Functions in Detail

SAP® BEST PRACTICES

FOR FAST MOVING
CONSUMER GOODS
BEST PRACTICES FOR MANAGING FAST-MOVING
CONSUMER GOODS, MADE EASY BY SAP

SOLUTIONS DESIGNED FOR BUSINESSES OF ALL SIZES

SAP® Best Practices for Fast-Moving Consumer Goods (FMCG)
supports midsize enterprises that require rapid implementation
and large companies that want to create a corporate template
for their subsidiaries. Whether you are a new or existing SAP
customer, using SAP Best Practices for FMCG gets your
solutions up and running quickly.

SAP Best Practices for FMCG describes exactly how best to

implement various key business processes in your system –
including how to set up and configure your SAP software.
These SAP best practices are delivered to you as an unrivalled
combination of detailed business documentation that describes
first-in-class business practices and a complete set of technical
tools and information to help you implement the business
processes.

The SAP best practices are described below.

HIGHLIGHTS – BEST PRACTICES IN THE BEVERAGE AND

MEAT PROCESSING INDUSTRIES
Direct Store Delivery of Beverages with Empties
Management
The SAP best practice for distributing beverage products directly
to the end customer shows how to make beverage goods avail-
able to stores and customers quickly, manage empties returned
from customers, and directly influence end customers such as
bars and restaurants. The best-practice information also helps
beverage producers or distributors optimize process settlement
in sales and distribution and reduce logistics costs by optimally
planning visits to stores.
Empties Processing
The SAP best practice for empties processing focuses on the use
of empties-specific functionality when processing customer
orders and working with inventory management. Empties data is
printed on delivery notes and on billing documents, enabling
producers and distributors to learn about their complete empties
stocks and empties balances with each customer at the touch of
a button. Empties-specific reports also make an empties inventory
easy to manage.
Extended Rebate Processing
The SAP best practice for extended rebate processing in the
beverage industry focuses on wholesalers’ adherence to contrac-
tual obligations and beverage producers’ determination of the
success of a new product or a new display, regional differences,
and so on. The determination requires information on the
actual sales quantities and sales values realized by different sales
outlets. Beverage producers commit the wholesalers they supply
to report the sales that the wholesalers have achieved – broken
down by materials.
Excise Tax Calculation
The SAP best practice for excise tax calculation focuses on
tracking all goods movements of alcoholic beverages. It assists
producers and wholesalers that deal with alcoholic beverages
and manage excise taxes by helping them fulfill their legal
obligation to declare the amount of alcoholic beverages they
sell and scrap in every period. The tax return is the primary
document supported by the excise tax calculation.
Extended Rebate Processing for Customers
The SAP best practice for extended rebate processing for
customers focuses on direct sales with a customer. The sales are
saved as billing documents. A direct rebate agreement based
upon direct sales is created and a rebate is paid to the customer
at the end of the agreed period, after the sales quantity agreed
upon in the rebate agreement has been reached.
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Indirect Sales Without CRM
Similar to the best practice for extended rebate processing with
pendulum list in the beverage industry, this SAP best practice
focuses on the use of sales data to determine the success of a
new product or a new display, regional differences, and so on.
To acquire this information, a manufacturer or distributor
requires its wholesalers to report their sales by material. Using
information on the actual sales quantities and sales values
reached by various sales outlets, a company can prepare
business analyses.
Direct Store Delivery of Fresh-Daily Products
This SAP best practice is similar to the one for direct store
delivery of beverages, but focuses on distributing fresh-daily
products, such as ground meat, directly to the end customer.
The best-practice information shows how to make fresh-daily
goods available to stores and customers quickly. The best-prac-
tice information also helps producers or distributors optimize
process settlement in sales and distribution and reduce logistics
costs by optimally planning visits to stores.
Livestock Procurement and Meat Production
This SAP best practice focuses on the procurement of livestock
and the subsequent production and sale of finished meat
products. Especially important is the flexible pricing procedure
used to determine the actual value of the delivered livestock
and the segmentation of the meat before production. A cost-
object controlling method can be used to assign the costs of
production to the goods produced. Although the best-practice
information focuses on meat, this SAP best practice can also be
used in the fish and dairy industries.
Meat Trading
The SAP best practice for trading meat products assists whole-
salers who receive and resell meat products. The best-practice
methods focus in particular on batch management.
KEY SAP BEST PRACTICES FOR FMCG
In addition to the specialized best practices for beverage and
meat processing, SAP provides best practice methods,
documentation, and configuration support for the following
core business processes involved in managing fast-moving
consumer goods.
Enterprise Management: Product Cost Planning, Sales
Planning, and Overhead Cost Management
SAP best practices for enterprise management help companies
perform processes ranging from multilevel demand planning
to cost center planning, and from product costing to sales
and profit planning. The best-practice information is
compatible with various other SAP best practices for materials
management, production planning and production, and sales
processing.
Procurement of Stock Material
The SAP best practice for procurement of stock material begins
with a request for quotation (RFQ) mailed to vendors to inquire
about their prices. A price comparison references the completed
RFQs and determines the best offer for a product. A contract
follows. At this point, a purchase requisition and a purchase
order that references the requisition are created. The process
continues with goods receipt; batch numbers are then created
automatically. Before the goods can be placed into unrestricted
stock, a quality inspection must be performed. A usage decision
posts the goods into unrestricted or restricted stock. The SAP
best practice for procurement of stock material supports
quotation handling, procurement contracts, automatic batch
management, and quality inspection in purchasing.
Internal Procurement: Stock Transfer with or Without
Delivery and Cross-Company Stock Transfer
SAP supports three best-practice methods of internal procure-
ment. The first is cross-plant, internal procurement of materials
for a single company code. This process uses standard functions,
such as material requirements planning, purchase requisitions,
stock transport orders, transportation planning, and handling
of internal deliveries. The second simplifies the process and
omits the delivery documents. The third allows stock transfers
among several company codes.
Production Planning and Discrete Manufacturing
The SAP best practice for production planning and discrete
manufacturing describes business processes typical of
companies with lot-size-oriented production, such as in the
food industry. Automatic batch determination based upon
expiration date is performed during production order process-
ing. The SAP best practice supports goods movement (goods
issues and goods receipts) and completion confirmation for
the production order. The best-practice descriptions also
include the primary required functions for cost-object
controlling, such as preliminary costing, simultaneous costing,
and period-end closing.
Production Planning and Process Manufacturing
The SAP best practice for production planning and process
manufacturing describes methods for process-oriented
(regulated) production, such as that found within the food
industry and in production by lot size. Automatic batch deter-
mination based upon expiration date is performed during
production order processing. The best practices also describe
in-process and postprocess quality management. The best-
practice descriptions also include the primary required
functions for cost-object controlling, such as preliminary
costing, simultaneous costing, and period-end closing.
Production Planning and Repetitive Manufacturing
The SAP best practice for production planning and repetitive
manufacturing supports non-lot-based production, in which
the order does not store the quantities of the end products and
their corresponding costs. Instead, a product cost collector, to
which all costs are posted, is used only as a controlling object.
After production, the system posts the goods receipt of the
finished material (assembly) and backf lushes the components.
The costs are posted to the cost collector, and material and
accounting documents are created automatically. Automatic
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 www.sap.com/contactsap

batch determination based upon expiration date is also per- trading goods. To support foreign-trade processing, SAP
formed. The best-practice descriptions also include the primary provides a software cockpit that helps companies through the
required functions for cost-object controlling, such as prelimi- steps involved in reporting their exports and imports to the
nary costing, simultaneous costing, and period-end closing. appropriate authorities.

Sales Order Processing Returns and Complaints

The SAP best practice for sales order processing describes the The SAP best practice for returns and complaints supports all the
entire process chain for a standard sales process with a cus- activities necessary for reclamation processing. The complaints
tomer. The business process encompasses all steps from creating process focuses on processing credit memos if goods are not
an order to the billing procedure, including extensive pricing returned. During returns processing, goods are returned and a
facilities, material substitution, free good items, availability quality evaluation is performed.
check, batch determination, and invoice lists.
Returnables Processing
Sales Order Processing via EDI The SAP best practice for processing returnable goods comprises
The SAP best practice for sales order processing via electronic all activities necessary for the shipment of goods with standard
data interchange (EDI) encompasses a business document packaging-material pallets. This process can be considered an
exchange between business partners via EDI, which is typical alternative to handling-unit management.
for order processing. The inbound sales order uses the EDI file
(PO) from a supplier to create a sales order automatically via Batch Recall
EDI. When a billing document referring to the sales order The SAP best practice for batch recall describes all steps
is created, an outbound EDI file (invoice) is generated required to recall a defective batch already delivered to a
automatically. customer. A sales activity is created to record the recall. If a
batch does not fulfill the customer’s quality demands or if a
Consignment Processing defect is discovered, a notification letter is sent to all customers
The SAP best practice for consignment processing describes who have received the batch. An automatic follow-up activity
the process in which the products shipped to the customer is created to handle the returns of the defective batch. During
are still owned by the company until the customer sells them follow-up, a return can be created and processed. The SAP best
to a third party. The best-practice descriptions cover the practice for batch recall uses the functionality of the sales sup-
following steps: consignment fill-up, consignment issue, port component to trigger batch-specific returns processing.
and consignment pickup. A report determines the customer addresses of those affected.

Foreign Trade Cross-Company Sales Order Processing

The SAP best-practice descriptions for foreign trade provide This SAP best practice supports the processing of sales orders
two examples of foreign trade. The first includes the steps across company codes. If a customer places an order that the
required for the export of finished materials and trading vendor cannot fill, the vendor sends the goods to the customer
goods. The second includes the import of raw materials and from a plant that belongs to another company code.

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