Download Business Process Overview Unit Purpose The purpose of this unit is

Business Process Overview
5. Business Process: Overview
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 SAP AG
Unit Purpose
The purpose of this unit is to expand on the introduction of the SAP R/3 System by explaining
how it supports business processes.
?SAP AG
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Business Process Overview
Unit 5 Topics
Business Process Overview
 Business Processes
 SAP R/3 Functionality
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 SAP AG
Unit Topics
This unit consists of the following main topics:
?SAP AG

Business Processes

SAP R/3 Functionality
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Business Process Overview
Business Processes and SAP R/3 Functionality
Manufacturing
Planning & Execution
Procurement
Customer Order
Management
Financial/Management
Accounting & Reporting
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 SAP AG
Business Processes and SAP R/3 Functionality
There are four main business processes in most businesses:
?SAP AG

Manufacturing Planning and Execution

Procurement

Customer Order Management

Financial/Management Accounting and Reporting
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Business Process Overview
Business Processes and SAP R/3 Functionality
SOP: Sales Operation Planning (Forecast)
MPS: Master Production Scheduling
MPS uses sales information (forecast and actual) to generate production plans.
Production plans specify “We need X amount of Y by date T1.”
MRP: Material Requirement Planning
MRP uses sales plan and production plan to generate raw material requirements.
(“Z amount of material W is needed by date T2.”)
Planned Order: Production requests forecast.
Production Order: Actual production requests
The complete integration of the SAP R/3 System makes it possible to represent business
processes in the system irrespective of the application.
Industrial enterprises focus on value-added chains that may affect the logistic process chains
Sales, Manufacturing and Purchasing/Procurement.
The figure shows that planning, controlling, reporting and information management is possible
along the logistic value-added chains. Controlling can be executed for different business
functions such as Procurement, Manufacturing, Sales, etc.
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Business Process Overview
?SAP AG
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Business Process Overview
Business Processes and SAP R/3 Functionality
Manufacturing
Planning &
Execution
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 SAP AG
Business Process and SAP R/3 Functionality
Manufacturing Planning and Execution Process

Manufacturing Planning and Execution refers to the process of recognizing demand, netting
requirements, planning for the production and/or procurement of materials, and capacity to
satisfy the demand.

The SAP R/3 application modules that support this process are:

?SAP AG
•
Materials Management (MM)
•
Financial Accounting (FI)
•
Sales and Distribution (SD)
•
Production Planning (PP)
•
Controlling (CO)
•
Human resources (HR)
Its functionality includes the following:
•
Sales and Operations Planning (SOP)
•
Master Production Scheduling (MPS)
•
Material Requirements Planning (MRP)
•
Shop floor control
•
Production Order (Execution, Management, Processing)
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Business Process Overview
?SAP AG
•
Logistics Information System (LIS)
•
Product costing
•
Capacity Requirements Planning (CRP)
•
Bills of Material (BOM)
•
Routing
•
Work centers
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Business Process Overview
Business Process: Overview
Manufacturing
ForeForecast
cast
Sales
SalesOper.
Oper.
Planning
Planning
MPS
MPS
MRP
MRP
Manufacturing:
Manufacturing:
Execution
Execution
Order
Order
Settlement
Settlement
Inventory
Inventory
Capacity
Capacity
Costing
Costing
Planning,
Planning,Reporting
Reporting and
andAnalysis
Analysis
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 SAP AG
Business Process Overview
Manufacturing Planning and Execution

The Manufacturing Planning and Execution process encompasses the forecasting of demand;
the closed loop planning phase; and the control of the production activities through inventory
valuation, order settlement, and product costing.

For our scenario in the following unit, the major functions that are related to this process are:
?SAP AG
•
Master Production Scheduling (MPS)
•
Materials Requirements Planning (MRP)
•
Planned Order Processing
•
Production Order
•
Goods Issue
•
Production Order Receipt
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Business Process Overview
Business Processes and SAP R/3 Functionality
Procurement Process


Procurement refers to the process of requisitioning, vendor sourcing, purchasing, receiving, and
paying for materials and services to be used throughout the organization.

The SAP R/3 application modules that support this process are:
•
Materials Management (MM)
•
Financial Accounting (FI)
•
Production Planning (PP)
•
Controlling (CO)
•
Plant Maintenance (PM)
Its functionality includes the following:
?SAP AG
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Reorder point planning
•
Requisitions
•
Source determination
•
Request for quotation processing
•
Contracts/scheduling agreements (Blanket PO)
•
Purchasing
•
Receiving
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Business Process Overview
?SAP AG
•
Inventory update
•
Invoice verification
•
Payment
•
Purchasing Information System (PurchIS)
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Business Process Overview
Business Process Overview
Procurement
Requirement
Requirement
for
forGoods/
Goods/
Services
Services
Purchase
Purchase
Order
Order
Goods
Goods
Receipt
Receipt
Invoice
Invoice
Verification
Verification
Vendor
Vendor
Payment
Payment
Planning,
Planning,Reporting
Reportingand
andAnalysis
Analysis
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 SAP AG
Business Process Overview
Procurement

The Procurement process encompasses the purchasing of goods and services from recognition
of the requirement through final vendor payment for the goods or services received.

For our scenario in the following unit, the five major functions that are related to this process
are:
?SAP AG
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Purchasing requisition
•
Purchase order processing
•
Goods receipt
•
Invoice receipt/verification
•
Payment
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Business Process Overview
Business Processes and SAP R/3 Functionality
Customer Order Management Process

Customer order management refers to the process of taking orders, checking availability,
delivering goods, invoicing customers, and receiving payment.

The SAP R/3 application modules that support this process are:

?SAP AG
•
Sales and Distribution (SD)
•
Financial Accounting (FI)
•
Materials Management (MM)
•
Production Planning (PP)
•
Controlling (CO)
Its functionality includes the following:
•
Pre-sales activity
•
Sales order processing
•
Inventory sourcing
•
Delivery
•
Billing
•
Customer payment
•
Customer support (question resolution)
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Business Process Overview
•
?SAP AG
Sales Information System (SIS)
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Business Process Overview
Business Process Overview
Customer Order
Management
Pre-Sales
Pre-Sales
Activities
Activities
Sales
Sales Order
Order
Processing
Processing
Inventory
Inventory
Sourcing
Sourcing
Delivery
Delivery
Billing
Billing
Customer
Customer
Payment
Payment
Planning,
Planning,Reporting
Reporting and
andAnalysis
Analysis
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 SAP AG
Business Process Overview
Pre-Sales Activities: Request for quotes
Inventory Sourcing: Decide to produce or purchase what customer needs.
Customer Order Management

The Customer Order Management process encompasses order handling from the first customer
contact in marketing through receiving final payment for goods and services delivered.

For our scenario in the following unit, the four major functions that are related to this process
are:
?SAP AG
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Sales order processing
•
Customer delivery
•
Customer billing
•
Customer payment
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Business Process Overview
Business Processes and SAP R/3 Functionality
Financial/Management
Accounting & Reporting
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 SAP AG
Business Processes and SAP R/3 Functionality
Financial/Management Accounting and Reporting Process

Financial/Management Accounting and Reporting refers to the process of planning, recording,
and monitoring business events by report and analysis.

The SAP R/3 application modules that support this process are:

?SAP AG
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Financial Accounting (FI)
•
Controlling (CO)
Its functionality includes the following components:
•
General ledger
•
Special purpose ledger
•
Cost center accounting
•
Profit center accounting
•
Profitability analysis
•
Internal order accounting
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Business Process Overview
Business Process Overview
Overview
Reporting & Analysis
Financial/Management
Accounting & Reporting
Structure
&
Organization
Daily
Activities
Period.
Processing
Planning & Forecasting
BUSINESS PROCESS
FOUNDATION
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 SAP AG
Business Process Overview
Period Processing is conducted at the end of each month, and at the end of a year.
Financial/Management Accounting and Reporting

The Financial/Management Accounting and Reporting process encompasses the planning,
recording, and monitoring of business events.

Each of the three previous business processes have links to the Financial/Management
Accounting and Reporting process.

The major functions related to this process for our scenario in the following unit are:
?SAP AG
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General ledger accounting
•
Legal and management reporting
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Business Process Overview
Discussion
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 SAP AG
?SAP AG
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