Project Report

FINAL PROJECT REPORT

“SALES AND BILING SYSTEMS” IN SAP

(PRODUCTION PLANNING)

SUBMITTED TO: SUBMITTED BY:

ICAII NAME : HARJINDER SINGHLC CODE:01687 ROLL NO : 520841039COURSE : MBA( PM )(SIKKIM MANIPAL UNIVERSITY)

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TABLE OF CONTENTS

1. Preface2. Acknowledgment

3. Declaration

4. Abstract

5. Company profile

6. 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 SAP8. Introduction to PP Module 8.1 What is PP? 8.2 Enterprise Structure 8.3 Customization9. Define plant10. Define company code11. Define MRP Controller12.Production Planning13.Bibliography

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PREFACE

I am the student of Sikkim manipal university, Ludhiana studying in 4th

semester. As a part of 2-year MBA course, I have undergone a project as a

Major project Work on “Introduction to SAP PP Module & SALES AND

BILLING 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 BILLING

SYSTEM . This report provides the knowledge regarding the technology

used in the project.

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ACKNOWLEDGEMENT

To matter what accomplishment we achieve somebody

helps us. For every accomplishment we need the

cooperation and help of others. As knowledge advances by

steps not by leaps so, ability advances by encouragement

and guidance.

First of all would like to thank ICMHRD for providing an

opportunity to create this project. Then I would like to

thank OSWAL GROUP Ltd, Ludhiana 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 Mr. SIDDHARTH

SHARMA (PP Consultant) 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”.

HARJINDER SINGH Sikkim Manipal university

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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 sikkim manipal university, submitted to the Institute is authentic record of our own work carried out at the end of third semester Ludhiana, has been approved by the project in charge after an oral examination on the same, in collaboration with an Head of I.T Department .

HARJINDER SINGH Above statements by the candidate are true to the best of our knowledge.

Signature Signature

(Head of I.T Department) (Advisor)

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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 -90’s 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

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of the transaction Data. After this, the enterprise would be ready to run SD

Module in SAP.

Systems DEPARTMENTS

I am undergoing training in the Systems Department, which is well equipped with

the latest software technologies. There are around 250 workstations. The 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

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Mr. Sunish Gupta ABAP Consultant

Mr. Adhish Prabhakar ABAP Consultant

Mr. Siddharth Sharma pp

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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.

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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.

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ERP had its origins in manufacturing and production planning . In the mid -90’s 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 planning—it doesn't do much of that—and 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.

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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.

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Human Resources

o Payroll

o Organization

o Hiring

Treasury

o Commitments

o Investments o Currencies

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2.2 EXPLORING ERP’S BENEFITS

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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

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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

ERP’s are often seen as too rigid and too difficult to adapt to the specific

workflow and business process of some companies—this 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.

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

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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 organization’s supply chain.

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

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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

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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.

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The following diagram depicts the whole scenario -

Fig 6:- Software layers of R/3 system

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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.

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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

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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

department’s 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.

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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 manager’s 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

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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.

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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

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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.

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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

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INTRODUCTION TO

(PRODUCTION

PLANNING)

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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

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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.

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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 :-

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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 company’s 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.

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4.2 FLOW CHART OF ENTERPRISE STRUCTURE

Sales area

Fig10:-Flow chart of Enterprise Structure

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SL 1 SL 2

SALES ORGANIZATION

COMPANY

COMPANY CODE 1 COMPANY CODE 2

COMPANY CODE 3

PLANT 1 PLANT 2

PLANT 1 PLANT 2 PLANT3

SL 2

CONTROLLING AREA

PURCHASING

ORGANIZATION

DISTRIBUTION CHANNEL

DIVISION

PLANT

MAINTENANCE

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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

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USER AUTHENTICATION CHECK

Fields entered are:-

1. User name

2. Password

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SAP WELCOME SCREEN

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

navigation area.

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ENTERPRISE STRUCTURE

TRANSACTION CODE – SPRO INITIAL SCREEN

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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

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Details of Added Entries

Fields Entered are:-

Company:- 4444

Company name:- G & G Enterprises

Country:- IN (India)

Language Key:- EN (English)

Currency:- INR (Indian Rupee)

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Prompt for Creation of Request

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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.

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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

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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 AccountingEdit,

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

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Details Of Added Entries

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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.

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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

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Details of added Entries


City Code:- 0001

Factory calendar:- 01

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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)

After making required entries, click on save a request code is generated and our plant is

added in the list of existing company codes.

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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.

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Maintenance of Number Range

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Maintenance of MRP Controller

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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.

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Maintenance of Floats

It specify extra time to be allowed for ProductionFields Entered:-

1. Schedule Margin Key:-000

2. Opening Period:-003

3. Float Before Period:-003

4. Float After Production:-005

5. Release Period:-010

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Maintenance Of 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.

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Maintenance of BOM/Routing Selection

Fields Entered:-

Plant:- 4447

BOM select Id:- 01

Routing select Id:- 01

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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

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After maintaining all Parameters

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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

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Storage Location No. :- SL1

Description:- Storage Location

After making required entries, click on save a request code is generated and our Storage

Location is added in the list of existing Storage locations.

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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

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Fields Entered are :-

Purchasing Organization:- 4445 & 4446

Purchasing Organization Description:- Product Purchasing

After making required entries, click on save a request code is generated and our

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

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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

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After making required entries, click on save a request code is generated and our Sales

Organization is added in the list of existing Sales Organizations.

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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

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Distribution Channel:- 42 & 43

Description:- Product Distribution & For Billing


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

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DEFINE DIVISION

Division: - Division is the way of grouping materials, products or services. This

represents company’s product line like nature of material. It tells about spectrum of cts.

Menu Path:- Logistic Material Master Settings for keyfields Define Divsion


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Division:- D0 & D2

Description:- Product & Electricity


Distribution Channels is added in the list of existing Distribution Channels

DEFINE CONTROLLING AREA

69

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


70


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

71

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

72

Now your Company Code has been assigned to your Company.

Assignment of Controlling Area to Company

73

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.


74

Final Screen

75

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

76

Assignment of Plant to Company Code

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

Plant to Controlling Area

77

Company Code 4445 get selected

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

78

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

79

80

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.

81

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.

82

Final Screen

83

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

84

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

85

Assignment of Sales Organization to Company Code

86

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.

87

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

88

4.4 PRODUCTION PLANNING MODULE

89

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

90

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

91

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

92

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

93

Material master is a file which contains information of a particular material depending

upon the views selected from the user department

Transaction Code-MM01

94

CREATE MATERIAL – INITIAL SCREEN

Fields Entered Are:-

1. Industry Sector- M (Mechanical engineering)

2. Material Type- FERT (Finished product)

Hit enter

95

SELECT VIEW SCREEN

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

96

Organizational Level

Fields Entered:-

Plant:- 4447

Storage Location:- SL1

97

Basic Data 1

Fields Entered:-

Material Description:-Fan

Base Unit of Measure:-pc

Material Group:-00120

98

Base Data 2

99

Purchasing Screen

Fields Entered:-

Purchasing Group :- 000

100

MRP 1 Screen

Fields Entered:-

MRP Type:- PD( Planned)

MRP Controller:- 111

Lot Size:- EX(lot for lot Order Quantity)

101

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

102

MRP 3 Screen

Fields Entered:-

Period Indicator:- M

Strategy Group:- 10

Availability Check:- 01

103

MRP 4 Screen

104

Work Scheduling

Fields Entered:-

Production Scheduler:- 420

Production Scheduler Profile:- 111111

105

Accounting 1 Screen

Fields Entered:-

Valuation Class:- 7920

Price Control:- S(Standard Price)

Standard Price:- 100

106

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.

107

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.

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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.

109

Customizing of BOM

Menu Path:- SPRO Logistics- General Material Master Basic Settings

Material Types Define Attributes of Material Types

110

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)

111

CREATE BOM – INITIAL SCREEN


Plant :- 4447

BOM Usage :- 1

Hit enter

112

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.

113

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

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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

115

Customizing of Work Center

116

Screen for Creating of Work Center

Transaction Code:- CR01

Menu Path:- Logistics Production Master Data Work Centers

WorkCenter CR01(Create)

117

CREATE WORK CENTER – INITIAL SCREEN


Work Center:- 1555

Work Center Category:- 0001

Hit enter

118

Basic Data


Person Responsible:- 777

Usage:- 009

119

Default Value


Control Key:- PP01

Setup:- MIN (Minute)

Machine:- MIN (Minute)

Labor:- MIN (Minute)

Hit Enter

120

Capacities


Setup Formula:- SAPR05

Processing Formula:- SAPR06

Teardown Formula:- SAPR03

Hit Enter

121

Scheduling


Capacity Category:- 001

Setup Formula:- SAP001

Processing Formula:- SAP002

Teardown Formula:- SAP007

Hit Enter

122

Costing


Cost Center:- 4220

Activity Type:- 4221, 4220, 4223

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

123

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

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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

125

Screen For Creating Routing

Transaction Code:- CA01

Menu Path :- Logistics Production Master Data Routing Routings

Standard Routing CA01(Create)

126

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.

127

Assigning of Work Centers


Work Centers:- 1555, 1556

Standard Key :- 46, 47

Hit Enter then save your Routing will be saved.

128

4.5 FLOW OF PP

For Discrete Manufacturing

129

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

130

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

131

MRP Procedures:-

Whether and how material is planned.

-MRP—PD--- 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

132

Customizing of MRP

133

Stock Requirement List

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

MRP.

134

MRP Screen

135

Planned Order

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

Production Order.

136

Stock Requirement List

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

137

Customizing of Production Parameters

Menu Path:- Production Shop floor control Master Data Order Define

Order Type Dependent Parameter

138

Production Order

Production Order:- These are used in Discrete Manufacturing scenario where product

Stability is less it is basically the order given by MRP Controller to the Shop floor people

to start production.

139

Customizing of Release Production Order

Menu Path:- Production Shop Floor Control Operation Avail Check

Define Checking Control

140

Production Order after Release

141

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

142

Customizing of Confirmation Parameter

Menu Path:- Production Shop Floor Control Master Data Operations

Confirmation Define Confirmation Parameters

143

Stock before Confirmation

144

Time Ticket Confirmation

145

After Confirmation Production Order

Here we can check the status of Production Order.

GMPS:- Goods Moment Posted.

It means final Confirmation has been done.

146

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

147


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.

148

Customizing of Goods Receipt

Menu Path:- Material Management Inventory Management Plant parameters

149

Goods Receipt

150

Stock after Confirmation

151

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.

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6. Appendix

Account

assignment

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.

Base unit 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

BOM explosion

date

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.

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

153

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.

External

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.

Floats after

production

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

production.

Floats before

production

Number of workdays allocated to this order as float before

production.

Goods Issue

(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.

Goods

movement:

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)

Goods Receipt

(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

GUI 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

154

IDES 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 a material master record. Once you have assigned an

industry sector to a 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.

155

Material

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

Moving average

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.

Movement

Type: -

- 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.

MRP controller. 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

156

planning, for firming procurement proposals and so on.

Number

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

Procurement

type

Classification determining whether a material is produced in-house,

procured externally, or both.

Purchase

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.

Purchasing

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

157

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.

Purchasing

procurement

time

Time that purchasing department requires to convert a purchase

requisition into a purchase order

Purchasing

value key

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.

Reconciliation

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 developments

in 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

158

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

Scheduling

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

Special

procurement

type

An indicator in the material master record that defines external

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

Stock Transfer

(ST):

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

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3. Blocked stock

4. Warehouse stock

Transfer Posting

(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

AREA

THE VALUATION AREA SETTING IS USED TO CALCULATE TOTAL

STOCK VALUE.

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

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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

CodeDescription

/n + Transaction code End current system task and go to new system task

/o + Transaction codeCreate a new session and go to new system task without closing

prior session

/o List open sessions

/i or /nend Log off

BIBLIOGRAPHY

BOOKS:-

161

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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http://www.help.sap.com/

http://www.sapgenei.com/

http://www.sap-img.com/

http://www.sapzone.com/

http://www.sapinfo.com/

http://www.sap.com/

Documents

Project Report