What is SAP?
Each business holds its objectives and goals, procedures, and requirements. Most importantly, the current businesses require innovative technologies with complete functions that fill the gap between business processes and folks. SAP MM course in pune
An organization has several departments and teams, in order to run them successfully; there should be an ERP system that supports them by coordinating all information and communication within the organization. An ERP system is a grouping of software, and the company’s activities carried out to accomplish various operations.
An ERP software helps to adjust the entire project value chain and also simplifies the critical processes effectively and efficiently.
Presently,SAP ERP is one of the powerful Enterprise Resource Planning systems. SAP stands forSystems, Applications, and Products in the data processing. In the year 1972,Wellenreuther, Hopp, Hector, Plattner, and Tschira founded SAP software.
SAP system includes various integrated modules, which covers almost all the feature of the business management. Since 2010, SAP has more than 140,000 installations globally, over 25 industry-specific business solutions, and more than seventy-five thousand customers in 120 countries.
Need of an ERP system:
Well,any beginner who wants to make a career in SAP ERP isenthusiastic to know about the ERP system, and the very first question whicharises to their mind is why an ERP system is required? To answer this question let us consider a scenario:
Acustomer wants to purchase a specific product. Thus, the contacts the salesdepartment of an enterprise- the sales team’s links with the inventory team to check the product’s availability. But, unfortunately, that product is unavailable and the organization lose the sale. To make sure that this won’t rehash next time; the organizations are using ERP software. Let us see how an ERP system overcomes these issues. But before learning about ERP system let us understand how various departments are involved in the entire business process.
The step by step procedure is mentioned below:
1.A customer approaches the sales department to check the product’s availability.
2.Then the sales teams link to the inventory department to check whether theparticular product is available or not.
3.If the product is unavailable, the sales team connects to the productionplanning department and asks them to manufacture the product.
4.Next, the production planning team connects again with the inventory departmentto check the availability of raw material.
5.If the raw material is unavailable, the production planning team purchases itfrom the wholesalers.
6.Then the production planning team moves the raw materials to the shop floorexecution for the creation of an actual product.
7.Once the product is ready, the shop floor team sends it to the sales team.
8.The sales team, in turn, delivers the specific product to the client.
9.Meanwhile, the sales team informs the finance department regarding the incomegenerated by the sale of the product. Production planning team then update the finance team with payments to be done to different vendors for raw materials.
10.The HR department is also involved in the complete process to take care of anyHR related issue.
Thisis the usual business process that any manufacturing company follows. Below area few essential points that can be derived from the above scenario:
A company has different subdivisions or business units.
- These subdivisions or business units communicate with each other continuously and exchange information with each other.
- An organization becomes successful by communicating and transferring data within departments, as well as related third-party such as vendors, clients, etc.
- Theenterprise can be classified as a decentralized and centralized system as perthe communication and data exchanged is accomplished.
Decentralized System: Many companies with decentralized system face several issues such as:
Datais maintained locally at the specific departments and also the departments willnot be able to access information and data from other sections. SAP MM classes in Pune
To know the issue with the decentralized ERP system, let us consider the abovebusiness process scenario once again. The customer contacts the sales department to purchase a particular product, but he wants the product urgently. As this is a decentralized process, the sales team doesn’t have any real-time information access related to the availability of the product and therefore connects with the inventory department to check the availability of the product; this process takes a lot of time, and the client looks for another vendor which results in customer disappointment and loss of revenue.
If the product is unavailable and the sales team connects with the production planning team to manufacture the product for further use. Production planning team in turn checks for the required raw material. In a distributed system, the production planning and inventory department separately store the information of raw material; this raises the data maintenance cost.
Whensales team check for the availability of raw material for a particular product,as per the inventory department it confirms the availability of the product, but at the same time as per the database of the production planning team it shows the product is unavailable. The organization purchases the raw material, but this increase the material and inventory cost. If the raw material is available, but there is a shortage of workers then shop floor team connects with the HR department, who recruit the momentary workers higher than market rates; this increases the cost of labor.
Atthe same time, the production planning section fails to inform the finance teamregarding the material purchasing. Therefore, the finance department delays the payment decided by the vendor; this affects the company’s reputation and also invite probable legal action.
Theseare the significant issues with the decentralized system. In order to overcomethese problems, the organizations are using a centralized system, i.e., ERP.
Centralized System: If a company utilizes acentralized system, the data is preserved at the central location, and it isshared with various departments. Also, the departments can access the information or data of other departments. Let us consider the same business process scenario once more to solve this issue of the decentralized system:
Most of the people still have confusion in moving towardsSAP ERP. Here you can understand in a better way- Why do People Want to Get SAP Certification?
Alldepartment shares the data or information with the central information system.
When a client contacts the sales team for purchasing a product, the sales team has real-time information access to the products in inventory which is informed by the inventory team in the centralized system.
- The sales team immediately responds to client requests which results in increased income and customer satisfaction.
- If it is required to manufacture the specific product the sales team updates the centralized database so that all the departments get information about the status of the product.
- Even the production planning team gets an update automatically by the centralized database for requirements. The production planning team checks the availability of the raw materials through the central database.
- This avoids data duplication and provides correct data. The shop floor team is responsible for updating the employee’s status regularly in the central database so that the HR department can access it and can recruit suitable candidates in case of shortage of employees at market price; this lowers the labor cost.
- With the centralized system, the vendors can directly submit their invoices to the central enterprise system; and the finance team can easily access the invoice. Thus, the payments can be done on time and any kind of legal actions are also avoided.
- SAP,a German multinational software corporation founded in 1972, is a global marketleader in providing ERP (Enterprise Resource Planning) solutions and services to large enterprises within more than 130 countries. SAP is a sort of ERP that is comprised of a number of integrated modules that are used to manage businesses -- mostly large enterprises -- but recently small to medium sized businesses have also adopted the solutions.
Majormodules of the SAP system are here:
FinanacialModules:
· InvestmentManagement (IM)
· FinancialAccounting (FI)
· Controlling(CO)
· Treasury(TR)
· EnterpriseControl (EC)
LogisticsModules:
· Sales& distribution (SD)
· Production,
· Materialmanagement (MM)
· etc.
Humanresource management Module:
· OrganizationalManagement
· PersonnelManagement
· etc.
CrossApplication Module:
· SAPOffice
· Workflow(WF)
Theseare modules work in collaboration in a single enterprise with each moduleworking on single part management of the system. For instance, human capital management is a part of an enterprise, but when you enter in this sub-part you will go crazy seeing the complexity and all those integration.
Withthose many modules and complex structure, now you must have come to the pointthat "How is SAP used" is not that easy to answer. Even a single book will not be suffice to introduce the working of SAP ERP solutions.
So,if you want to learn SAP applications and want to get a job in it, it highlyhighly recommended taking proper classes, workshops, tutorials, and go most importantly hands on practice. Hands on practice is also quite a troublesome job as you wouldn't be able a SAP based ERP, and even if you do, I am afraid, either you will have to pay for it or you have some close one working on the system. Online SAP MM Training In Pune.
