EGN_5620_MM_Org_Structure Fall 2011 Regular

EGN_5620_MM_Org_Structure Fall 2011 Regular - Materials...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Materials Management (MM) Materials Management (MM) Organizational Structure EGN 5620 Enterprise Systems Configuration Fall, 2011 MM Organizational Structure MM Organizational Structure Theories & Concepts EGN 5620 Enterprise Systems Configuration Fall, 2011 Enterprise organizational structure Enterprise organizational structure Organizational Structure, Definition ◦ The relationship of intra/inter elements of an enterprise system ◦ The structure is shaped by company’s Strategy (e.g. operation mode), Competency, and Capacity. Enterprise organizational structure Enterprise organizational structure Define a structure for each of the 4 enterprise elements: ◦ Resources ◦ Work ◦ Decision ◦ Information Organizational structure – resources (1) Organizational structure – resources (1) Resource types ◦ Human resource (capital) ◦ Material ◦ Machine ◦ Tools ◦ Equipment ◦ Facility ◦ Utilities ◦ Capital Organizational structure – human Organizational structure – human resource (2) Span of control ◦ Depending on planning, communicating, training, and execution/control tasks ◦ Classically ranged from 3­7 subordinates ◦ The use of IT/IS changes the landscape. Major structure types ◦ Functional ◦ Project ◦ Matrix Organizational structure – human Organizational structure – human resource (3) Generic organization hierarchy ◦ Corporate ◦ Company ◦ Division ◦ Factory (plant) ◦ Department ◦ Section ◦ Group Unit structure ◦ Head ◦ Associate head ◦ Executive assistant ◦ Support staff ◦ Members Organizational structure – human Organizational structure – human resource (4) In support for the business decisions below: ◦ Strategic decision ◦ Tactic decision ◦ Operation decision In support for financial accountabilities (profit centers vs. cost centers) ◦ By default, every organization unit is a cost center with various cost accounts ◦ Profit centers consider both sales/revenues ◦ Cost centers propose (and operate) under budgets ◦ Trends: push profit center designation down the organization hierarchy Enterprise organizational structure Enterprise organizational structure Work structure ◦ Generic work hierarchy Program (not a work order) Project Deliverable item Task Sub­task Operation Step ◦ Work constraints Hierarchical (managerial) Lateral (technical) Enterprise organizational structure Enterprise organizational structure Decision structure ◦ Decision hierarchy Strategic Tactic Operational ◦ Business processes are nested with work and decision activities. They are thus based on human resource and work structure designs Enterprise organizational structure Enterprise organizational structure Information structure ◦ Business knowledge Organized by: ◦ Operation type and ◦ Business process ◦ Engineering data Organized by: ◦ Product type and ◦ Process type ◦ Production data Organized by ◦ work order MM Organizational Structure SAP Implementation EGN 5620 Enterprise Systems Configuration Fall, 2011 MM Organizational Structure Related Topics MM and organizational data MM and purchasing (SAP R/3) Organizational data & structures Organizational relationships Warehouse management January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 13 13 Business Process Integration MM SD Data Master Rules Org Data FI F I M S D IF FI M M MM S D SD January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 14 14 Org Data MM Organizational Data M January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 15 15 Organizational Data A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions Are static data and are rarely changed The definition of organization units is a fundamental step; it is a critical factor in how the company will be structured and run. January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 16 16 Organizational Structure Client Chart of Accounts Company Credit Control Area Fiscal Year Variant Controlling Area Company Code January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 17 17 SAP Org Structure ◦Client ◦Company ◦Chart of accounts ◦Company code ◦Credit control area ◦Fiscal year variant ◦Cost centers January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 18 18 Standard Hierarchy for Cost Center An organizational unit that serves to refine and focus a managerial accounting and reporting sub­system Each standard hierarchy is attached to the appropriate Controlling Area All cost centers (groups) of interest must be entered in the Standard Hierarchy A mapping of responsibility to individual managers and cost centers facilitates expense. ◦ Collection ◦ Tracking ◦ Reporting January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2007. All rights reserved. rights 19 Cost Center Groups Logical groupings of cost centers in the standard hierarchy to establish accountability and responsibility for one or more cost centers Facilitates reporting, planning, and allocating costs at a more aggregated level January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2007. All rights reserved. rights 20 Cost Centers Designation Units that are distinguished, for example, by area of responsibility, location, or type of activity ◦ Copy center ◦ Security department ◦ Maintenance department One or more value­added activities are performed within each cost center Can be permanent or temporary (e.g., internal order) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2007. All rights reserved. rights 21 Cost Centers (continued) Operates as a collector and assignor of responsibility for expenditures A way to identify and track where costs are incurred for evaluation purposes January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2007. All rights reserved. rights 22 Profit Centers primary revenue collection objects in the system posted to all balance sheet postings can be attributed by cost centers assigned to a single controlling area and a single company code grouped together into a hierarchy to represent the organization structure for analysis of income versus expenditure for different parts of a organization Some organizations don’t have profit centers January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2007. All rights reserved. rights 23 SAP MM Organizational Structure Plant Valuation Area Storage Locations Shipping Point Purchasing Organizations Purchasing Groups January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 24 24 Organization structure (Plant) ­ inventory vs. warehouse mgt. Inventory Management (MM) Storage Loc. 10 Company C001 Plant P001 Storage Loc. 20 Company Code Plant P002 Storage Loc. 30 Warehouse 1 Aisle 1 Rack 1 Aisle 3 Aisle 1 Rack 1 Warehouse Management (WM) January 2008 January Storage Loc. 40 Warehouse 1 Aisle 2 Rack 1 Plant ABC123 Storage Loc. Warehouse Aisle 2 Aisle Storage Rack Quantity © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 25 25 Plant Lowest valuation area Organizational level where Material Requirements (MRP) runs Generally used to describe a production site, a distribution center or centralized warehouse May be a physical or logical unit January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 26 26 Valuation Area The valuation area determines at which level a material is valuated (inventory value is established) SAP R/3 allows valuation at the company code or plant level, but recommends valuation area be set at the plant level January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 27 27 Storage Location Subdivision of a plant Where materials are managed (inventory management) ◦ Raw Materials ◦ Maintenance, Repair, and Other (MRO) ◦ Finished Products May be a physical or logical unit January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 28 28 Shipping Point Shipping points are independent organizational entities within which processing and monitoring of the deliveries as well as goods issue is carried out. A delivery is processed by one shipping point only. January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 29 29 Organizational Relationship Plant/Storage Location Plant P001 Storage Location 10 - Inventory January 2008 January Storage Location 20 - Quality © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 30 30 SAP (Sub)modules in MM (I) 1. Purchasing Management 1. Inventory Management SAP sub­module that involves the acquisition of goods and services to support the creation of goods and services in the organization Master data for the purchasing management exists in the (MM) as well as the (FI) modules It interfaces with the Production Planning (PP), and Quality Management (QM) modules A SAP sub­module that involves goods movement, material stock and inventory controlling, material documents, & period processing January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 31 31 SAP Modules using MM (II) Warehouse management ◦ A SAP module that focuses on managing materials location in a warehouse ◦ No connection with its financial module January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 32 32 Purchasing Organization Organizational unit responsible for the procurement of materials and services. SAP requires that purchasing organizations be assigned at the plant level A purchasing organization can be assigned to more than one plant A purchasing organization can be assigned to a company code January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 33 33 Organizational Relationships Plant/Purchasing Organization (1) Plant P001 Purchasing Organization – P001 Purchasing Organization – P002 One plant – multiple purchasing organizations January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 34 34 Organizational Relationships (Continued) Plant/Purchasing Organization (2) Plant P001 Plant P002 Purchasing Organization – P001 Purchasing Organization – P002 Each plant has its own purchasing organization January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 35 35 Organizational Relationships (Continued) Plant/Purchasing Organization (3) Purchasing Organization – P001 Plant – P001 Plant – P002 One purchasing organization for multiple plants January 2008 January © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 36 36 Organizational Relationships (continued) Plant/Purchasing Organization (4) Purchasing Organization – P001 Company Code C001 Company Code C002 Plant – P001 Plant – P002 One purchasing organization for multiple company codes January 2008 January © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 37 37 Purchasing Group Responsible for specified purchasing activities Often used to identify individual buyers Used for reporting January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 38 38 Organizational Relationships Purchasing Organization/Purchasing Group Purchasing Organization – P001 Purchasing Group 001 January 2008 January Purchasing Group 002 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 39 39 Organizational Structure Company Code C001 Purchasing Organization – P001 Purchasing Group 001 January 2008 January Plant P001 Storage Location 10 - Inventory Storage Location 20 - Quality © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 40 40 Warehouse Management Not required for purchasing functionality of SAP R/3 A separate module in the SAP R/3 environment Many functions and elements can be performed outside of the module January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 41 41 Warehouse Management Elements Receiving, identifying and sorting goods Placing goods into storage bins Taking inventory Monitoring and inspecting goods in storage Preplanning distribution of materials Picking and accumulating orders Packaging, loading and shipping goods January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 42 42 Inventory Management & Warehouse Management Relationships Inventory Management (MM) Storage Loc. 10 Company C001 Plant P001 Storage Loc. 20 Company Code Plant P002 Storage Loc. 30 Warehouse 1 Aisle 1 Rack 1 Aisle 3 Aisle 1 Rack 1 Warehouse Management (WM) January 2008 January Storage Loc. 40 Warehouse 1 Aisle 2 Rack 1 Plant ABC123 Storage Loc. Warehouse Aisle 2 Aisle Storage Rack Quantity © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. 43 43 PEN, Inc. MM Organizational Structure EGN 5620 Enterprise Systems Configuration Fall, 2011 Pen Inc. Organizational Structures At Company code level) Client 700 Credit Control Area (Cxxx) Pen Inc. Fiscal Year Variant (2011) Chart of Accounts (Cxxx) Company Code (Cxxx) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 45 45 Pen Inc. Organizational Structures Pen Inc. Organizational Structures Credit Control Area (Cxxx) Client (700) Fiscal Year Variant (2011) Chart of Chart Accounts (Cxxx) Accounts Company Code (Cxxx) Controlling Controlling Area (Cxxx) Area Plant Plant (Pxxx) (Pxxx) Cost Center Cost Standard Hierarchy (PENINCxxx) (PENINCxxx) Purchasing Organization Organization (Pxxx) (Pxxx) SL10 SL20 Purchasing Purchasing Group (xxx) Group Shipping Shipping Point (Sxxx) (Sxxx) ADMINxxx A005 A010 A015 A020 Exercises: Exercises: 60. Create Vendor Master Accounting 61. Create Vendor Master Purchasing Record 62. Create Vendor Master Record Centrally 63. Create Vendor Master Record Centrally 64. Create Vendor Master Record Centrally 69. Create material Master for Trading Goods 70. Create Material Master for Operating Supplies 82. Create Vendor Master Record for Landlord 83. Create Rent Expense Account 84. Create for Invoice Receipt for Rent Expense 85. Display and Review G/L Account Balances and Individual Line Items Exercises: Exercises: 86. Display and Review Vendor Account Balances and Individual Line Items 87. Post Payment to Landlord 88. Display and Review G/L and Vendor Account Balances and Individual Line Items 124. Create Shipping Point 201.Create Controlling Area 202. Assign Company Code to Controlling Area 203. Create Cost Center Standard Hierarchy 211. Maintain Cost Center Standard Hierarchy ...
View Full Document

Ask a homework question - tutors are online