Introduction to the case Study

This case study is the concluding section of the R/3 training sequence for SAP partners from the
areas of financials and logistics. Building on the knowledge gained during the function-based
application training courses. It is designed to demonstrate how a typical integrated R/3
implementation project works. Participants learn how to define corporate structures in the R/3
System, based on the description of a model company.

First of all, the corporate structure is configured in the SAP system. The main business
processes are then designed and tested in all corporate areas and, for all SAP applications for
which the participants have received training. Once they have completed this case study,
participants should be capable of modeling corporate structures in R/3 and performing the
integrated configuration of a company 's business processes.

PROCEDURE

You have just one week in which to configure on SAP system and implement specific business
processes based on line project description provided. Each project team should contain at least one
person from each SAP module. The teams are responsible for performing their own project
planning and control on a daily basis.

Each project team will receive its own client - a copy of client 000 - so that starling point in the case
study is exactly the same as it would be in a “real” customer project

You will receive group numbers from 01 - nn Your client is 851 nn So if you are in group 02, your
client is 853.

You will also need to agree to user names. There are ten users (CASE0I - CASE 10) created in the
system, the initial password is STUDY.

The case study consists of two parts.

Part I: Defining the organizational structures
Part II: Designing the business process
The aim of Part I, as in a “real” project, is for the project team members and the customer's
management team to reach joint agreement about the organizational structure.

It also enables you, as part of your ongoing training, to present the organizational structures drawn up
within your group at the plenary meeting, to discuss the pros and cons, and to model the business
processes in an organizational structure that will work in practice.

Part II of one case study is concerned with customizing and modeling the business processes. On the last
day of the case study project, each group will present specific business processes in the plenary meeting.
Participants will then discuss how the chosen implementation will actually work in practice.
The planned schedules for the case study is as follows:

Day I Setting up the project team

Designing the organization structure
Presenting and finalizing organizational structure
Creating a project plan
Day II - Day IV Customizing in the SAP system
Modeling business processed in the SAP system
Day V Presentation of business processes

All participants and instructors will attend a plenary meeting daily from 4:30 pm to 5-00 p m to discuss
problems that affect all groups

If you have problems or questions within your group, you can made use of Second Level Support from
the instructors. These services are paid to the instructors Swiss bank account at the customary K4 (DM
2.150)11.

As the process of contacting the instructions via the official SAP OSS System would be too time
consuming and would involve too much additional effort, especially in view of billing, please forward
your questions via the mail system in your client, describing your problem in as much detail as possible,
the mail recipient is the user “SAP “

THE COMPANY

Motorsport Berlin GmbH (MSB) Is a medium size company which manufactures motorcycles. Its
products include motocross motorcycles and street motocycles, and also does a strong trade in motorcycle
accessories MSB's head office is in Berlin.

MSB operates a wholly-owned subsidiary called Motorsport München GmbH (MSM). which is located in
Munich MSM buys motorcycles and accessories from MSB and is therefore primarily a trading company.

Year-end closing is performed for the entire group and for the individual subsidiaries. Fixed assets must
be managed in accordance with company law and cost-accounting regulations

A standard, integrated cost accounting system must be designed for the entire group. Cost centers must
be set up to manage functions of the same kind and must have unique numbers throughout the company.
Marketing costs must be entered separately and should be displayed separately on the balance sheet.

The company requires separate profit and loss statements for each of the following areas: street
motorcycles, motocross motorcycles, and accessories. It is vital for the company's strategic orientation to
know the contribution margins of each customer/group. Contribution margin figures should be available
for each sales center.

The motocycles are manufactured by MSB in Berlin. MSB sells products from its sales office in Berlin
and Wuppertal. A certain amount of stock is transferred from Berlin to Wuppertal for sales purposes.
MSM sells motorcycles and accessories through its own sales center in Munich.

The group sells its products to both wholesalers and retailers.

MSB has an additional warehouse in a suburb of Berlin, where it

manufacturers “Nostalgika” motorcycle horns. The horns and all
other accessories are stored at this location. All accessories are also
stored here. These parts usually shipped separately from
motorcycles.

In Wuppertal, some materials are planned using consumption-planning with forecast. Purchasing is
decentralized, but there are central master agreements.

After careful consideration, the management of MSB decided to implement an integrated software system
for the entire group. A comparison of various solutions showed that the SAP R/3 3.0 System was best
able to meet the group's requirements and growth plans, and the company purchased licenses for the
modules FI. CO. MM. PP and SD.

The entire SAP installation will take place on a computer in Berlin, including database and application
server. The individual group locations will be connected to the system via leased lines.

Your company

"CONSULTANTS R'US"

has won the contract to perform this SAP implementation project.

Tasks in Part I
- Set up your project team and structure it so that the project runs as smoothly as possible
- Define the organizational structure, giving reasons for your definition You should try to include all
organizational units. If you do not have all the information you need. You are to make your own
assumptions (as long as you give reasons for them)
Please note: The organizational structure must be agreed upon with MSB managers at a plenary meeting.
You should not start configuring the organizational structure in customizing until agreement has been
reached.
- Use the BEW where appropriate (information about the business processes is available in Part II)
- Create a presentation showing your organizational structure.

Tasks in Part II

- Draw up a project and define milestones.

- To maintain a clear overview of your project, you should use the BEW tools. However, bear in mind that
time is limited.
- Examine planning problems and solutions to these problems.
- Examine integration aspects for the entire software spectrum.
- Define the processes in the business transactions (see Chapter 7)
- Describe problems and obstacle encountered when creating the prototype.
- Write a daily status report for temporary meeting containing the following information:
o what functions and process installed?
o what problems occurred?
o is the project still on schedule (milestones) ?
 INTRODUCTION
Now that you have defined the organizational units. Part II gives you the information you need to
configure the appropriate business processes

The ?? of the team assigned to support the implementation of the enterprise system at MSB is to create
a ?? prototype of the system and present it at the plenary meeting The experienced consulting team
should be the information available from the customer and contained herein to design and configure the
organizational structure and the corresponding master records for the company. A prototype must be
created for all posting documents required and for the resulting accounting documents for the
individual business transactions. These prototypes must then be tested. Document and give reasons for
all the major recommendations that your team makes. When you give your presentation, you should
emphasize integration and the business flow long the logistics chain.

This document contains the information already entered by your project team. If you need more details
information you can submit inquiries to user “SAP“ via the mail system. specifying KUNDE
(CUSTOMER). The course instructors are then available to you in an additional as customer
employees. This function is not charged for separately.

Please prepare a list of open points and an informal status report for each daily plenary meeting.

The management of MSB expects to receive your prototype at the earliest possible opportunity.
Note: You should give priority to presenting your prototype.
Configure the processes you need for the presentation first. Once you have modeled the core processes,
you can begin to consider further aspects

2 – Master Data

2.1 G/L Account Master Data

One chart of accounts (INT) is used for both companies.

2.2 Bank Master Data

Enter the house banks and corresponding bank accounts for the company codes.
Bank Town Bank (11) Bank country Bank number
Deutsche Bank Berlin DB DE 10070000
Dresdner Bank Wuppertal DREBA DE 33080030
Stadtsparkasse Munich SPK DE 70150000

Bank data for the individual business partners must be maintained in the customer master records and/or
in the vendor master records. You need to enter the bank country, bank number and account number for
each business partner account.

2.3 Customer Master Records

Customer master records arc maintained decentrally. The sales and distribution department
creates customer master record and determines the customer number to be used. The accounting
department is responsible for entering accounting data in the master records. One member of the project
team will act as credit manager and will define the necessary credit information for the credit control
areas.
2.3.1 Accounts groups
Account group Description Humber range
1000 Regular customers 300000 - 399999
CPD One-time customers 1000- 1009

Create one master record for domestic one-time customers and one master record for foreign one-time
customers. Sort customers by name and location in the line item display.

Use a field selection for account group 1000 that is controlled as follows:
- The field "region'*, "industry" and "terms of payment” should be required-entry fields
- The sales district field is suppressed.
The following reconciliation accounts should be allocated to the individual customers
- Account 140000 Domestic receivables account
- Account 140010 Domestic receivables account • account one-time customers
- Account 141000 Foreign receivables account
- Account 141010 Foreign receivables account • account for one-time customers.
2.3.2 Goods receipt times
The following goods receipt time must be defined. The goods receipt times are entered in a customer
master record and allocated to the unloading points. The system determines a possible unloading time at the
ship-to-party location and triggers a warning message if the goods cannot be unloaded at the selected business
partner at the calculated time. The definition must include an unloading point and a calendar ID.

Goods receipt Day Morning Afternoon

GRI Monday 09:00-11:30 14:00-16:00
Tuesday 08:00-11:00 14:00- 16:00
Wednesday 08:00-11:00 14:00- 15:30
Thursday
Friday 08:00 - 11:00 14:00- 15:00
GR2 Monday 10:00-12:00 15:00- 16:30
Tuesday 09:30- 12:00 15:00-16:30
-+
Wednesday
Thursday 09:30-12:00 15:00- 17:00
Friday 09:30-12:00 15:00- 16:30

2.3.3 Incoterms
MSB and MSM currently both use the following Incoterms:
- CIF/ Cost, Insurance, and Freight
- CIP Carriage and Insurance Paid to
- ZEX Express freight to be calculated
2.3.4 Terms of payment
The following terms of payment are currently used
- PT01 8 days 5%
14 days 2%
21 days net
- PT02 14 days 3%
30 days 2%
 45 days net

PT01 is used by the head office (MSB). PT02 applies to all other customers (including retail).

2.3.5 Customers
The country and town listed in the customer master record determine the allocation of customers to sales
organizations. The customers listed below are interested in all of MSB's product groups
Customer Address Currency Goods receipt Sales Terms of
Conran Partner Country Channel payment
MSM DEM GR2 Wholesale PT 01
MSM München DE
Konigsalle 125 D
80101 Munich
Telephone 089/416-434
Contact Panner: Mr Harms

Below are the customers (wholesale and retail) that MSB and MSM sell their products to

Customer Address Currency Goods Sales Terms of

Contact Partner Country receipt channel payment
Language
Motorrad Böhm DEM GRI Wholesale PT02
Auf der Garte DE
42401 Wuppertal D
Telephone: 0202/3120-971
Contact partner :
Ms. Wisniewski
BMW Deutschland DEM GR2 Retail PT02
Festplatz 2115 DE
80102 M ùnchen D
Telephone. 0S9/1416-344
Contact partner: Mr. Meyers
Hot Wheels DEM GRI Wholesale PT02
Kurfurstendamm 1266 DE
10523 Berlin D
Telephone: 030214-3121
Contact partner Ms. Nagin

All Terrain Cycles GBP GR2 Wholesale PT02

315 Crocked Avenue GB
London W4R 5Y6 E
Telephone: 705-435-4353
Contact Partner:
Ms Sportolari
2.4 Material Matter Records

As MSB places considerable emphasis on quality it has begun by recording changes in the most important
materials products. This practice should be continued via a change management function built into the
system. MSB currently arranges changes according to design project member. MSB is very interested in
finding out how the functions for planning, scheduling and controlling changes can be used. The following
table contains the material numbers in the current system.

2.4.1 Finished goods

Material Decription Valuation Dist. Plant

number Class
100001 Street motorcycle 500cc - black 7903 MW MS
100014 Motocross motorcycle 500cc- green 7904 MW MS
100025 Street motorcycle 750cc - black 7903 MW MS
100030 Motocross motorcycle 750cc- green 7904 MW MS
100040 Horn "Nostalgika” 7905 MR MS

2.4.2 Accessories

MSB's product range also includes accessories. These items are only bought and sold: they are not part of the
manufacturing process. The following materials should be included.

Material number Description Dist. Plant

500020 Back rest MW & ME MSBS
500021 Screw-drive grease MW MSBS
500022 Black leather motorcycle pants
500026 Tigereye halogen lamp
500099 -GROLSCH" beer six-pack

2.4.3 Material types

The following material types and number ranges are used at MSB:

Materia1 Beginning of End of External/ Account

number number Internal category
range range reference
Finished products 100.001 199.999 External 0009
Semi-finished products 30.001 79.999 External 0008
Raw materials 20.001 29.999 External 0001
Operating supplies 400.001 499.999 External 0002
Trading goods 500.001 599.999 External 0005
Services 600.001 699.999 External 0006

2.4.4 Material Group

MSB has defined the following material groups and reporting purposes
 - .001 Accessories
- 002 Other
- 003 Motorcycle

2.4.5Additional information for sales and distribution

The material masters of finished products are maintained jointly by the product
development group. Additional information is maintained by the sales department.
although this takes place on an irregular basis because many of the department members
are often out of the office. The sales department is responsible for maintaining the following:
- Minimum order quantity for accessories
- Delivery plant
- Loading group
- Transportation group
- Storage conditions
2.5 Vendor Master Records
The vendor master records maintained centrally.

2.5.1 Account groups

MSB usually purchases items from a small number of regular vendors, although it docs purchase
from other vendors under certain circumstances. It is MSB’s company policy to use the one-time
vendor function in the R/3 System for these vendors.

The following table contains information about the account groups and number ranges for vendors:

Account group Description Number range

KRDI Dorn, vendors Internal, numerical
KRDA Foreign vendors Internal, numerical
KCPD One-time vendors External, alphabetical

MSB uses material number allocation, except for one-time vendors. To simplify the process of reporting
and control, the company requires two one-time vendor accounts: one tor foreign and one for domestic
vendors

The field status for the account groups should indicate that the payment method is a required-entry field

The following reconciliation accounts should be used.

- Account 160000 Domestic payables account
- Account 160010 Domestic payables account – one-time account
- Account 161000 Foreign payables account
- Account 161010 Foreign payables account – one-time account
Sort by name & location in individual items display screen for one-time accounts
2.5.2 Vendors
The following vendor master records must be defined

Vendor Description Payment terms Goods receipt

Address Currency Identification
Contact partner Invoice
Verification
MSB Berlin Plant PT01 No
Palaststrabe 335 DEM
10025 Berlin
Telephone: 030/617-1783
Contact Partner:
Ms.Klaus
Laverda Motorcycle manufacturer PT01 Yes
Westheimer Str. 811 Vendor for Berlin plant DEM
201102 Hamburg
Telephone: 040/508-1409
Contact Partner:
Mr. Guzzi
Top Design This company handles No
Quadrigagasse 111 subcontracts orders
10251 Berlin The materials delivered
Telephone: 030/561-278 are frames, paint and
Contact Partner: Mr. logos
Moto
Quick Cleaning Cleaning service for PT02 No
Parkstra Be 235 Berlin DEM
10253 Berlin
Telephone:030/621/233
Contact Partner:
Mr. Propper
All Terain Cycles Accessories PT02 No
315 Crocked Avenue GBP
London W4R 5Y6
Telephone: 705-435-4353
Contact Partner:
Mr. Purchase

3 – Material Management

3.1 Procurement
The following purchasing groups are required
- 001 for the procurement of accessories
- 002 for the procurement of services
- 003 for the procurement of motorcycles
Automatic source determination should be used.
The following points must be taken into account when ordering raw materials or semi-
finished products:
- After manufacturing the frames are taken to the external company. Top design to
be spray-painter MSB considers the paint and logo as raw materials
- Processing fee per frame: DEM25
- Raw material costs for paint (per frame) DEM 250
- Raw material costs for logo (per frame) DEM 050

3.2 Valuation

MSB valuates motorcycles at standard prices and prices and bases accessory prices on moving
average prices. Use appropriate price control indicates for semi-finished products and raw materials
3.3 Physical Inventory

As MSB cames out annual inventories, the entire company stock level must be established for the
balance sheet by the cut-off day. During physical inventory, material movements cannot take place in
the warehouse.
3.4 Forecasting

Material requirements for the Tigereye halogen lamp can be planned used forecast based planning

The following consumption values exist:

Month Tigereye halogen
lamp
Month - 1 1000
Month - 2 950
Month - 3 920
Month - 4 800
Month • 5 830
Month - 6 750
Month • 7 750
Month • 8 700
Month - 9 500
Month - 10 550
Month - 1 1 450
Month-12 500

3.5 Material Requirements Planning

MSM orders motorcycle from Berlin using a scheduling agreement for which a delivery
schedule is produced in MRP. Material requirements planning creates purchase
requisitions and planned orders. The requisitions are then convened into purchase orders

Accessories are planned on the basis of consumption. Use various procedures here.

A combination of planned requirements and consumption-based planning is used

for raw materials.
3.6 Plant Stock

Perform the initial entry of stock balances for selected products and discuss the problems I involved

4 – SALES AND DISTRIBUTION

4.1 Organization

4.1.1 Sales Organization

The German market is divided between two sales organization. One of MSB and one for
MSM and one-for MSM. Each sales organization it responsible for negotiating and
determining conditions and characteristics for its business transactions

4.1.2 Sales channels

The MSB and MSM sales organizations both use two sales channels for selling their
Goods:

- Wholesale
- Retail
4.1.3 Divisions

MSB’s products are divided into three groups. All product lines can be sold by both sales organizations via both sales
channels.
- Street motorcycles
- Motocross motorcycles.
- Accessories

4.1.4 Sales offices

The company decided to set up separate sale- offices for the different regions so that it is possible to
report sales per sales office. The following sales offices must be defined.
- Berlin
- Wuppertal
- Munich
4.1.5 Distribution centers

As already mentioned, Berlin is responsible for most of the company’s manufacturing activities. No
product are manufactured at the Wuppertal and Munich sites.
The Munich plant buys ils stock from MSB. The agreement lakes the form of a scheduling agreement
specifying quantities and dates. These quantities and dates are maintained in MRP on the basis of the
annual sales plan developed by MSM.

MSB acts as a vendor for MSM, and MSM is defined as a customer of MSB MSB therefore creates
a sales scheduling agreement with delivery schedule lines for its customer MSM. The scheduling
agreement items appear as requirements at the distribution center in Berlin

Stock transfer takes place on delivery and is settled in billing.

4.1.6 Shipping points

Each plant has two shipping points, which are responsible for processing deliveries. The shipping point
for normal deliveries processes the majority of deliveries. MSB also offers customers the option of
express deliveries, with guaranteed delivery within one day anywhere in Germany. This shipping point is
reserved for express deliveries:

Shipping Point Description

D001 Berlin, regular delivery
DEXP Berlin, express delivery
C001 Wuppertal, regular delivery
CEXP Wuppertal, regular delivery
T001 Munich, regular delivery
TEXP Munich, express delivery
U001 External warehouse, regular delivery

4.2 Functions

4 2.1 Pricing

Each individual sales organization is responsible for the pricing procedure used when entering purchase
orders and processing billing. Material costs, discounts and surcharges may therefore vary between
sales organizations. It was decided that each sales organization should have a separate pricing
procedure to reflect its own pricing policy.

The pricing procedure is also influenced by the sales channel used A special discount must be defined for
wholesalers to reduce the gross product price. It was decided “Price group" Field in the customer master
should be used to determine whether there is a wholesale discount. It would be possible to make the
discount dependent on the sales channel only. By using the price group field, it is possible to allow
several discount rates based on different price groups.

The following conditions apply for pricing at MSB:

- A basic material price must be defined for each sales organization, scaled according to quantity
- Customer-specific material price are possible
- A discount of 25% is granted for orders from wholesalers
 - The price determined when the purchase order is entered is fixed and cannot be changed later in
billing
- The cash discount amount should appear for each item in the price specifications
- The material costs should be also be listed in the item price specifications, in addition to the
gross contribution margin calculated
- In the case of an express delivery, an additional freight charge should be listed in the item. This
charge depends on the weight of the goods shipped and is triggered by a special incoterm that is
entered for the express delivery in the sales document

4.2.2 Availability check and transfer of requirement

Both MSB and MSM want to record requirements created by a sales order, Separately The alternative
would be to group requirements in collective purchase requisitions for a day or a week, but in this ease,
no details would be available bout the source of the requirements

4.2.2.1 Wuppertal

The scope of the availability check for sales orders should take account of the transfer requirements at the
distribution center in Berlin so that the planned inward stock movement created in MRP can be matched
with purchase orders entered in Wuppertal.
4.2.2.2 Munich

The scope of the availability check for sales orders should take account of planned inward stock
movements so that the future planned inward nock movements can be matched with the purchase orders
entered in Berlin, according to the dates and quantities in the g purchasing scheduling agreement.

4.2.3 Shipping

The system should, if possible, provide default values for the data required m shipping This function
should be automated, for example, for shipping points, routes and picking location determination
4.2.3.1 Shipping points

The shipping point is determined for each order item. One shipping is defined as the default in the
determination tables. The order shipping points can be entered as alternatives. The standard shipping
point depends on the shipping conditions in the customer master, the material loading group and the
delivering plant. Make sure that you define two shipping conditions - one for regular and one for express
deliveries - and the corresponding determination table. Only one loading group is required because all
materials are loaded onto trucks using a fork lift

The shipping point should he determined as follows:

Delivering plant Shipping condition Loading group Shipping point
Berlin 01 0001 D00I
Berlin EX 0001 DEXP
Wuppertal 01 0001 C001
Wuppertal EX 0001 CEXP
Munich 01 0001 T001
Munich EX 0001 TEXP

4.2.3.2 Routes

The route describes the itinerary for the delivery of goods to customers and the type of transaction used.
Route determination takes place of every order item and can be redefined when delivery takes place,
based on the weight to be transported. Determine the following routes for the existing customers and
internal goods movements.
Route From To Shipping Transit Transportation
type time lead time
RDE00I Berlin Wuppertal Truck 2 3
RDE002 Berlin Munich Truck 3 3
RDE010 Berlin Berlin Truck 0.5 1
RDE100 Wuppertal Wuppertal Truck 0.5 L
RDEEXP Germany Germany Air 1 1
RCA00I Munich Munich Truck 05 1
RCA100 Munich London Truck 6 3

4.2.3.3 Transportation zones

Create the following transportation zones for allocation in the customer master records:

Country Zone Description

DE DEB001 Berlin
DE DEW00I Wuppertal
DÊ DEMOO Munich
GB GBL001 London

4.2.3.4 Route determination

Route determination should take place automatically in the sales order. It is not necessary redetermine
the route when the delivery is created. Only one transporting group is required, because all goods are
shipped on pallets. Maintain the route determination table as follows:

Shipping Recipient Transportatio Shipping Transportatio Route

Point Country n Zone Condition n group

D001 DE DEB001 01 RDE010

D001 DE DEW001 01 RDE001
D001 DE DEM001 01 RDE002
 DEXP DE DEM001 EX RDEEXP
DEXP DE DEW001 EX RDEEXP
DEXP DE DEB001 EX RDEEXP
C001 DE DEW001 01 RDE100
T001 DE DEM001 01 RCA001
T001 GB GBL001 01 RCA100

4.3 Additional Sales Information

Configure the system to meet the following requirements:

- Use the standard order type available in the system to process regular sales orders. MSB does
not currently require any special-order types.
- MSB requires a special scheduling agreement to process sales to MSM.
- MSB has decided that it wants to use credit memo requests, debit memo requests and the
return order type, in addition to the standard order type.
- The only partner role that can be different for the individual items in the sales documents is the
ship-to party.
- An incompletion procedure based on the standard procedure must be used order entry
However, do not include the order number in the list of fields to be checked. A warning
message should be issued if details of weights or voles
missing.
- Possible entries should be used to make the order entry process faster efficient. Provide vinous
goods as default values for order entry by defining a product proposal.

4.4 Additional Shipping Information

Shipping processes must take place as quickly and efficiently as possible. The shipping team has decided
that the standard functionality is suitable, and that the standard delivery document should be used for
sales orders.

Due to the scope of anticipated deliveries, delivery documents arc created daily via collective
processing. Exceptions to this rule are cases in which the customer requires an express delivery. In this
case, the delivery document is created separately for each order.

As the warehouse structure is not complex, no warehouse management functions will he built in.
However, it should be possible to enter the location for picking in the delivery document.

The unload points must be defined in the customer master record, along with the goods receiving times.

4.5 Additional Billing Information

The following requirements must be met in billing:
- A standard invoice should be used with reference to a delivery.
- Customers usually a separate invoice for each delivery. However, it was decided that customers
can also receive billing schedules on request. A two-week calendar should be defined so that it is
possible to combine all deliveries in one billing date that falls on the second and fourth Fridays of
each month.

5 Financial Accounting

5.1 Master Data

You need a vendor master record for processing the monthly invoices for cleaning services provided by
August Hohne Gebaudereinigung Berlin. The invoices are payable immediate (net).
5.2 Document Processing
Use the following document types. Add the corresponding number ranges where possible:

XI Customer invoice
DG Customer credit memo
DZ Customer payment
VI Vendor invoice
KG Vendor credit memo
VP Vendor payment
SA G/L accounts

Use internal number assignment with the corresponding number range intervals

5.3 Incoming Payments

It must be possible to enter a reason code in Financial Accounting for incoming payments
with unwarranted cash discount deductions and disputed items.

5.4 Outgoing Payments

Incoming invoices should be paid via bank transfer. A cross check should be issued for payments of over
DEM 50,000.

5.5 Correspondence

The head of accounting would like to be able to send an account statement to customers. Customers
should receive a reminder every three weeks: group companies every four weeks. The text of the letter
should be identical in both cases.

5.6 Asset Accounting

Sample master records arc required for cost centers in the area of manufacturing. Master records should
be created for several manufacturing plants and one assembly plant. At least one master record is required
for buildings with allocation to the “buildings” cost center. The extension to the assembly shop will be
processed using the "assets under construction" function.

The appropriate postings must be made for month end closing in internal and external accounting

5.7 Reporting

Carry out a customer account analysis.

Display the individual items of a customer or vendor, and display the important aspects of the document

5.8 Closing Operations

Month-end closing must be performed for the current month in the company concerned. For this
reason, the posting period must be closed on the last day of the month and a new period must be set up
for the next month. Maintain the appropriate tables. Prepare a balance sheet and loss statement.

5.8.1 Closing

A financial statement/profit and loss structure with corresponding hierarchy levels has been created for
preparing the balance sheet and the profit and loss statement for the individual companies .

Structure name IN'T

Sum totals and subtotals are prepared for each group. Each item has its own text G/L accounts have been
allocated to the lowest level. Revise this if necessary.

5.8.2 Aggregation

The company codes must be aggregated at the MSB level. Prepare the profit and loss statement for the
purposes of the ease study.
.
6. Controlling

6.1 Overhead Cost Controlling Master Data

Both company codes are in one controlling area. Define the controlling area and assign it to the
corresponding company codes.

6.1.1 Cost Elements / Activity Types / Statistical Key Figures

Transfer the required G/L accounts from Financial Accounting to cost accounting for primary cost entry
and primary cost allocation. You need to analyze the chart of accounts and determine the cost dement
types.

Create the corresponding statistical key figures, activity types and secondary cost elements for internal
cost allocation.

The cost elements and activity types arc valid from 01.01.1996 to 31.12.1999.
Statistical Key Figures: 9100 Employees
7800 Energy Consumption in KW
Activity Types: Allocation Cost Elements
1410 Setup Hours 611410 Allocation Setup
1420 Manufacturing Hours 611420 Allocation Manufacturing
1430 Assembly Hours 611430 Allocation Assembly
1440 Setup Hours (Assembly) 611440 Allocation Assembly Setup
1450 Inspection Hours 611450 Allocation Inspection
1460 Repair Hours 611490 Allocation Repairs
Secondary Cost Elements: 65xxxx Order Settlement
510000 assessment (Cafeterias)

Use the following cost dement Cost element groups to sort similar cost elements into groups:

Cost Element Group Cost Elements

GBAB All other groups, overhead allocation sheet
Materials 40xxxx, 415000
Energy 416100, 417000
Human Resources 42xxxx, 43xxxx, 44xxxx
Maintenance 45xxxx
Taxes 46xxxx
Rental 47xxxx
Assessment 51xxxx
Internal 61xxxx
Total All cost and revenue elements (for completion
inspection and possibly for profitability analysis)
Configure cost centers for all primary and secondary costs for actual and planned postings. Service cost
centers should be managed on a quantity basis. The cost center currency corresponds to the controlling
area currency. The cost centers are valid from 01.01.1996 to 31.12.1996

6.1.3 Internal orders

MSB has decided to participate in a motorsport event held annually at Zandvord in the Netherlands in
order to advertise and market the company's street motorcycle.

In order to monitor the marketing budget, the marketing manager has requeued a detailed
analysis of the planned and incurred costs. This is done using an internal order which is
settled to the sales cost center in Berlin on a monthly basis. Alternatively. the settlement could be
made to profitability analysis. These two alternatives should be represented using two test orders.

Create a new internal order type for advertising and marketing events. As only a few events are planned,
the number range 1000-1999 should be assigned.

6.2 Planning in Overhead Cost Controlling

MSB currently plans activity - independent costs and uses manual / political allocation prices for the
activity types. Using a production cost center, show the customer the options for activity - dependent
planning of primary and secondary costs. Then perform the following planning activities.

6.2.1 Planning Statistical Key Figures

For the cost centers listed below, the statistical key figure 7800 Energy usage must be planned per month
in order to allocate the costs for the cafeteria to the number of employees in each cost center:
X1100 Real estate-buildings 20.000 kWh
X2000 Service cost center 15.000 kWh
X3100 Gearbox assembly 35.000 kWh

For the cost centers listed below, the statistical key figure 9100 Number of employees must be
planned per month in order to allocate the costs for the cafeteria to the number of employees in each
cost center:

X2000 Service Cost Center 45 Employees

X3200 Street Motorcycles 50 Employees
Assembly
X3300 Motocross Motorcycles 60 Employees
Assembly
X4010 Warehouse At Main 25 Employees
Location
X5110 Sales Berlin 20 Employees
6.2.4 Planned distribution

The electricity cost elements planned on the energy cost center should be distributed to the appropriate
cost centers on the basis of the planned energy consumption per cost center. Create the planned
distribution cycle requited.

6.2.5 Planned Assessment

The costs planned or the cafeteria cost center should be allocated on the basis of the number of employees
in each cost center Create the planned assessment cycle required.

6.2.5 Planned Assessment

The costs planned on the cafeteria cost center should be allocated on the basis of the number of
employees in each cost center. Create the planned assessment cycle required.

6.2.6 Planning to Internal Orders

Plan the following costs for the order “Zandvord Rally & VIP Tent “:

Travel Expense 10,000 DEM

Rental of an Exclusion Stand 1,200 DEM

Advertising Material 36,000 DEM

Other Cost (Including Beer) 2,800 DEM

6.3 Actual Costs in Overhead Cost Controlling

6.3.1 Primary actual costs

Post to your cost centers and internal orders in Financial Accounting as follows:
- Electricity costs to the energy cost center
- Direct labor costs and salaries to production cost centers
- Indirect labor and external services to the cafeteria cost center
- Travel expenses, rental fees and advertising material to the alternative internal orders for
Zandvord Rally.
- Repair services in maintenance for the MSB and MSM sales cost centers.
Post to your cost centers and internal orders in SA’P integration as follows.
- Purchase orders, good receipts, invoice receipts from Material Management Material
consumption from the warehouse
- Material Consumption from the warehouse
- Cost accounting depreciation and interest from Asset Accounting
6.3.2Internal Activity Allocation
Post to your cost center and internal orders with internal activity allocation as follows.
- Repair hours front maintenance to the production cost centers
- Repair hours from maintenance to the internal orders
- Inspection lime from quality inspection to the warehouse cost centers for receiving inspections.
6.3.3 Accrual

Set up accruals for the current fiscal year via the overhead cost element "Christmas bonus" on the basis of
the salaries and wages for all production cost centers.

Set up accruals for the current fiscal year via the target actual cost element "cost accounting insurance"
for the "real estate and buildings cost center.

Perform the actual accrual/deferral postings for the current month

6.3.4 Actual distribution

Perform actual distribution for energy based on the planned values for the statistical key figure 7800.

6.3.5 Actual Assessment

Perform an actual assessment according to the planned assessment for the cafeteria.

6.3.6 Actual order settlement

Settle your alternative internal orders for Zandvord Rally.

6.4 Profit Center Accounting

Create a standard hierarchy. Create profit centers for the street motorcycles; motocros motorcycle and
accessories.

Make sure that all relevant master data (particularly materials, cost centers, orders) assigned to the
appropriate profit centers. Bear in mind that customizing is also required in other modules for profit
center accounting (particularly SD).
• ^

Create a report for the street motorcycle profit center using the standard SAP reporting settings.

6.5 Profitability Analysis

Create a simple profitability analysis using the cost accounting cost of sales accounting procedure Use the
standard SAP settings as far as possible.

Bear in mind that the operating concern applies to all clients, so you can copy a predefined operating
concern

Be prepared to discuss the alternatives and differences in profitability reporting in R/3 3.0
7. PRODUCTION PLANNING

7.1 Work Center

The following work centers are required

Work Center Description Activity type
BRAKE Brake assembly Production time setup time
GEAR Gear assembly Production time setup time
SMASS.M Assembly of street motorcycles Assembly time
MCASSM Assembly of motocross motorcycles Assembly time
QUALITY Quality inspection Inspection time
EXTSUB External processing
Cheek which cost centers and activity types the work centers should be allocated to.

7.2 Capacity

Work on the basis that the work centers are not hierarchically structured and have the following
capacity:
- Begin: S:00 a.m.
- End: 6 00 p.m.
- One-hour lunch break
- Efficiency rate: 80%
Labour capacity must be evaluated for each work center. The available capacity should be adapted to
the capacity evaluation on the basis of a planning run. Discuss possible bottle necks and methods for
solving them.

7.3 Routings

After entering the routings, use the scheduling function to determine the production times. Store these
times in the material masters.

7.3.1 Routing for Brake Assembly

Description of activity Work center Setup Production

Assembly of front-wheel brake BRAKE 5 mins 10 mins
Assembly of rear-wheel brake BRAKE 5 mins. 15 mins.
Quality inspection QUALITY. 1 min.

7.3.2 Routing for gear assembly

Description of activity Work center Setup Production
Assembly of gear system GEAR 10 nuns. 180 mins
Quality inspection QUAIJTY 10 mins

7.3.3 Routing for Final Assembly of motocross motorcycles

Description of activity Work center Setup Production

Final Assembly SMASSM 20 Mins 400 Mins
Quality Inspection QUALITY 60 Mins
7.3.4 Routing for Final Assembly of Motocross Motorcycles

Description of activity Work center Setup Production

Final Assembly MCASSM 20 Mins 400 Mins
Quality Inspection QUALITY 60 Mins

7.3.5 Routing for frame

Discuss the routing possibilities for painting the frame.

7.4 Bills of Materials

Assign the components to the operations during or after BOM entry.

7.5 Sales Planning Production Plan

Production at MSB is based on a 12-month sales planning horizon. Finished products arc MRP-
controlled materials

The production plan is derived from the sales plan. In the next 12 months, 7,000 motorcycles will be
manufactured, with a strong seasonal production increase in February and March.

Discuss the various methods of preplanning, the use of product groups and replenishment in the
various operations. Propose a planning strategy for MSM using the various R/3 functions

It is estimated that 5.000 street motorcycles and 2.000 motocross motorcycles will be sold in the next
12 months: sales will increase dramatically in February and March.

7.6 Material Requirements Planning

A production plan / material requirements planning is required for creating dependent requirements
and planned orders.

7.7 Capacity Planning

Capacity planning is used to determine overload situations in the production capacity available. Find out
which work centers are affected and take action to determinate the overloads.
7.8 KANBAN

MSB is considering introducing new methods for replenishing its production lines. The motorcycle
engines will be procured externally. If SAP can meet the requirements for production line replenishment,
MSB would use KANBAN techniques. Help MSB to make its decision.
8. PRESENTATION OF THE PROTOTYPE

You have now identified diverse important business functions. The R/3 transaction that support these
functions should form the basis of the presentation the last day of the case study.
- 1a. Demonstrate preplanning in Munich and the transfer of requirements to the production
plant. Perform planning for the black 500cc street motorcycle in the production plant

- 2a. Be prepared to demonstrate and discuss the company wide stock transfer requirements of
MSM and MSB

- 2a. Create a purchase order for the vendor Laverda. Convert one of the purchase requisitions
created in MRP into a purchase order.

- 2c. Invoice verification.

Use invoice verification to record the invoice from the vendor Laverda

- 3a. Create a standard cost estimate for the black 500cc street motorcycle. Mark the cost estimate
and release it.

- 3b. Create a production order for black 500cc street motorcycles in the production plant. Convert
a planned order created in MRP into a production order.

- 3c. Post the goods of the components for the production order.

- 3c. Perform the periodic activities for the production order (surcharges. WIP. variances,
settlement).

- 4a. Create a sales order for the sales office in Munich.

The customer All Terrain Cycles places an order for the following express delivery:

Material Quantity

Black 500cc Street Motorcycles 100

Black 750cc Motocross Motorcycles 75

Togereye Halogen Lamps 50

Black Leather Motorcycle Pants 50

Check that the following details are correct.

- Shipping point
- Route
- Delivering plan
- Pricing
- 4b. Process the delivery for this order
All materials must he deine red in full. Perform puling and goods issue Male sure that the storage
locations are specified

- 4c. Create the hilling document for this delivery

Create the hilling document and male sure that a posting is made to Financial Accounting.
Check the posting in Financial Accounting to validate the G/L accounts used

- 5a. Create a return order with a reference to the sales order

The customer has lodged a telephone complaint about the paint on some of the motorcycles
delivered
Create a return order for five black 500cc street motorcycles.

- 5b. Create the delivery for the return order.

Post goods receipt for the return of the damaged goods.

- 5c. Create the corresponding credit memo.

Create the credit memo for the return order and check the posting to Financial Accounting.

- 6a. Post an incoming payment.

You receive a payment from the customer Motorrad Bohm. DEM 23 were deducted for excess
freight charges and DEM 27 for a 3-hour delay in delivery. We have authorized the offsetting of
DEM 23. but DEM 27 are outstanding and should be marked as a “disputed item”

- 6b. Post a vendor invoice.

An invoice has been received from the cleaning company for monthly rental fees. The costs and
quantity details are always posted to the same specified cost centers.
Demonstrate the update using a template

Cost center Time used

Real estate/buildings 900 hours
Cafeteria 66 hours
Sales Berlin 43 hours

- 6c. Create a payment run for all outstanding invoices.

The payment run should contain at least 3 invoices, one of which Is blocked. Find an appropriate
blocking reason.

- 7a. Post primary and Secondary costs to the cafeteria cost center. Then perform an assessment for
the cafeteria to the production cost centers based on the number of employees