UNIT III

ERP MODULES
Alexis Leon
ERP MODULES
Finance
Manufacturing and Production Planning
Sales and Distribution
Plant Maintenance
Quality Management
Materials Management
Financial Module
Financial Accounting (General Ledger, Accounts Receivable,
Accounts Payable, Fixed Assets)
Investement Management (Investment
Planning/Budgeting/Controlling, Depreciation
Forecast/Simulation/Calculation)
Controlling (Overhead Cost Controlling, Activity Based
Costing, Product Cost Accounting, Profitability Analysis)
Treasury (Cash Management, Treasury Management, Market
Risk Management, Funds Management)
Enterprise Controlling (Executive Information System,
Business Planning and Budgeting, Profit Center Accounting)
FINANCIAL ACCOUNTING General Ledger
General Ledger produces the enterprises financial statements including the
Balance Sheet, which shows the enterprises assets, liabilities and
equity at a point in time, the Income Statement, which shows the
enterprises income, expenses and net profit over a period of time, the
Cash Flow Statement which shows sources and applications of cash,
and associated financial reports such as the Trial Balance. The rest of
the reports are there to track the numbers on the financial statements
back to individual transactions. Most businesses prepare monthly
statements. Every ERP package has a General Ledger module.
General Ledger is unusual in that it receives transactions from many other
modules. There are two ways to accomplish this: Detail and
Summarized.
General Ledger has the following functions:
Maintain Chart of Accounts
Maintain Budgets
Maintain Recurring Transactions
Print Financial Statements
Print Trial Balance
Allocate Transactions
Consolidate Transactions
Periodic Processing
Maintain Module Information
32
Every enterprise purchases goods, services, assets, or office
supplies from its suppliers (also known as vendors). Accounts
Payable pays these suppliers on time (taking advantage of
payment discounts if possible) while avoiding duplicate
payments and bank over-drafts.
Accounts Payable is the last step in the supply chain where
Purchasing is the first. Accounts Payable accepts invoices,
selects invoices to be paid, generates checks and forecasts
future cash requirements based on due dates. Some AP checks
are issued to people or organizations that are not worth putting
on file since they are likely to receive only one check. Some
enterprises prepay part of the invoice amount because the
supplier requires a deposit. Every ERP has an Accounts
Payable module.

FINANCIAL ACCOUNTING Accounts Payable
Every business sells products and/or services to its customers.
Order Entry creates invoices when a customer orders
something and Accounts Receivable keeps track of what
payments have been made to which invoices. Commonly, it
also prepares a report which shows how long each invoice has
been outstanding. Every ERP has an Accounts Receivable
module.
Collection
If Accounts Receivable invoices become overdue, Collection
initiates processes to collect the money. Usually this means a
telephone call followed by a series of letters of increasing
severity. If these efforts fail, Legal may become involved or the
invoice may be written off, or sold to a collection agency for a
fraction of its face value. As part of CRM, details of each
contact with the customer including date, employee, contact
person, and activity are stored in Customer.
FINANCIAL ACCOUNTING Accounts Receivable
A "fixed asset" is something the enterprise has purchased that
has a useful life of more than one year. Fixed Assets keeps
track of all these objects and allocates part of their purchase
price to each year of their life. There are a variety of ways in
which this allocation can be done. For some assets, the
allocation or "depreciation" is specified by law. Not all ERP
packages have a Fixed Assets module.
Fixed Assets has the following functions:
* Maintain Asset Information
* Enter Transactions
* Generate Depreciation
* Maintain Module Information
FINANCIAL ACCOUNTING Asset Accounting
FINANCIAL MODULE-INVESTMENT MANAGEMENT
(Investment Planning/Budgeting/Controlling, Depreciation
Forecast/Simulation/Calculation)
Every enterprise has a reserve of funds. As the enterprise grows
larger, the total reserve becomes larger and larger. Eventually, it
is large enough that it is prudent for the enterprise to invest part
of it to gain a higher rate of return than would be possible in a
checking account. These investments include GICs, mutual
funds, stocks, bonds, and other investment options. Investment
Manager keeps track of these investments. Only large ERP
packages have an Investment Manager module.
Investment Manager has the following functions:
* Maintain Investment Information
* Enter Transactions
* Print Investment Summary
* Maintain Module Information
FINANCIAL MODULE - CONTROLLING
(Overhead Cost Controlling, Activity Based Costing)
Controlling
The controlling system gathers the functions required
for effective internal cost accounting. lt offers a
versatile information system, with standard
reports and analysis paths for the most common
questions. In addition, there are features for
creating custom reports to supplement standard
reports.
Overhead Cost Controlling
Many organizations experience a significant
increase in the percentage of indirect costs,
which cannot be directly assigned to either the
products manufactured, or to the services
rendered.
While cost monitoring and optimisation may be
quite advanced in production areas,
transparency is often lacking in overhead cost
areas.
The Overhead Cost Controlling sub system focuses
on monitoring and allocation of overheads.
Cost Centre Accounting
Cost centre accounting analyses where overheads
occur within the organization.
Costs are assigned to the sub-areas of the
organization where they originated.
The system offers a wide variety of methods for
allocating posted amounts and quantities. In
particular, activity accounting permits, the
allocation of great many costs to products,
based on cost sources and enabling
assignments, which were not previously
possible.
Overhead Orders
Overhead orders subsystem collects and analyses
costs, based on individual internal measures.
This system can monitor and automatically check
budgets assigned to each measure.
FINANCIAL MODULE - CONTROLLING
(Overhead Cost Controlling, Activity Based Costing,
Activity-Based Costing
The goals of the entire organization, should come before the goals
of individual departments, when it comes to business process
reengineering.
The Activity-Based Costing module, is a response to the growing
need for monitoring and controlling cross-departmental
business processes.
In addition to functions and products. Seeing costs from a new
perspective, substantially enhances organizational transparency
in overhead areas. The system automatically determines the
utilisation of business processes by products, customers, and
other cost objects based on the cost drivers taken from the
integrated accounting environment. This, signicantly reduces
the effort involved in maintaining a business process model in
a separate system.
Product Cost Controlling
Product Cost Controlling module determines, the costs
arising from manufacturing a product, or providing a
service. Plan and standard values, serve in valuating
warehouse stock and for contrasting revenues received
with costs. In addition, the values in Product Cost
Controlling. are crucial for determining the lowest
price limit for which a product is profitable.
Simulations illustrate the effects of changes in
production methods on the cost of goods
manufactured.
Cost Object Controlling
Cost object controlling helps you monitor manufacturing
orders. Integration with the logistics components
results in a logistical quantity flow, that provides
instant information on actual cost object costs,
allowing ongoing costing calculations at any time.
Follow-up calculations determine and analyse the
variances between actual manufacturing costs, and the
plan costs resulting from Product Cost Planning.
Profitability Analysis
Profitability analysis subsystem examines the sources of
returns. As part of sales controlling, Profitability
Analysis is the last step in cost-based settlement, where
revenues are assigned to costs according to the market
segment. You can dehne any market segment-
distinguishing, for example, between products,
customers, orders, sales organizations, distribution
channels and business areas-and evaluate it, according
to contribution and revenue margins. information from
Profitability Analysis, frames important decisions in
areas such as determining prices, selecting customers,
developing conditions and choosing distribution
channels.
FINANCIAL MODULE
Treasury (Cash Management, Treasury Management)
Cash Management
To anlyse financial transactions for a give period. It
also records future developments for purposes of
financial budgeting.
Treasury Management
It offers functions for managing financial deals and
positions, from trading to transferring data to
Financial Accounting.
Market Risk Management
It acts as an integrated central risk control station with
monitoring and management functions.s
Funds Management
It supports Funds Management Process from
budgeting all the way through to payments,
including monitoring expenditures, activities,
resources and revenues.

FINANCIAL MODULE
Treasury (Market Risk Management, Funds Management)
FINANCIAL MODULE
Enterprise Controlling
(Executive Informaiton Systems, Business Planning and
Budgeting, and Profit Center Accounting)
Executive Information Systems
It integrates data from Financial Components, other ERP Components, and
non-ERP data sources both inside and outside the enterprise.
Business Planning and Budgeting
It supports Business Units and Groups in the calculation of business targets,
such as return on investment. It also supports central investment
planning, budget release and tracking.
Profit Center Accounting
All business transactions in Financial Accounting, Material Management,
Asset Management, and Sales / Distribution, which affect profits, are
automatically reflected in Profit Center Accounting
33
34
35
36
37
Manufacturing Module
38
Manufacturing Module
39
Manufacturing Module
40
41
42
HR Module
43
HR Module
44
Plant Maintenance Module
45
Plant Maintenance Module
46
47
48
49
50
MM Overview
SAP Materials Management (MM) Module provides a
comprehensive solution for Materials Management within
the integrated supply chain.
Also, it supports other logistics functions such as
plant maintenance and project management, which
also require materials information.
MM works as part of an on-line, real-time system for
processing, maintaining and recording integrated
transactions.
Objectives:
Provide a general overview of the Materials
Management (MM) Module and the relevant
sub-modules.
Understand what is meant by the integrated
supply chain
Identify areas where MM and other SAP
modules integrate.
51
Integrated Supply Chain
52
MM Overview
53
54
55
56
57
58
59
60
61
Sales & Distribution
Sales queries
Inquiries & Quotations
Sales order
Outline Agreements
Contracts & Scheduling agreements
Delivery / Shipment
Invoicing / Billing
After Sales support
62
Sales & Distribution
Functions performed during sales order
processing are,
Inquiry Handling
Quotation preparation
Contracts
Order Management (Contracts management)
Monitoring sales transactions
Checking for availability
Transferring requirements to materials planning
(MRP)
Scheduling delivery
Calculating prices & taxes
Checking credit limits
Invoice/Bill
Creating printed/e-documents for confirmation
63
Sales & Distribution
64
Sales & Distribution
Sub modules
Master Data Management
Order Management
Warehouse Management
Shipping
Billing
Pricing
Sales Support
Transportation
Foreign Trade
65
Sales & Distribution
Master Data Management
Information about raw materials in stock,
products in hand, customers, suppliers
etc.
Available to decision makers.
For automatic generation of reports,
contracts, invoices etc.
Products are sold or sent to business
partners.
Accounting & Materials management also
access it.
66
Sales & Distribution
Order Management
Sales Order Management
Purchase Order Management
Entire sales & purchase processes.
Internal & external.
For quick anticipation & response.
67
Sales & Distribution
Warehouse Management
Inventory planning
Inventory handling
Intelligent location assignment
Inventory reporting
Inventory analysis
Lot control
Tracking & tracing.
Distribution data collection
Paperless warehousing.
68
Sales & Distribution
Shipping
Delivery is central shipping document.
When created, picking & delivery
scheduling are initiated.
Data generated during shipping
processing are recorded.
Delivery refers to a sales order (or)
transportation order for stock
transfer.
69
Sales & Distribution
SALES AND DISTRBUTION
MAIN MODULES
1. Master Data Management
2. Order Management
3. Warehouse Management
4. Shipping
5. Billing
6. Pricing
7. Sales Support
8. Transportation
9. Foreign Trade
SALES AND DISTRBUTION
SALES AND DISTRBUTION
Master Data Management
Master Data
1. Trading Community Architecture
Customer, Supplier, Employee
2. Products
3. Salespersons
4. Sales Territory
SALES AND DISTRBUTION Order
Management Sales Order Management
SALES AND DISTRBUTION Order
Management Purchase Order Management
SALES AND DISTRBUTION
Warehouse Management
1. Inventory Planning
2. Inventory Handling
3. Inventory Location, Assignment
4. Inventory Reporting
5. Inventory Analysis
6. Lot Control
7. Distribution Data Collection
SALES AND DISTRBUTION
Shipping
SALES AND DISTRBUTION Billing
1. Invoice
2. Debit and Credit Memo
3. Proforma Invoices
4. Rebates
SALES AND DISTRBUTION
Pricing
1. Price Quotations
2. Discounts (Quantity, Payment Terms etc.)
SALES AND DISTRBUTION
Sales & Support
1. Price Quotations
2. Discounts (Quantity, Payment Terms etc.)
SALES AND DISTRBUTION
Transportation
1. Inward & Outward Movement of Goods
2. Transportation Planning and Processing
HUMAN RESOURCES

1. Personnel Management (HR Master Data, Personnel
Administration, Recruitment, Travel Management, Benefits
administration, Salary administration)
2. Organizational Management (Organizational Structure,
Staffing Schedules, Job Descriptions, Planning Scenarios,
Personnel Cost Planning)
3. Payroll Accounting (Gross / net Accounting, History
Function, Multi-Currency Capability, International Solutions)
4. Time Management (Shift Planning, Work Schedules, Time
Recording, Absence Determination)
5. Personnel Development (Career and Succession Planning,
Profile Comparisons, Qualifications Assessments,
Additional Training Determination, Training and Event
Management)
HUMAN RESOURCES
Personnel Management
Personnel Administration
* Shared Employee Information

HR Master Data: Core HR Data
a) Job
b) Position
c) Grade
d) Employee Master Information

Recruitment
* Automated Hiring Process (Manage Open Positions, Applicant Screening,
Selection, Hiring, Correspondence, Reporting, and Cost Analysis)
* eHiring

Travel Management: Travel Approval to Travel Expense Report

Benefits administration: Define Benefits, Enroll Employees, Cost/Benefit
Simulations

Salary administration: Salary Review Process, Manpower Costing
HUMAN RESOURCES
Organizational Management
* Graphical Organization Charts
* Staffing Schedules by headcount,
percentage, and working hours
* Work Center Descriptions
* Job Tasks and Description

HUMAN RESOURCES
Payroll Accounting
* Centralized / Decentralized Payroll
* Apply Business Rules
* Country Specific Payroll (Language,
Currency, and Regulatory Requirements)

HUMAN RESOURCES
Time Management
* Attendance System
* Leave System
* Overtime/Late Sitting System
* Shift Planning (Manage Staff Shortage and
Excess)
HUMAN RESOURCES
Personnel Development
* Comparison of Qualification and Profile
* Training Need Analysis
* Training Schedules

PLANT MAINTENANCE
* Preventive Maintenance Control
* Equipment Tracking
* Component Tracking
* Plant Maintenance Calibration Tracking
* Plant Maintenance Warranty Claims Tracking

PLANT MAINTENANCE
Preventive Maintenance Control
Planning, Scheduling, and Control of facilities
and Equipment
Monitoring by:
a) Hours of Operation
b) Units of Production Produced
c) Gallons of Fuel Consumed
d) Number of Days in operation since the last
service level
PLANT MAINTENANCE
Equipment & Component Tracking
Acquisition and Utilization History
Asset Management
Identification of Chronic Problems

PLANT MAINTENANCE
Plant Maintenance Warranty Claims Tracking
* Establish Type and Length of Warranty
* History of Warranty Maintenance

QUALITY MANAGEMENT
1. Quality Planning (Management of basic data for quality
planning and inspection planning, Material Specifications,
Inspection Planning)
2. Quality Inspection (Trigger Inspections, Inspection
Processing with inspection plan selection and sample
calculation, Print shop papers for sampling and inspection,
record results and defects, make the usage decision and
trigger follow-up actions)
3. Quality Control (Dynamic sample determination on the
basis of the quality level history, application of statistical
process control techniques using quality control charts,
Quality Scores for inspection lots, Quality notifications for
processing internal or external problems and initiating
corrective action to correct the problems, Inspection lot
processing and problem processing)
* Material Management (Purchasing, Inventory
Management, Warehouse Management, Material
Requirements Planning)
* Production (Work Scheduling, Shop Floor Control)
* Sales and Distribution (Delivery, Creation of Quality
Certificates)
QUALITY MANAGEMENT
Computer Integrated Quality Management (CIQ)
Pre-Purchasing Activities
Purchasing
Vendor Evaluation
Inventory Management
Invoice Verification and Material Inspection

MATERIALS MANAGEMENT


MATERIALS MANAGEMENT
Pre-Purchasing Activities


MATERIALS MANAGEMENT
Purchasing Activities
Purchasing Integration with other modules
[Link] Accounting System
[Link] Accounting System
[Link] and Distribution


MATERIALS MANAGEMENT
Vendor Evaluation
1. Deliver Date, Prices etc. Purhcase Order
2. Quality Results Quality Management
3. Lead Times Material Planning


MATERIALS MANAGEMENT
Inventory Management
1. Maintenance of Stock
1. Quantity
2. Value


MATERIALS MANAGEMENT
Invoice Verification and Material Inspection
1. 2 Way PO Quantity
2. 3 Way PO Quantity + Receive Quantity
3. 4 Way PO Quantity + Receive Quantity + Inspection Quantity