ERP Midterm Review

Silo Effect

A system in which workers complete their tasks in separate departments without regard tot he consequences for other components of the process

Business Processes

A set of tasks or activities that produced desired outcomes. When it is integrated, all the data from a company is put together into one system, so all the departments can have access to it.

Procurement

All the activities involved in buying or acquiring the materials used by the organization, such as raw materials needed. Comprised of five steps completed in three functional areas.

Fulfillment

Consists of all the steps involved in selling and delivering the products to the organizations or customers.

Materials Planning

Uses historical data and sales forecasts to plan which materials will be procured and produced when and in what quantities.

Production

The actual creation of the products. This process is concerned with acquiring materials needed internally.

Project Management

Deals with the planning, forecasting, and production, or marketing of a product or products at all stages of the product lifecycle.

Inventory and Warehouse Management (IWM)

Concerned with the storage and tracking/movement of materials.

Software Architecture

The technical structure of the software, how users interact with the software, and how the software is physically managed on computer hardware.

Steps in the Procurement Process

Create purchase requisition, create and send purchase order, receive materials, receive invoice, send payment to vendor.

Steps in the Fulfillment Process

Pre sales, order processing, inventory sourcing, shipping, billing, payment.

Customer Relationship Management (CRM)

Connects a company’s ERP system to those of its customers.

Product Lifecycle Management (PLM)

Helps companies administer the processes of research, design, and product management.

NetWeaver

SAP’s operating system.

Client

Highest organizational level, represents the enterprise and comprised of many companies.

Company Code

Organizational level. The central organizational element in financial accounting; identifies legal entities in an enterprise (client); legally independent from other companies in the enterprise. Clients can have multiple of these, but it must only belong to one client.

Plant

Organizational Level. Performs multiple functions and is used by many processes. Represents factory, warehouse, office, distribution center, etc.

Raw Materials

Materials that are purchased from a vendor and used in the production process.

Finished Goods (FERT)

Materials that are created by the production process by other materials.

Trading Goods

Materials that are purchased from a vendor.

Accounts Receivable

Financial accounting account that is used to manage money owed by customers for goods and services purchased from the company. Used in the fulfillment process.

Semi-Finished Goods (HALB)

Goods still in production.

Bank Ledger Accounting

Concerned with recording data associated with bank statements. The ledger holds account information that is needed to prepare financial statements and includes accounts for assets, liabilities, owner’s equity, revenues, and expenses.

Accounts Payable

Concerned with vendors, involves sub-ledgers to track money owed to individual vendors. Used in the Procurement Process.

Reconciliation Account

A general ledger account that consolidates data from a group of related sub-ledger accounts. Ex: A/R, A/P, and assets accounting. Is also known as a general ledger account.

Asset Accounting

Tracks the financial consequences associated with the entire lifecycle of an asset (acquisition to disposal).

Subledger Accounts

Accounts specific to something. Ex: customer, vendor, and item.

DATA

Used in a goods reciept.

Tangible Assets

Physical and measurable assets that are used in a company’s operations. Ex: property, plant, and equipment.

Intangible Assets

Nonphysical assets used over the long-term. Ex: patents, trademarks, and franchises.

Purchase Organization

Handles tasks in the procurement process.

Goods Reciept

Uses data from materials, quantities received, location, date, time.

Invoice Verification

Ensures information is consistent across all documents. Ex: Three-Way Match (the most common), Two-Way Match.

Three-Way Match

Matches the purchase order, goods receipt document, and the invoice.

Two-Way Match

Matches the purchase order and the goods receipt document.

Wholesale Channel

Does not include sales taxes in calculating prices (in the U.S.); requires a minimum volume of purchase and offers volume discounts; it may designate a specific plant or plants from which deliveries are made.

Web Services, EDI, Fax, Print

Media that can be used to communicate with vendors in SAP.

Parallel Accounting

Used to implement multiple ledgers and use each ledger for different purposes.

Enterprise System

Systems that support end-to-end processes. Increase profitability, productivity, and competitiveness by removing barriers between functional areas. Ex: ERP System, Supply Chain, Customer Relationship Management.

ERP

Largest and most complex enterprise system. A fully integrated and global system that supports multiple languages and currencies. Focuses primarily on intra-company processes. Business process management software that uses a system to facilitate information flow between all business functions inside the organization. Ex: SAP, Microsoft Dynamics AX, SAP Business One.

Master Data

The entities within a business process that are used repeatedly; they help the business process flow.

Organizational, Master, Transaction

Types of data in an ERP.