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SAP America, OS.PPT - 10/13/97, Slide 1


GOAL OF BUSINESS PROCESS WORKSHOP

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.
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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
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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
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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.
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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)
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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..
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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
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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
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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)
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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)
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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
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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)
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SAP America, OS.PPT - 10/13/97, Slide 13
General Ledger Processing
Integrated with:
procurement (MM)
assets accounting (AM/IM)
controlling (CO)

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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

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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
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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
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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

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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)
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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
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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
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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
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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)

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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.

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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.
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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

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SAP America, OS.PPT - 10/13/97, Slide 26
3. Profit Center Accounting, contd
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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.

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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
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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
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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.
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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


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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
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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
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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)

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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?
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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
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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
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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
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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
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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


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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
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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
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SAP America, OS.PPT - 10/13/97, Slide 43
Sales and Distribution
Business Process Workflow
Scenario: Standard Order Handling

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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
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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
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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.
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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
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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
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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
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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
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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.
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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
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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

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SAP America, OS.PPT - 10/13/97, Slide 54
Time Management
Long Term Daily Work Schedule
Flexible Daily Work Schedule
Calculate Overtime
Incentive Wages
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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
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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
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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