SAP screen has a unique transaction code. A
transaction code may contain only letters such as zstm or a combination of letters

and numbers such as me51. In SAP, you can use transaction codes as a shortcut or
alternative to using the navigation path to get to a system task.

Listed below are the commands used in combination with the transaction codes.

Command + Trans
Description
Code
/n + Transaction code End current system task and go to new system task
Create a new session and go to new system task without closing
/o + Transaction code
prior session
/o List open sessions
/i or /nend Log off

BIBLIOGRAPHY

BOOKS:-

SAP PP ( FUNCTIONALITY AND TECHNICAL CONFIGURATION)
BY MARTIN
SAP ONLINE LIBRARY HELP

WEBLINKS:-

www.sap.com
www.sapinfo.com
www.sapzone.com
www.sap-img.com
www.sapgenei.com
www.help.sap.com

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