SAP has become an important part of business to be incorporated for the efficient business processes and functions. It has developed ERP solutions that are completely industry specific with an excellent support infrastructure which is winning over businesses globally.
But in order to understand how the SAP solution works, one should have an in depth knowledge of the various processes involved in the business such as finance, production, accounting, sales etc. Also it is necessary to understand the correlation of all the processes and how they are entwined with each other. For e.g. If the business is in the process of making sales, there should be an instant update with its related process i.e. the inventory and manufacturing processes. Further, when the manufacturing process is recorded an instant placement of order for the raw material should be made to the vendors. These are inter-related processes called Business Process Engineering and understanding them is a priority before understanding the SAP solution and further investing for SAP Training.
Let us understand the process more clearly with the help of the following examples:
The Purchase Process:
- The production manager prepares a list of the raw material that the company will need according to the manufacturing plan of a certain product. The list is then prepared keeping in mind the raw material present with the company and how much more will be required.
- Accordingly a vendor is selected by the purchase department on the basis of the cost of the raw material.
- When the vendor is decided upon, the purchase order is sent.
- The raw material received from the vendor is added up in the inventory records of the company.
- It is necessary to verify the invoice received from the vendor.
- When all is done the vendor is paid for the same.
The Process of Production:
- SOP or what is known as Sales and Operations Planning is the process where forecasts based on the sales of the company are implemented in a model developed by the company to check the feasibility of the production planning.
- Depending upon the forecasted sale the actual plan of production is made which is called as MPS or Master Production Scheduling.
- According to the production plan of the company the actual requirement of raw material is derived which is known as Material Requirement Planning or MRP.
- A planned order is converted to a production order when the list of requirements is completely ready and the company is ready to place an order.
- Upon receiving the required raw material the actual production takes place and then is entered in the records as finished goods.
The Process of Sales:
- The pre-sale activity which consists of planning of the mode of sale by the sale personnel
- The sales personnel enters an entry of the sales order into the system from the point of sale with the help of a computer and internet.
- The order is then fulfilled by checking the inventory of the company for a suitable product and having it shipped.
- It is then delivered to the customer.
- Then the final billing and payment of the product are done.
These are just examples of the different functions of a business. Keeping records of the above different functions is made easy with SAP and hence SAP is gaining a steady popularity in the corporate world.