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Steps in Implementing SAP

Study Material Contributed by Ulhas Kavle - Senior SAP Consultant, Mahindra Satyam
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Steps in implementation of SAP PP/SAP PPPI

Steps in implementation of SAP PP/SAP PPPI -

Step 1: Delivering a SAP PP Overview Presentation to the Client.

The first thing in an implementation is presenting SAP to the client team. It is expected that the
consulting team would give an overview of SAP and explain the same in a lay man way.
You would not be surprised to see a lot of big names in the room; keeping your cools and giving
your best is very important. This becomes the first interaction with the client. A good PPT and a
good presentation will convey a great message about the team and about you as an individual.
The first interaction with the client and the organization can be really horrifying if the you are
implementing SAP in a big manufacturing organization and you see the big chimneys touching the
sky and Silos standing llike monsters. This is where your mind would start playing on you and you
would all of a sudden feel as if God has nominated you to mess up SAP and distroy yourself and
your career. At this juncture I have just one advice and thought, that the bigger the company, the
easier it is and the more flexible they are to accept standard SAP and standard processes. You
would just be fine!!!

Step 2: Decide the organizational Structure for SAP PP - Plants and Storage Locations :

Deciding facilities as Plants As a Consultant decide the manufacturing plants which needs to be separately identified in SAP as
Plants.
Plants are the place where the manufacturing or warehousing activities happen.

The Material is valuated at plant level and inventory is stored at plant level.
Also note that Manufacturing or Warehouse facilities which are far apart from each other are
nominated as Plants, though this is not a governing rule. For certain reasons Finance may wants to
set up, 2 manufacturing activities lying close to each other, as separate plants due to different
material price existing at the 2 places or because these 2 facilities may have different Legal
accounting procedures (and they may be coming under 2 different legal heads)
Note - You cannot assign a plant to more than one company code.
Deciding Storage Locations @ a Plant Once you decide the plants you have to decide the storage locations where the materials would be
stored or inventoried in the system.
Storage Locations for example can - Raw material Receiving Locations, Raw material Return to
Vendor locations, Shop Floor issuing Location, Finished Goods Storage Location etc.
You may create certain Storage Locations specially for storing certain materials or certain type of
materials which are important to the organization or their storage methods and MRP criteria are
different.
Illustration Company Code = Dew Steels Pvt Limited
Plant 1 = 0001
SLOC1 = RAW
= 0001
SLOC2 = FGI
= 0002
SLOC3 = SHOP
= 0003
SLOC4 = SCRAP = 0004
Plant 2 = 0002
SLOC1 = RAW
= 0001
SLOC2 = FGI
= 0002
SLOC3 = SHOP
= 0003
SLOC4 = SCRAP = 0004
SLOC5 = REWORK = 0005

Step 3 : Understanding the Manufacturing or Logistical Business Processes :

The following points and questions need to be answered:

Production Strategy - Start with finding whether the Production process is Made-to-Order
or Made-to-Stock and are there certain products manufactured Made to order and certain
products manufacture made to stock.
Manufacturing Locations and Supply Chain - Understand the manufacturing facilities
and warehousing facilities in the company & their geographical locations. This will help
you understand the supply chain of the company.
It also becomes significant to understand the supply chain, i.e., know the raw materials
that go in production, know their procurement methods, the storage locations from
where the raw material is stored and from where it is issued for production processes;
know the vendors and the existing tie-up with those vendors for procurement of raw
materials. On the other hand understand the warehousing of the raw materials as well
as the finished products; know how they are delivered for warehousing and how they
are delivered to the final customer. It is wise to know the packing and shipping
processes of the products.
Products Manufactured - Make a list of the Products manufactured in various plants. You
can put them in a excel list and understand the products and product families available.
This can help you finding out the number of products manufactured at a a plant and the
whether there is any kind of existing concept of Material Master in the organization. You
can also drill down to know the material coding methods which would help you design the
SAP Material Master.
Manufacturing Facility - Understand the Production process and the various Machines
the product goes through before it is manufactured. Make a note of the operations or
Machine where the production needs to be booked and/or costing needs to be booked.
These operations are potentially your work centers to be used in the production
Routing/Recipe. Other point which make you decide whether a certain operation or
Machine would become a part of your Routing/Recipe, is the amount of time consumed in
the production; appreciable time spent at a certain operation surely makes it a candidate for
Routing/Recipe.
Investigate the average production lead time per product. Thereby inquire whether
there is any kind of time study analysis already existing in the organization. This will
help you set up the operations, work centers, standard production time for producing a
base quantity.
You have to understand you would be assigning Work centers to the operations and
every work center has scheduling, capacity and costing related information. For
Scheduling you should choose or make a formula with which the time is consumed at
the work center, for example a regular production would consume time as equal to [Setup + {(Production order Qty X Std Time consumed) / Base Quantity}] or a Work
center which process many number at one given time span can have a
capacity/scheduling formula as - {Set Up Time + [{Volume of Base Qty / Base Qty X
(Production Order qty - 1)} / {Volume of Furnace + 1}] X Furnace Time}.
MRP and Planning Strategies - Tabulate the Planning strategies and MRP Methods
for each and every component that is a part of the BOM. You have to understand whether

these raw materials would go through consumption based planning methods like reorder
point planning or whether they would go through more stringent planning processes like
Lot for lot MRP planning. Also note the planning strategies for the in-house manufactured
products, which off course should go through the stringent planning processes like madeto-order, made-to-stock, final assembly processing etc. Other parameter like lot sizing
procedures, planning methods, scrapping policies, any quota arrangements, procurement
methods also hold equal importance.
Preparations for Made-to-stock - If the production is made-to-stock understand the
existing forecasting methods and the forecasting rules. Know whether the forecasting is for
a product or for a group of products belonging to a family. Confirm whether production is
totally on the forecasted demand or there are any changes to the forecast made before they
are passed on to production. Identify the parameters that are used in forecasting like the last
periods sales figures for a city, country, region or a sales group or any other factors.
Design of BOM - Understand the raw materials that are consumed in production and
decide on which components should become a part of the Bill of Materials. While doing
this you need to know an important point that the prices of each of the components in the
BOM add up to make the total cost of the product thus involve the costing team too.
Involvement of the Product development team, Product designing team or the shop floor
managers to decide whether a certain component or a certain product drawing and
important production related texts are to be included in the BOM.
Design of Routing/Recipes - Similarly before designing the Routing, it is important to
again involve the costing team to decide the operations which will become a part of the
Routing/Recipes. Again the time study team or the product development team or the
costing team can make corresponding contributions in adding the standard machine time,
setup time required for production of a base quantity.
Study of Legacy System - Study the existing Legacy system and the various activities they
record on their computers and the various activities they do outside the computers {if any}.
Understanding the Legacy system will help you know how their existing systems can be
duplicated, removed or optimized in SAP. The Study of the legacy system will help you
read the organization and the work procedures in the organization. You can also plan in
making use of this legacy system and decide interface certain activities with SAP and let
them continue in the Legacy system. Legacy System can also help you setting up the
Master data in SAP like the BOM and Routing/Recipe.
Shop Floor Recordings - Understand the shop floor and the product confirmations
processes at each and every operation also find out how the products are received in stock
and whether there are quality inspections carried out on the output.
Quality Inspections - Know the quality inspections methods that are used and the product
passing and rejecting activities. Find out how important quality of the product is important
for the company and whether there is a need to implement SAP Quality Management.
Ask the management whether the product is reworked upon and what the scrapping process
is. Make a note whether the scrapped or reworked materials is sold in the market or re-used
in production.

Step 4 : Document the Business Processes in a Blueprint Document :

Blueprint - As-Is Versus To-Be Processes:

A Blueprint is a document that records all the existing processes and the to-be processes for these
existing processes. The best way to do this is to put each process one by one and put next to it the
SAP to-be processes. Also include the step by step activities that would be the part of a given to-be
process.
The Following Processes may become part of your Blueprint - This is just an example:
Process 1 : Raw Material Procurement
Process 2 : Raw Material Staging to the shop floor for Production
Process 3 : Master Data creation - BOM,
Process 3a : Master Data creation - Work center
Process 3b : Master Data creation - Routing/Recipe
Process 4 : Material Requirement Planning for the Raw Materials
Process 5 : Material Requirement Planning for the assemblies/subassemblies
Process 6 : Production order creation and Release
Process 7 : Shop Floor Execution
Process 8 : Production order Goods Receipt
Process 9 : Quality Inspections in Production
Process 10 : Product Costing and Order settlement
Topic 11: Technical developments like interfaces, reports, Module Pools, user exits and data
conversion technical objects like LSMW and programs that are required to build the various
activities involved in the manufacturing activities.
Topic 12: Gaps Analysis
Blueprint - Gap Analysis:
In an attempt to map the existing processes into SAP, there is always a risk that some of the
processes or activities in a process may not be map-able with the Standard process set ups in SAP.
Such activities or processes which become impossible to map in SAP are categorized as Gaps.

These gaps are documented properly under the Gaps section. At the end of the blueprinting
process, the implementing and the consulting team should discusses these Gaps and then sign-off's
the blueprint. They brainstorm on possible solutions to overcome such gaps, these solutions are
workarounds or technical developmental solutions to the Gaps. Most of the times such gaps are
met by technical developments in SAP as standard SAP do not provide the solution for the
activities/processes. Such technical developments are most of the times very complex.
It is also possible that the Gaps are never met and the team decides to carry out the activities or
processes outside of SAP.
Creation of Functional specifications for the ABAP developments:
The consultants would create functional specifications for the Technical ABAP developments.
Such Document is a descriptive document that explains in detail the logic that is to be used for
developing the ABAP technical object. This document would contain the fields and tables and the
link between them to help the ABAP'er design or develop the same.
The technical objects for which the Functional Specifications are created are:
a) Reports
b) Interfaces
c) Module Pool
d) Data Conversion Objects
e) User-Exits
Average Time required for Blue-printing:
2-3 Months.

Step 5: Data Load and Planning

The Consulting team, each module, should list down all the Master data objects and how the data
will be collected.
Creation of Data Collection Templates:
For SAP Production Planning and Control, the consultant should design the Master data and
decide the fields for which values are to be collected from the users so as to create the respective
master data in SAP. For example in the case of "BOM", the consultant plans on creating a BOM
and enter the value for the following fields Selection Data : Header Material, Plant, BOM Usage, Start date of validity,
Item Data : Component, Item Category, Material Code, Qty, UOM, Component Scrap, Whether
Recursive Indicator, whether a co-products.

Header Data : Base quantity, BOM Alternate text.

Then in this case the consultant should teach the user the meaning of each field and create a excel
layout with the above fields in it arranged one after the other, for the purpose of collection of
this data.

Educating the Data Collectors on the Data Collection Templates:

The consultants should educate the users or the super users about the Master data template they are
going to use for the collection of Master Data. It makes sense to organize such training since data
is the heart of any project and it should be collected very sincerely. As a consultant you should
explain each and every field in the excel template that you would make for the data collection
purpose. You should also educate the users on the values that you expect for the fields. It may also
happen that you may default certain values for certain fields and you should also educate the data
collectors about it. The template should be very clear and should contain the definitions and
particulars about each and every field as shown below:
Excel Row 1 - Field Descriptions
Excel Row 2 - SAP Field Names
Excel Row 3 - Definitions and points to note
All Row below - Data for Collection

Development of a ABAP program to Upload the data in the collected format:

An Upload program or an LSMW should be created in SAP to upload the data in the same
collection layout as decided.

Step 6: Configurations and Testings

Once the Blueprint is ready, you are expected to configure the SAP Production Planning
system. The following are the methods involved in a sequence of occurrence:
First Golden Client Configuration - This is a client where only configurations are done for all the
modules by the respective consultants.
Second Transfer (use SCC1 - Transaction code to transfer) configurations to the Development
Client where you would be carry out the initial Unit test on your Module. On a parallel stream,

when the functional team is configuring in the Golden Client, the development or the Technical
team starts developing the technical objects, for which they will use the Functional
specifications as prepared by the functional consultants. This is done by the consulting team
members.
Third Carry out Unit test in the Development Client. All the consultants from all the modules would
create a list of transaction codes or activities to test in SAP Development client so as to test that
their modules work in SAP. This Unit test plan has to be created in a word document or excel
document before you do any test. Before you do such test you need to create some master data that
would be used for the test. This is done within the consulting team members.
Fourth Carry out a String test in the development client. A String test is a small integration test which is
done between the modules to test SAP integration and flow of information between them, though
this is not marked as the Integration test. To test such strings successfully the consulting teams
should create common set of master data that is linked between the modules; and using such
representative data (representative data means a master data that well represents the organization
where you are implementing - Use real data only) the consulting team gets in to a conference room
and tests the strings from start to end. To do successfully it is mandatory that a common flow
document should be created beforehand and used for recording the Test results and the status of
the test. Once you are happy with the tests you can also demonstrate the same to the client
implementing team. A successful test allows the team to transport the configuration to the
Quality Assurance Client or the testing client.
Fifth The Functional team tests the Technical objects developed by the ABAP Consultants in the
development client. This activity goes in parallel with the unit test, string test. A Functional
testing document is prepared to record each and every test on the object. All the issues recorded
are fixed by the ABAP'er. A successful test allows the team to transport the configuration to the
Quality Assurance Client (QA) or the testing client. Once you are happy with the tests you can
also demonstrate the same to the respective module owners or super users from the client's
implementing team.
Note You should also note that the user role, access and security assignments are made before the
allocations before going in to the 6th Step as below. The integration tests are always carried out
using the final user ID with the right roles and accesses. Normally in big implementations there is
a separate team that does the security aspect of SAP.
Sixth Once the Objects are transferred to QA Client and once the Configurations are transported to the

QA Client, the implementing team carries out an Internal Integration test for the SAP Modules
and SAP Technical objects all arranged in the sequence of occurance. Before carrying out this
major integration test in the QA the Consulting team and the client side team sits together and
drafts all the scenarios and processes and activities in one document in a operational sequence to
form a end-to-end scenario cycle. The Client is totally involved in such activities. In most cases,
the client side super users or core users are the people driving such tests. In Many organizations
now-a-days there are 3 to 4 rounds of such integration tests carried out.
It is important to keep a track of the Issues and Gaps which are announced out of such test and
make sure that they are properly recorded in an issue-tracker and solved by the consulting team if
the issue is SAP related and if the issues are business process related they are solved also by the
client side team with some involvement of the SAP consultants.
Note The First 5 activities normally consume around 3 months in a project and the 6th activity normally
consumes around 1 month.

Step 7 : Cutover Process and Golive

Definition:
In a SAP Cutover process, the consulting team and the individual consultants in the team plans out
a cutover process. A Cutover in SAP means the roll over from the existing legacy system to the
new SAP system. And to assure this roll over is fine or this movement to SAP is fine a good
cutover process or a good cutover plan is important. Cutover forms the following:
Prepare the production client. This is the Final Go live Client.
Load of all the Master Data in SAP Production Client.
Identify the cutover Schedules. Make clear of these Dates to all and each in th organization.
Promote SAP in the organization and Create an Awareness of SAP.
Make sure you have a Black out period which would act as an window to change your
systems to SAP and get it going in a true real time sense. In this window there would be no
Sales, Purchasing and Production activities, such Window is required to make sure that the
transformation to SAP is smooth and the user community records all the existing/open
information in SAP and gets real time with SAP. Once the window is finished both SAP
and Shop floor Activities and organizational data is on the same page and real time; thus
SAP can gets a well settled real time platform to start with.

 Make a note of all the open documents which would be required to be entered in SAP like
the open Sales orders, open production/process orders, open purchase orders, on hand
inventory etc. All these open documents and stock needs to be uploaded in SAP in this
"Black Out Window".
Make sure all the configuration and development transports have been moved to
the Production Client.
After the Black out period, you would be going live with SAP on a real time basis.
The cutover process for SAP PP can be:
a) Upload all the Assemblies/Subassemblies Stocks as SAP inventory using the 561 Movement
type. If certain stocks are in quality you can move it to Quality Inspection stocks too. Similarly if
they are in blocked stock you can also upload in blocked stock in SAP.
b) You can assume that whatever which was in production before the blackout is finished and is in
stock, thus you can create inventory for these expected receipts from these production orders and
once the SAP Go lives after the Black out period you would avoid recording SAP transactions for
the production orders which were already assumed to be finished and were already brought in to
inventory or as an option number 2, you can assume the real time production order status thus
creating all the production orders in the blackout period and confirming them till the operation
they are produced before the blackout period, this second strategy would be a true picture of your
shop floor. The option number 1 is simpler and avoids all the complexities and uploading of SAP
open production orders.

Step 8: Post Go live

The consulting team normally supports the organization for a period of 45-60 days initially,
recording all the issues and solving them on the priority of the issue. The organization at this stage
has started using SAP for the designed scenarios and processes. At this stage they require all the
helping hand they can get from the super users and the consultants.
This stage is the most critical stage and decides the success of the project.