So, I hope you find this slide to be very familiar because we've seen this slide in our previous session. This is a slide where we talked about a customer, Best Buy, engaging Apple to make orders of iPhone's. Basically what the sales process is, the fulfillment process is having a client, a user of the system to step through these various activities to allow a customer inquiry to be fulfilled. We will be seeing how this takes place in the world of SAP. So, before we would go into the specifics of how this works in SAP, we need to first learn about different data types that are used by SAP. So broadly, we see three different types of data that is being used by SAP. The very first one is Organizational Data. What organizational data does is that they model the organizational structure of enterprises that include things like legal entities, subsidiaries, and smaller components such as factories, sales regions, and so on. At the very top, we have the first concept of a Client. The client is the highest organizational level within SAP. It could represent a enterprise that consists of others legal entities or subsidiaries. At the next level, we have a Company. A company is responsible for making financial reporting as a legal entity. So, the reason why SAP have designed the structure of having clients and multiple companies is because such a structure happens quite often in the real world. For instance, if we were to think about Apple Inc. on top of selling their main line of products of an Apple. They have also acquired other companies such as the Beats Electronics, which is known for their headphones and more recently they have acquired the Shazam, which is a UK company known for music discovery. So, in that sense it will be useful for SAP to map out a two-tier hierarchy for Apple here and many companies have this kind of structure as well. At the same time because companies could lie in different countries, so a feature that companies have is that they allow the user to record a home currency to allow for more specific listing of what they do in the operation. Another story that I would like to share with you is that in Johnson and Johnson. Johnson and Johnson is a multinational enterprise that is involved in the sales and manufacture of many different product lines including pharmaceutical products, medical devices, and also consumer packaged goods. They had been in business for over 100 years and as you could imagine in order to sustain a day to day business activities, they have to create several different legacy systems to support these different businesses. In fact, based on the statement that we see on this slide here, we know that they have created over 60 different ERP systems in the pass to support the business. In 2013, Sandra Peterson, the Chairman of the Johnson and Johnson group, made a statement about the need to reconsolidate all of these different systems so that they can get a consistent view of the entire enterprise. So, this goes back to what we have seen in our previous session. In the fact, that because different departments tend to have a silo view of what they're doing and as a result the company is not able to perform an efficient role. The same issue applies if we look at the enterprise level and the prices having many sub-companies out there finds it hard to consolidate the cost and the revenue that they have across different companies. As a result it's useful to consolidate all of these different units into one major enterprise system. So, over here, based on what you have heard on clients and also companies, if we were to implement this enterprise system in SAP for Johnson and Johnson, how many companies would you choose to have? Is it 1, 10, 100 or more than 100? So, based on what we've seen in this statement over here, because Johnson and Johnson have close to 300 operating companies, it's quite likely they will be utilizing over 100 different companies within their instant station of SAP. Moving on, we go to this concept of a Plant. So, a plant represents a facility that creates, stalls, or maintains a material. A concept of a material could refer to a raw material, semi-finished goods, or even finished goods in SAP. As a result of these three different definitions of a material, a plant in SAP could either be a factory that produces a finished good. A distribution center that's responsible for distributing these goods out to their clients or a service center that brings in damaged goods for repairs? So, quick check on your understanding over here, how many plants do you see in this enterprise? If your answer is three, then you're on the right track. Here's another quick question to check on your understanding of what we have learned so far. So, over here, I have come up with a hypoethical company known as Classy Furniture Inc. and what they do is as you could guess from the name of the enterprise, they manufacture and they sell furniture. They have operations in the United States and also in Germany. So, a quick question to you, how many legal entities do you see in this enterprise? How many US based plants doesn't have? So, the first answer should be pretty obvious to you, that should be two legal entities because there's one in the United States and there's one in Germany. For the second question, you should be thinking of three. There are three US plants that is shown in this picture here: One in Dallas, one in San Diego, and one in Miami. So, I'm going to give you an order third question. This is slightly more involved, if a customer orders from Texas Austin, which plants should handle that for the information on this different locations, the Dallas plant is a manufacturing plant that is responsible for producing the furniture. San Diego and Miami plants are actually distribution plants responsible for shipping the finished products to customer. So, another piece of information for folks out there, who are not familiar with the geographical parts of the US is that Austin is much closer to Dallas compared to San Diego or Miami. So, given this situation, which plant do you think should be the one responsible for sending the good? Take a moment to think about that. Pause the video. I will reveal the answer in a short moment. So, the answer over here is that users in SAP could specified Dallas as the plant that ships the good simply because the SAP is a very flexible system. It allows users to make tweaks in the definitions and to carry out different business activities. For cost consideration, it would be much cheaper to ship the goods from Dallas as opposed to shipping it from San Diego or from Miami. So, in this case over here, users have the option to ship finished furniture from Dallas to their client in Austin. The next concept that we will be talking about is Storage Location. Storage locations are places where stocks are physically kept within the plant. There are dedicated places within a factory to store raw materials and semi-finished goods. For distribution centers, there are also dedicated places to place different stocks of finished goods. Based on what we have seen in the previous session, we have heard this concept of material staging. This is a process where we have to count and ready different number of goods so that they will be out for shipping. A storage location does exactly that to put in finished products in their right places so that they can be shipped out next.
