Identify all of the business processes, at a high-level

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GOAL OF BUSINESS PROCESS WORKSHOP

• Identify all of the business processes, at a
  high-level
• Define the type of data (in a high-level) that
  will be maintained in the processes.

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AGENDA
Definition of Business Processes

• High Level Business Process Overview
• Business Process
• Project System
• Production Planning
• Financial Accounting
• Controlling
• Asset Management/Investment Management
• Materials Management
• Sales and Distribution
• Human Resources
• Define the Business Processes and data in SAP
  based on the Chico Creek Brewerys Organizational
  Structure
• Document the Companys SAP Business Processes

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Project System - Business Processes

• Creating a project
• Developing a project
• Executing a project
• Analyzing a project
• Closing a project

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Project System - Components

• Project Definition Stores master data for the
  entire project, including overall start and end
  dates, project owner, project number, and
  description.
• Work Breakdown Structure (WBS) The hierarchy
  that the WBS elements are organized into. Breaks
  down processes into the smallest components or
  tasks.
• WBS elements The building blocks of the
  project. They represent different phases or
  parts of the project. Each WBS element is a cost
  object. All project costs are posted to WBS
  elements.
• Network (optional) The activities are linked
  together to create the network in the form of a
  PERT chart. SAP can determine the critical path
  from this.

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Project System - Features

• Cost Planning (via the WBS)
• Date Planning and Scheduling
• Link to Purchasing (Purchases made show up
  immediately as project costs)
• On-line Reporting
• Financial Control
• Graphic Displays (Network, WBS, Gantt Charts)

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PP-Continuous Process

• Continuous Process Scenario overview
• manages the planning, execution, and control
  activities for our process-oriented manufacturing
  of beer.
• 4 Basic Steps that encompass our brewing
  process..

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Step 1 of Continuous Process

• Begins with the Sales and Operation Planning
• forecasting tool, ie. used to helps decide
  specific number of batches of each type of beer
  that should be made
• Long-term production plan and Master Schedule are
  produced using SOP information

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Step 2 of Continuous Process

• The master flow is computed using the MRP and
  capacity leveling.
• Capacity leveling is determined in step 1 and
  balances the master schedule and plant capacity
• Material Requirements are passed to the
  procurement process

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Step 3 - Continuous Process

• The process order is created and manages the
  actual production of the beer
• process order transforms materials and processes
  used with the master recipe into actual
  information that is needed to brew the batches of
  beer
• contains master recipe data and workflow
  instruction
• master recipe description of materials needed in
  one production run (grain, purified water, hops,
  fermented sugar, barley malt)

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Step 4 - Continuous Process

• Actual production which is the completed scenario
  flow
• Material is received, the resources are used, and
  the process order is completed and closed out
• resources production personnel needed for
  production (maintenance workers, forklift
  drivers, line workers, warehouse personnel)

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Vendor Processing
Consolidation
Customer Processing
External Accounting
Special Purpose Ledgers Processing
OTA Vendor Processing
General Ledger Processing
Credit Subsidiaries Head Office Process
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General Ledger Processing

• Generates closing reports as required by law
• Structure
• company code (CO)
• business area (not applicable for the CCBC)
• chart of accounts (each module will give input)

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General Ledger Processing

• Integrated with
• procurement (MM)
• assets accounting (AM/IM)
• controlling (CO)

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Vendor Invoice Processing

• Connects Purchasing to Accounting
• Master Record consists of 3 parts
• general data (addr, telephone, etc.)
• company code data (payment terms, methods)
• purchasing organization data (p.o., quotes)
• most of this information comes from MM and is
  posted to G/L

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Vendor Invoice Processing

• Posted to one of two accounts
• current assets account
• fixed assets account (will go to AM)
• also posted to G/L

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Customer Processing

• Mgmt of transactions for standard customers
• Credit Management (Sales)
• closely linked to CO cash forecasting

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Customer Processing

• Customer Master Record consists of 3 parts
• general data (addr, telephone, etc)
• company code (form of payment, due dates)
• sales data (shipping, invoicing, etc.
• this info is mostly from the sales team
• all the transactions are posted to the G/L

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Customer Processing

• Dunning procedures remind customer that the
  payment is overdue
• Info needed from SD
• level ( of days overdue)
• text (strength of language)
• vendor dunning
• optional interest charges
• print-out of payment (due deadline)

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Functional Areas - CO Chico Creek Brewing Company

• Conventional cost center accounting typically
  structures costs by using the companys
• organizational structure and areas of
  responsibility (e.g. functions).
• This shows where costs accrue in the company,
  but it does not specify what
• resources were used how.

Company
Personnel
R D
Marketing
Production
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Process-Oriented Structure
Functional Areas
Business Processes Order Process Product
develop. Customer service FI Accounting
Personnel
R D
Marketing
Production

• SAP uses a process-oriented view that considers
  costs on the basis of process organization
• across functions. Costs are debited to a
  business process based on its resource usage.

• The business planning and controlling scenarios
  in R/3 provide conventional
• cost center accounting capabilities but
  supplement these by allocating cost center
• costs to business processes.

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Business Scenarios - CO Chico Creek Brewing
Company
1. Cost Object Controlling
2. Profitability Analysis
Business Planning and Controlling CO Module
4. OH Cost Management
3. Profit Center Accounting
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1. Cost Object Controlling

• Cost object controlling is a part of product
  cost accounting
• that focuses on the economical creation of a
  product (called
• cost object).
• It supplies key information for planning and
• monitoring of product costs.
• Product cost controlling attributes the costs
  incurred in a
• company to its output units. (products,
  orders)

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2. Profitability Analysis

• Profitability analysis carries out a profit
  analysis. Costs are
• compared to revenues. This is the last step in
  the settlement process.
• Profitability analysis takes an external
  viewpoint using actual data,
• by looking at market segments.
• We propose that CCBCs profitability segments
  are based on
• product line. (Type of beer, pub, merchandise)
  
• Other options could be customers, activity,
  organization,
• geographical area, etc.

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3. Profit Center Accounting

• The goal here is to have a structure according
  to profit responsibility.
• Profit centers can be seen as investment
  centers.
• Shows operating results from a management
  standpoint.
• It is a statistical package, pulling data from
  different modules.
• Data is primarily transferred from FI, SD, AM,
  and MM.
• Profit centers can be structured according to
  products, markets,
• or functions. We have chosen products.

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3. Profit Center Accounting, contd
FI Transfer of primary costs and revenues from
customer invoice processing SD Transfer of
revenues and sales deductions (freight,
discounts) as well as reserves (e.g. from rebate
agreements) via invoice transfer. MM Transfer of
all costs from goods movements (consumption
postings, materials receipt, invoice receipt,
price changes/revaluation, inventory
differences) AM Availability of all
profit-related data from the creation,
utilization, and sale of capital goods
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3. Profit Center Accounting, contd
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4. Overhead Cost Management
Overhead cost management plans, allocates,
controls, and monitors indirect costs. All
indirect costs are charged to the cost centers
where they were incurred or to the jobs that led
to their occurrence.
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Fixed Asset Processing
Budgeting
Leased Asset Processing
CAPITAL ASSET MANAGEMENT
Planned Plant Maintenance
Cash Management
Plant Maintenance due to damage
Project- related plant maintenance
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Fixed Asset Processing

• Asset master record maintenance
• Create
• Change
• Retire

• Settle AuC
• Post Capitalization
• Transfer Posting
• Write-Up
• Creation/Transfer of Reserves
• Reports
• Inventory
• Year-End Closing

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AM - Depreciation

• Planned depreciation is calculated automatically
• Can be recalculated or changed manually
• Calculated in multiple depreciation areas
  (parallel valuation technique)
• Depreciation values are transferred as planned
  and actual costs are allocated to cost centers
  (CO)
• Depreciation simulation and forecasting available
  for individual asset or group of assets.

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Asset Master Record Data

• Elements of an Asset Master Record
• Historical cost
• Salvage value
• Life
• Insurance information
• Cost center

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INVESTMENT MANAGEMENT SCENARIO
Budget Approval
Roll-Up Corporate Planning
Budget Distribution
Measures
Project Planning
Reporting
Program Structure
Settlement Capitalization
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IM - AuC to Asset
Create AuC -Automatically created
when investment profile is entered and order
is released
Settlement -Settles to AuC
Capital Order (greater than 30 days)
AuC Depreciation forecast and simulation interest
calculation.
ASSET
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Treasury - TR

• Cash Management (TR-CM)
• Handle all cash related transactions and
  reporting activities.
• Distinguishes between actual money and payments
  in transit
• Integrated with G/L, A/R, and A/P systems and
  sales and procurement.
• Funds Management (TR-FM)

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TR-CM
G/L
Recurring Entries
A/R
A/P

• The basic elements needed for managing cash
• Where is our cash?
• What will we receive?
• What will we pay?
• What other predictable transactions will occur?

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Funds Management (Budgeting)

• Functions
• Prepare budget
• Monitor budget by tracking the achievement to
  targets in each of the budgets divisions
• To perform these functions the following must be
  estimated
• Cash requirements for operations
• Cash requirements for CI projects
• Planned cash receipts

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Materials Management Processing Stock Material

• Materials Requirement Planning
• Reservation processing
• reserve material
• plan goods issue
• Single item MRP
• Entire MRP
• Effects SD, QM, PP, FI

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Materials ManagementProcessing Stock Material

• Requisition Processing to Stock Material
• Requirement for material --gt Purchase Requisition
• Source of supply
• Without a source of supply
• Input Examples
• Material
• Purchasing Information
• Purchasing Outline Agreement
• Vendor
• Effects SD, PP, QM

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• Materials Management
• Processing Stock Material
• Processing of RFQ Issued to Vendor
• - Communicates material/service requirements to
• potential suppliers
• - Input Examples
• Material
• Purchasing Information
• Vendor
• Supply Source
• Time
• Effects SD, QM, PP, CO

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Materials Management
Processing Stock Material Vendor Quotation
Processing - Occurs after vendors respond to
quotation request - After Vendor information is
submitted into system, price comparison is
possible - A rejection notice is transferred if
quotation is unselected
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Materials Management Processing Stock
Material Purchase Order Processing for Stock
Material - Vendor quotation processing and
vendor RFQ processing trigger this step -
Input Examples Purchase Requisition Material I
nternal Order Customer Order Cost Center - A
Purchase Order includes detailed data such as
type of material, quantity, delivery
date and price
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Materials Management Processing Stock
Material Processing Goods Receipt - Begins with
the arrival of materials and shipping
notification - Material is checked and storage is
determined - If order is accepted we adjust
purchase order dates and select a valuation
type -Effects FI, PP
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Sales and Distribution

• Business Process Workflow
• Scenario Standard Order Handling

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Master Data for SD

• Master Data
• Business Partners
• Customer
• Vendor (Internal i.e. MM)
• Beer for tap room, souvenirs
• Employee in Company (salesperson)
• Product Proposal
• Grouping of items to make available for sale
  (I.e. By a pallet of Pale Ale)
• If customer frequently purchases from a product
  proposal, this information can be assigned in
  Customers Master Data

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Master Data continued

• Product
• Price
• Documents (for shipping, billing, sales)
• Sales support
• Organizational Structure (shipping points, sales
  areas,etc.)

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Pats Bar in Calgary

• Pat calls CCBC to inquire about products
• Wants to buy two kegs of Pale Ale and one keg of
  Hefeweisen to be delivered weekly.
• Sales Representative gets Pats company name,
  address, etc. to store in sales support master
  data. Also determines the distribution channel
  for his company for correct quotation.
• Accesses inquiry processing to determine correct
  prices, a quotation process document is created
  and sent.
• Pat agrees to the quotation. Next, standard
  order processing occurs with reference to the
  quotation.

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Billing Process

• Product is determined to be in-stock
• A credit check occurs and passes resulting in
  Pats order being released
• Delivery processing occurs in which is it
  determined that the delivery is relevant for
  billing and for shipping.
• Billing
• Process determines that the purchase is not
  relevant for a rebate
• Billing document is sent
• Export papers are created and sent
• Billing document is not released for billing
  because
• Order confirmation is necessary to release
  billing document

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Shipping Process

• Transportation planning occurs
• Shipment route is determined (stored in Master
  Data for future reference)
• From Chico Center to Chico train depot via truck
• From Chico to Calgary via rail
• From Calgary train depot to Calgary distribution
  center via truck
• From distribution center to customer (Pats Bar
  is within 100 mile radius)
• Transportation processing occurs
• Shipping notification is generated and sent to
  customer

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Delivery of Goods

• Quality is checked (by PP, referenced by SD)
• Order is sent to MM
• Goods issue is posted
• Truck is loaded from plant site and sent
• Upon delivery to Pats Bar, it is determined that
  one keg of Pale Ale is damaged.
• Pat signs invoice for acceptance of the one keg
  of Pale Ale and one keg of Hefeweisen.
• To accommodate for damaged goods, CCBC will
• a) Offer to send Pats Bar a keg through a rush
  order with no extra cost. Delivery will
  be rushed
• b) Offer to give Pats Bar a credit.
• Signed invoice is given to FI for processing

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Packaging Returns

• Empty kegs picked up from Pats Bar upon next
  delivery
• Returnable packing pick-up process occurs
• Shipping papers are created
• Empty kegs loaded onto trailers
• Trailers loaded onto train to be sent back to
  Chico center
• MM processes goods receipt
• Goods receipt is posted

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Conclusion

• Pats Bar is now CCBCs business partner, thus is
  located in our Master Data
• CCBC can now call him as part of our sales
  activities or he can call on us.
• If Pats Bar becomes a frequent customer, CCBC
  can assign material listing or product proposal
  to his account making transactions faster.

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Sales
Inquiry
M a t e r i a l s M g m t
Quotation
Returns
Standard Sales Order
Delivery Free Of Charge
Scheduling Agreement
Shipping
Delivery
Transport
Billing
Debit Memo
Invoice
Credit Memo
Financial Accounting
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Organizational Management

• Organizational Plan Processing
• Job Description
• Processing of Employee Status for Planning and
  Development
• Staffing
• Personnel Cost Planning

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Time Management

• Long Term Daily Work Schedule
• Flexible Daily Work Schedule
• Calculate Overtime
• Incentive Wages

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Payroll Processing

• Multinational tax, benefit, and garnishment
  related laws and regulations
• Automate the workflow system and be flexible
  enough to adapt itself
• Automatically transfers data to general ledger
  and cost accounting systems

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Salary Administration

• Compensation Structure
• Structuring and Managing of salary and reward
  compensation packages
• Can analyze the effects of salary increases and
  decreases

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Benefits Administration

• Administering human resource benefits
• setting up each benefit plan
• define cost and coverage options
• eligibility rules established
• Step-by-step guides for developing, defining, and
  maintaining benefit plans
• Eligibility rules based on predetermined criteria
  defined and verified by the system