the logistic information system in sap erp
TRANSCRIPT
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The Logistic Information System in SAP ERP
Sales & Distribution and Material Management
Author: Domicián Máté
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Table of Contents Preface ..................................................................................................................................................... 3
Introduction to SAP ERP Logistics ......................................................................................................... 4
Logistics Components ......................................................................................................................... 4
Enterprise Structure in SAP ................................................................................................................ 7
Questions ............................................................................................................................................. 8
Solutions of the Questions ................................................................................................................. 10
Sales and Distribution ........................................................................................................................... 11
Organizational Structure in and Distribution .................................................................................... 11
Processes in Sales and Distribution ................................................................................................... 14
Master Data in Sales and Distribution ............................................................................................... 17
The Company of GBI in SD .............................................................................................................. 18
SAP HANA Overview and SD Application ...................................................................................... 19
Exercises ............................................................................................................................................ 21
Questions ........................................................................................................................................... 40
Solutions of the Questions ................................................................................................................. 46
Material Management (MM) ................................................................................................................. 48
Organizational Structure in Material Management ........................................................................... 48
The Procurement Process .................................................................................................................. 50
Master Data in Materials Management ............................................................................................. 52
Global Bike Structure for Materials Management ............................................................................ 53
Exercises ............................................................................................................................................ 54
Questions ........................................................................................................................................... 70
Solutions of the Questions ................................................................................................................. 77
References ............................................................................................................................................. 80
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Preface
This article guides the end-users through different processes of Logistical Information System
(LIS), such as Material Management, Sales and Distribution, etc. As one of the most im-
portant and implemented logistics functionalities, the SAP makes information more managea-
ble and accessible. However, the primary target group for this item includes students of eco-
nomics at the University of Debrecen who will execute logistics transactions as a part of their
future job functions, but this material is also aimed to support the members of SD community
to solve MM and SD issues, furthermore, this material is recommended to all people who
wish to master new functionality of SAP R/3.
The next chapters provide a detailed, comprehensive guide to the day-to-day logistics func-
tions. Its objective is to give a resource to the users of SAP for learning how to perform all of
the key functions of the logistics, how to trouble-shoot minor business problems and other
system issues, how to explore the advanced LIS functions, etc.
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Introduction to SAP ERP Logistics
Logistics Components
Logistics in SAP ERP is built on a collection of applications, components, and functional-
ities which enable the automation of requirements relating to material handling and services,
orders of internal customers, processes of production, storage and quality assurance, etc. The
current version of SAP ERP 6.0 includes much new functionality of logistics that add new
features, such as global trade management, compensation management and agency business,
but the core has not changed much throughout the years (Mazzulo–Wheatley, 2011). Let's
have an overview on some of the most important logistics components:
Materials Management
The Materials Management (MM) in SAP ERP is one of the oldest logistics functions that
serves as a foundation of the entire company. The main components of MM include con-
sumption-based planning, purchasing, inventory management, logistics invoice verification,
and physical inventory. It houses master data objects that are shared with other system mod-
ules and includes the material masters, service masters, batch records, and vendor masters.
There are also component-specific master data objects, such as purchasing info records,
source lists, and quota arrangements. These are very important while the different logistics
transactions, are executed because the system will determine the correct data based on these
records.
Sales and Distribution
Sales and Distribution (SD) cover the entire chain of processes (order-to-cash) from custom-
er inquiry and sales orders to the delivery of products to the customer destination of choice
through billing and payment collection. The components of logistics execution are also
heavily integrated and include picking, packing, and shipping.
Logistics Execution
The Logistics Execution (LE) functionality of SAP ERP covers the entire product movements
in companies starting with goods receipts through inbound delivery including the standard
processes of pick, pack, and put-away. This application is accomplished by using the Ware-
house functions of the system. Following the transfer order process goods can be moved in-
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ternally within the plant between the storage locations, using inventory management or ship-
ping functions of outbound delivery to execute cross-plant or -company movements.
Production Planning and Control
The Production Planning (PP) functionality in SAP ERP helps in managing the production
process of companies. The production process starts with the analysis of requirements and
includes input from forecasts, planning tools and material master settings. The basic planning
procedures are defined in different material requirements planning (MRP) types. This plan-
ning system reviews the past consumption values and sales figures, forecast and estimate sta-
tistical calculations to determine future requirements.
Plant Maintenance
The Plant Maintenance (PM) functionality is applied to maintain the equipment and other
technical infrastructure used by companies and customers. It makes possible the execution of
inspection of planning, timing, maintenance and prevention. Furthermore, it allows the exe-
cution of various external services. The PM has independent components on its own, for ex-
ample, plant maintenance unit, master data handling unit and further logistical units.
Customer Service
The Customer Service functionality helps companies in servicing customers with warranty
repairs and servicing products in those cases when materials can be sent back to be repaired
or to be maintained on site. Guarantee services are especially important to help companies
maximize the efficiency of their services and the satisfaction of their customers.
Quality Management
The Quality Management (QM) is fully integrated with other SAP functionalities and compo-
nents, and configured to meet company-, and industry-specific requirements. The standard
QM supports the quality management tasks, such as quality planning, quality inspection, and
quality control, as well as other supplementary integrated SAP logistics functions.
SAP Global Trade Management
The SAP Global Trade Management (GTM) is part of modules from the SAP Business Suite.
It was designed by SAP, taking into consideration those companies which are oriented with
large scale trading contracts or partners around the world involving multiple trading coun-
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tries. One of the main objectives of GTM is to keep and improve the effectiveness of the sup-
ply chain, primarily by integrating all elements of logistics, FI and settlements to the buyers
and sellers.
The GTM processes concern both domestic sales and foreign sales. Each process begins with
an inquiry and is followed by a draft contract, which is supposed to be confirmed as a final
contract. The global trading business starts with a sales order for customers or a purchase or-
der for vendors. The implementation and configuration of both SD and MM components and
settings are obligatory. The customer and vendor master data should be configured to allow
the GTM application to exist and integrate FI, MM and SD modules properly. (See: Figure 1.)
Figure 1. The integration of FI, MM and SD modules
Source: (Chudy at al., 2015)
Additional SD elements such as pricing conditions and sales transactions are also required.
Enabling purchasing transactions in the MM side is also essential for the smooth operation of
the GTM applications. The Trading Contract interacts with the Sales and Purchase orders,
while Trading Execution interacts with the Delivery, Shipping, and Billing on the SD side, as
well as Shipping, Goods Receipts, and Invoice Verification on the MM side. The FI modules
of (AR and AP) postings are placed throughout the supply chain cycle.
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Enterprise Structure in SAP
Logistics is a process-oriented application, so it needs to reflect the company's structure
(Chudy–Castedo, 2012). The enterprise structure consists of several levels across various are-
as, such as financial, logistical, manufacturing, sales and further areas. Let’s get an overview
of the enterprise main components.
Client
The Client is the highest level in the SAP structure. ( Note: The client number should be
entered in the logon screen along with the users’ ID and password.)
Company Code
The company code is the first functional level that belongs to Financial Accounting. The
company code reflects a company's legal entity. As recommended the SAP has probably more
than one company code.
Plant
The logistics structure reflects the operational structure of a company. At the top of the pyra-
mid there is the plant. The plant is the element where a company's operations are executed
(i.e., purchasing, production, inventory, and sales). The plant should be an SAP element that
reflects a physical location within the structure of companies. Below the plant, there are sev-
eral levels from different functional areas.
Storage Location
The storage locations are places where the stock is kept. In the SAP system, the storage loca-
tions retain the quantity and the value of each material that a company uses. Every time any
material is received from a vendor, or sold to a customer, a production order is needed. The
storage location reflects the results of these changes in the stock levels and it updates the
General Ledger as well.
Warehouse
The warehouse and warehouse number represents all of the racks, cages, and crates that are
used to store the products. The storage location informs us how many units of a certain prod-
uct are available. The warehouse numbers signify the place of the products. It is built from a
number of storage types, sections and bins. The storage types define the logical and physical
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locations to reflect either the physical layout of the facility or the logical division of zones
based on the picking or put-away techniques. The storage type consists of one or more storage
sections to subdivide or group together them into storage bins with similar features or uses,
such as rack spaces or slots.
Purchasing Organization
The Purchasing Organization is an organizational unit within Logistics. Almost all business
transactions related to procurement are carried out in a purchasing organization. The Purchas-
ing Organizations represents the different purchasing groups (i.e. raw materials, assets and
equipment etc.) of companies.
Purchasing Group
The purchasing groups denote the people in charge of the procurement. Each purchasing
group has master data of its name, telephone and/or fax number, email address etc. The pur-
chasing group is responsible for procuring a material or a class of materials for internal units
and the contact for external suppliers.
Questions
Answer the following questions!
1. An ERP Logistics in SAP ERP is built on a collection of applications, components,
and functionalities which enable the automation of requirements relating to material
handling and services, orders of internal customers, processes of production, storage
and quality assurance etc.
a) True
b) False
2. The main components of …….. include consumption-based planning, purchasing, in-
ventory management, logistics invoice verification, and physical inventory.
a) SD
b) MM
c) LM
d) PE
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3. The ……………… functionality helps companies in servicing customers with warran-
ty repairs and servicing products in those cases when materials can be sent back to be
repaired or to be maintained on site.
a) Quality Management
b) Plant Maintenance
c) SAP Global Trade Management
d) Costumer Service
4. The SAP Global Trade Management is fully integrated with other SAP functionalities
and components, and configured to meet company-, and industry-specific require-
ments.
a) True
b) False
5. Describe SAP Global Trade Management (GTM) application could integrate FI, MM
and SD modules.
…………………………………………………………………………………………
…………………….……………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
6. The Purchasing Group is an organizational unit within Logistics.
a) True
b) False
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7. The enterprise structure consists of several levels across various areas, such as finan-
cial, logistical, manufacturing, sales and further areas.
a) True
b) False
8. The …………………….. are places where the stock is kept.
a) warehouses
b) storage locations
c) plants
d) companies
9. The ……………….. is the first functional level that belongs to Financial Accounting.
a) clients number
b) storage location
c) company code
d) warehouse code
Solutions of the Questions
Check your answers!
1. True
2. MM
3. d
4. false
5. Check Figure 1.
6. false
7. true
8. b
9. c
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Sales and Distribution
The Sales and Distribution (SD) module functionality in SAP ERP covers the entire order-to-
cash (fulfillment) process of companies (Mohapatra, 2014). The Global Bike Inc. currently
uses a very simple process to fulfill customer orders. The process begins when GBI receives a
customer’s purchase order, which it validates and authorizes via a sales order. The warehouse
then prepares and sends the shipment, after which accounting forwards an invoice. The pro-
cess ends when GBI receives payment from the customer.
This simple process has worked well for GBI up to this point. Because GBI has grown
rapidly, however, the company wants to utilize the new ERP system it acquired to enhance its
process for filling customer orders. Specifically, it wants to make the process more efficient
and customer friendly as well as more transparent by keeping track of the status of every or-
der throughout each step in the process. In addition, it wants to incorporate other sales-related
activities, such as developing leads and responding to inquiries, into the new process.
In this chapter, we discuss the fulfillment process in detail, with a special focus on how
an ERP system supports the process. We begin by identifying the key organizational levels
and the master data related to the process. Next we examine the process steps in detail, and we
explain how fulfillment is integrated with other processes. We conclude by discussing the
various reports related to fulfillment.
Organizational Structure in and Distribution
The SAP system allows complex volume of business units to be defined and to represent the
functional and legal structure of a company. In this section, firstly, the components of enter-
prises will be overviewed (see Figure 2.) that are used in SD.
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Figure 2. An overview of Enterprise Structure in SAP SD
Source: (Mohapatra, 2014)
Sales Organization
The sales organization has an own enterprise structure in logistics to define for distributing
goods and services. At least one sales organization has to be assigned to the company code for
accounting. A defined sales organization has an own address, currency, a calendar etc.
Distribution Channel
The distribution channel identifies a unique way for customers to obtain goods and services
from the company, such as wholesale, retail, internet sales, and so on. One or more plants can
be assigned to a combination of sales organizations and distribution channels. ( Note: at
least one distribution channel is needed for SD to function properly. After defining the distri-
bution channel the following SD functions are available:
defining materials and servicing master data,
creating and maintaining customer master data,
allowing complex pricing strategies,
defining determination of sales document types,
using the channels in sales statistics.
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Division
The SAP enterprise structure is usually based on a wide group of products or services. A dis-
tribution channel, similarly to a single division, can be assigned to multiple sales organiza-
tions, and exactly one division is needed for logistics function.
Sales Office
In the SAP system, the sales office is optional. A sales office can be assigned to one or more
sales areas and it can consist of sales groups, usually representing a salesperson or a group of
salespeople.
Sales Group
Sales groups are optional functionalities in the SD module and usually represent the salesper-
son or a group of salespeople.
Sales Area
One of the main components that required for SD to function properly is the sales area. A
sales area is built from a combination of sales organization, distribution channel and division,
as described earlier. Basically, the sales area defines distribution channel that a specific sales
organization can use to sell products or services of a particular division.
Credit Control Area
The credit control area is a FI organizational unit that maintains and monitors credit limits for
customers. A credit control area can be assigned to one or more company codes.
Plant, Storage Location
A plant is needed to procure, store, and distribute goods and services, which is linked to the
company code. It is also linked to the Sales Organization and Distribution Channel. A storage
location is also recommended to inventory products to function and fulfill the deliveries.
Shipping Point
This enterprise structure is responsible for the distribution activities. At least one shipping
point can mirror a physical shipping dock, a mail depot, or a group of people. A shipping
point has its own address and calendar function, influencing the scheduling and processing of
deliveries to customers, or replenishment deliveries. The shipping point also influences the
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pick storage location determination together with the plant and shipping condition. The organ-
izational assignment of the shipping point is carried out at plant level.
Loading Point
The Shipping points could have loading points representing specific logistics structures, such
as loading docks, responsible persons for loading location that are assigned during the deliv-
ery process.
Transportation Planning Point
The transportation planning point is assigned to the company code and allows for planning
and execution of shipments. These optional points represent the physical transportation de-
partment that are responsible, amongst other things, for shipment and geographical territory
responsibility. ( Note: at least one planning point is needed for proper transportation func-
tionality to available, but they cannot be shared among multiple company codes.
Processes in Sales and Distribution
The package of SD module functionalities in SAP R/3 covers most of the standard business
functions that are universal for each industry.
(See Figure 4. for the overview of SD processes).
Figure 3. The Sales and Distribution Process Overview
Source: (Chudy at al., 2015)
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Pre-Sale Activities
In real-life scenarios, before the sale takes place, the company needs to collect some infor-
mation and create master data records in the SAP system about existing and potential custom-
ers. After master data records have been created, the actual contact with the sales prospects is
made and can be recorded as an SD document in the form of an inquiry or a quotation. These
documents help to determine important sales-related data that can be accessed for reporting
purposes to evaluate sales activities, and finally to convert to sales orders. The full records of
the sales activities establish the contact with customer to collect the payment. The storage of
the pre-sales data also aims to establish large contracts and scheduling agreements.
Order Processing
Order processing is built on numerous activities and usually it starts with recording the actual
sales order, then procurement steps if goods or services are not available, followed by deliv-
ery picking, packing, and shipping to the final destination.
The sales order document stores the data of customer's firmed request for goods or services
of the companies. The system maintains and establishes master data to fulfill the request. The
sales order also contains customer information, partner data (sold-to, ship-to, bill-to), materi-
al, quantity, pricing, delivery date, shipping and other transportation information required for
delivery.
The goods availability check is performed at the time of the order entry, generating the po-
tential procurement requests as needed. The requirements created by the sales order can be
filled from the available inventories, and procured by replenishment that is processed by in-
ternal source of transport or production orders and other external purchase order documents.
On the shipping date, the delivery documents are created, and the route is determined by
using SAP. In this case the process of picking, packing, staging processes can be determined.
The transfer order includes master data from the delivery document, picking methods
(grouped deliveries, wave picking) etc. The confirmation of the transfer order completes the
picking activities.
The transportation functions of logistics module can start co-operating with freight service
providers, the tendering process, and finished by creating the shipment cost document, which
captures the payable activities related to the delivery for the customers. The delivery packing
list and the bill of lading output are usually triggered at the completion of these steps.
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The posting of the goods issue completes the sales process and results in stock movement
or a confirmation of service that changes the actual inventory, and modifies the accounts bal-
ance in Financial Accounting.
Billing
The last step of SD process, before collecting the customer's payment, is creating a billing
document or invoice which is to be sent to the customer's bill-to party for payment request.
The billing data are copied from either the sales or the delivery and other billing documents,
creating credit or debit memos. When the billing documents are created, an account determi-
nation is performed, and the appropriate General Ledger postings are executed.
Financial Accounting
The material documents recorded when the goods issue was posted, and a subsequent ac-
counting document stored the stock movement data. The transportation service provider end-
ed up the purchase order as an entity for accounts payable, and the incoming payment from
the customer was also posted against the invoice (as a billing document) was submitted during
the previous steps.
All activities in the SD process are reflected in the system as documents, master data, and
pricing records, and they are used as a foundation for the sales info system (SIS) or SAP
Business Warehouse (Chudy at al., 2015).
Special orders
Cash Sale
In cash sales, the goods are paid for immediately when your customer receives them, and the
delivery document is created at save. In the cash sale delivery can be defined to be picking
relevant or not depending on business requirements, so it may need to confirm picks and then
post goods issue. Also, when the order is saved, the output condition is triggered to generate
the paper invoice as a receipt for the customer.
Rush Order
In a rush order, a customer picks up the goods, or deliver them the same day the order is
placed, but the invoice for the customer is later created. In the standard SAP system, you de-
fine the sales document type SO for rush orders. The subsequent delivery document type LF
is created immediately at order save. Then, execute picking, removing goods from storage,
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and posting goods issue. The goods are delivered to or picked up by the customer. Then, the
billing documents are created most likely during the standard billing run batch processing,
and invoices are printed and sent to your customer.
Master Data in Sales and Distribution
Master data in SD consists of information that does not change frequently (e.g., addresses)
and pertains to customers, employees, SAP system users, materials, batches, condition records
(discussed later), vendors, and more (Mohapatra, 2014). Master data is composed of specific
master records; for example, a single customer will have a customer master record, and all of
the customer master records together generate the customer master data. SAP software was
created with the objective of serving almost any company, regardless of its size, industry, or
country, predefined master data requires little customization.
Customer Master Data
In SAP systems, customer master records are broadly divided into three parts: general data,
company code data, and sales area data. This data is stored in tables, which consist of fields
that are important from a Financial Accounting and Sales and Distribution perspective. Gen-
eral data contains address, communication, control, marketing, payment transaction, unload-
ing point, contact person, and trade-related information etc.
Company code data contains the fields important from a Financial Accounting perspec-
tive. Sales area data mainly contains the fields important from a Sales and Distribution per-
spective. The information about partners defined in the customer master record. There are
different transactions that allow you to create, change, and display customer master data based
on the combination of areas to be maintained.
Customer Credit Master Data
The Customer credit master data is created and maintained for individual customers and for
mass processing. The screens that constitute the customer credit master record are Overview,
Address, Central Data, Status, and Payment History. The Address, Status, and Payment Histo-
ry are automatically populated from customer master and transaction data. The fields that
must be entered manually are Credit Limit (and its currency), Customer Credit Group, Risk
Category, Accounting Clerk, Customer Representative Group, and other data from external
rating agencies or internal information and texts.
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Material Master – Sales Views
The material master data is considered to be the most important master data in SAP systems
and has many screens for storing Materials Management, Financial Accounting, Sales and
Distribution, Production Planning, Quality Management, and Controlling information. The
Sales and Distribution data is stored in three screens: Sales: Sales Org. Data and Sales: Gen-
eral or Plant Data. In the next two sections, we will discuss important sales-relevant fields in
material master records and a few examples of customizing material master fields.
Batch Management Master Data
A batch management master data is often used in process industries (i.e. oil and gas, concrete,
paint, pharmaceuticals, fast-moving consumer goods, and others) or where shelf-life man-
agements a concern (e.g., foods and beverages). A batch number is a number associated with
a specific storage unit of a material. Products with the same batch number should be used.
The Company of GBI in SD
The following sample company is used to demonstrate logistics functionalities. The Global
Bike Group is composed by the Global Bike Inc. (GBI) in the US and in Germany the sec-
ondary Global Bike Germany GmbH. In North America, there are three geographical loca-
tions, namely Dallas, San Diego and Miami, that assigned to the sales regions (East and
West). In Germany, Hamburg is established in the North and Heidelberg in the South of Ger-
many. In order to visualize the organizational structure of Global Bike see Figure (4.).
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Figure 4. The GBI’s basic enterprise structure for SD
Source: based on ARIS(2015)
SAP HANA Overview and SD Application
In this section, we explain in simple terms what SAP HANA has to offer, how daily jobs will
be impacted by this new IT technology, and also what SAP HANA is and how it impacts the
Sales and Distribution component (Chudy et al. 2015).
Let’s begin by identifying SAP HANA, which is a piece of information technology that
allows to process massive analysis of real-time data in the memory of the servers. This means
no more delays or long hours spent on nights running that report required. SAP HANA is be-
coming the new platform for current and future SAP analytics and applications. This is the
reason why it’s important to understand the basics of SAP HANA to manage the future chal-
lenges better. SAP HANA stands for high-performance analytic appliance and relates to a
relational database management system developed by SAP. SAP HANA available for the
Cloud, Mobile, and Social Media networks.
SAP supports cloud computing solutions. In October 2012, HANA (One) was broad-
casted as a variation of the original SAP technology, which uses a smaller amount of memory
via Amazon Web Services. In 2013, SAP HANA also began offering the HANA Cloud Plat-
form (hosting services and cloud environment), and SAP HANA enterprise cloud (enterprise
solutions for SAP Business Suites and Business Warehouse as Service). Mobile and social
Global Bike
Global Bike Inc
US West
San Diego Dallas
US East
Miami
Global Bike Germany
Germany South
Heidelberg
Germany North
Hamburg
Client
Company Code
Sales Organization
Sales Office
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networks are supported by a real-time data platform in SAP to allow you uniformity and a
faster data analysis.
SAP HANA Impact on Sales and Distribution (SD) and is delivered with functionality
for SD. SAP HANA also provides a platform to develop applications and is expected to have
more SD applications based on this new technology. SAP HANA significantly advances the
time spent running Sales and Distributions reports.
SAP HANA-Optimized is part of business intelligence (BI) that uses HANA technology
and BI content uses DataSources and (BEx) queries to accelerate analysis of SD reports such
as sales overviews, delivery, pricing conditions, service levels, and even SD backorders. SAP
delivers queries using MultiProvider, which enables to run reports at a more granular level
without the loading of data into an InfoCube (real-time data).
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Exercises
Exercise No. 1.: Display the costumer’s Sales Areas and Master Data of the given cus-
tomer of Global Bike Inc. from the USA.
The additional needed information is the following:
Company (Code): Global Bike Inc. (US00).
Costumer (Code): Rocky Mountain Bikes (1000)
Solution of Exercise No. 1.: Use the following menu path of SAP to display master data
of the given costumer or enter the transaction code of XD03.
Logistics Sales and Distribution Master Data Business Partner Customer
Display Complete
Figure 5. Display costumers Master Data (XD03)
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In the next screen (Figure 6.), the SAP system expects to enter the search criteria, such as the
customer, the company and the sales area data.
In this case, enter the four-digit number of the costumer code (1000) that was given by the
instructor into the field of “Costumer”. Following this, enter the field of “Company Code”
with US00.
Figure 6. Costumer display – Initial Screen
After this click on the dialog box Costumer’s sales areas…, so the following screen will
come up to display the type of the sales organizations, distribution channels and divisions in
relation to the given costumer.
Figure 7. Sales Areas by Costumers
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Go back and click on or press Enter in order to display the master data for Rocky
Mountain Bikes. The following screen will come up:
Figure 8. The Master Data of Rocky Mountain Bikes
Click on the exit icon to return to the SAP Easy Access Menu screen.
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Exercise No. 2.: Use the SAP Easy Access Menu to create a Customer Inquiry.
(Remember: An inquiry is a customer’s request to be provided with a quotation or sales in-
formation without obligation. An inquiry can be related to materials, services, conditions and
delivery dates.)
Additional information:
Costumer (Code): Rocky Mountain Bikes (1000)
Solution of Exercise No. 2.: To create an inquiry, follow the SAP menu path or execute
the command of VA11:
Logistics Sales and Distribution Sales Inquiry Create
Figure 9. Create an inquiry
Enter the following information into the following screen:
IN for Inquiry Type,
UW00 for Sales Organization (US West),
WH (Wholesale) for Distribution Channel and
BI (Bicycles) for Division.
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Figure 10. Create an Inquiry – Initial Screen
Then press Enter. This will produce the following screen.
Figure 11. Create an Inquiry – Initial Screen
Click on the Sold-to party field and enter the costumer’s code (1000).
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Enter 0001 for the PO Number, the today’s date for the PO date (F4, then use ), the
today’s date for the Valid from date (F4, then use ) and a date one month from today for the
Valid to date (F4, then select the concrete date).
The costumer wants only one product – the Deluxe Touring Bike (black).
Use the search function of the system. ( Note: Make sure that the Sales material at the
description tab is active)
On the Sales material by description tab, enter Sales Organization (UW00), the Distribu-
tion Channel (WH) and type Material description as *Deluxe*.
Figure 12. Restrict the range area of the material
Then click on to get the list of bicycles, choose (double click) on the DXTR1000 mate-
rial. This will produce the following screen (see Figure 12.).
Enter an order quantity of 5 pieces.
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Figure 13. Create an inquiry - Overview
Figure 14. Create an inquiry – Net Value
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The Expected ordinary value (4,500$) is a calculated value, which takes the net value
(15.000$) of the order and multiplies it by the probability (30%) of having an inquiry from
this customer. The order probability of 30% is the default value that was set for GBI for in-
quiry documents.
( Note: Use the scroll icon to get to the Order probability column (two columns right of the
Net value column).
Click on to save the inquiry. The SAP system will assign a unique number to the in-
quiry: . ( Note: remember on it later.)
Click on the exit icon to return to the SAP Easy Access Menu screen.
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Exercise No. 3.: Use the SAP Easy Access Menu to create a Customer Quotation.
An inquiry presents the terms, such as price, delivery schedule etc. to a customer considering
a purchase. A quotation is similar to inquiry, except that it is a legally binding offer for deliv-
ering the requested product or services.
Solution of exercise No. 3.:
The Bike Zone would like a quote for the items in the inquiry created before. ( Note: copy
the details from the inquiry into the new quotation.)
To create an inquiry, follow the next menu path or execute the command of VA21:
Logistics Sales and Distribution Sales Quotation Create
Figure 15. Create a Quotation
Enter QT for Quotation Type, UW00 for Sales Organization (US West), WH (Wholesale)
for Distribution Channel and BI (Bicycles) for Division.
Click on the Sold-to party field and enter the costumer’s code (1000). Enter “0002” for the
PO Number, the today’s date for the PO date, the today’s date for the Valid from date and a
date one month from today for the Valid to date. Choose the black Deluxe Touring Bike
(DXTR1000) as a material.
This will produce the following screen.
30
Figure 16. Create a quotation – Enter Order Quantity
Add 5 as the order quantity.
To encourage the Bike Zone to become a loyal customer, a $50.00 discount should be author-
ized on each Deluxe Touring bike on the entire order.
In order to add the $50.00 discount select the Deluxe Touring bike line in the order, then
click on the Item conditions icon ( ).
Add the condition type of K004 (material discount) with an amount of 50$ to the pricing
procedure.
The following figure shows the changed pricing details of the Deluxe Touring Bike.
31
Figure 17. Create a Quotation – Item Data
Note that the discount is now applied to the order. Click on the back icon to return to
the main quotation screen.
Click on to save the new quotation. The SAP system will assign a unique number to the
quotation: . ( Note: remember on it later.)
Click on the exit icon to return to the SAP Easy Access Menu screen.
32
Exercise No. 4.: Use the SAP Easy Access Menu to create a Sales Order with reference to
a quotation.
The Bike Zone has agreed upon the terms and conditions of the created quotation, and wants
to order some bikes. ( Note: try to simplify the order creation process by copying the quota-
tion into the sales order).
Solution of Exercise No. 4.:
To create a sales order, follow the next menu path or execute the command of VA01.
Logistics Sales and Distribution Sales Order Create
Figure 18. Create a Sales Order
Enter the Order Type of OR. The other fields (Sales Organization, Distribution Channels
etc.) should not essentially be filled now.
Click on the Create with Reference icon. This will produce the fol-
lowing pop-up search window (Figure 19.).
33
Figure 19. Create a Sales Order with Reference
( Note: make sure that the Quotation tab is selected), choose the Quotation field, and then
click on the search matchbox icon.
Make sure that you have selected the last created Sales document according to customer
PO number of “0002”, then click on the icon. (See: Figure 20.)
Figure 20. Create a Sales Order with Reference
After double-clicking on the quotation, the number (20000000) for the quotation will be en-
tered automatically into the Create with Reference window.
Click on the Copy icon to copy the order information from the quotation into the sales
order screen.
34
Figure 21. Create a Sales Order - Overview
Enter a new PO number (i.e. “0003”) and the valid PO date. ( Note: the Req. deliv. date
is copied from the quotation and could be different from the available date).
Click on to save the sales order.
The SAP system will assign a sales order number. (
Note: remember on it)
Click on the exit icon to return to the SAP Easy Access Menu screen.
35
Exercise No. 5. : Use the SAP Easy Access Menu to start the Delivery Process.
In this exercise, let’s start the Delivery Process and fulfill The Bike Zone’s order with a deliv-
ery document.
Solution of Exercise No. 5. :
Follow the menu path or execute the command of VL01N:
Logistics Sales and Distribution Shipping and Transportation Outbound De-
livery Create Single Document With Reference to Sales Order
Figure 22. Outbound Delivery with Reference to Sales Order
Enter “DL00” as a Shipping Point (Dallas). Then enter a selection date one week from the
PO day.
Figure 23. Create Outbound Delivery
36
Then click on the enter icon. This will produce the following screen (Figure 24.).
Figure 24. Outbound Delivery Create - Overview
This screen shows that the order has not been picked yet.
After clicking on the save icon, a delivery document will be created with a unique doc-
ument number: .
Click on the exit icon to return to the SAP Easy Access Menu.
37
Exercise No. 6. : Use the SAP Easy Access Menu to pick materials
In this exercise pick materials on delivery note.
Solution of Exercise No. 6. :
Follow the menu path or execute the command of VL02N:
Logistics Sales and Distribution Shipping and Transportation Outbound De-
livery Change Single Document
If the Outbound Delivery document number is not entered automatically, search for the deliv-
ery document using the tab Outbound Delivery: Not Posted for Goods Issue (MI00 for Ship-
ping Point and your customer number for Ship-to party).
After clicking on the enter icon also click on the picking tab, then enter FG00 for SLoc (stor-
age location) and the appropriate quantity for the picked quantity (5 for DXTR1000).
Click on to save the picking information. You should get the following message at the bot-
tom-left corner of the screen.
Click on the exit icon to return to the SAP Easy Access Menu.
38
Exercise No. 7. : Use the SAP Easy Access Menu to post a goods issue and check the
stock status.
In this exercise post a goods issue and check the stock list.
Solution of Exercise No. 7. :
Follow the menu path or execute the command of VL02N:
Logistics Sales and Distribution Shipping and Transportation Outbound De-
livery Change Single Document
If the Outbound Delivery document number is not entered automatically, search for your de-
livery document using the tab Outbound Delivery: Not Posted for Goods Issue (MI00 for
Shipping Point and your customer number for Ship-to party). With the correct delivery docu-
ment number filled in, click on the Post Goods Issue icon. The following message at the bot-
tom-left corner of the screen should be seen.
To see the impact that the goods issue for the bikes in the sales order for The Bike Zone has
had on the inventory position of GBI, follow the following menu path:
Logistics Materials Management Inventory Management Environment
Stock Stock Overview
The Material and Plant fields are not automatically filled in, click on the Material field, then
click on the search icon. Use the Sales material by description tab with the Sales Organiza-
tion, Distribution Channel and * for Material. Pick the black Deluxe Touring bike. Then, enter
the Plant field. When the Material and the Plant field are correctly filled (compare with the
screenshot above), click on the execute icon. (Note that the available inventory has
changed. Select the Miami DC, then click on the Detailed Display icon.)
The inventory is reduced from before by the amount that used to appear as Schd. for delivery.
Click on the enter icon to close the window and then click on the exit icon to return
to the SAP Easy Access Menu.
39
Exercise No. 8. :Use the SAP Easy Access Menu to review the document flow.
In this exercise review the document flow.
Solution of Exercise No. 7. :
The document flow tool links all documents that were used in The Bike Zone’s sales order.
Again, there are many ways to access the document flow tool. One way is to start by display-
ing the sales order document.
Follow the menu path or execute the command of VA03:
Logistics Sales and Distribution Sales Order Display
If the sales order is not displayed, search for the sales order number using the Sales document
according to customer PO number tab. Enter your PO number.
To access the document flow tool, follow the pull-down menu path:
Environment Display document flow
Review the SD documents for The Bike Zone’s order. Select any document and click on
to look at it in detail.
Click on the exit icon to return to the SAP Easy Access screen.
40
Questions
Answer the following questions!
1. The Sales and Distribution (SD) module functionality in SAP ERP covers the entire
order-to-cash (fulfillment) process of companies
a) True
b) False
2. Describe a typical Enterprise Structure in SAP Sales and Distribution.
…………………………………………………………………………………………
…………………….……………………………………………………………………
…………………………………………………………………………………………
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…………………………………………………………………………………………
3. The …………….. has an own enterprise structure in logistics to define for distributing
goods and services.
a) sales office
b) division
c) distribution channel
d) sales organization
41
4. A ……….. is needed to procure, store, and distribute goods and services, which is
linked to the company code.
a) plant
b) storage location
c) shipping point
d) loading point
5. The division identifies a unique way for customers to obtain goods and services from
the company, such as wholesale, retail, internet sales, and so on.
a) True
b) False
6. At least one shipping point can mirror a physical shipping dock, a mail depot, or a
group of people.
a) True
b) False
7. At least one shipping point is needed for proper transportation functionality to availa-
ble, but they cannot be shared among multiple company codes.
a) True
b) False
8. Describe briefly the Sales and Distribution Process.
…………………………………………………………………………………………
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42
9. Describe briefly the Pre-Sales SD Processes.
…………………………………………………………………………………………
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10. Describe briefly the Order Processing SD Processes.
…………………………………………………………………………………………
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11. Master data in SD consists of information that does not change frequently and pertains
to customers, employees, materials, batches, condition records vendors and etc.
a) True
b) False
43
12. The vendor master data is considered to be the most important master data in SAP sys-
tems.
a) True
b) False
13. The ………………. is created and maintained for individual customers and for mass
processing.
a) Customer Credit Master data
b) Customer Master Data
c) Material Master
d) Batch Management Master Data
14. In SAP systems ………………….. records are broadly divided into three parts: gen-
eral data, company code data, and sales area data
a) Customer Credit Master data
b) Customer Master Data
c) Material Master
d) Batch Management Master Data
15. Describe GBI’s basic enterprise structure for SD.
…………………………………………………………………………………………
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16. SAP HANA, which is a piece of information technology that allows to process mas-
sive analysis of real-time data in the memory of the servers.
a) True
b) False
44
17. SAP is not support cloud computing solutions.
a) True
b) False
18. Use the SAP Easy Access Menu and create an Inquiry today with one week deadline.
Use the following information to solve this exercise, and describe it step by step:
a) Costumer code : (1000)
b) Sales Organization: (US West),
c) Distribution Chanel: wholesale trade
d) Divisions: Bicycles
e) Product: DXTR1000
f) Quantity: 5
g) ………………………………………………………………………………………
……………………….………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
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The unique number of the Inquiry: ………………………………………………
19. In North America, there are three geographical locations, namely Dallas, San Diego
and Miami, that assigned to the sales regions of East and West.
a) True
b) False
20. In Germany, there are three geographical locations, namely Hamburg and Berlin are
established in the North and Heidelberg in the South of Germany
c) True
d) False
45
21. Use the SAP Easy Access Menu and create a Sales Order with referring to an earlier
generated Quotation today with one month deadline. Use the following information to
solve this exercise, and describe it step by step:
a) Costumer code : (1000)
b) Sales Organization: (US West),
c) Distribution Chanel: wholesale trade
d) Divisions: Bicycles
e) Product: DXTR1000
f) Discount: 100$ per bikes
g) Quantity: 10
h) ………………………………………………………………………………………
……………………….………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
The unique number of the Sales Order: ……………………………………………
The unique number of the Quotation:.. ……………………………………………
22. Use the SAP Easy Access Menu and create a Stock List of the DXTR2000 product
and send it via the mail to the instructor.
46
Solutions of the Questions
Check your answers!
1. true
2. Check Figure 2. for the correct answer.
3. d
4. a
5. false
6. true
7. false
8. Check Figure 3. for the correct answer
9. Check Figure 3. for the correct answer
10. Check Figure 3. for the correct answer
11. true
12. false
13. a
14. b
15. Check Figure 4. for the correct answer
16. true
17. false
18. To create an inquiry, follow the SAP menu path or execute the command of VA11:
Logistics Sales and Distribution Sales Inquiry Create
Enter the following information:
• IN for Inquiry Type,
• UW00 for Sales Organization (US West),
• WH (Wholesale) for Distribution Channel and
• BI (Bicycles) for Division.
Click on the Sold-to party field and enter the costumer’s code.
Enter 0001 for the PO Number, the today’s date for the PO date and a date one
week from today for the Valid to date.
On the Sales material by description tab, enter Sales Organization (UW00), the
Distribution Channel.
Enter an order quantity of the pieces.
47
Click on the save icon to save the inquiry and wrote the assigned unique number to
the inquiry.
19. true
20. false
21. To create a sales order, follow the next menu path or execute the command of
VA01. Logistics Sales and Distribution Sales Order Create
Enter the Order Type of OR. The other fields (Sales Organization, Distribution
Channels etc.) should not essentially be filled.
Make sure that you have selected the last created Sales document according to cus-
tomer PO number.
Click on the Copy icon to copy the order information from the quotation into the
sales order screen.
Enter a new PO number (i.e. “0003”) and the valid PO date. (Note: the Req. deliv.
date is copied from the quotation and could be different from the available date).
Click on the save icon to save the sales order and wrote the assigned unique num-
ber to the sales order.
22. Follow the menu path or execute the command of MD04:
Logistics Materials Management Inventory Management Environment
Stock Stock/Requirements List
Enter the Material of Deluxe Touring Bike (DXTR2000) and the Plant of Dallas.
Then click on the icon.
48
Material Management (MM)
In this chapter we represent the procurement process, where the initial step in this process is
to create a requisition, which is then converted to a purchase order and sent to a vendor. When
the vendor receives the purchase order, it ships the materials, which the ordering party re-
ceives in the receive materials step. The ordering party also receives an invoice from the ven-
dor, and it then makes a payment to the vendor.
This simple process has served GBI well until now due to its small size and closely
connected operations. However, as GBI has grown and its operations have become more dis-
persed and complex, GBI’s management has come to realize that it needs to reevaluate how
GBI procures materials so that the company can take advantage of the most effective and effi-
cient processes. To accomplish this objective, management needs to familiarize itself with the
various options available to GBI for executing the procurement process. In addition, it wants
to analyze the process steps and their impact in greater depth (Magal– World, 2012).
Once management has attained a thorough understanding of the tactical and strategic
aspects of this current procurement process, it can then design and implement a new process
that best meets GBI’s needs. It can also determine the best way to manage this process using
the SAP ERP system.
Organizational Structure in Material Management
The SAP system allows complex volume of business units to represent legal structure of a
company in accordance with the procurement processes. In this section, we shall give an
overview on the logistics components of enterprises used in Material Management (Bow-
ersox–Closs, 2012):
Client
A client is an independent environment in the system that is self-contained both in legal and
organizational aspect. A client in MM represents separated master records and other set of
tables.
Company Code
Company Code is the smallest organization unit for which a complete system can be main-
tained. The company code is a financial accounting unit that entry all logistics events that
require posting to the accounts and create a complete audit for financial statements.
49
Plant
A plant is an operating area or branch within a company in logistics that subdivide the pro-
curement process from the viewpoint of manufacturing, distribution, purchasing or mainte-
nance and material planning etc.
Storage Location
Storage Location is an organizational unit that facilitates the differentiation between the vari-
ous stocks of a material in a plant.
Purchasing Organization
The buying activity of a plant takes place at the purchasing organization. The Purchasing Or-
ganization unit is responsible for procuring services and materials. In other perspective it ne-
gotiates the conditions of the purchase with vendors.
Purchasing Group
The Purchasing Group is a key organizational unit that represents the buyer or group of buy-
ers who are responsible for certain purchasing activities, such as the procurement of a material
or class of material.
50
The Procurement Process
A typical procurement process includes the following phases (Akash, 2012):
Determination of requirements
Purchase requisitions are created manually to inform the Purchasing department about mate-
rial requirements. After setting an MRP procedure for a material in the material master, the
SAP system automatically generates a planned order or a purchase requisition. If the system
generates a planned order, it can later be converted to a purchase requisition.
Determination of supply source
The system supports buyers in determining possible supply sources. The sources of supply
determination can be used to create requests for buyer quotations (RFQs). In addition, pur-
chase orders, contracts, and conditions can be referred to in transactions as logistics docu-
ments that already exist in the system.
Vendor selection
After comparing the prize differences of various quotations, the appropriate vendors can be
selected easily in the procurement process. The rejection letter in this process can be sent au-
tomatically if the conditions are not acceptable.
Purchase order processing
The purchase orders can be created manually or automatically by the system. Data necessary
for purchase orders can be copied from purchase requisitions or quotations. The option of
working with outline agreements is also available.
Purchase order monitoring
This process monitor the processing status of the purchase orders in the system, for instance if
a delivery or an invoice has already been received for a purchase order item. The outstanding
deliveries can also be reminded to the vendors.
Goods receipt
In the goods receipt process the inbound deliveries are entered in the system by referring to
the associated purchase order to reduce the number of entries that need to be made. Referring
to the associated purchase order also allows us to check whether the goods are delivered in the
required quantities and match the relevant purchase order. The system updates the purchase
order history continuously.
51
Invoice verification
The incoming invoices are verified in the system by referring to the relevant purchase order or
delivery to check the calculations and accuracy of the invoice. The verification availability of
purchase order and goods receipt data means that the system notifies differences in quantity
and price.
Payment processing
During the payment process the vendor’s liabilities are settled. The accounting department is
responsible for running this program on a regular basis.
Beside the general procurement process described here (see Figure 26.), other procurement
processes are also possible.
Figure 25. The process of procurement
Source: (Akash, 2012)
Determinations of
requirements
Determinations of sources of
supply
Vendor selection
Purchase order
processingGoods receipt
Invoice verification
Payment processing
Purchase requsition
Purchase order
52
Master Data in Materials Management
In Material Management, there are a number of master data files that are fundamental to the
functionality (Murray, 2010). The Material Master contains all of the information that is re-
quired for a material with regards to each area the material is used, i. e., sales, finance, manu-
facturing, quality, and so on. The Vendor Master contains the information that is required for
purchasing any item or service. The purchasing information record is used when purchasing
specific items for a vendor. Batch data is held for each batch of material that is defined in the
system. That data can be used to determine which batch is used or sold. Serial number data is
used for items that need to be uniquely identified, for example, if each piece is purchased with
a warranty.
Material Master Data
The Material Master data is comprised of data that relates to a number of different areas. For
materials to be used successfully, the data has to be collected and entered into the Material
Master record. Not only does the data have to be entered for those areas but also for the spe-
cific organizational areas: plants, storage locations, sales organizations, and so on. For exam-
ple, a material cannot be purchased without the relevant purchasing data being entered.
Vendor Master Data
The Vendor Master record contains data that is used in purchasing. The Vendor Master has
three distinct sections: general data, purchasing data, and accounting data. The general data
has basic information on the vendor such as name, address and telephone number. The pur-
chasing data is entered for the vendor at a purchasing organizational level and includes con-
trol data required in purchasing, partner functions, and purchasing defaults. The accounting
data is the financial data that is entered at the company code level. This data includes tax in-
formation, bank details, and payment methods.
Purchasing Data
The Material Master will contain some purchasing data at the purchasing organization level,
which means that the material data may be different for one purchasing organization to the
next. However, it is the purchasing information record that contains data to a unique combina-
tion of vendor and material. This means that the same material can be purchased from differ-
ent vendors, and the price offered by each vendor may be also different.
53
Batch Management
The Batch Management is used when items of the same material number have the same at-
tributes and can be identified using those attributes. For example, for a biological company, a
batch of chemicals will be made at one time and that batch will have values for a number of
attributes that will be different from a different batch. The batch values can determine whether
a batch is suitable to be used, sold, or stored in a certain way.
Serial Numbers
A serial number is used to exceptionally distinguish items of the same material number. This
is important for companies that use materials that are purchased with a warranty or materials
that must be uniquely identified. For example, aircraft parts are serialized so that maintenance
personnel can record data against that serialized part and replace it when it has performed a
certain number of cycles.
Global Bike Structure for Materials Management
The following company (GBI) is used to demonstrate logistics functionalities in MM. The
Global Bike Inc. has three plants in Dallas, San Diego and Miami in the US. Thus, in Germa-
ny, in Hamburg and Heidelberg there are other ones. The storage locations refer to raw mate-
rials, finished or semi-finished goods and miscellaneous products.
Figure 26. The GBI’s enterprise structure in MM
Source: based on ARIS(2015)
Create Purchase Requisition
Global Bike
Global Bike Inc
San Diego and Miami
Trading goods
Finished goods
Miscellaneous
Dallas
Raw materials
Semi fin. goods
Finishes goods
Miscellaneous
Global Bike Germany
Heidelberg
Raw materials
Semi fin. goods
Finishes goods
Miscellaneous
Hamburg
Trading goods
Finished goods
Miscellaneous
54
Exercises
Exercise No. 9. : Use the SAP Easy Access Menu to create a Purchase Requisition.
In this exercise a promotional campaign will be initiated in 1 month to introduce new bikes.
Create a purchase requisition about ten products. Choose a vendor who is capable of satisfy-
ing the needs emerging in this sales campaign.
Solution of Exercise No. 9. :
Follow the menu path or execute the command of ME51N:
Logistics Materials Management Purchasing Purchase Requisition Create
This will produce the following screen.
Figure 27. Create Purchase Requisition
55
Figure 28. Create Purchase Requisition – Item Overview
Select the Item Overview icon to expand the item overview.
Figure 29. Create Purchase Requisition – Material
Enter into the Material field the Deluxe Touring Bike (DXTR1000) and the quantity of 10.
The selected day for Delivery Date has to be calculated as one month from today.
56
Following this, enter the Plant of Dallas (DL100), the Storage Location – Finished Goods
(FG00), and the Purchasing Group of North America (N00).
After clicking on compare the entering screen with Figure 29.
Then, click on the save icon to save the purchase requisition.
The system will create a unique Purchase requisition document number:
Click on the exit icon to return to the SAP Easy Access screen.
57
Exercise No. 10. : Use the SAP Easy Access Menu to display the Stock/Requirements
List.
In this exercise, display the stock/requirements list about the bikes. The created purchase req-
uisition should be visible within the stock/requirements list with a date of one month from
today.
Solution of Exercise No. 10. :
Follow the menu path or execute the command of MD04:
Logistics Materials Management Inventory Management Environment
Stock Stock/Requirements List
Figure 30. Stock/Requirement List in MM module
Enter the Material of Deluxe Touring Bike (DXTR1000) and the Plant of Dallas (DL100).
Then click on the icon. The stock/requirements list should be looked similar to the
screen below.
58
Figure 31. Stock/Requirement List – Initial Screen
This will produce the following screen.
Figure 32. Stock/Requirement List – Initial Screen
Click on the exit icon to return to the SAP Easy Access screen.
59
Exercise No. 11. : Use the SAP Easy Access Menu to create a Request for Quotation.
In this exercise, create a separate request for quotation (RFQ) for a vendor. This process will
be used to collect the necessary pricing, delivery, etc. information that is needed to support
the selection of a vendor to satisfy the needs for the requested bikes.
Solution of Exercise No. 11. : Follow the menu path or execute the command of ME41:
Logistics Materials Management Purchasing RFQ/Quotation Request for
Quotation Create
Figure 33. Request for Quotation (RFQ)
Figure 34. Request for Quotation (RFQ) – Initial Screen
60
Enter RFQ Type AN, today’s date as RFQ Date, and the first day of the next month as
Quotation Deadline.
In the Organizational Data field group enter the Purchasing Organization of GB US. –
(US00) and the Purchasing Group of North America (N00).
In the Default Data for Items, enter the Plant of Dallas (DL100).
Figure 35. Request for Quotation (RFQ) – Initial Screen
Then, select the icon, which will produce the following screen.
61
Figure 36. Selection of Purchase Requisition
If the Purchase Requisition number has not been entered yet, use the F4 help to find the
saved (10000010) number of the purchase requisition. Then, click on the icon and the
Create RFQ - Selection List (see figure 37.) will appear:
Figure 37. Create RFQ - Selection List
Enter the “SLoc” (Storage Location) as Finished Goods (FG00).
Click on the “Select all items” icon to select all items.
Then, click on the “Adopt” icon to adopt all item information into the RFQ.
62
Figure 38. Create RFQ – Item Overview
In the Create RFQ - Item Overview menu see Item (10) screen, then click on Header de-
tails icon to display the RFQ header data. Enter RFQ1000 as the Collective number - Coll.
No.
Figure 39. Create RFQ – Header Data
63
After comparing the entry with the following screen below, click on the “Line items”
icon to display the line items.
Figure 40. Create RFQ – Item Overview
Select the icon to display the vendor address. In the Vendor Address screen, use the F4
help function to find a vendor. Use the *Dallas* text for searching a vendor.
Figure 41. Vendor selection
64
Double-click on the result row (see Figure 41.) to insert the vendor number (103000) of
Dallas Bike Basics into the Vendor field.
Figure 42. Vendor selection - Result
Then, press enter to occupy the vendor’s data into the corresponding fields.
Figure 43. Create RFQ – Vendor Address
Click on the icon to save the RFQ. Then a warning message will appear. In this case
press “Yes” to save it anyway. Finally, the SAP system will create a unique document (RFQ)
number .
Click on the exit icon to return to the SAP Easy Access screen.
65
Exercise No. 12. : Use the SAP Easy Access Menu to create a Purchase Order with refer-
ence to an RFQ.
In this exercise, create a Purchase Order by referencing the quotation received from the ven-
dor. Reference is made to the successful quotation and the details are imported into a new PO.
Solution of Exercise No. 12. : Follow the menu path or execute the command of ME21N:
Logistics Materials Management Purchasing Purchase Order Create
Vendor/Supplying Plant Known
Figure 44. Create Purchase Order
If there is no navigation screen on the left side, click on the icon. As
selection variant choose “Requests for quotations” as shown below
Figure 45. Request for Quotation
66
In the following screen, in the Material Number field use the F4 help to find the requested
trading goods. On the Material by Material Type tab, select the Material field and search for
the Deluxe Touring Bike (DXTR1000).
Figure 46. Material by Material Type
Then, press Enter or click on .
Figure 47. Purchasing Documents
67
Double-click on the bikes to select it. Click on the execute icon. This will produce a
screen with the RFQ.
Figure 48. Document Overview
Single-click on the requisition/quotation that wants to be referred and select the “Adopt”
icon to adopt the information.
Figure 49. Create Purchase Order
68
Verify that the system copied the Material number. ( Note: if the header data have not
been displayed yet, open the section by clicking on the Header icon.)
Save the Purchase Order with “Save” icon. The system will assign a unique purchase
order document number.
Click on the exit icon to return to the SAP Easy Access Menu screen.
Exercise No. 13. : Use the SAP Easy Access Menu to create Goods Receipt for Purchase
Order.
In this exercise, receive into inventory the stock items ordered in the previous task. A goods
receipt document will be created referencing our purchase order thereby ensuring the products
ordered was received within the timeframes requested and in quality condition. Goods on
hand will be increased and an accounting document will be generated recognizing the value
associated with these goods.
Solution of Exercise No. 13. : Follow the menu path:
Logistics Materials Management Inventory Management Goods Movement Goods
Receipt For Purchase Order GR for Purchase Order (MIGO)
Make sure that Goods Receipt and Purchase Order are selected in the dropdown lists. Enter
(or find) the PO number in the field next to them. Then, press Enter which will populate the
PO data into the fields.
If the line item in the item overview section is read only, click on it at the bottom of the screen
to close the item detail section. Then, check OK. The SLoc (Storage location) Trading Goods
should already be entered.
Finally, click on the icon or the save icon to post the goods receipt. The system will
create a unique goods receipt document.
Click on the exit icon to return to the SAP Easy Access Menu screen.
69
Exercise No. 14. : Use the SAP Easy Access Menu to Display the purchase order history.
In this exercise, Review the status for the PO for chain locks. A PO history tab is created
within the PO once a transaction has taken place against the order number to support this
functionality.
Solution of Exercise No. 14.: Follow the menu path:
Logistics Materials Management Purchasing Purchase Order Display
The PO is displayed automatically. If not, click on (Other Purchase Order) icon and find
the PO number. If the line item data is not yet displayed, open the section by clicking on the
Item Detail icon.
On the Purchase Order History tab, review the activity that has taken place in reference to this
purchase order. Click on your WE (Goods Receipt) material document number. This will
bring directly to the material document created when the goods receipt is created.
On the Doc. info tab, select the icon. Now looking at the General Ledger post-
ing that took place in the background when goods receipt was saved. Click on the icon
twice to go back to your PO.
On the Purchase Order History tab, click on your RE-L (Invoice Receipt) document number.
This will bring directly to the invoice document that just created when the invoice receipt is
done.
Select the icon. Now looking at the General Ledger posting that hap-
pened in the background when saving the invoice receipt. Click on the icon to go back to
the invoice document.
Click on the exit icon three times to return to the SAP Easy Access screen.
70
Questions
Answer the following questions!
1. The initial step in procurement process is to create a requisition,
a) True
b) False
2. A company code is an independent environment in the system that is self-contained
both in legal and organizational aspect
a) True
b) False
3. A ………………… is an operating area or branch within a company in logistics that
subdivide the procurement process
a) storage location
b) plant
c) purchasing organization
d) purchasing group
4. A ……………………………… is the smallest organization unit for which a complete system
can be maintained
a) storage location
b) plant
c) purchasing organization
d) company code
5. A Storage Location is an organizational unit that facilitates the differentiation between
the various stocks of a material in a plant.
a) True
b) False
71
6. A Storage Location unit is responsible for procuring services and materials.
a) True
b) False
7. Describe the process of procurement in MM.
…………………………………………………………………………………………,,
…………………….……………………………………………………………………
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………,
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
8. Purchase requisitions are created manually to inform the Purchasing department about
material requirements.
a) True
b) False
9. Purchase requisitions can be used to create requests for buyer quotations (RFQs).
a) True
b) False
10. This ……………. is the processing status of the purchase orders in the system can be
maintained.
a) purchase order
b) process monitor
c) goods receipt
d) invoice verification
72
11. The process of …………….. is verified in the system by referring to the relevant pur-
chase order or delivery to check the calculations and accuracy of the invoice.
a) purchase order
b) process monitor
c) goods receipt
d) invoice verification
12. The Vendor Master contains the information that is required for purchasing any item
or service.
a) True
b) False
13. The Vendor Master contains all of the information that is required for a material with
regards to each area the material is used.
a) True
b) False
14. The ………………… will contain some purchasing data at the purchasing organiza-
tion level, which means that the material data may be different for one purchasing or-
ganization to the next.
a) Serial Numbers
b) Material Master
c) Batch Management
d) Purchasing Data
15. The ………………… is used when items of the same material number have the same
at-tributes and can be identified using those attributes
a) Serial Numbers
b) Material Master
c) Batch Management
d) Purchasing Data
73
16. A serial number is used to exceptionally distinguish items of the same material num-
ber.
a) True
b) False
17. The Global Bike Inc. has three plants in Dallas, San Diego and Miami in the US.
a) True
b) False
18. The Global Bike Inc. has three plants in Germany, in Hamburg, Berlin and Heidelberg
there are other ones.
a) True
b) False
19. Describe the GBI’s enterprise structure in MM.
…………………………………………………………………………………………,,
…………………….……………………………………………………………………
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………,
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………,
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………,
…………………………………………………………………………………………
…………………………………………………………………………………………
74
20. Use the SAP Easy Access Menu and create a Purchase Requisition with one week
deadline. Use the following information to solve this exercise, and describe it step by
step:
a) Purchasing Group: North America
b) Storage Location: Finished goods
c) Plant: Dallas
d) Divisions: Bicycles
e) Product: DXTR1001
f) Quantity: 10
g) ………………………………………………………………………………………
……………………….………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
The unique number of the Purchase Requisition: ………………………………
21. Use the SAP Easy Access Menu and create a Request for Quotation (RFQ) with one
month deadline. Use the following information to solve this exercise, and describe it
step by step:
a) Purchasing Organization: GB US.
b) Purchasing Group: North America
c) Storage Location: Finished goods
d) Plant: Dallas
e) Divisions: Bicycles
f) Product: DXTR1001
g) Quantity: 10
h) Vendor Code: 103000
75
………………………………………………………………………………………
……………………….………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
The unique number of the RFQ: ………………………………….
22. Use the SAP Easy Access Menu and create a Purchase Order with reference to an
RFQ.with one month deadline. Use the following information to solve this exercise,
and describe it step by step:
a) Purchasing Organization: GB US.
b) Purchasing Group: North America
c) Storage Location: Finished goods
d) Plant: Dallas
e) Divisions: Bicycles
f) Product: DXTR1001
g) Quantity: 10
h) Vendor Code: 103000
i) ………………………………………………………………………………………
……………………….………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
The unique number of the Purchase Order: ………………………………….
76
23. Use the SAP Easy Access Menu and to display the purchase order history. Describe
the solution step by step:
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………..
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………..
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………..
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………..
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………..
…………………………………………………………………………………………..
77
Solutions of the Questions
Check your answers!
1. true
2. false
3. b
4. d
5. true
6. false
7. Check Figure 25. for the correct answer.
8. true
9. false
10. b
11. d
12. true
13. false
14. b
15. c
16. true
17. true
18. false
19. Check Figure 26. for the correct answer.
20. Follow the menu path or execute the command of ME51N:
• Logistics Materials Management Purchasing Purchase Requisition
Create
Enter into the Material field the Material and the quantity. The selected day for De-
livery Date has to be calculated as given from today.
Enter the Plant of Dallas, the Storage Location, and the Purchasing Group of North
America.
Click on the save icon to save the purchase requisition.
21. Follow the menu path or execute the command of ME41:
Logistics Materials Management Purchasing RFQ/Quotation Request
for Quotation Create
78
Enter RFQ Type AN, today’s date as RFQ Date, and the first day of the next
month as Quotation Deadline.
In the Organizational Data field group enter the Purchasing Organization of GB
US. – (US00) and the Purchasing Group of North America (N00). In the Default
Data for Items, enter the Plant of Dallas (DL100).
Then, select the Reference to PReq icon.
Find the earlier saved number of the purchase requisition and click on the execute
icon.
Enter the “SLoc” (Storage Location) as Finished Goods (FG00).
Click on the “Select all items” icon to select all items.
Then, click on the “Adopt” icon to adopt all item information into the RFQ.
In the Create RFQ - Item Overview menu see Item (10) screen, then click on
Header details icon to display the RFQ header data. Enter the Collective number -
Coll. No.
Double-click on the result row to insert the vendor number (103000) of Dallas
Bike Basics into the Vendor field.
Then, press enter to occupy the vendor’s data into the corresponding fields.
Click on the save icon to save the RFQ.
22. Follow the menu path or execute the command of ME21N:
Logistics Materials Management Purchasing Purchase Order Create
Vendor/Supplying Plant Known
In the Material Number field use the F4 help to find the requested trading goods.
On the Material by Material Type tab, select the Material field and search for the
Deluxe Touring Bike. Then, press Enter or click on .
Double-click on the bikes to select it. Click on the execute icon. This will produce
a screen with the RFQ.
Single-click on the requisition/quotation that wants to be referred and select the
“Adopt” icon to adopt the information.
Verify that the system copied the Material number. ( Note: if the header data
have not been displayed yet, open the section by clicking on the Header icon.)
Save the Purchase Order with “Save” icon.
23. Follow the menu path of:
Logistics Materials Management Purchasing Purchase Order Display
79
The PO is displayed automatically. If not, click on the (Other Purchase Order) icon
and find the PO number. If the line item data is not yet displayed, open the section by
clicking on the Item Detail icon.
On the Purchase Order History tab, review the activity that has taken place in refer-
ence to this purchase order. Click on the WE (Goods Receipt) material document
number. This will bring directly to the material document created when the goods re-
ceipt is created.
On the Doc. info tab, select the FI document icon. Now looking at the General Ledger
posting that took place in the background when goods receipt was saved. Click on the
back icon twice to go back to your PO.
On the Purchase Order History tab, click on the RE-L (Invoice Receipt) document
number. This will bring directly to the invoice document that just created when the in-
voice receipt is done.
Select the Follow on Documents icon. Now looking at the General Ledger posting that
happened in the background when saving the invoice receipt. Click on the back icon to
go back to the invoice document.
Click on the exit icon three times to return to the SAP Easy Access screen.
80
References
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Bowersox, D. J. – Closs, D. J. (2013): Logistical Management: The Integrated Supply Chain
Process, McGraw-Hill.
Chudy, M. – Castedo, L. – Lopez, R. (2015): Sales and Distribution in SAP ERP: Practical
Guide, SAP Press.
Chudy, M. – Castedo, L. (2012): Sales and Distribution with SAP: 100 Things You Should
Know About... , SAP Press.
Magal, S. R. – World J. (2012): Integrated Business Process with ERP Systems, Whiley.
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Mohapatra, A. (2014): Optimizing Sales and Distribution in SAP ERP: Functionality and
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