Business Process Workshop
Transcript of Business Process Workshop
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SAP America, OS.PPT - 10/13/97, Slide 1
GOAL OF BUSINESS PROCESS WORKSHOP
Identify all of the business processes, at a high-level
Define the type of data (in a high-level) that will be maintained in the processes.
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AGENDA High Level Business Process Overview
Business Process
Project System
Production Planning
Financial Accounting
Controlling
Asset Management/Investment Management
Materials Management
Sales and Distribution
Human Resources
Define the Business Processes and data in SAP based on the Chico Creek Brewery’s Organizational Structure
Document the Company’s SAP Business Processes
Definition of Business ProcessesDefinition of Business Processes
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Project System - Business Processes Creating a project
Developing a project
Executing a project
Analyzing a project
Closing a project
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Project System - Components Project Definition – Stores master data for the entire project,
including overall start and end dates, project owner, project number, and description.
Work Breakdown Structure (WBS) – The hierarchy that the WBS elements are organized into. Breaks down processes into the smallest components or tasks.
WBS elements – The building blocks of the project. They represent different phases or parts of the project. Each WBS element is a cost object. All project costs are posted to WBS elements.
Network (optional) – The activities are linked together to create the network in the form of a PERT chart. SAP can determine the critical path from this.
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Project System - Features Cost Planning (via the WBS)
Date Planning and Scheduling
Link to Purchasing (Purchases made show up immediately as project costs)
On-line Reporting
Financial Control
Graphic Displays (Network, WBS, Gantt Charts)
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PP-Continuous Process Continuous Process Scenario overview:
manages the planning, execution, and control activities for our process-oriented manufacturing of beer.
4 Basic Steps that encompass our brewing process……..
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Step 1 of Continuous Process Begins with the Sales and Operation Planning
forecasting tool, ie. used to helps decide specific number of batches of each type of beer that should be made
Long-term production plan and Master Schedule are produced using SOP information
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Step 2 of Continuous Process The master flow is computed using the MRP and
capacity leveling.
Capacity leveling: is determined in step 1 and balances the master schedule and plant capacity
Material Requirements are passed to the procurement process
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Step 3 - Continuous Process The process order is created and manages the actual
production of the beer
process order transforms materials and processes used with the master recipe into actual information that is needed to brew the batches of beer
contains master recipe data and workflow instruction
master recipe: description of materials needed in one production run (grain, purified water, hops, fermented sugar, barley malt)
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Step 4 - Continuous Process
Actual production which is the completed scenario flow
Material is received, the resources are used, and the process order is completed and closed out
resources: production personnel needed for production (maintenance workers, forklift drivers, line workers, warehouse personnel)
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ExternalAccounting
Vendor Processing
OTAVendor
Processing
SpecialPurpose Ledgers
Processing
Consolidation CustomerProcessing
General Ledger
Processing
CreditSubsidiariesHead Office
Process
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General Ledger Processing Generates closing reports as required by law
Structure:
company code (CO)
business area (not applicable for the CCBC)
chart of accounts (each module will give input)
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General Ledger Processing Integrated with:
procurement (MM)
assets accounting (AM/IM)
controlling (CO)
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Vendor Invoice Processing Connects Purchasing to Accounting
Master Record consists of 3 parts
general data (addr, telephone, etc.)
company code data (payment terms, methods)
purchasing organization data (p.o., quotes)
most of this information comes from MM and is posted to G/L
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Vendor Invoice Processing Posted to one of two accounts:
current assets account
fixed assets account (will go to AM)
also posted to G/L
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Customer Processing Mgmt of transactions for standard customers
Credit Management (Sales)
closely linked to CO & cash forecasting
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Customer Processing Customer Master Record consists of 3 parts:
general data (addr, telephone, etc)
company code (form of payment, due dates)
sales data (shipping, invoicing, etc.
this info is mostly from the sales team
all the transactions are posted to the G/L
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Customer Processing Dunning procedures remind customer that the payment
is overdue
Info needed from SD:
level (# of days overdue)
text (strength of language)
vendor dunning
optional interest & charges
print-out of payment (due deadline)
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Functional Areas - COChico Creek Brewing Company
• Conventional cost center accounting typically structures costs by using the company’s organizational structure and areas of responsibility (e.g. functions). This shows where costs accrue in the company, but it does not specify what resources were used how.
Company
Personnel R & D Marketing Production
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Process-Oriented Structure
Functional Areas:
• SAP uses a process-oriented view that considers costs on the basis of process organization across functions. Costs are debited to a business process based on its resource usage.
• The business planning and controlling scenarios in R/3 provide conventional cost center accounting capabilities but supplement these by allocating cost center costs to business processes.
Personnel R & D Marketing Production
Business Processes:
Order Process
Product develop.
Customer service
FI Accounting
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Business Scenarios - COChico Creek Brewing Company
Business Planningand Controlling
CO Module
1. Cost Object Controlling
3. Profit CenterAccounting
4. OH Cost Management
2. Profitability Analysis
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1. Cost Object Controlling
• Cost object controlling is a part of product cost accounting that focuses on the economical creation of a product (called cost object).
• It supplies key information for planning and monitoring of product costs.
• Product cost controlling attributes the costs incurred in a company to its output units. (products, orders)
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2. Profitability Analysis
• Profitability analysis carries out a profit analysis. Costs are compared to revenues. This is the last step in the settlement process. • Profitability analysis takes an external viewpoint using actual data, by looking at market segments.
• We propose that CCBC’s profitability segments are based on product line. (Type of beer, pub, merchandise) Other options could be customers, activity, organization, geographical area, etc.
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3. Profit Center Accounting
• The goal here is to have a structure according to profit responsibility. • Profit centers can be seen as investment centers. • Shows operating results from a management standpoint. • It is a statistical package, pulling data from different modules. • Data is primarily transferred from FI, SD, AM, and MM.• Profit centers can be structured according to products, markets, or functions. We have chosen products.
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FI: Transfer of primary costs and revenues from customer invoice processingSD: Transfer of revenues and sales deductions (freight, discounts) as well as reserves (e.g. from rebate agreements) via invoice transfer.MM: Transfer of all costs from goods movements (consumption postings, materials receipt, invoice receipt, price changes/revaluation, inventory differences)AM: Availability of all profit-related data from the creation, utilization, and sale of capital goods
3. Profit Center Accounting, cont’d
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3. Profit Center Accounting, cont’d
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4. Overhead Cost Management
Overhead cost management plans, allocates, controls, and monitors indirect costs. All indirect costs are charged to the cost centers where they were incurred or to the jobs that led to their occurrence.
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CAPITAL ASSET
MANAGEMENT
Fixed AssetProcessing
Leased AssetProcessing
Planned Plant
Maintenance
PlantMaintenance
due to damage
Project-related plantmaintenance
Budgeting
CashManagement
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Fixed Asset Processing
Asset master record maintenance:
Create
Change
Retire
Settle AuC
Post Capitalization
Transfer Posting
Write-Up
Creation/Transfer of Reserves
Reports
Inventory
Year-End Closing
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AM - Depreciation Planned depreciation is calculated automatically
Can be recalculated or changed manually
Calculated in multiple depreciation areas (parallel valuation technique)
Depreciation values are transferred as planned and actual costs are allocated to cost centers (CO)
Depreciation simulation and forecasting available for individual asset or group of assets.
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Asset Master Record Data Elements of an Asset Master Record
Historical cost
Salvage value
Life
Insurance information
Cost center
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INVESTMENT MANAGEMENT SCENARIO Budget
Approval
BudgetDistribution
Measures
ReportingProgramStructure
ProjectPlanning
Roll-UpCorporatePlanning
Settlement & Capitalization
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IM - AuC to Asset
Capital Order(greater than
30 days)
Create AuC-Automaticallycreated wheninvestment
profile is enteredand order is
released
Settlement-Settles to
AuC
AuCDepreciation forecast
and simulationinterest calculation.
ASSET
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Treasury - TR
Cash Management (TR-CM)
Handle all cash related transactions and reporting activities.
Distinguishes between actual money and payments in transit
Integrated with G/L, A/R, and A/P systems and sales and procurement.
Funds Management (TR-FM)
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TR-CM
G/L
A/R A/P
RecurringEntries
•The basic elements needed for managing cash:•Where is our cash?
•What will we receive?
•What will we pay?
•What other predictable transactions will occur?
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Funds Management (Budgeting)
Functions:
Prepare budget
Monitor budget by tracking the achievement to targets in each of the budgets divisions
To perform these functions the following must be estimated:
Cash requirements for operations
Cash requirements for CI projects
Planned cash receipts
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Materials Management Processing Stock Material
Materials Requirement Planning
Reservation processing
reserve material
plan goods issue
Single item MRP
Entire MRP
Effects SD, QM, PP, FI
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Materials ManagementProcessing Stock Material
Requisition Processing to Stock Material
Requirement for material --> Purchase Requisition
Source of supply
Without a source of supply
Input Examples
Material
Purchasing Information
Purchasing Outline Agreement
Vendor
Effects SD, PP, QM
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Materials ManagementProcessing Stock MaterialProcessing of RFQ Issued to Vendor
- Communicates material/service requirements to potential suppliers - Input Examples
• Material • Purchasing Information • Vendor • Supply Source • Time • Effects SD, QM, PP, CO
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Materials ManagementProcessing Stock Material
Vendor Quotation Processing
- Occurs after vendors respond to quotation request- After Vendor information is submitted into system, price comparison is possible- A rejection notice is transferred if quotation is unselected
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Materials ManagementProcessing Stock MaterialPurchase Order Processing for Stock Material
- Vendor quotation processing and vendor RFQ processing trigger this step
- Input Examples Purchase Requisition Material
Internal Order Customer OrderCost Center
- A Purchase Order includes detailed data such as: type of material, quantity, delivery date and price
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Materials ManagementProcessing Stock MaterialProcessing Goods Receipt
- Begins with the arrival of materials and shipping notification
- Material is checked and storage is determined
- If order is accepted we adjust purchase order dates and select
a valuation type
-Effects FI, PP
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Sales and Distribution
Business Process Workflow
Scenario: Standard Order Handling
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Master Data
Business Partners
Customer
Vendor (Internal i.e. MM)
Beer for tap room, souvenirs
Employee in Company (salesperson)
Product Proposal
Grouping of items to make available for sale (I.e. By a pallet of Pale Ale)
If customer frequently purchases from a product proposal, this information can be assigned in Customer’s Master Data
Master Data for SD
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Product
Price
Documents (for shipping, billing, sales)
Sales support
Organizational Structure (shipping points, sales areas,etc.)
Master Data continued
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Pat’s Bar in Calgary Pat calls CCBC to inquire about products
Wants to buy two kegs of Pale Ale and one keg of Hefeweisen to be delivered weekly.
Sales Representative gets Pat’s company name, address, etc. to store in sales support master data. Also determines the distribution channel for his company for correct quotation.
Accesses inquiry processing to determine correct prices, a quotation process document is created and sent.
Pat agrees to the quotation. Next, standard order processing occurs with reference to the quotation.
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Billing Process Product is determined to be in-stock
A credit check occurs and passes resulting in Pat’s order being released
Delivery processing occurs in which is it determined that the delivery is relevant for billing and for shipping.
Billing
Process determines that the purchase is not relevant for a rebate
Billing document is sent
Export papers are created and sent
Billing document is not released for billing because:
Order confirmation is necessary to release billing document
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Shipping Process
Transportation planning occurs
Shipment route is determined (stored in Master Data for future reference)
From Chico Center to Chico train depot via truck
From Chico to Calgary via rail
From Calgary train depot to Calgary distribution center via truck
From distribution center to customer (Pat’s Bar is within 100 mile radius)
Transportation processing occurs
Shipping notification is generated and sent to customer
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Delivery of Goods Quality is checked (by PP, referenced by SD)
Order is sent to MM
Goods issue is posted
Truck is loaded from plant site and sent
Upon delivery to Pat’s Bar, it is determined that one keg of Pale Ale is damaged.
Pat signs invoice for acceptance of the one keg of Pale Ale and one keg of Hefeweisen.
To accommodate for damaged goods, CCBC will:
a) Offer to send Pat’s Bar a keg through a rush order with no extra cost. Delivery will be rushed
b) Offer to give Pat’s Bar a credit.
Signed invoice is given to FI for processing
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Packaging Returns Empty kegs picked up from Pat’s Bar upon next
delivery
Returnable packing pick-up process occurs
Shipping papers are created
Empty kegs loaded onto trailers
Trailers loaded onto train to be sent back to Chico center
MM processes goods receipt
Goods receipt is posted
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Conclusion Pat’s Bar is now CCBC’s business partner, thus is
located in our Master Data
CCBC can now call him as part of our sales activities or he can call on us.
If Pat’s Bar becomes a frequent customer, CCBC can assign material listing or product proposal to his account making transactions faster.
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Inquiry
Quotation
ReturnsStandard Sales
OrderDelivery Free
Of ChargeSchedulingAgreement
Sales
Delivery TransportShipping
Debit Memo Invoice Credit Memo
Financial Accounting
Materials
Mgmt
Billing
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Organizational Management Organizational Plan Processing
Job Description
Processing of Employee Status for Planning and Development
Staffing
Personnel Cost Planning
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Time Management Long Term Daily Work Schedule
Flexible Daily Work Schedule
Calculate Overtime
Incentive Wages
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Payroll Processing Multinational tax, benefit, and garnishment related laws
and regulations
Automate the workflow system and be flexible enough to adapt itself
Automatically transfers data to general ledger and cost accounting systems
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Salary Administration Compensation Structure
Structuring and Managing of salary and reward compensation packages
Can analyze the effects of salary increases and decreases
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Benefits Administration Administering human resource benefits
setting up each benefit plan
define cost and coverage options
eligibility rules established
Step-by-step guides for developing, defining, and maintaining benefit plans
Eligibility rules based on predetermined criteria defined and verified by the system