Business Process Overview
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.
Unit Topics
This unit consists of the following main topics:
Business Processes
SAP R/3 Functionality
Business Processes and SAP R/3 Functionality
There are four main business processes in most businesses:
Manufacturing Planning and Execution
Procurement
Customer Order Management
Financial/Management Accounting and Reporting
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.
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:
•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)
•Logistics Information System (LIS)
•Product costing
•Capacity Requirements Planning (CRP)
•Bills of Material (BOM)
•Routing
•Work centers
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:
•Master Production Scheduling (MPS)
•Materials Requirements Planning (MRP)
•Planned Order Processing
•Production Order
•Goods Issue
•Production Order Receipt
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:
•Reorder point planning
•Requisitions
•Source determination
•Request for quotation processing
•Contracts/scheduling agreements (Blanket PO)
•Purchasing
•Receiving
•Inventory update
•Invoice verification
•Payment
•Purchasing Information System (PurchIS)
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:
•Purchasing requisition
•Purchase order processing
•Goods receipt
•Invoice receipt/verification
•Payment
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:
•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)
•Sales Information System (SIS)
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:
•Sales order processing
•Customer delivery
•Customer billing
•Customer payment
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:
•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
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:
•General ledger accounting
•Legal and management reporting
?SAP AGSAP20 SAP R/3 Overview (Internation5-1