Are we coming out of it ??!!

By S.Suren

Yes, it’s about the economy. After almost a year in recession, are we beginning to see some signs of improvement ?

With the economic environment stabilizing for 2 worst hit sectors in the UK, things there could be looking up, though not a recovery at least the economy for these sectors have begun to stabilize.

It has been mentioned by many experts that Japan’s economy could be the first to look up. The signs for these are beginning to show in the Nikkei. The Nikkei 225 was up 0.4% and the Japan's industrial output rose in May for the third straight month indicating improvement in its manufacturing sector, but this does not necessarily indicate that it’s an improvement; experts say we are still a long way away from that.

There seemed to have been a recovery in the Asian stock markets as indicated by a 35% rebound in the MSCI Asia-Pacific Index, and the investment banks in Asia have seen a rise in fees in the second quarter which rose 37% over the last quarter to their highest quarterly level in a year.

We could perhaps interpret these as good signs of things to come. Let’s just hope that everything turns back to normal again, and then make sure that a framework is setup for trading of financial instruments and avoid having the entire world economy depend on the inability of a few organizations to practice proper trading of their financial instruments.

But then if we had read the signs from the first time it happened, this wouldn’t have happened again...so whats to say it won’t happen again..maybe not as a direct consequence of “Toxic Debt” but perhaps something even more noxious!!

Peace out!!

Figures as at 29th June 2009.

suren@erparena.com

SAP AFS Split Valuation

By S.Suren

What is Split Valuation?

Split Valuation means managing a material as several partial stocks. Each partial stock is valuated separately.

Split Valuation in AFS

In the apparel industry one of the main reasons behind using Split Valuation would be to valuate the RMs differently based on their SKU levels.

For instance, the various sizes of men’s pants have significant differences in their material input (e.g. zippers). Therefore, the large, medium and small sizes should be valuated and costed separately.

Activate Split Valuation

Path : IMG -> Material Management -> Valuation & Account Assignment -> AFS Split Material Valuation

TCode :OMWC

AFS uses its own special valuation category X for split valuation. Valuation types are not maintained in Customizing but separately for each material in the material master´s AFS Valuation view.

Quick 3 Steps Setup Process

1. Define the global valuation type

2. Define the global categories - This is where we mention which valuation category is to be linked to which valuation types as default.

Note: Activate the valuation type to valuation category.

3. Assign the Valuation Category: Valuation Type combination to Category to Organisational Unit.

Note: Activate the valuation category to the plant.

And thats it, those are the simple steps to setup split valuation characteristics and definition. Once this is done you need to maintain the material master accordingly, this is detailed out

below :

Steps to use Split Valuation in SAP AFS Material

1. Create a Material with a Grid and specify the ”Valuation Category“ as “X“ in the Accounting 1 tab.

2. In the “AFS Valuation“ tab you need to now enter the “Valuation Type“ code for the relevant “SKU“ .

In the above example, my requirement is to valuate the material based on 3 main sizes, i.e. XS, M and L.

Using the Preferred SKU option, I have decided that :

• Size XS and S will be valued similarly

• Size M will be valued seperately

• Size L,XL and XXL will be valued similarly.

3. Save.

Thats about it. Now you could valuate materials different based on their special characteristics, known as Valuation Types in Split Valuation.

Hope you found this post informative. For any queries, suggestions and comments feel free to email me on suren@erparena.com.

Have a nice day !!

SAP New G/L Document Splitting

Document splitting is a new feature in the new General Ledger that enables you to create balanced financial statements for entities such as profit centers and segments.

The predefined splitting method (0000000012) covers the majority of business scenarios but some cases still require you to go beyond the standard splitting functions. With document splitting activated, the system splits accounting line items according to splitting rules.

Setting in Document Splitting

• Splitting Method : Standard method used 0000000012, Modifiable
• Splitting Rule : Combination of Document Splitting Method, Business Transactions and Variants – Modifiable
• Item Categories – System Defined
• Standard Variants – Standard 0001, Modifiable

Document Splitting Structure :

Steps 1 :

The system checks if the entry for the account has been maintained in the document splitting setting : “Classify G/L Accounts for Document Splitting”, the “Category” defined for the relevant account is then identified.

Steps 2 :

The system then checks the “Classify Document Types for Document Splitting” for the document type setting as per the document type that was entered. In this case it is “KR”.

Steps 3:

The system then checks the “Define Document Splitting Rule” to check for the transaction “0300” :

The system then checks the “Item categories assigned to this (higher level)” in the same window to the left:

The system then checks the “Base item categories” under the above item category, and if this category has been specified in the first setting in Step 1, this is taken as the base in calculating how the Vendor value should be splitted.

The above was a brief on how the Document Splitting functionality works in SAP. Hope you found this post useful, for more information with examples on this functionality, feel free to drop me an email.

suren@erparena.com

Have a nice day !!

SAP AFS Specials !!

This post is in response to the mails I have got from my readers, to list out the key features of SAP AFS IS that distinguishes it from the standard SAP R/3 offerings.

SAP® Apparel and Footwear (SAP® AFS) is SAP's solution for the apparel and footwear industry, which meets challenges in the trade like managing the enormous volumes of data that come with ever-increasing design variations, the changing seasons, and huge numbers of Stock Keeping Units (SKUs). Challenges like creating effective marketing strategies that convince business customers and consumers to buy your lines despite increasing competition and price transparency. Challenges like managing collaborative business scenarios, partnerships, and licensing agreements. And challenges like dealing with vertical integration as manufacturers venture into retailing and as retailers expand into production.

SAP Apparel & Footwear Solution

Industry Introduction

The Apparel & Footwear Industry is a challenging industry where trends are created overnight and fashion changes very variably, there is growing pressure on the companies involved in this industry to efficiently manage all the networks and interlinks of the supply and value chain and related operations that go into delivering the final product to consumer at the right time.

The AFS Industry puts a considerable strain on the monitoring of domestic and foreign production thereby creating a complicated value chain that can be the deciding factor in determining the bottom line.

The AFS Industry puts a considerable strain on the monitoring of domestic and foreign production thereby creating a complicated value chain that can be the deciding factor in determining the bottom line.

A common practice in this industry has been the outsourcing process powered by high levels of division of labour. These practices have been the greatest cost-cutting drivers in the production process of companies in this industry.

With a spread out of production sites around the world, the importance of supervising and monitoring these production sites have become more challenging, especially with the increase in transport costs and meeting sales deadlines.

The core processes in this industry such as raw material planning & procurement, new product designs & innovations, production efficiency, coordination and control, are taking on more and more importance and therefore more often than not are centralized.

Initiation of SAP AFS Industry Solution

In January 1996, the SAP Munich development group began developing an industry solution to cater to the needs of the apparel and footwear industries and this was to be delivered by December 1997 and that was when SAP Apparel and Footwear Solution was delivered.

The new solution was developed in conjunction with such industry leaders as Reebok International Ltd and VF Corp and today this Industry Solution is being used by more than 60+ SAP AFS Customers worldwide.

SAP AFS enables you to benefit from the latest SAP technology and infrastructure enhancements. It continues to be the obvious choice for companies operating in the apparel and footwear sector.

SAP AFS Solution Characteristics

• Ability to Handle Grids

The main addition that SAP AFS gives to the standard SAP Solution is the ability to handle sizes. This is defined in the system as Grids. SAP AFS is also designed keeping in mind the details involved in production, procurement, sales & distribution and materials in an Apparel Environment.

SAP AFS is presently been categorized under the “Consumable Products” in SAP’s List of Products. Though SAP AFS Solution is primarily used in the Apparel & Footwear sector, given its design the features it also serves other industries such as jewellery and furnitures as the solution provides the ability to handle sizes.

• Seasonality in SAP AFS

Season play a very important role in the product life cycle of the apparel industry. Since apparel is very much dependant on the season, the planning and production carried out needs to be aligned with the demand of the relevant season.

The seasonality functionality is an integral part of the Sales & Distribution Module in the SAP AFS Solution. This functionality is integrated together with the ability to handle grids, thereby providing a broader usage scope of the functionality itself.

Seasons in AFS also include the ability to maintain collections and themes for each season. The presence of these features help in further classification of the offering for a season apart from providing a concept for each category of product offering.

• AFS Categories

It’s a known fact that there are large volumes of data involved with maintaining AFS Materials. This is where categories come in to logically segment materials. The categories that are usually maintained in the AFS Industry is based on the quality level, type of customer and regional requirements.

These categories are of 2 types:

• Requirement Categories

• Stock Categories

These categories are used in the Material Master with the coverage strategy assigned to it. The coverage strategy determines how the requirements categories are assigned to the stock categories. This assignment takes place during the availability check, the MRP and the allocation run.

The 3 main characteristics above is what distinguishes the highlighting features that SAP AFS IS has when compared to standard SAP R/3.

I hope you found this post, informative and interesting. Your suggestions and queries are welcome at suren@erparena.com.

A few Other SAP AFS Article on this site :

Challenges in the Apparel Industry : Article 1 / Article 2 / Article 3

For more SAP AFS Artciles click on the labels section (right hand side).

Have a nice day!!

The TCode table !!

In this post, I thought I'll be a little technical and share a quick tip on SAP Tables.

If you at anytime have a situation where you need to browse through the list of all the customized tcodes that have been created for a particular customer project in a particular client box, you could simply run a query for the table "TSTCT".

Steps as follows :

1. Go to SE11

2. Enter "TSTCT" and go into display.

3. Go to the browser window (CTLR+SHIFT+F10)

4. For customised tcode enter "Z*" in the TCODE query field, or "Y*" for SAP Vendor Partner created codes.

5. Execute.

Hope this tip comes in handy.

suren@erparena.com

Consulting Know-hows !!

By S.Suren

• To be a good consultant only technical skills will not do, presentation and people management skills are vital. It’s also good to keep these skills polished since research show that there is a growing demand for consultants with good soft skills rather than just technical skills. 

• Users need to be educated about the benefits of an ERP solution mainly that an ERP is not necessarily going to reduce their work by a large margin but is going to help them organize and structure business processes.

• A business application is not designed to cater to user inefficiencies. Do not expect the system to validate and check each and every transaction the user enters into the system. Golden rule in any business application that processes data – “Junk IN, Junk OUT”

• A good consultant should be willing to teach and educate the users on the system functionalities, no matter how many times the user asks. Remember a consultant’s role involves that of a trainer and in some cases maybe even a mentor.

• “Do not jump the gun” – this phrase comes in handy to bring back the enthusiastic project team inline into the present scope of the project than let them into beginning to customize a solution to fit the user needs even before considering the possibilities.

• “Shotgun for a mosquito” – I came across this when used by one customer. Who in his opinion understood the solution proposed to be something of a larger scale than that needed to solve the issue at hand. I’m sure this if used humorously will guarantee some laughs.

• “Reinvent the wheel” – It’s always ok to use something that has already been done to cater to a requirement, than wanting to do something from scratch just to keep yourself busy and for the sake of doing something in the presence of the client. Some people call it as not being innovative, well my answer to that is, “if we all looked to reinvent the wheel, we all would still be rolling round shaped stones,so to speak literally ".

• Not all issues reported by users are user issues; some are the trainer’s issue who taught them. So when you get to train someone make sure you say them exactly the way it is, and if you do not know something its always advisable to keep that area for later (after you have mastered it) than just explain something remotely close to the area which could confuse the user.

• “Freeze the base” – It only common that during the beginning of the project the projects teams are all enthusiastic about the project and beginning envisioning project deliveries that are way beyond the initial project scope. There is no one to be blamed here since this is common thing at the start of the project, only as the project is going forward do the team members involved begin to identify the deliveries that need to be delivered and can be done given the time and budget of the project. This is where it is very important at the very beginning itself to not get carried away with the project team and make sure that the basic functionality base of the project deliverables is concentrated on first.

• “Scope Seep“– This is a new term out there. It was coined by Alan Weiss. It refers to situation when the consultants puts himself in a position where he wants to prove something which he need not, thereby in the process beginning to provide more than what was asked for and unconsciously leading to the scope broadening (known as Scope Creep). A good consultant will stick to what is most important to the clients and make sure that that is followed and implemented perfectly. 

Hope you found this information useful !!

Have a nice day !!

suren@erparena.com