Organizational Structure Workshop

GOAL OF ORGANIZATION STRUCTURE
WORKSHOP
Obtain an Understanding of the Customers Key
Business Processes
Define the Chico Creek Brewerys Organization
Structure in SAP based on those Business Processes
SAP America, OS.PPT - 10/13/97, Slide 1

AGENDA Definition of Organization Structure
Customer High Level Business Overview
Business Process Review
Financial/Asset Management
Sales Logistics
Procurement, Logistics Planning
Define the Organizational Elements in SAP based

on the Chico Creek Brewerys Business Processes
and Reporting Requirements.
Document the Companys SAP Organization
Structure

Integrated Business Process Review
Business Overview
Companys Mission Statement
Markets
Customer Base
Products and Services
SAP Implementation Drivers

MISSION STATEMENT
Our mission is to successfully implement SAP R/3 at
the Chico Creek Brewery in a timely, professional
manner so that our client can realize a faster and more
productive way to run their business processes.
We intend to create a sustainable competitive
advantage for Chico Creek Brewery, as well as,
substantial profitable results through the
implementation of SAP R/3.

Integrated Business Processes Overview
Procurement
Logistics Planning
Sales Logistics
Production
Finance / Asset Management

Integrated Business Process Overview
Production
Fore- Sales Oper Manufacturing Order

MPS MRP
cast Planning Execution Settlement
Capacity Inventory
Costing
Financial and Managerial Reporting and Analysis

Organizational Structure Review
Organizational Structure
3000
US Chico Creek Brewery
Business 93
90
Area Stout
Pale Ale
4000
3000
Purchasing Australia
US #1
Organization
Division/ 90 3000 93 3000

Plant Pale Ale US Stout US
Sales 3000
Organization US
Distribution 03
Channel Wholesale
Division 90 93 R
Pale Ale Stout

Finance Management /Accounting & Reporting
FINANCIAL FINANCIAL MANAGEMENT

ACCOUNTING REPORTING REPORTING
(FI / AM) (FI) (CO)
COST CENTER
ACCOUNTING (CCA)
ACCOUNTS
SD RECEIVABLE
INTERNAL ORDER
ACCOUNTING (OPA)
PROJECT
GENERAL ACCOUNTING
ACCOUNTS LEDGER
MM PAYABLE NATURAL
PRODUCT COSTING
ACCOUNT
PROFIT CENTER
ACCOUNTING (PCA)
ASSET
MANAGEMENT
PROFITABILITY
ANALYSIS (PA)
R

Organizational Elements - FI
Company
Represents a legal/tax entity - Where do you
legally represent the financial events of
transacting business?
Arms Lengths Transactions
Level of External Reporting or Legal Sets of Books

Companies for Name of Customer
Company Codes: Identify the proposed company

codes if any for customer being evaluated.
Benefits: Identify the benefits of recommended
usage of company codes.
Costs: Identify the costs of recommended usage
of company codes.
Issues: Identify any open issues/questions.

Chico Creek Brewing

Co.
Company Codes
North America Australia Japan Singapore Canada

Operating Chart of Accounts

G/L Account Master Records Required in One or Several
Company Codes
Postings are Made to these Accounts
Maximum of a 10 Digit Code
A company Must be Linked to One Operating Chart of
Accounts
An Operating Chart of Accounts can be Linked to Many
companies

Operating Chart of Accounts = General Ledger

Different from a lot of other Financial System
Applications in that the G/L account is strictly
comprised of the natural account code.
The management reporting structures (i.e. cost centers,
divisions, regions, and job orders) is not embedded
within the chart of accounts.
In SAP there is a relative relationship between the chart
of accounts profit and loss natural account code and
the cost centers.

Organizational Elements - CO
Controlling Area
An organizational unit within a corporation in which
comprehensive independent management accounting
can be performed.
Allows you to group Company Codes from a Cost
Accounting View.
It links the financial accounting module (FI) to the
management accounting module(CO) in SAP.

Linking of FI and CO
The Operating Chart of Accounts Links Financial Accounting(General
Ledger) to Management Accounting in the following way:
A Company Code is Linked to the Operating Chart of Accounts
The Controlling Area is Linked to the Operating Chart of Accounts
A Company Code then can be Linked to any Controlling Area as long as they
are both Linked to the Same Operating Chart of Accounts
Several Companies can be Linked to a Single Controlling Area
regardless of the Companies Functional Currency.

Profit Center Accounting
Used to Calculate the Profit of an Area of Responsibility within the
Organization (e.g. the Brewery)
The Areas of Responsibility (Profit Centers) could be Based on
Regions, Functions, or Products (e.g. Production).
Supports Calculating Operating Profit using the Cost of Goods Sold
P/L Format and/or the Period Accounting Method
A Profit Center can also be Viewed as an Investment Center since it
is Possible to Transfer at Period End the Balance Sheet Positions for
Assets, WIP, AR, AP, and Inventory

Profit Center
A Profit Center is not an Independent Account Assignment
Object at the Moment of Entering a Transaction in SD or MM; It is
Derived From Existing Objects and is Allocated to the Correct
Cost Object
As a Default, Revenue and Costs for Profit Centers are Derived
as follows:
Sales Order Line Item based on the Product being Sold
Direct Costs Based on the Assignment of Production Orders and Direct
Costs.
Overhead Costs Based on the Assignment of the Cost Center or other
Cost Object

Profit Centers for Chico Creek Brewing

Profit Centers: A division of the functional business areas
which CCBC is involved with (e.g. the sale of
merchandise).
Benefits: The ability to capture costs in Profit Centers, and
perform profitability analysis on a single part of the
business.
Issues: Identify additional Cost Centers in the
Organizational Structure, and map them to existing
processes..

Cost Centers
Departmental Breakdown of your Legal Entity Structure
Lowest Level of Organization where you want to Collect and Analyze
Costs/Departmental Performance
Departmental Budgets and Expense Analysis
Interdepartmental Cost Allocations
Each Cost Center is Assigned to a Profit Center, which is Assigned to a
Company Code
Cost Centers are Structured into Organizational and/or Functional
Hierarchical Groups

Chico Creek Brewing Company, Company Codes and Profit Centers
Operating Concern
CCBC
Controlling Area
1000
Company Code Company Code Company Code Company Code Company Code
2000 3000 4000 5000 6000

United States Australia Japan Canada Singapore (Planned)
Controlling Area
1000
Profit Center Profit Center Profit Center Profit Center Profit Center Profit Center Profit Center
1000 1100 1200 1300 1400 1500 1600
Taproom (Pub) Merchandise Porter Stout Pale Ale Hefe Weisen Seasonal

Organizational Elements - CO 10/08/98
Chico Creek Brewing Company, Cost Centers
CC 2100 CC 2200 CC 3200 CC 4200 CC 5200 CC 6200 CC 2300 CC 3300 CC 4300

US AU JP CAN SP US AU JP
Manufacturing Administration Administration Administration Administration Administration Sales & Distrib. Sales & Distrib. Sales & Distrib.
CC 2101 CC 2106 CC 2111 CC 2210 CC 3210 CC 4210 CC 5210 CC 6210 CC 2310 CC3310 CC4310
Accounting Accounting Accounting Accounting Accounting
Water purifier Malt Mill Whirlpool US AU JP CAN SP Sales, US Sales, AU Sales, JP
CC 2102 CC 2107 CC 2112 CC 2220 CC 3220 CC 4220 CC 5220 CC 6220 CC 2350 CC 3350 CC 4350
Legal Legal Legal Legal Legal
Mash Turn Lauter Tun Filters US AU JP CAN SP Distribution, US Distribution,AU Distribution,JP
CC 2103 CC 2108 CC 2120 CC 2230 CC 3230 CC 4230 CC 5230 CC 6230

Purchasing Purchasing Purchasing Purchasing Purchasing
Kettle Hop Strainer Bottling US AU JP CAN SP
CC 5300 CC 6300
CC 2104 CC 2109 CC 2130 CC 2240 CC 3240 CC 4240 CC 5240 CC 6240 CAN SP
Management Management Management Management Management Sales & Distrib. Sales & Distrib.
Heat Exchanger Fermenters Kegging US AU JP CAN SP
CC 2105 CC 2110 CC 2140 CC 2250 CC 3250 CC 4250 CC 5250 CC 6250 CC 5310 CC 6310
Insurance Insurance Insurance Insurance Insurance
Conditin. Tanks Wort Receiver Finished Goods US AU JP CAN SP Sales, CA Sales, SP
CC 2260 CC 3260 CC 4260 CC 5260 CC 6260 CC 5350 CC6350

HR HR HR HR HR
CC 2400 CC 2500 US AU JP CAN SP Distribution, CA Distribution,SP
Taproom (Pub) Merchandise

AM - Depreciation Areas
USA Canada Australia Japan
Chart of Depreciation Chart of Depr. Chart of Depr. Chart of Depr.
Depr. Areas Depr. Depr. Depr.

Areas Areas Areas
Company Code
Pub/ Company Company Company

Code Code Code
Brewery Taproom Merch.
Canada Australia Japan
R

AM - Asset Number Structure

Asset Classification

IM - Hierarchical Structure
Investment Management
Program
Orders (CO) Projects (PS)

Organizational Elements - MM
Purchasing Organizations and Plants

Chico Creek Brewing Co.
United States Canada Singapore Japan Australia
Purchasing
organizations Brewery Tap Room Retail
Brewing Tap Room Retail

Plants Plant Plant Plant
Dry Wet
Storage Inventory R
Inventory

Purchasing Organization
Responsible for procurement for the brewing, tap room and
retail plants
Responsible for negotiating pricing and delivery terms with
vendors for each purchasing organization

Purchasing Organization for Chico Creek Brewing Co.
Purchasing Organization: Each company will have its own
purchasing organization
Benefits: A purchasing organization is assigned to a cost
center where inventory is tracked and costs are incurred

Plant
It is a production facility that can have multiple locations
associated with it
Usually a manufacturing facility, warehouse or a location that
stocks, manages and valuates inventory
May be a physical site with multiple
manufacturing/production lines
Can be a physical location (cost centers may or may not be
associated to a plant i.e. administrative vs. manufacturing
cost centers)
SD availability checking is normally done at the plant level

Plant (Cont.)
Links to production (PP), materials management (MM), and

sales and distribution (SD)
A plant is assigned to a company
Purchasing organizations are assigned to plants

Plant for Chico Creek Brewing Co.
Plant: There are three plants: brewing, tap room and retail
Benefits: Being able to keep track of the profits and costs of
each plant

Storage Location
A location within a plant where inventory is stored

Storage Locations for Chico Brewing Co.
Storage Locations: Brewery and tap room will have two

separate storage locations: one for dry goods and one for
wet or cold goods.
Benefits: Assets and incurred costs can be tracked by the
different storage locations.

Organizational Elements - SD
Sales Organization, Distribution Channel and Division
Chico Creek Brewing Company
3000
US
4000
Australia
Sales 3000
Organization US
Distribution 03
Channel Wholesale
90 93
Division
Pale Ale Stout

Sales Organization
A representation of a selling unit responsible for

product liability and other claims made by
customers
Each business transaction is processed within a
sales organization
Master Data Maintenance for Customers, Pricing
at Sales Organization Level
Sales Organization Assigned to a Company Code
where Sales Revenue is Recognized (Links SD &
FI)
Plants Assigned to a Sales Organization
R

Sales Organization for Chico Creek Brewing Company
Sales Organization: United States, Australia, Canada,

Japan, Singapore, Tap Room, Catering, Bakery,
Merchandise
Benefits: To produce statistics for each of the sales
organizations.
Costs: A manager will be required to head up each
sales organization, therefore, costs may be slightly
higher.

Distribution Channel
Used to define how different products reach

consumers (I.e. retail, wholesale, or direct sale)
Relevant Master Data such as price, minimum
order qty, and ship-from location may differ
between each channel
Each Sales Order travels through one Distribution
Channel
Distribution Channel assigned to a Sales
Organization (I.e. direct sale for Merchandise
items)
R

Distribution Channels for Chico Creek Brewing Company
Distribution Channels: Wholesale, Direct Sale,

and Retail
Benefits: We can determine the profitability of
each channel within a specified sales
organization.
Costs: By having additional distribution channels
(wholesale, retail), we will incur transportation
costs.

Division
A way of Grouping Materials, Products, or

Services
Assign each product line to a particular division
Define customer-specific agreements for each
division, including partial deliveries, pricing, and
payment terms

Division for Chico Creek Brewing Company

Division: 5 types of beer, menu items, souvenirs,
and services provided by catering.
Benefits: To keep track of how well each product
sells within a given area.
Costs: By making the divisions equal to each type
of product and service, the divisions will become
more difficult to configure and maintain.

Sales Area
Sales Area is a Combination of:

Sales Organization
Distribution Channel
Division
All customer data relevant for sales is defined

according to the sales area (I.e. can specify for
each customer how pricing is done in each sales
area)
Links the Order Entry System(SD) to the
Financial/Managerial System(FI/CO)
R

Sales Area for Chico Creek Brewing Company
US Merchandise Tap Room
Stout
Pale Ale
Wholesale Porter
Hefe Weisen
Seasonal
Stout
Hats Pale Ale
Tee shirt Porter
Direct sale Sweatshirts Hefe Weisen
Seasonal
Stout
Pale Ale
Retail Porter
Hefe Weisen R
Seasonal
Sales Organization, Distribution Channel and Division
Chico Creek Brewing Company
3000 3000 5000 4000 5000 8000 9000 1000 2000

US AU Singapore Japan Canada Tap Rm. Catering Bakery Merchandise
03 04 05 04
Wholesale Direct Sale Retail Direct Sale
90 91 92 93 94 60 70 80
Pale Ale Hefe Porter Stout Seasonal Shirts Sweatshirts Hats

Human Resource Structure
HUMAN RESOURCE MANAGEMENT DEPARTMENT
DIRECTOR
Human Resource Manager
ANALYST ANALYST ANALYST

Compensation & Benefits (HRIS) Employment & Recruiting Development
(Payroll, Benefits) (EEOC, AA) (Training, OD, Safety & Health)
PERSONNEL ASSISTANT
(Graphic Reports, Events Planning)
(Actually Assists All Analysts)

Organizational Structure Review
Organizational Structure
2000
US Chico Creek Brewery
Business 93
90
Area Stout
Pale Ale
3000
3000
Purchasing Australia
US #1
Organization
Division/ 90 2000 93 2000

Plant Pale Ale US Stout US
Sales 2000
Organization US
Distribution 03
Channel Wholesale
Division 90 93 R
Pale Ale Stout

Organizational Structure Workshop

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GOAL OF ORGANIZATION STRUCTURE

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

Define the Organizational Elements in SAP based

SAP America, OS.PPT - 10/13/97, Slide 2

SAP America, OS.PPT - 10/13/97, Slide 3

SAP America, OS.PPT - 10/13/97, Slide 4

Finance / Asset Management

SAP America, OS.PPT - 10/13/97, Slide 5

Fore- Sales Oper Manufacturing Order

Financial and Managerial Reporting and Analysis

SAP America, OS.PPT - 10/13/97, Slide 6

Division/ 90 3000 93 3000

Pale Ale Stout

SAP America, OS.PPT - 10/13/97, Slide 7

FINANCIAL FINANCIAL MANAGEMENT

SAP America, OS.PPT - 10/13/97, Slide 8

SAP America, OS.PPT - 10/13/97, Slide 9

Companies for Name of Customer

Company Codes: Identify the proposed company

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

Chico Creek Brewing

North America Australia Japan Singapore Canada

SAP America, OS.PPT - 10/13/97, Slide 11

Operating Chart of Accounts

SAP America, OS.PPT - 10/13/97, Slide 12

Operating Chart of Accounts = General Ledger

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

SAP America, OS.PPT - 10/13/97, Slide 14

SAP America, OS.PPT - 10/13/97, Slide 15

SAP America, OS.PPT - 10/13/97, Slide 16

SAP America, OS.PPT - 10/13/97, Slide 17

Profit Centers for Chico Creek Brewing

SAP America, OS.PPT - 10/13/97, Slide 18

SAP America, OS.PPT - 10/13/97, Slide 19

2000 3000 4000 5000 6000

SAP America, OS.PPT - 10/13/97, Slide 20

CC 2100 CC 2200 CC 3200 CC 4200 CC 5200 CC 6200 CC 2300 CC 3300 CC 4300

CC 2103 CC 2108 CC 2120 CC 2230 CC 3230 CC 4230 CC 5230 CC 6230

CC 2260 CC 3260 CC 4260 CC 5260 CC 6260 CC 5350 CC6350

Taproom (Pub) Merchandise

SAP America, OS.PPT - 10/13/97, Slide 21

Depr. Areas Depr. Depr. Depr.

Pub/ Company Company Company

SAP America, OS.PPT - 10/13/97, Slide 22

SAP America, OS.PPT - 10/13/97, Slide 23

SAP America, OS.PPT - 10/13/97, Slide 24

Orders (CO) Projects (PS)

SAP America, OS.PPT - 10/13/97, Slide 25

Purchasing Organizations and Plants

United States Canada Singapore Japan Australia

Brewing Tap Room Retail

SAP America, OS.PPT - 10/13/97, Slide 26

SAP America, OS.PPT - 10/13/97, Slide 27

SAP America, OS.PPT - 10/13/97, Slide 28

SAP America, OS.PPT - 10/13/97, Slide 29

Links to production (PP), materials management (MM), and

SAP America, OS.PPT - 10/13/97, Slide 30

SAP America, OS.PPT - 10/13/97, Slide 31

SAP America, OS.PPT - 10/13/97, Slide 32

Storage Locations: Brewery and tap room will have two

SAP America, OS.PPT - 10/13/97, Slide 33

SAP America, OS.PPT - 10/13/97, Slide 34

A representation of a selling unit responsible for