Configuring SAP R/3 and an Term Paper

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Judy E. Scott, Iris Vessey, 2000 (pp. 213-223) illustrate through their analysis of R/3 failures that integration left to rudimentary programming that simply maps non-ABAP fields to ABAP fields is prone to failure and lack of scalability and security. Fang Zhao, 2004 (pp. 675-689) mentions that the role of production planning's integration is to further produce a higher level of efficiency in all aspects of transactions. This includes higher transaction velocities for BOM Master Data use, more accurate use of both logical and physical BOMs, and the critical integration links to inventory management, MRP synchronization and demand management interfaces to enable a higher level of transaction accuracy and responsiveness on the part of manufacturing. SAP's Production Planning Module has been designed to support these workflows, and as SAP dominates process industries, the ERP provider has includes the PP-PI module for Oil and Gas. The following figure shows an example of the process workflow of the SAP R/3 PP Module being used in a furniture manufacturing company. Figure 3 illustrates how critical integration of the SAP R/3 PP Module is to legacy and 3rd party systems including those from Viewlocity and SmartTeam, two systems that manage product data and also manage the manufacturing execution system (MES) integration to the production planning system.

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The majority of the process workflow is based on the PP Module from SAP, showing a workflow that supports S&OP, MRP and Demand Management process functions.

Figure 3: Process Workflow showing SAP R/3 system and legacy system integration (Source: SAP Sapphire presentation, 2007)

The implications to manufacturers of relying on the SAP R/3 PP Module are measured in attaining financial performance gains as well. An example of this is shown in the following table of results accumulated through the research completed byThang N. Nguyen, 2005 (et. al.), Mahesh Gupta, Amarpreet Kohli, 2006 (pp. 687-696) and Fang Zhao, 2004 (et. al.).

Summary

The implications of streamlining manufacturing, procurement, supply chain, and the many customer-facing processes through the use of ERP systems have significant financial implications on the organizations adopting them. The many challenges of installing SAP R/3 into heterogeneous environments as discussed in this paper show that Order Management and Production Planning Modules make significant contributions to the organizations that have constructed their enterprise systems around them. The role of Production Planning specifically to align purchasing, procurement to demand management is one of the main catalysts of improved financial performance possible using an ERP system......

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