HISTORY OF THE ERP (ENTERPRISE RESOURCE PLANNING) SYSTEM

In the 70s: The concept of ERP did not exist. SAP developed a software that was

able to manage process data (purchases, sales, production) in real time and the

It was recorded in a central database, all through a system called R/1.

In the 80s: They started to be known as Standard ERP systems, and the only

A pioneer in that field was SAP, which became a leader in that market.

At the beginning of 2003, SAP redefined the concept of ERP; it would no longer be a system with

una base de datos, sino una combinación de productos que abarcan procesos básicos

such as purchasing, sales, and production, which intertwines the various departments of a

organization.

What is SAP ERP

The acronym in English stands for Enterprise Resource Planning, which

combine all the business activities and technical processes of a company into one

computer solution

Easy handling

Integrated: Combines any activity that impacts other modules, it is

saying allows sharing data between departments.

Robusta: Unique database, it manages a large amount of information for

so they can be analyzed

Reliable: It has information at hand and in real time.

What is SAP:

It is a computer management tool that companies use to improve

efficiently their organizational processes. By its acronym, it is Applications System and

Products is a computer system, composed of several interconnected modules, for

to encompass all the functions of a company in all its areas or departments.

This system is based on the concept of combining a series of applications to

manage the value chain of a company, providing the user with flexibility to

to face dynamic situations of the market.

Advantages of using SAP

1. Optimization of business processes: being an easy-to-use system,

It will reduce the time, thus optimizing the processes to be carried out.

2. Access to reliable, accurate, and timely information: reliable because the

information appears in our report, accurate because we have

information that we entered ourselves and timely because we can

consult at any time.

[Link] de compartir información entre diversos departamentos o

components of the organization (integrated system)

[Link] of unnecessary data and processes: When performing an operation and being

an integrated system helps to ensure that such information reaches the area

corresponding without this area carrying out any new process, but the

continuation of the same.

5. Real-time information provision

6. Predictive capacity: Based on the stock, the system alerts you to be able to perform.

new requests or OC.

7. Reduction of time and costs of processes: SAP already has the record and

stores historical data on time and maintenance costs for some

machines or equipment.

8. It allows standardizing processes without major adjustments except for the specificities.

that require the company: Being standardized processes means that it

adapts to any type of company.

9. Use of enjoyable or friendly transactions

Disadvantages

Success is based on the implementation technology, as it depends on the

practical improvements of SAP to ensure successful operation, without the

Correct use and application of the methodology cannot guarantee its use.

correct of this application.

2. Resistance to change and the willingness to manage activities under the new

The SAP environment can limit the efficiency in executing operations. It

How long have you been used to using systems other than SAP?

3. Low ability to perform tasks in the SAP environment which limits its

efficiency, since a poorly trained user does not make the most of the system

4. Very high implementation costs

5. We can only see the application in medium and large companies, because they are

who can bear the large costs of implementation

Concept of SAP integration

SAP is made up of modules that allow segmenting or subdividing the

applications by areas or functions, but working coordinately and in real time

In summary, it integrates or connects the different areas with each other to optimize the

process management.

What is SAP MM

It is the logistical module responsible for managing and controlling the materials and

services that an organization possesses and requires.

2. Covers all tasks related to the procurement area, including,

logistics planning, supplier evaluation, and invoice verification.

 3. It also includes stock management of the materials, with the aim of optimizing

the company's supply cycle.

4. Provide support information to management in order to inform and

monitor the logistical operations of the business.

Procurement cycle in SAP MM

1. Determination of requirements: it is the need to supply certain material

or service required by our organization (Solped)

2. Determination of the supply source: Determine who will be our

supplier or suppliers (to whom we are going to buy)

3. Supplier selection: depends on factors such as price, delivery time,

quality of the good or service. These factors are evaluated, compared, and chosen.

supplier.

4. Purchase order processing: this PO is referenced to a request for

offer generated in the determination of sourcing or request

of order generated in the determination of requirements

5. Order tracking: here you can see the delivery times, conditions of

payment, freight all of this is carried out by the purchasing analyst

6. Receipt of materials: Receive materials or services

7. Logistics invoice verification: verify invoice based on our input.

merchandise, here the accounts payable is generated and sent to finance for the

payment execution.

8. Execution of payment (in charge is the finance module)

SAP MM Structure

Purchasing sub-module

Solped

Search strategy

Request for quotation

Orders / framework contracts

Stock management submodule

Goods receipts

Internal movement of materials (transfers)

Physical inventory taking

Merchandise out

Creation of material documents

Invoice verification sub-module

Creation of the logistics invoice

Generate accounts payable

Creation of financial document

All this detailed structure integrates with the MASTER DATA:

 MATERIALS MASTER and SUPPLIERS MASTER

Material master:

Contains all the information about all the materials that a company buys, sells.

or store.

Supplier master:

Contains all the information of the suppliers who will supply said

materials.

Materials Master in SAP

They are divided into views, which refer to each piece of information.

that we require from that material:

General information view: Contains or associates the material code,

description of the material and the unit of measurement of said material.

Material planning view: lead time, quantity

of minimum stock, characteristic of planning

Stock view center/warehouse: it allows us to know the quantity of certain

there is material at a specific center or warehouse. It allows us to see

in real time the amount of that material.

 Accounting view: information about the valuation of the material is saved

(price, valuation category, ability to view the value of that material in

a particular center

Shopping view: information is saved about the purchasing groups that

they manage the material, prices, and unit of measures

Sales view: information about distribution channels, group is stored

of loading or transportation that uses some material, tax indicator of

sales.

Production programming view: roadmap information,

availability of a material for a production process.

Quality control view: provides information on quality management.

Note: The material master is always managed by the MM module.

Vendor Master in SAP

1. Datos generales:dirección, teléfono, datos de control (RUC), datos bancarios y

contact persons

2. Company data: accounting information, payment operations (types of banks,

payment type check or transfer), applicable taxes (withholdings)

3. Datos de organización de compras:información para las compras (condiciones

payment, invoice verification based on goods entries, quantity

minimum purchases from that supplier (line of credit), minimum amount for a

purchase), business interlocutor.

Organizational structure of SAP MM

Client: it is a unit within a SAP system that is autonomous in the

legal and organizational aspects as regards data, with records

independent teachers, as well as a set of independent tables.

From a business standpoint, the principal represents a group of

companies.

Society: it is the smallest organizational unit of external finance.

for which a complete and autonomous system can be reproduced

accounting. This includes the entry of all events that need to be

accounted for in the accounts and the creation of a complete log for balances

and profit and loss accounts

Center: it is an organizational unit within logistics that subdivides a

company from the point of view of production, procurement and the

planning of need. A center can represent a variety of

entities within a company such as, for example: production installation,

distribution center, regional sales office, etc.

Warehouse: it is an organizational unit that allows differentiating the stocks of

material inside a center. Stock management is carried out at the level of

Center warehouse just like the inventory process.

Purchasing organizations: it is a unit within logistics that sub

divide the company according to purchasing needs (good or service). One

the purchasing organization acquires materials or services, negotiates conditions

shopping with suppliers and takes responsibility for it

transactions.
 Purchasing group: it is a key for a purchasing manager or group of

buyers responsible for certain purchasing activities

internally, the purchasing group is responsible for the procurement of

a material or a class of materials.

SAP MM submodules

a) MPR = Material Requirements Planning: It performs the

planning for the generation of provisional orders, solped, based on

from the material supply needs for manufacturing or the

Supply of the final product on time and in the required quantity.

the needs planner answers the questions of how much and when

procure the required materials.

b) PUR = Purchasing Management: PUR Purchases is a component of management

materials that provide support to the phase of managing the order request

formally to a supplier, to provide certain goods and

services in accordance with the stipulated terms and conditions.

External procurement of materials or services. Determination of

possible sources of supply for a need identified by the

planning and control system of needs or directly emerged

within an area of specialization

c) IM = Inventory Management: It includes the following activities:

movement of goods, entries, exits, transfers, process of

physical inventory, stock management.

d) IV = Verification of logistical invoices: It is the culmination of the process of

provisioning, this is where the accounts payable to the creditor are generated, after

conclude the purchasing management, the stock management, finally the verification is done

invoices based on our merchandise intake.

e) IS = Information system: Allows for real-time data analysis.

information structure forms the database for group analysis

purchasing, inventory management, material movement, and replenishment forecasts.

The information structure forms the basis for groups of materials,

supplier and material analysis.

 At the input level, it means that the requested material goes directly to stock, and not

it is charged to a finance area otherwise it will be charged directly to our account of

inventory.
 TOPIC 2 ORGANIZATIONAL STRUCTURE SAP MM

Principal

Autonomous unit both in legal and organizational aspects as well as in the data,

with independent master records, like a set of tables

independent.

From a business perspective, it represents a group of companies.

From the SAP point of view, it is the highest hierarchical level within the

system.

The principal is a company that has several independent entities:

Example: General Motors, whose principal would be General Company, and below

Hello, here are the societies.

Companies:

Smallest organizational unit of external finances

A complete and autonomous accounting system can be reproduced.

Include all relevant elements for accounting.

Represents an independent accounting entity that prepares its own balance sheet.

(company within a group of companies)

Example: Independent societies within General Company, which are dedicated to

certain activities such as manufacturing parts or components

Center:

Logistics organizational unit that subdivides a company from the point

from the perspective of production, supply, and planning

needs.
 Represents entities within a company: production facility,

distribution center, regional sales offices, company headquarters

maintenance location.

In a center, logistical movements, purchases, sales, and shipments can be carried out.

and transfers (movement of materials)

Warehouse

Organizational unit that allows differentiating stocks within a center.

The stock management by quantities at the center is carried out at this level.

The inventory process is also carried out at this level

Inside the warehouse, stock differentiation is carried out by type of material and activity.

inventory process, counting

Purchasing organization

Organizational unit that subdivides the company according to needs

purchase (national or export materials or services)

Acquire materials or services, negotiate purchasing conditions with the

suppliers and assumes the responsibilities of those transactions.

Buying group

Group responsible for purchasing activities

Internally, he is responsible for the procurement of a material or class.

of material (raw materials, packaging, consumables, products

finished)
 Externally: main channel for business relations with the

suppliers

The purchasing group is not comparable to other units of the structure of the

company

The purchasing group is not tied to any of the mentioned structures, it is

independent.
Decentralized purchasing organization.
Materials Master

Understand all the individual material records stored in the system, the

which contains descriptions of all the materials that a company obtains, produces and

manages in stock.
Datos básicos: información de la descripción del material, texto breve,

unit of measurement (und, kg.), weight of the material.

Planning of needs: information related to whether the material is

plan and what is its planning characteristic, if the material is

internally or externally within the company or if there is stock available

minimum for the provisioning process (forecast information)

to avoid running out of stock in our warehouses)

Stock center/warehouse: views related to a specific activity within the

master data. Here is information on the quantity of units available in a

warehouse, how they are distributed.

Material finances: when the material was purchased, from which supplier

we have bought and what is the value of the material

Warehouse: information on where the material was created (at the level of center and

warehouse

Warehouse management: in this view we have information about the number of

warehouse, what is the specific location within the warehouse where it is located

material

Purchases: information about purchasing organization and purchasing group

in charge of provisioning the material

Sales: processes of direct sales to the customer, taxes, channels of

distribution

Planning: relevant information for the procurement process

planned for what is to come in the future supply of a material

Quality management: information on the inspection plans subject to

material. (quality inspection process)

 Forecast: as the material has been consumed, demand history at the level of

statistics which is very related to the planning process

Classification: it is related to a warehouse management process, here it

keep information about batch management of a material.

Starting level:

here is where the number or code of the material is placed, whether internal (automatic) or

external (manual)

Type of material (raw material, finished products, etc.)

Field in which the company operates (automotive, pharmacy, etc)

Type of material

SAP MM classifies materials in the following way:

Raw materials

Auxiliary and consumable materials

Semi-finished products

Manufactured products

What data does the type of material control?

Number assignment: it is the code, it can be external (generated in a way

manual) or internal (automatically generated by the system)

Supply class: this determines whether the material is produced

internally (done by the same company) or we buy it through a

external provider.

Area of specialization: material created or purchased for a specific area

Field selection: determines whether the material is for the field of

production or consumption, according to the type.

Determination of accounts: upon receiving the merchandise, determine account of

automatic inventory.
Parameterizations: it allows us to have predetermined information for the

creation of a master data. (it is parameterized with the purpose of already having

selected the views we are going to create and the type of material

Reference material: we can create material referencing another, to

Hello, we copied information from that reference material in order to carry out the

creation of the new material.

Profiles: at the user level, we determine what type of material we are going to use or

create.

Collective warehouse data entry: it allows us to create or expand in a way

collectively at the warehouse level without the need to enter them individually.

create material collectively in different warehouses

Bulk update: SAP allows updating materials or codes.

massive.
 Supplier Master

It is the database that stores and records financial information, conditions of

payments, contact details, and purchase conditions of creditors. In SAP, it is possible to create

master provider at the organizational level of purchases and at the center level (accounting and

financial
A nivel de mandante (datos generales)

Supplier's address

Comunicación:teléfonos, correos electrónicos.

Datos de control:domicilio fiscal, RUC.

At the level of the purchasing organization (purchase data)

Conditions: credit line, discounts

Incoterms: conditions for import processes

Minimum order value: minimum order quantity that we will accept

to the supplier

At the level of society (accounting)

Bank details: which bank do we make the payment to the supplier?

Payment control: if the payment is made by check or transfers.

Account Management: the accounting account to which we make the

receipt of the material or the one we make the payment to the supplier

Withholdings: of taxes that are applied to the provider at the time of making

the payment to the supplier.

Supplier CPD = Sporadic supplier
 In the MM module, the only and most used is the interlocutor SUPPLIER OF

MERCHANDISE

Service Master

It is the data used for service provisioning.

Purchasing Master

It is a database of information that is used to carry out the process of

acquisition within the procurement process. The most important thing is the

purchase conditions.
 The purchasing conditions are master data where we store information about the

price, discounts or surcharges according to the type of condition that is recorded.

Framework contract: defines price conditions over time, across a

year from such date to such date, and the price will be variable throughout the period that is

temporal.
Calculation scheme:

The calculation scheme is made up of different classes of conditions that will go to

they will add or subtract from the price according to the calculation definition of each condition.
Purchase info record: It is a record that associates information of a supplier and a

specific material and proceed to store it in a purchasing organization (it is like a

supplier history, which determines what material they supply and when they supply it

and the conditions it offers, as well as what was the last order or purchase made to you

made
Evaluation topic 2 - materials teacher and supplier
 THEME 3 - STOCK MATERIAL SUPPLY

Request for stock material order

1.ME51N Purchase requisition: Standard SAP transaction, it is a document of

internal requisition where management or the purchasing department is requested to acquire

of materials or services. "When talking about inventory materials, it is a

material that we are going to see in quantities and in value

a) Manual creation by the user

b) Automation in the planning of needs / manufacturing orders

If any order, purchase request, or framework contract has previously been made,

these documents can be taken as a reference for the new purchase order

that will be carried out.

Characteristics of the purchase order request:

a. When a purchase order request for a valued material is created, the price is

extract from the master materials register.

b. The unvalued material or without a master record must have the valuation placed.

manually

c. Liberation can refer to the value of the individual position.

d. If there is a defined release strategy, you can create a solped or you can

create an order with reference to a purchase requisition, only after it has been

released the same

Order request release

It is an approval process carried out by an authorized person to release,

based on the information and criteria corresponding to the order positions (it

can free individually and collectively

Three conditions of release

Release strategy: a release strategy must be defined for the

purchase order requests in the customizing for purchase order requests

Completed version: if you have activated version management in the customizing for

purchasing, for order requests and release by position

Security parameter: a group and release code are assigned for the

release users in their security profile, as an authorization parameter

unique for each level of release.

ME41N Request for quotation

Document by which the purchasing organization requests the supplier a

quotation proposal for the acquisition of a material or service

Structure:

a) Header of the quote request: contains general information about the

request for quote (supplier's address)

b) Positions: contains the total amounts and the delivery dates for the

materials or services specified in the request for proposal.

Note: unlike other purchase documents, the user cannot enter

allocations in the offer request

Request for proposal - bid number

The tender number links several requests for proposals that belong to the same one.

request, facilitating the analysis of the offers based on this number, it can be

be alphanumeric.
ME21N Purchase Order

Ways to place an order

Evaluation topic 3
EXAM TOPIC 4
EXAM TOPIC 5
EXAM TOPIC 6