Introduction to SAP

SAP stands for Systems, Applications and Products in data Processing and it’s a commercial
ERP (Enterprise Resource Planning) software which integrates all information in a single
software considering various factors like time and cost. SAP is designed to manage resources,
information and activities that are required to complete business processes.
1972 – Systems, Analysis and Program development (SAP-R1) by IBM Engineers.
1979 – Systems, Applications products in Data processing (SAP R2).
1991 – Mainframe computing to client server Architectures (SAP R3)
SAP Related Products : SAPs products focus on ERP (Enterprise Resource Planning)
My SAP.com – SAPs internet strategy (Integration via Internet)
SAP Focus – Process industries, Discrete industries, Consumer industries, Service
industries, Financial services and Public services (6 Industries)
The main product is SAP ERP
SAP has developed more than 300 + products. Some they resell.
SAP Business one for small customers, SAP R3 and SAPECC to SAP Hana.
However, the main range of the prominent SAP software SAP ECC is currently divided into the
products SAP ERP, CRM, PLM, SCM, SRM, SAP ERP core HR, SAP ERP Finance, SAP ERP order to
cash, SAP ERP Plan to product and SAP ERP Procure to pay.
In 2017, SAP released S/4 HANA Cloud. This new software proved ideal for businesses with
1500+ employees. Larger organizations often operate on a two-tiered system. With the cloud-
based version of HANA, corporations can manage a comprehensive full business suite
 Benefits of SAP in Business
•More than 25 industry solution portfolios for large industries and
more than 550 micro vertical solutions for midsize companies and
small business.
CRM (Customer Relationship Management) - Helps companies to acquire or retain customers,
gain marketing & customer insight and align organization on customer focused strategies.
PLM (Product Life Cycle Management) – reduce time to market, improve product quality,
reduce prototyping costs, identify potential sales opportunities and revenue contributions,
maintain and sustain operational serviceability, and helps manufacturers with a single source
of all product related information necessary for collaborating with supply product lines.
SCM (Supply Chain Management) – Helps companies enhance operational flexibility across
global enterprises and provide real time visibility for customers and suppliers.
SRM (Supplier Relationship Management) – Facilitates the procurement of goods via a web-
based platform which can reduce the time span and costing of procurement cycle using
innovative methods to manage business processes with key suppliers.
• Effective data processing and information flow across organizations.
• Manpower reduction due to integration & Keying in data
• Reduced inventory level due to MRP (Material requirement planning)
• Increased sales due to various internal reporting reports.
• Reports for analysis, efficiency etc.,
Various Modules in SAP
 SAP Enterprise
• SAP R3 hints at its functionality.
• R signifies Real-time system 3 represents - 3-tier architecture
• Presentation server Client (SAP GUI)
• Database server,
• Application server
Users can access SAP system through SAP GUI or Web browser. It's
called front-end. Only the front-end is installed in the user's PC not the
application/database servers. Database and Application may exist on
the same or different physical location.
SAP ECC (SAP central component) also known as SAP ERP which is the
first suite of applications for businesses.
Organizations can interchangeably use it with ECC. Both systems – SAP
R/3 and SAP ECC – were only offered as an on-premises solution, i.e. as
an installation on a separate server with clients.
 SAP Landscape
• ASAP – ASAP is a clearly defined implementation strategy that ensures customers a quick &
predictable implementation, regardless of size or complexity of environment.
• Accelerated SAP is SAPs implementation solution for R3 projects.
The components that make up ASAP are
Methodology: The ASAP roadmap define the phases of implementation process & supports these
with a comprehensive project plan.
Tools: Supported by a comprehensive set of both PC-based & R/3-resident tools.
Project knowledge – Project Management, Change Management, Risk Analysis & Review
programs.
The methodology consists of 5 phases
1. Project Preparation: Provides initial planning & preparation for R/3 project
2. Business Blueprint: Detailed documentation of the results gathered during requirements
workshops. On this basis, how the company intends to run their business within the R/3 system.
3.Realization: Implement all the business & process requirements based on business blueprint.
You configure system in 2 work packages, Baseline, & Final configuration.
4. Final preparation: Complete Testing, End user training, system Management, & cutover
activities to finalize your readiness to go live.
5. Go live & Support: Transition from a project-oriented, pre-production environment to
successful & live production operation. Continuous Improvement by providing on-going support
which covers solutions for those Business changes, technology changes, or change in the user
community which are standard in a productive environment & assistance for post go-live.
 SAP Landscape
SAP system landscape is defined as an arrangement of SAP servers. A 3-system landscape
which consists of Development Server (Dev), Quality Assurance server (QAS), and Production
Server (PROD).
Development Server would have multiple clients for ex: 190- Sandbox, 100- Golden, 180- Unit
Test at the initial stages, a sandbox server is used where all the customization, configuration is
performed and whatever is done will not affect other servers. Upon satisfactory configuration
we Redo it in the Golden client which is a neat client and not for rough usage. This is a only
configuration client and no transactions performed. The Golden client is the data base. The
incorrect or unsatisfactory configuration is corrected in Golden and saved. While saving you get
a transport request which we save by giving a description and transport it to Test client.
Quality Assurance Server - have multiple clients for ex: 300- Integration Test, 700 to 710
Training. All changes that are required by the client are performed in the DEV environment and
later, the request is transported to production. Next is to save the configuration in development
server and saved in workbench requests and this has to be transported to Production server.

Production Server
We can consider it as the final or the most refined stage where the work is done when project
is in production/go live. Client - 200
 SAP Implementation
The project normally starts off  with a Kick off meeting in which the team size, team
members, reporting system, responsibilities, duties, methodology, dates and
schedules, working hours which have been pre decided are formally defined.

Functional consultant is expected to generate knowledge about the current business

process, design current business flows, study current business processes and its
complication, in all we can say getting through with current business setup.
Flow diagrams and DFD (data flow diagram) are prepared, most of the time in Vision
format, all this forms the part of AS IS document. Then the DFD/ERD (Entity
relationship diagram) are prepared and this documentation is called TO BE .

Mapping and GAP analysis is done for each module, Integration after mapping, gap
analysis and configuration is done simultaneously.

Everything configured has to be documented in the form of predefined templates,

approved by the team leads or who ever the consultant is reporting to.

Functional consultants also prepare test scripts for testing the configured scenarios.
End user manual and user training is also delivered by Functional Consultants.
 Importance of SAP MM in an organization
The daily activities if we divide we will
observe that
The requirements for any organization is 3Ms :
5-10% are Men related,
10-15 % are Money related and
75-80% will be related to Materials.
Men

Money

Materials

Materials are used either for production or Maintenance. With the ever changing demand and
supply environment and unpredictable supply lead times it is essential to have SAP MM like
software in place which has an efficient materials management system.
 SAP MM ORGANIZATION
COMPANYSTRUCTURE
A company may be
a business, service
organization; It may
consist of one or
more
establishments and
operate at one or COMPANY CODE
several locations.

PLANT

STORAGE
LOCATION
 SAP FI ORGANIZATION STRUCTURE

Chart of depreciation are used in order to manage various legal requirements for the depreciation and
valuation of assets as per country.
Chart of accounts is defined at the client level consists a list of G/L accounts assigned to company
codes used by an organization to book the daily revenue and expense.
Credit control area used to check credit limit for customers. We can assign one credit control area to one
or more company codes.
Business areas are used to distinguish business transactions of an organization at unit/branch level. For
example: A construction company has one company code but it has various projects so each project will
be defined as business area.
 SAP SD ORGANIZATION STRUCTURE

Sales Organization
A Sales organization is used to distribute products and services and can be assigned to a company
code. One or more Plants can be assigned to one or many Sales organizations.
Distribution Channel
A distribution channel can be assigned to a single or many Sales Organizations and can assign a
sales office as per company’s market policy or as per an internal organization.
Division
A division is defined as a product line or grouping of services or material and can be assigned to
one or more sales organization. A product is always assigned to one division and a Sales Office.
 ORGANIZATION STRUCTURE OF WM

SAP Warehouse Management system (WMS) provides flexible, automated support in

processing all goods movements and in managing stocks and efficient processing of all
logistics processes within a warehouse. SAP Extended Warehouse Management (SAP
EWM) came into existance in 2014.
In Inventory management stock of ware house only can be known whereas in WM we
can manage stock s in Storage type and Bins.
 3 types of Data in SAP
Master Data
A data base which contains all the relevant information maintained at client level and useable
to all functional resources and automatically update (Flow) during the actual transactions.

Eg. Material master, Vendor master, Service master, Customer master

Transaction Data

The actual day to day transactions for the business processes of the organization .

Eg. Purchase requisition, Purchase order, Sales order

Customizing Data

The backend configuration of all relevant data to enable business processes.

Eg. Defining and assigning the Organizational elements and the transactional
programming.
 PURCHASE ORGANIZATION AND
PURCHASE GROUP

Purchase Organization is a key element of purchasing wherein the purchasing aspects of Logistics
are handled in an organization. This is assigned to a company code and all its plants normally. A
central purchase Organization however is not assigned to a company code as it is the representative
of all the company codes of a company. Many purchasing organizations like Standard Purchase org,
Reference purchase org and Inter plant or Cross company purchase org etc can be assigned to a
single plant.While creating purchase order we need to specify the purchase org, purchase group,
Plant and company code.

Purchasing group refers to a contact person of a company code to external vendors and
internally refers to the organization as a classification of material purchases. Eg. Raw
material purchase, chemical purchase, machinery purchase etc., Hence purchasing
group is neither assigned to a plant nor to a company code as it represents the entire
company. The person can initiate purchases for both centralised / decentralised
purchases.
 MATERIAL TYPES & FUNCTIONAL RESOURCES

PRODUCTION MAINTENANCE
Spares
• Raw material • Spares • Consumables
• Semi Fin Goods • Consumables • These are used by the
entire organizational
• Finished Goods • These type of materials are
functional depts like HR,
• Packing material mostly the spares like Security, Safety and this
• Scrap Pumps, Valves, Control consumption of materials
• The raw materials are panel, Sensor and will aid in the general
the ones consumables like screws, upkeep of the plant and
nut, bolts, gasket, does not relate to
purchased(Purchase production directly.
dept) issued to lubricants etc.,
Production dept and • This kind of maintenance
processed to get the is taken up by civil, elect,
Finished goods which mech engineeeing depts
are intended for sale for the capital machinery
(Sales dept) assets which are involved
in production process.
 MATERIAL MASTER IN SAP
The material master is the most important and frequently used document in an
organization.

This has 27 views and 240 fields of information about the material of which 46
fields are mandatory.

The number range for material is assigned as per material type and there is a provision of
18 characters either Alpha, Numeric or Alpha numeric.

The material master is created as per industry type and material type and are assigned to
plant and storage locations.

The search engine for the material master is designed to identify the material by Description,
code, material type, Group, plant, Bom etc.,

T Codes : MM01- create, MM02 - Edit and MM03 - display

 MATERIAL MASTER VIEWS & FIELDS
Material in SAP means material code which we can give ourselves or Auto generated which we call Internal or external assignment of
number (Code).
In the first screen, we need to select the industry sector and material type. Then the system displays the below given views which can be again
selected. Then the material need to be assigned to Plant and storage location. After filling the fields by concerned individual departments the
data is saved and system displays the material code.

Basic Data 1: Text, Basic UOM, Material Group, Old Material No., X Plant Material status, Dimensions (weight, volume, size) Packaging material data,
Configuration Management.
Basic Data 2: Basic Material, Design Drawing ( No link indi, Doc, Doc type, page), CAD indicator

Classification: Class, std. Class indicator, status of class, characteristics & value

Sales : This will not come when we select the material type as raw material as it is meant for purchase only and not sale.
Purchasing : Basic UOM, Order Unit, P Group, M Group, Plant specific Material status, Purchase Value Key, Auto PO indicator,Batch Management
indicator, GR processing time, Quota arrangement usage, JIT schedule indicator
Purchase Order text : Text

MRP1 : MRP group, MRP type, ABC indicator, Reorder point, MRP controller, Lot size, Min/Max lot size,

MRP2 : ProcType, Quota arrangement usage, JIT del. Schedule, GR processing time, Planned delivery time, Schedule Margin key, Safety stock

MRP3 : Forecasting ( Period indi., Fiscal year variant), Planning data (strategy group, planning material, planning plant)Availability check,

MRP4 : Storage location MRP, BOM explosion, Repetitive manufacturing

Quality Management : Post to inspection, Master Inspection characteristics

Plant/sloc1 : Unit of issue, storage bin, batch management indi., shelf life data.

Plant/sloc2 : weight\volume

Accounting1: Valuation Category, Valuation class, Price control, Price unit, Previous period/year button, std cost estimate button

Accounting2: Tax data, LIFO indicator

Costing 1, 2 : Costing with or without quantity structure, previous,current and future costing etc.,
 VENDOR MASTER
All purchasing of materials or services happen from Vendors. All commercial
data relating to a particular vendor is captured in a Vendor master.
The initial screen asks for the Company code, purchase organization and account group for
the vendor. Also the vendor types are standard vendor, consignment vendor, service vendor,
sub contracting vendor.
The vendor master has 3 types of data namely :
1. Communication data
The title whether it is individual, private limited r Limited, Address, Phone, mail details of
vendor.
2. Purchasing Data
The order quantities, price, tax and other conditions for supply, terms of payment, currency,
minimum order value, International commercial terms.
3. Accounting Data
Whether the vendor is also a customer, Bank details, payment mode, Reconcillation account,
payment block, partner functions like material vendor, indicators for PO Invoicing party, goods
supplier, alternative payee
For a one time activity or rarely used vendor or material purchase a one time vendor is used and
system will permit process with minimum information.
T Codes : XK01– Create, XK02 – Edit, XK03 - Display
 SERVICE MASTER & PURCHASE
 The Service master contains the record of service activities which
are purchased like Audit service, Repair and maintenance service,
man power supply, vehicle service, loading service etc.,
 The Co. Code, Plant, Pur Org, Pur GP, Service category, activity
code, description, UOM, group of the service etc., are filled up
and the code thus created can be used for purchasing of the
subject service through regular purchase order with rates, tax and
other conditions.
 The completed activities are received through a service entry
sheet referring the PO.
 The bill passing activity is done through Logistics invoice
verification as done for material Purchase orders.

 T Codes : AC01, AC03 to create, edit & display.