SAP R/3 Business Blueprint Understanding Enterprise Supply Chain Management

by Curran, Thomas A.; Ladd, Andrew

• ISBN13: 9780130853400
• ISBN10: 0130853402
• Edition: 2nd
• Format: Paperback
• Copyright: 1999-08-19
• Publisher: Prentice Hall

Summary

8534K-4 The complete business and implementation guide to SAP(TM) R/3(TM)! In order to gain the maximum value from SAP(TM) R/3(TM), you need to understand the rich business framework embedded in R/3(TM) and know how to implement it within your unique organization. The revision of this best-selling classic does both: documenting the deep process knowledge built into R/3(TM), helping decision-makers understand its benefits and offering start-to-finish guidance for R/3(TM) implementers organization-wide. Newly updated to reflect R/3(TM) Release 4.5, this book delivers: Detailed coverage of finance, human resources, production, purchasing, sales, and service management with SAP(TM) R/3(TM) Key business-process scenarios, presented in common business terms An overview of the IT infrastructure provided by SAP(TM) for e-commerce and supply chain management Analysis of R/3(TM) middleware transaction management and application distribution Practical coverage of the R/3(TM) Repository, SAP(TM) Business Framework, and R/3(TM) Business Objecs Updates on the latest methodologies for R/3(TM) evaluation and the tools for R/3(TM) implementation A view of SAP(TM) R/3(TM) beyond Y2K and the challenges for the next generation enterprise using the Internet You won't find a clearer guide to SAP(TM) R/3(TM). You'll discover how key components of R/3(TM) link together, how they integrate the entire enterprise, and how to keep deriving business benefits from R/3(TM) long after it's been installed. And to help you derive benefits from this book long after you've purchased and read it, go to the PrenticeHall PTR ERP Series Companion Website-designed to keep you up-to-date with the latest tools, techniques, information, and data on Enterprise Resource Planning technologies. You'll find this Companion Website one of the best ERP i

Author Biography

Thomas Curran is President of Component Software (Cambridge, MA), which produces desktop ERP applications. He worked for five years as technology strategist for SAP AG.

Andrew Ladd is Director of Communications for Component Software, Inc., for whom he was written numerous white papers and technical documents.

Table of Contents

Foreword	xv
Preface	xvii
Copyright and Trademark Acknowledgments	xxi
Introduction	xxiii
Part I Business Engineering	1	(58)
Business Engineering and Enterprise Optimization	3	(16)
Significance of Business Engineering	4	(1)
Principles of Business Engineering	5	(1)
Elements of Business Engineering	6	(1)
Requirements For Successful Implementation of Business Engineering	7	(1)
It Implementation Issues	8	(1)
Effects of Integration of Information Technology	9	(1)
Evolution of Information Technology	10	(1)
Client/Server Technology	11	(2)
Benefits of Client/Server Technology	13	(1)
SAP™ and Client/Server Technology	14	(2)
Beyond Business Engineering	16	(2)
Continuous Engineering	16	(1)
Supply Chain Management	17	(1)
Desktop ERP	17	(1)
Conclusion	18	(1)
The Business Blueprint	19	(26)
Pros and Cons of Business Blueprints	20	(2)
General Design of the R/3™ Blueprint	22	(1)
Focus of the R/3™ Blueprint	23	(1)
Event-Driven Process Chain Methodology	24	(2)
Describing Complex Business Processes	26	(6)
Ordering Toner	28	(2)
Recruiting a New Employee	30	(1)
Planning a Seminar	30	(2)
EPC Methodology and Viewpoints in the R/3™ Reference Model	32	(11)
Reference Model Viewpoints---Car Dealership	34	(2)
The Component Model---What Happens?	36	(1)
The Organizational Model---Who Does What?	37	(1)
The Data Model---What Is Needed?	38	(3)
The Interaction Model---How Do Company Models Interact?	41	(2)
Summary	43	(2)
Configure to Order	45	(14)
Standard Software Implementation Issues	47	(1)
Mapping with the Business Blueprint	48	(2)
Redlining the Blueprint	50	(1)
Extending the Business-Process Design	51	(6)
Conclusion	57	(2)
Part 2 Process Design	59	(206)
Value Chain Thinking	61	(10)
The Value Chain Principle	62	(2)
R/3™ and the Value Chain	64	(1)
Overview of Part 2: Value Chain Thinking	65	(6)
Sales Logistics	71	(28)
Standard Order Handling Scenario	72	(14)
Mailing Campaign Processing	76	(1)
Sales Activity Processing	77	(1)
Customer RFQ Processing	78	(1)
Customer Quotation Processing	79	(1)
Standard Order Processing	80	(3)
Delivery Processing	83	(2)
Goods Issue Processing for Stock Material	85	(1)
Billing	85	(1)
Contract Handling and Scheduling Agreements	86	(2)
Third-Party Order Handling	88	(1)
Customer Consignment Stock Handling	89	(1)
Cash Order Handling	90	(1)
Rush Order Handling	91	(1)
Make-to-Order Sales Order Handling	92	(1)
Assembly-to-Order Sales Order Handling	93	(1)
Empties and Returnable Packaging Handling	93	(1)
Returns Handling	94	(1)
Decentralized Shipping	95	(2)
R/3 Sales Logistics Summary	97	(2)
Production Logistics	99	(22)
Production by Lot Size	101	(9)
Processing of Sales and Operation Planning	103	(2)
Demand Management	105	(2)
Material Requirements Planning (Single-Item MPS)	107	(2)
Creation, Release, and Execution of Production Order	109	(1)
Repetitive Manufacturing	110	(1)
Make-to-Order Production	111	(1)
Process Manufacturing	112	(1)
Project-Related ``Engineer to Order''	113	(2)
Quality Management for Goods Receipt from Production	115	(3)
R/3 Production Logistics Summary	118	(3)
Procurement Logistics	121	(22)
Procurement of Stock Material	122	(8)
Material Requirement Planning	126	(1)
Requisition Processing to Stock Material	126	(1)
Processing of RFQ Issued to Vendor	127	(1)
Vendor Quotation Processing	127	(2)
Purchase Order Processing for Stock Material	129	(1)
Goods Receipt Processing	130	(1)
Procurement of Consumable Materials	130	(2)
Procurement of Consignment Materials	132	(2)
Procurement of Subcontract Work	134	(2)
Stock Transfer Processing	136	(1)
External Services Management	137	(1)
R/3™ Procurement Logistics Summary	138	(5)
External Accounting	143	(24)
Vendor Handling	145	(7)
Vendor Master Record Processing	146	(3)
Vendor Invoice Processing	149	(1)
Down Payment Release	149	(1)
Automatic Payment	150	(1)
Manual Payment	151	(1)
Customer Processing	152	(2)
OTA Vendor Processing	154	(1)
Creditor Subsidiary/Head-Office Processing	155	(1)
General Ledger Processing	156	(1)
Special-Purpose Ledger Handling	157	(1)
Consolidation	158	(3)
R/3™ External Accounting Overview	161	(6)
Organization and Human Resource Management	167	(24)
Recruitment	169	(8)
Creating a Search	171	(1)
Tracking the Search Process	172	(1)
Job Description	172	(2)
Employee Application Processing	174	(1)
Confirming the Application Receipt	174	(1)
Preliminary Personnel Choice	174	(1)
Personnel Processing	175	(1)
Employment Agreement Offer Processing	175	(1)
Applicant Status Check	175	(1)
Preparation for Employing the Applicant	175	(1)
Rejection of Offer	176	(1)
Applicant Pool Administration	176	(1)
Putting an Application on Hold	177	(1)
Rejection of Application	177	(1)
Business Event Handling	177	(1)
Business Trip Management	178	(1)
Time Management Handling	179	(1)
International Payroll Processing	180	(2)
Salary Administration	182	(1)
Benefits Administration	183	(1)
Personnel Planning and Management	184	(3)
R/3 Procurement Logistics Overview	187	(4)
Business Planning and Controlling	191	(18)
Cost Object Controlling	193	(5)
Production Order Preliminary Costing	196	(1)
Production Order Simultaneous Costing	197	(1)
Period-End Closing and Final Costing	198	(1)
Profitability Analysis	198	(2)
Profit Center Accounting	200	(4)
Overhead Cost Management	204	(2)
R/3™ Business Planning and Controlling Summary	206	(3)
Capital Asset Management	209	(22)
Planned Plant Maintenance	211	(6)
Maintenance Plan Processing	213	(1)
Maintenance Plan Scheduling	214	(1)
Maintenance Call Processing	214	(1)
Maintenance Order Creation and Processing	215	(1)
Maintenance Order Release	215	(1)
Maintenance Order Execution	215	(1)
Maintenance Order Completion Confirmation	216	(1)
Maintenance Order Settlement	216	(1)
Damage-Related Maintenance Processing	217	(1)
Project-Based Maintenance Processing	218	(1)
Cash Management	219	(2)
Budgeting	221	(1)
Fixed Asset Processing	222	(2)
Leased Asset Processing	224	(2)
R/3™ Capital Asset Management Summary	226	(5)
Finance Management	231	(18)
Treasury Management	232	(7)
Fixed-Term Deposit Processing (Money Market/Foreign Exchange/Derivatives Trading)	233	(1)
Product Type Selection	234	(1)
Fixed-Term Deposit Processing	234	(1)
Rollover	235	(1)
Correspondence	236	(1)
Settlement in Treasury	236	(1)
Netting Processing	236	(2)
Posting Approval in Treasury	238	(1)
Posting in Treasury	238	(1)
Accrual	238	(1)
Key Date Valuation	239	(1)
Realized Profits/Losses	239	(1)
Treasury Master Data Scenario	239	(1)
New Security Management	240	(1)
Treasury	241	(1)
Treasury Information System	241	(1)
Cash Management	242	(2)
Market Risk Management	244	(1)
R/3™ Finance Management Summary	245	(4)
Customer Service	249	(16)
Field Service	250	(7)
Recording and Processing Service Notifications	253	(2)
Opening and Processing Service Orders	255	(1)
Service Order Release	255	(1)
Service Order Completion Confirmation	256	(1)
Technical Results Recording	256	(1)
Resource-Related Billing and Invoice Processing	257	(1)
Service Order Settlement	257	(1)
Long-Term Service Agreements	257	(2)
In-House Repair Processing	259	(1)
Replacement Part Delivery Processing	259	(1)
Notification Receipt and Processing	259	(1)
Evaluations	260	(1)
R/3™ Customer Service Summary	261	(4)
Part 3 Architecture, Framework, and Tools	265	(98)
Architecture of the R/3™ System	267	(24)
R/3™ and the Distributed Environment	269	(2)
The Three-Tier Client/Server R/3™ Architecture	271	(2)
Benefits of the R/3™ Three-Tier Client/Server	273	(2)
Interprogram Communication	275	(1)
Middleware Transaction Management	276	(2)
Rationale for Distributed Business-Process Integration	278	(4)
Capabilities of Application Distribution In R/3+TM	282	(3)
Tools for Application Distribution	285	(3)
Model-Based Application Distribution	286	(1)
Distribution Reference Model	286	(1)
Using The Business Blueprint for Application Integration	287	(1)
Conclusion	288	(3)
R/3™ Framework and Infrastructure	291	(20)
Background of Business Integration	292	(2)
Sap™ Business Framework	294	(3)
Configuration of Enterprise Applications	295	(1)
Rationale for the Business Framework	296	(1)
Repository as Integrating Factor	297	(8)
Business Processes	299	(1)
Business Objects	300	(2)
Data Models	302	(1)
Object-Oriented Interfaces	303	(1)
Business Components	304	(1)
Enterprise Application Development	305	(5)
ABAP/4 Development Workbench	305	(2)
Development Workbench Features	307	(3)
Conclusion	310	(1)
Business Engineering in R/3™	311	(30)
R/3™ Business Engineer Overview	312	(2)
Business Engineer and Streamlined Implementations	314	(1)
Modeling the Distributed Enterprise	315	(6)
Application Components	316	(2)
Session Manager	318	(2)
Enterprise Organization	320	(1)
Using the R/3™ Reference Model	321	(8)
Business Object Model	321	(1)
Object-Oriented Data Model	322	(2)
Business Process Model	324	(2)
Workflow Model	326	(3)
Guideline for Implementing R/3™	329	(1)
Project Management Procedure Model	330	(1)
Accelerated SAP™	331	(3)
The Roadmap	332	(1)
Tools	332	(1)
R/3™ Services and Training	332	(1)
Project Preparation	333	(1)
Business Blueprint	333	(1)
Realization	333	(1)
Final Preparation	334	(1)
Go Live and Support Continuous Change	334	(1)
Workflow and Personnel Organization	334	(2)
Open Repository Interface	336	(3)
Business Engineer: Future Vision	339	(2)
Next Generation Enterprise	341	(22)
What Is Internet ERP?	341	(3)
Next Generation Application Components	344	(2)
The Industry Reference Model, Process Configuration, and Vertical Markets	346	(2)
Supply Chain Optimization, Planning, and Execution	348	(2)
Enterprise Application Integration	350	(4)
Business Object Integration Model	352	(1)
Business Process Integration Models	353	(1)
Electronic Commerce	354	(2)
Desktop ERP: Automating the Way People Work	356	(6)
Improved Browsers	356	(1)
Desktop ERP	357	(1)
Autonomous Software Agents	358	(4)
Conclusion	362	(1)
Index	363

Excerpts

Introduction "Business engineering is the rethinking of business processes to improve and accelerate the output of processes, materials or services." (Philip Morris, Lausanne, Switzerland) "It's the search for an optimal flow in a company." (Messerli AF, Switzerland) "It's the streamlining of business processes to have maximum effect with minimum resources in supporting company goals." (Ernst & Young, South Africa) "Generally, it's a customer focus. It's also the designing of new processes using new information technology to create an efficient business network that involves creative staff in the process redesign." (Fahrzeugausrustung Berlin GmbH, Germany)Companies from around the world are taking advantage of information technology (IT) to radically alter how they conduct business. In the past, IT was used simply to automate existing business functions, but now IT can improve or completely change how businesses operate. This approach is called Business Engineering, which has been the logical next step in the business-process reengineering revolution.Unlike business-process reengineering (BPR), which used IT mainly to automate certain functions performed in individual organizations -- such as manufacturing, finance, or production -- Business Engineering (BE) utilizes IT for designing or redesigning processes, the set of connected steps or "chains" performed in a business. In this way, BE takes advantage of information technology to support the redesign of organizations. By using BE to engineer entire process chains that span functional or organizational boundaries, companies can integrate all their critical business activities. Moreover, they can do so much earlier in an IT implementation than if using the older, function-centric approach of early BPR strategies. Completing process chains rapidly and efficiently is of great added value to both the company and its customers. It makes such core processes as production and finance more efficient and can bring competitive advantages through reduced costs, faster time-to-market, and improved responsiveness to customers.Business engineering arose out of the need created by BPR for software systems that could adequately support changing business processes. Although companies have gained a great deal from improving their business processes, many also have encountered problems with their business-process reengineering. After examining existing business processes, many companies completely dispensed with them, creating new process designs instead. Too often they miscalculated the risks and costs not only of reinventing new processes but of finding a software solution to match the new process design. After various trials and tribulations with poor software tools and systems, many companies have had to do away with their process design work simply because their information system software could not support the new design.In Business Engineering, IT is used both to create and support new process designs. Software can describe, simulate, or model organizations. It can also show how changes made to the organizations will affect processes. BE is not limited to describing processes, however. A model or business-process diagram illustrates not only a company's tasks and organizational structure but also how the company gets things done. A company's information model usually includes descriptions of aspects such as data, function, organization, information, and communication flow. A well-integrated information system not only improves overall business operation but makes it easier for the company to identify areas for further improvement. With prefabricated models of business applications, companies can reduce their risks while taking advantage of best-business procedures for business process engineering.As is the case in all engineering efforts, a good blueprint will map out th