ISSN (Online) 2278-1021

ISSN (Print) 2319-5940

International Journal of Advanced Research in Computer and Communication Engineering

Vol. 4, Issue 7, July 2015

Customization of Materials Management Module

of SAP ERP for Power Industries of C.G., India
Deepak Kumar Vishwakarma 1, K. J. Satao 2
M. Tech. (Software Engineering) Scholar, Computer Science and Engineering Department;
Rungta College of Engineering and Technology, Bhilai, Chhattisgarh, India 1
Professor, Computer Science and Engineering; Head, Dept of Information Technology and MCA,
Rungta College of Engineering and Technology, Bhilai, Chhattisgarh, India2

Abstract: Enterprise Resource Planning (ERP) systems, also called Enterprise Systems (ES) are among the most
important business information technologies that emerged during the last decade. While no two industries ERP systems
are the same, the basic concept of ERP systems is focused on standardization and synchronization of information, and
as a result, improved efficiency and output. To implement an integrated system of materials management, there must be
a central database wherein anyone in the company can find out all information about any material passing through the
plant. ERP streamlines all the business functionalities and gives desired result in one click. Customization and
configuration are parts of ERP implementation process. ERPs are always configured, and usually customized, when
implemented. An ERP system can help to improve the communication within an organization. SAP is a state-of–the-art
software for ERP implementation and customization. SAP is user friendly i.e. information will be obtained as and when
required. We have adopted a case study approach for this paper. For this we have taken case study of Chhattisgarh State
Government owned power company named as Chhattisgarh State Electricity Board (CSEB). In this paper, we have
concentrated mainly on selected functionalities of Material Management module that are necessary for power industries
of Chhattisgarh state for customization of SAP ERP software.
Keywords: Enterprise Resource Planning, System Application and Products, Materials Management Module,
Customization, SAP R/3.

I. INTRODUCTION
Power industries of Chhattisgarh state are in the extension service quality, and to lead to a reduction in service costs
stage. So to expand their energy trading business and to as well as to more effective decision-making (Ngai et al.,
become more profitable, they need to automate and 2008).
integrate their business processes. It is also necessary for
ERP implementations are usually large, complex projects,
the power industries to make a global presence. To fulfil
involving large groups of people and other resources,
their requirements, ERP software package is an important
working together under considerable time pressure and
tool. After comparing different types of ERP software; we
facing many unforeseen developments (Akkermans &
find SAP is suitable.
Helden, 2002).
A system that automates and integrates all modules of
business areas is known as an ERP system or simply ERP. Data accuracy is absolutely required for an ERP system to
An ERP system is used to integrate several data sources function properly. Because of the integrated nature of
and processes, such as manufacturing, control, and ERP, if someone enters the wrong data, the mistake can
distribution of goods in an organization. This integration is have a negative domino effect throughout the entire
achieved by using various hardware and software enterprise. Therefore, educating users on the importance of
components. An ERP system is primarily module-based, data accuracy and correct data entry procedures should be
which implies that it consists of various modular software top priority (Stedman, 1999), (Stein, 1999).
applications or modules [1]. Various issues at strategic, managerial, and operational
A software module in an ERP system automates a specific levels should be addressed in order to achieve optimum
business area or module of an enterprise, such as outcomes from an ERP system (Al-Mashari & Zairi,
production, finance, materials management, sales and 2000).
distribution, etc. These software modules of an ERP Materials Management deals with managing the materials
system are linked to each other by a centralized database (products and/or services) resources of an organization
[1]. with the aim of increasing productivity, reducing costs,
increase optimization and at the same time be flexible to
ERP system is a common term for a wide set of activities accommodate changes [7].
supported by multi-module application tool that helps A business process in SAP is termed as “Module”. SAP’s
organizations to manage their resources in better way. The Materials Management (MM) is a part of Logistics area
ERP system has been shown to be able to provide and helps to manage the procurement activity of an
significant improvements in efficiency, productivity and

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 ISSN (Online) 2278-1021
ISSN (Print) 2319-5940

International Journal of Advanced Research in Computer and Communication Engineering

Vol. 4, Issue 7, July 2015

organization from procurement process, inventory the above is possible through customizing in SAP R/3.
management, invoice verification, and material planning One important point to remember here is that
[7]. "Customizing" in SAP R/3 is client specific. But important
Materials Management is the backbone of the Logistics changes such as changes in pricing conditions are not
area which includes modules like Sales and Distribution, client specific. Such changes affect all the clients in the
Production Planning, Plant Maintenance, Project Systems, system and are cross client [10].
Warehouse Management, which are highly dependent on
Materials Management module [7]. II. CASE STUDY

Materials management is highly integrated with other A. Background of the company

modules such as FI(Financial Accounting), SD(Sales & CSEB was formed in accordance with the Section 5 of the
Distribution), PP(Production Planning), QM(Quality Electricity Supply Act 1948 as per the Notification
Management), PM(Plant Maintenance) [7]. published in the gazette of the Government of
Customization enables organization to adapt the Chhattisgarh dated 15 November 2000. CSEB became
enterprise-neutral and industry-specific functions, functional w.e.f. 01.12.2000. Chhattisgarh State Electricity
delivered as standard, to the specific business Board has been reorganized into five companies in
requirements of enterprise. accordance with the provisions contained in the Section
It supports enterprise whenever we: 131-134 of Electricity Act 2003 by the Govt. of
• Implement the ERP(SAP) System. Chhattisgarh vide Notification dated 19.12.2008 [11] :
• Enhance the ERP(SAP) System. (1) Chhattisgarh State Power Generation Company
• Upgrade to a new release or system. Limited,
(2) Chhattisgarh State Power Transmission Company
Customization controls the behaviour of ERP (SAP) Limited,
applications. Enterprises can only work with many ERP (3) Chhattisgarh State Power Distribution Company
(SAP) applications after they have made the appropriate Limited,
Customization settings – for example, after specifying in (4) Chhattisgarh State Power Trading Company Limited,
Customization, which currencies and purchasing groups (5) Chhattisgarh State Power Holding Company Limited.
are used in enterprise. Customization does not enable us to
modify SAP standard functions [8]. The holding company does the supervision, coordination,
and facilitation of the remaining companies. The area
Organizations might think that their needs are fairly close served by the power utility company is 1, 35,191 Square
to everyone else’s, and they don’t really need customized KM and 9942 villages are covered under intensive
ERP software. However, Generic approaches miss both electrification scheme.
simplifications and extra depth, specific to their way of
B. Power plants of the company
doing business. Customization puts enterprise and their
staff at the heart of the system [9].
Large companies have long understood the benefits of
customizing their software and spend millions to achieve
this goal.
Being fully customizable implies complete flexibility on
defining:
• The screens and workflows.
• The data model.
• The reports [9].
Customizing refers to tailoring the SAP R/3 software
based on the needs of the customer. Customizing in SAP
R/3 helps in meeting a company's individual requirements
based on its business. SAP R/3 transactions can be
customized to best leverage SAP ERP [10].
To take an example of how SAP can be customized,
consider a scenario of a company, which sells its products. Fig. 1. Existing power plants [13]
The company may sell its products both in the domestic as
well as in the export market. It is important that the C. ERP SAP in CSEB(CSPDCL)
company defines in SAP the correct business strategy. The distribution company, which is called the
Customizing can be used for this purpose. Thus, the Chhattisgarh State Power Distribution Company
company may define a sales organization, define various Limited(CSPDCL) decided to implement a centralized
distribution channels, assign distribution channels to sales server based-IT Solution. This involved creating a wide-
organization, define pricing conditions, assign general area network covering all the offices spread across the
ledger accounts, define tax determination rules etc. All of length and breadth of the state. The management decided

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 ISSN (Online) 2278-1021
ISSN (Print) 2319-5940

International Journal of Advanced Research in Computer and Communication Engineering

Vol. 4, Issue 7, July 2015

on an ERP solution to integrate all available modules and

to computerize its business functionalities. This made it Analysis of a power industry(for modelling & customization)
the first Government Power Distribution Utility in India
which implemented SAP Solutions for billing [12].
The board was previously using software developed on
COBOL and Sybase for its billing, stores, and finance Collect information and data from a power industry(relevant to material
accounting, and pay-roll. ERP-SAP was the best solution management)
to integrate all available modules and computerize its
business functionalities [12].
CSPDCL had started implementation of SAP in the year
2005. Indian IT company TCS(Tata Consultancy Services) Configure the SAP ERP s/w package for customization of MM module
was implementation partner. It is approximately Rs 150
Crore project. Its full implementation was scheduled till
year 2009. Still this implementation project has not rolled
out completely. Implementation modules are IS-
U/CCS(Industry Specific solution for Utilities - Customer Customize MM module as required
Care & Service) for LT(Low Tension) & HT(High
Tension) Billing and Customer Care, MM(Materials
Management), FI-CO(Financials – Controlling),
HR(Human Resource), DMS(Document Management
System), SRM(Suppliers Relationship Management), and Test & run SAP software
EAM(Enterprise Asset Management). In CSEB Module
wise or step-by-step implementation strategy was adopted.
IS-U/CCS and MM modules had gone live in 2007. HR
module had gone live in 2010. DMS module has gone live
in 2011. FI-CO module has gone live in 2012. EAM Get the output and required result(reports)
module has gone live in December 2013.
CSEB, along with TCS, charted a roadmap, which Fig. 2. Flow chart of Customization Methodology
included creating a state-of-the-art data centre for hosting After that, SAP ERP software was configured. Following
the servers and migrating from a de-centralized system to steps have been carried out under configuration process:
a centralized one. This involved developing a huge  Setting of Countries, Currencies, and Calendar,
WAN(Wide Area Network) across the state, connecting  Define Region/State,
all the divisional head quarters in the first and Sub-  Define Tax Jurisdiction,
Division offices later. With CSEB being the first utility to
 Set display Type for Date, etc.
have adopted ISU-CCS System, tailoring the SAP system
as per the billing logics was a major challenge. In the next step of Methodology, MM module is
customized. The tool used for customization is SAP IDES
This was achieved by involving the users directly with the
(Internet Demonstration and Evaluation System). SAP
developers of SAP system. Several innovative solutions
IDES is a normal R/3 system. It is simple to use, and is
were linked to the Core SAP IS-U implementation, which
used for demos, online/classroom training, and
helped CSEB overcome challenges. The Material
presentations. Potential customers use IDES to trial and
Management module had to be implemented at “one go”
test software via Internet.
all across CSEB, which was a considerable challenge.
However this had paid off, with the procurement and It supports latest release of the SAP ERP application that
inventory processes now being conducted through the MM is SAP ERP Central Component (ECC6.0).
module [12]. All the activities, carried out in this methodology, come
III. METHODOLOGY OF CUSTOMIZATION under customization process.
This methodology includes both program customizations
According to methodology, the power company named as
as well as report customizations.
CSEB was analyzed for MM module.
In our approach, concentration was mainly on selected
Then collection of data and information from this functionalities of Materials Management module that are
company, relevant to Material Management module of necessary for power industries of Chhattisgarh state. These
SAP s/w was done. functionalities are as follows:
 Purchase Order creation

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 ISSN (Online) 2278-1021
ISSN (Print) 2319-5940

International Journal of Advanced Research in Computer and Communication Engineering

Vol. 4, Issue 7, July 2015

Fig. 5. Verification of Invoice

But, before implementing these functionalities, the
following things were defined:
 Define company,
 Define company code,
 Edit address of company code,
 Define plant,
 Define and maintain storage location,
 Define and maintain purchase organization.
In such a way, demonstrable Enterprise Structure of
CSEB was created. After customization, testing of SAP
Fig. 3. Creation of Purchase order software was done. This step was repeated, until MM
 Goods receipt preparation module of SAP software run successfully and completely.
 Stock transfer and transfer posting

Fig. 4. Preparation of Goods Receipt

 Invoice verification
Fig. 6. Transfer of stock & posting

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International Journal of Advanced Research in Computer and Communication Engineering

Vol. 4, Issue 7, July 2015

In the last step, mainly reports of different styles and

formats were generated.
After customization, we can check list of materials, list of
vendors, Check details of purchase order and goods
receipt, and verify the invoices generated. We can check
details of Stock transfer and transfer posting.

Fig. 8. Interactive Report Format (screen 1)

Fig. 7. Classical Report Format

We can generate and view standard reports as well as
customized reports. Reports are very important for a
business organization. Here, we have used three different
reporting formats namely:
1) Classical Report Format:
In a classical report, the output is displayed in a single list.
Classical reports are simple reports, which are created by
using the output data (final data that have to be displayed
in a report) :
2) Interactive Report Format: Fig. 9. Interactive Report Format (screen 2)
In an interactive report, we can view multiple lists 3) ABAP(Advanced Business Application
simultaneously. With the help of interactive reports, first, Programming) List Viewer (ALV) Report Format :
an overview list (also called a basic list) is displayed, ALV reports, however, allow us to perform various
based on which further output lists(or called secondary functions with the displayed output, such as sorting,
lists) are displayed. These secondary lists are actually sub arranging, filtering, and retrieving data:
reports:

Fig. 10. ALV Report Format

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IV. CONCLUSION AND SCOPE OF FURTHER http://www.revelate.com/products/revelate-erp/why-customize-

your-erp.
WORK [10] (2014) The Saptechies website. [Online]. Available:
Customization is essential for successful implementation http://www.saptechies.org/ sap-r3-customizing-what-is-sap-
customizing.
of ERP software. It is observed that, whole ERP software [11] (2015) The CSEB website. [Online].Available:
package can be customized or we can select a module for http://www.cseb.gov.in/
customization. In this paper, customization of Materials [12] (2015) The ISSUU website. [Online]. Available:
Management module of ERP(SAP) software package has http://www.issuu.com/idgindia/docs/feb_2012_tcs_transformers.pdf
[13] The CSEB website.[Online]. Available:
been discussed. This modular customization has been http://www.cseb.gov.in/cspgcl/images/powergenmap.pdf/
carried out according to CSEB MM module. In this paper,
customization concept is mainly applied. There are two BIOGRAPHIES
types of customizations:
Program customization and report customization. Mr. Deepak Kumar Vishwakarma
received the B.E. degree from Pt.
It is a basic level of customization. So, it can be applied in Ravishankar Shula University, Raipur
power industries of Chhattisgarh. In this paper, (C.G.), India in Computer Science &
concentration was mainly on report customization. Engineering. He is currently pursuing
Program customization was also performed, but in little M. Tech. Degree in Software
extent. SAP is state-of–the-art software for ERP Engineering from Chhattisgarh Swami
implementation, that is why, it is chosen. Vivekananda Technical University Bhilai (C.G.), India.
An ERP implementation is considered to be successful, if His research areas include ERP, Data Mining, etc.
it achieves a substantial proportion of its potential benefits.
These benefits might include personnel reductions, a
decrease in the cost of information technology, better Prof. K. J. Satao is Professor of
inventory control, and an improvement in order and cash Computer Science & Engineering and
management. An alternate definition of implementation Head of Information Technology and
success is that the system achieves the level of Return on MCA Department at Rungta College of
Investment (ROI) identified in the project approval phase. Engineering & Technology, Bhilai,
The non-financial improvements are probably the most Chhattisgarh State, India. He has
significant. Many ERP implementations have failed, obtained M.S. degree in Software
because, they did not achieve predetermined corporate Systems from Birla Institute of Technology and Science,
goals. Pilani, Rajasthan State, India in 1991. He has published 60
Papers so far in various reputed National & International
This work can be extended further. Various other modules Journals, Conferences, and Seminars. He is Ex. Dean of
of SAP can also be integrated as and when necessary. Computer & Information Technology faculty in
Further report customization option is also open. Different Chhattisgarh Swami Vivekananda Technical University,
types of reporting styles can be used for quick Bhilai, India(A State Government University). He is Ex.
understanding of users at different levels of an member of the Executive Council and the Academic
organization. Council of the University. He is a member of the
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