1. R  SAP America, OS.PPT - 10/13/97, Slide 1 GOAL OF ORGANIZATION STRUCTURE WORKSHOP Obtain an Understanding of the Customer’s Key Business Processes Define the Chico Creek Brewery’s Organization Structure in SAP based on those Business Processes

2. R  SAP America, OS.PPT - 10/13/97, Slide 2 AGENDA Customer High Level Business Overview Business Process Review Financial/Asset Management Sales Logistics Procurement, Logistics Planning Define the Organizational Elements in SAP based on the Chico Creek Brewery’s Business Processes and Reporting Requirements. Document the Company’s SAP Organization Structure Definition of Organization Structure

3. R  SAP America, OS.PPT - 10/13/97, Slide 3 Company’s Mission Statement Markets Customer Base Products and Services SAP Implementation Drivers Business Overview Integrated Business Process Review

4. R  SAP America, OS.PPT - 10/13/97, Slide 4 MISSION STATEMENT Our mission is to successfully implement SAP R/3 at the Chico Creek Brewery in a timely, professional manner so that our client can realize a faster and more productive way to run their business processes. We intend to create a sustainable competitive advantage for Chico Creek Brewery, as well as, substantial profitable results through the implementation of SAP R/3.

5. R  SAP America, OS.PPT - 10/13/97, Slide 5 Integrated Business Processes Overview Finance / Asset Management Procurement Logistics Planning Sales Logistics Production

6. R  SAP America, OS.PPT - 10/13/97, Slide 6 Integrated Business Process Overview Fore- cast Sales Oper Planning MPS MRP Order Settlement Costing Inventory Manufacturing Execution Capacity Financial and Managerial Reporting and Analysis Production

7. R  SAP America, OS.PPT - 10/13/97, Slide 7 Organizational Structure Review 3000 US #1 90 Pale Ale 90 Pale Ale 93 Stout 93 Stout 3000 US 3000 US 3000 US 3000 US 3000 US 3000 US 90 Pale Ale 90 Pale Ale 90 Pale Ale 93 Stout 93 Stout 03 Wholesale 93 Stout Business Area Purchasing Organization Division/ Plant Distribution Channel Division Sales Organization Organizational Structure 3000 US 4000 Australia 4000 Australia Chico Creek Brewery

8. R  SAP America, OS.PPT - 10/13/97, Slide 8 ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE ASSET MANAGEMENT COST CENTER ACCOUNTING (CCA) INTERNAL ORDER ACCOUNTING (OPA) PROJECT ACCOUNTING PRODUCT COSTING PROFIT CENTER ACCOUNTING (PCA) PROFITABILITY ANALYSIS (PA) FINANCIAL ACCOUNTING (FI / AM) FINANCIAL REPORTING (FI) MANAGEMENT REPORTING (CO) GENERAL LEDGER NATURAL ACCOUNT Finance Management /Accounting & Reporting SD MM

9. R  SAP America, OS.PPT - 10/13/97, Slide 9 Organizational Elements - FI Represents a legal/tax entity - Where do you legally represent the financial events of transacting business? Arms Lengths Transactions Level of External Reporting or Legal Sets of Books Company

10. R  SAP America, OS.PPT - 10/13/97, Slide 10 Organizational Elements - FI Company Codes: Identify the proposed company codes if any for customer being evaluated. Benefits: Identify the benefits of recommended usage of company codes. Costs: Identify the costs of recommended usage of company codes. Issues: Identify any open issues/questions. Companies for Name of Customer

11. R  SAP America, OS.PPT - 10/13/97, Slide 11

12. R  SAP America, OS.PPT - 10/13/97, Slide 12 Organizational Elements - FI G/L Account Master Records Required in One or Several Company Codes Postings are Made to these Accounts Maximum of a 10 Digit Code A company Must be Linked to One Operating Chart of Accounts An Operating Chart of Accounts can be Linked to Many companies Operating Chart of Accounts

13. R  SAP America, OS.PPT - 10/13/97, Slide 13 Organizational Elements - FI Different from a lot of other Financial System Applications in that the G/L account is strictly comprised of the natural account code. The management reporting structures (i.e. cost centers, divisions, regions, and job orders) is not embedded within the chart of accounts. In SAP there is a relative relationship between the chart of accounts profit and loss natural account code and the cost centers. Operating Chart of Accounts = General Ledger

14. R  SAP America, OS.PPT - 10/13/97, Slide 14 Organizational Elements - CO An organizational unit within a corporation in which comprehensive independent management accounting can be performed. Allows you to group Company Codes from a Cost Accounting View. It links the financial accounting module (FI) to the management accounting module(CO) in SAP. Controlling Area

15. R  SAP America, OS.PPT - 10/13/97, Slide 15 Organizational Elements - CO The Operating Chart of Accounts Links Financial Accounting(General Ledger) to Management Accounting in the following way: A Company Code is Linked to the Operating Chart of Accounts The Controlling Area is Linked to the Operating Chart of Accounts A Company Code then can be Linked to any Controlling Area as long as they are both Linked to the Same Operating Chart of Accounts Several Companies can be Linked to a Single Controlling Area regardless of the Companies Functional Currency. Linking of FI and CO

16. R  SAP America, OS.PPT - 10/13/97, Slide 16 Organizational Elements - CO Used to Calculate the Profit of an Area of Responsibility within the Organization (e.g. the Brewery) The Areas of Responsibility (Profit Centers) could be Based on Regions, Functions, or Products (e.g. Production). Supports Calculating Operating Profit using the Cost of Goods Sold P/L Format and/or the Period Accounting Method A Profit Center can also be Viewed as an Investment Center since it is Possible to Transfer at Period End the Balance Sheet Positions for Assets, WIP, AR, AP, and Inventory Profit Center Accounting

17. R  SAP America, OS.PPT - 10/13/97, Slide 17 Organizational Elements - CO A Profit Center is not an Independent Account Assignment Object at the Moment of Entering a Transaction in SD or MM; It is Derived From Existing Objects and is Allocated to the Correct Cost Object As a Default, Revenue and Costs for Profit Centers are Derived as follows: Sales Order Line Item based on the Product being Sold Direct Costs Based on the Assignment of Production Orders and Direct Costs. Overhead Costs Based on the Assignment of the Cost Center or other Cost Object Profit Center

18. R  SAP America, OS.PPT - 10/13/97, Slide 18 Organizational Elements - CO Profit Centers: A division of the functional business areas which CCBC is involved with (e.g. the sale of merchandise). Benefits: The ability to capture costs in Profit Centers, and perform profitability analysis on a single part of the business. Issues: Identify additional Cost Centers in the Organizational Structure, and map them to existing processes.. Profit Centers for Chico Creek Brewing

19. R  SAP America, OS.PPT - 10/13/97, Slide 19 Organizational Elements - CO Departmental Breakdown of your Legal Entity Structure Lowest Level of Organization where you want to Collect and Analyze Costs/Departmental Performance Departmental Budgets and Expense Analysis Interdepartmental Cost Allocations Each Cost Center is Assigned to a Profit Center, which is Assigned to a Company Code Cost Centers are Structured into Organizational and/or Functional Hierarchical Groups Cost Centers

20. R  SAP America, OS.PPT - 10/13/97, Slide 20 Organizational Elements - CO Chico Creek Brewing Company, Company Codes and Profit Centers Controlling Area 1000 Company Code 2000 United States Company Code 4000 Japan Company Code 5000 Canada Company Code 6000 Singapore (Planned) Company Code 3000 Australia Operating Concern CCBC Profit Center 1200 Porter Profit Center 1000 Taproom (Pub) Profit Center 1100 Merchandise Profit Center 1400 Pale Ale Profit Center 1500 Hefe Weisen Profit Center 1600 Seasonal Profit Center 1300 Stout Controlling Area 1000

21. R  SAP America, OS.PPT - 10/13/97, Slide 21 CC 2102 Mash Turn CC 2107 Lauter Tun CC 2110 Wort Receiver CC 2103 Kettle CC 2108 Hop Strainer CC 2111 Whirlpool CC 2104 Heat Exchanger CC 2109 Fermenters CC 2112 Filters CC 2105 Conditin. Tanks CC 2120 Bottling CC 2220 Legal US CC 2230 Purchasing US CC 2240 Management US CC 2300 US Sales & Distrib. CC 2200 US Administration CC 2100 Manufacturing Organizational Elements - CO 10/08/98 Chico Creek Brewing Company, Cost Centers CC 2310 Sales, US CC3310 Sales, AU CC4310 Sales, JP CC 5310 Sales, CA CC 6310 Sales, SP CC 2140 Finished Goods CC 2106 Malt Mill CC 2101 Water purifier CC6350 Distribution,SP CC 2350 Distribution, US CC 4350 Distribution,JP CC 5350 Distribution, CA CC 3350 Distribution,AU CC 2210 Accounting US CC 2250 Insurance US CC 2260 HR US CC 2130 Kegging CC 3220 Legal AU CC 3230 Purchasing AU CC 3240 Management AU CC 3210 Accounting AU CC 3250 Insurance AU CC 3260 HR AU CC 4220 Legal JP CC 4230 Purchasing JP CC 4240 Management JP CC 4210 Accounting JP CC 4250 Insurance JP CC 4260 HR JP CC 5220 Legal CAN CC 5230 Purchasing CAN CC 5240 Management CAN CC 5210 Accounting CAN CC 5250 Insurance CAN CC 5260 HR CAN CC 6220 Legal SP CC 6230 Purchasing SP CC 6240 Management SP CC 6210 Accounting SP CC 6250 Insurance SP CC 6260 HR SP CC 3200 AU Administration CC 4200 JP Administration CC 5200 CAN Administration CC 6200 SP Administration CC 6300 SP Sales & Distrib. CC 5300 CAN Sales & Distrib. CC 4300 JP Sales & Distrib. CC 3300 AU Sales & Distrib. CC 2400 Taproom (Pub) CC 2500 Merchandise

22. R  SAP America, OS.PPT - 10/13/97, Slide 22 AM - Depreciation Areas Depr. Areas Pub/ TaproomMerch. Depr. Areas USACanadaAustralia Depr. Areas Japan Company Code Canada Company Code Australia Company Code Japan Chart of DepreciationChart of Depr. Brewery Company Code

23. R  SAP America, OS.PPT - 10/13/97, Slide 23 AM - Asset Number Structure

24. R  SAP America, OS.PPT - 10/13/97, Slide 24 Asset Classification

25. R  SAP America, OS.PPT - 10/13/97, Slide 25 IM - Hierarchical Structure Investment Management Program Orders (CO)Projects (PS)

26. R  SAP America, OS.PPT - 10/13/97, Slide 26 Chico Creek Brewing Co. Tap Room Brewing Plant Brewing Plant Tap Room Plant Tap Room Plant United States Canada Plants Purchasing Organizations and Plants Organizational Elements - MM Singapore Japan Australia Brewery Retail Plant Retail Plant Dry Inventory Dry Inventory Wet Inventory Wet Inventory Storage Purchasing organizations

27. R  SAP America, OS.PPT - 10/13/97, Slide 27 Organizational Elements - MM Responsible for procurement for the brewing, tap room and retail plants Responsible for negotiating pricing and delivery terms with vendors for each purchasing organization Purchasing Organization

28. R  SAP America, OS.PPT - 10/13/97, Slide 28 Organizational Elements - MM Purchasing Organization: Each company will have its own purchasing organization Benefits: A purchasing organization is assigned to a cost center where inventory is tracked and costs are incurred Purchasing Organization for Chico Creek Brewing Co.

29. R  SAP America, OS.PPT - 10/13/97, Slide 29 Organizational Elements - MM It is a production facility that can have multiple locations associated with it Usually a manufacturing facility, warehouse or a location that stocks, manages and valuates inventory May be a physical site with multiple manufacturing/production lines Can be a physical location (cost centers may or may not be associated to a plant i.e. administrative vs. manufacturing cost centers) SD availability checking is normally done at the plant level Plant

30. R  SAP America, OS.PPT - 10/13/97, Slide 30 Organizational Elements - MM Links to production (PP), materials management (MM), and sales and distribution (SD) A plant is assigned to a company Purchasing organizations are assigned to plants Plant (Cont.)

31. R  SAP America, OS.PPT - 10/13/97, Slide 31 Organizational Elements - MM Plant: There are three plants: brewing, tap room and retail Benefits: Being able to keep track of the profits and costs of each plant Plant for Chico Creek Brewing Co.

32. R  SAP America, OS.PPT - 10/13/97, Slide 32 Organizational Elements - MM A location within a plant where inventory is stored Storage Location

33. R  SAP America, OS.PPT - 10/13/97, Slide 33 Organizational Elements - MM Storage Locations: Brewery and tap room will have two separate storage locations: one for “dry” goods and one for “wet” or cold goods. Benefits: Assets and incurred costs can be tracked by the different storage locations. Storage Locations for Chico Brewing Co.

34. R  SAP America, OS.PPT - 10/13/97, Slide 34 Organizational Elements - SD Sales Organization, Distribution Channel and Division 90 Pale Ale Division 3000 US 3000 US 03 Wholesale 03 Wholesale Sales Organization Sales Organization Distribution Channel 3000 US Chico Creek Brewing Company 93 Stout 93 Stout 4000 Australia 4000 Australia

35. R  SAP America, OS.PPT - 10/13/97, Slide 35 Organizational Elements - SD A representation of a selling unit responsible for product liability and other claims made by customers Each business transaction is processed within a sales organization Master Data Maintenance for Customers, Pricing at Sales Organization Level Sales Organization Assigned to a Company Code where Sales Revenue is Recognized (Links SD & FI) Plants Assigned to a Sales Organization Sales Organization

36. R  SAP America, OS.PPT - 10/13/97, Slide 36 Organizational Elements - SD Sales Organization: United States, Australia, Canada, Japan, Singapore, Tap Room, Catering, Bakery, Merchandise Benefits: To produce statistics for each of the sales organizations. Costs: A manager will be required to head up each sales organization, therefore, costs may be slightly higher. Sales Organization for Chico Creek Brewing Company

37. R  SAP America, OS.PPT - 10/13/97, Slide 37 Organizational Elements - SD Used to define how different products reach consumers (I.e. retail, wholesale, or direct sale) Relevant Master Data such as price, minimum order qty, and ship-from location may differ between each channel Each Sales Order travels through one Distribution Channel Distribution Channel assigned to a Sales Organization (I.e. direct sale for Merchandise items) Distribution Channel

38. R  SAP America, OS.PPT - 10/13/97, Slide 38 Organizational Elements - SD Distribution Channels: Wholesale, Direct Sale, and Retail Benefits: We can determine the profitability of each channel within a specified sales organization. Costs: By having additional distribution channels (wholesale, retail), we will incur transportation costs. Distribution Channels for Chico Creek Brewing Company

39. R  SAP America, OS.PPT - 10/13/97, Slide 39 Organizational Elements - SD A way of Grouping Materials, Products, or Services Assign each product line to a particular division Define customer-specific agreements for each division, including partial deliveries, pricing, and payment terms Division

40. R  SAP America, OS.PPT - 10/13/97, Slide 40 Organizational Elements - SD Division: 5 types of beer, menu items, souvenirs, and services provided by catering. Benefits: To keep track of how well each product sells within a given area. Costs: By making the divisions equal to each type of product and service, the divisions will become more difficult to configure and maintain. Division for Chico Creek Brewing Company

41. R  SAP America, OS.PPT - 10/13/97, Slide 41 Organizational Elements - SD Sales Area is a Combination of: Sales Area is a Combination of: Sales Organization Sales Organization Distribution Channel Distribution Channel Division Division All customer data relevant for sales is defined according to the sales area (I.e. can specify for each customer how pricing is done in each sales area) All customer data relevant for sales is defined according to the sales area (I.e. can specify for each customer how pricing is done in each sales area) Links the Order Entry System(SD) to the Financial/Managerial System(FI/CO) Links the Order Entry System(SD) to the Financial/Managerial System(FI/CO) Sales Area

42. R  SAP America, OS.PPT - 10/13/97, Slide 42 Sales Area for Chico Creek Brewing Company Wholesale Direct sale Retail USMerchandiseTap Room Pale Ale Porter Hefe Weisen Stout Seasonal Pale Ale Porter Hefe Weisen Stout Seasonal Pale Ale Porter Hefe Weisen Stout Seasonal Hats Tee shirt Sweatshirts

43. R  SAP America, OS.PPT - 10/13/97, Slide 43 Organizational Elements - SD Sales Organization, Distribution Channel and Division 3000 US 3000 US Chico Creek Brewing Company 3000 AU 3000 AU 5000 Singapore 5000 Singapore 4000 Japan 4000 Japan 5000 Canada 5000 Canada 8000 Tap Rm. 8000 Tap Rm. 9000 Catering 9000 Catering 1000 Bakery 1000 Bakery 2000 Merchandise 2000 Merchandise 04 Direct Sale 03 Wholesale 05 Retail 92 Porter 93 Stout 94 Seasonal 91 Hefe 90 Pale Ale 04 Direct Sale 80 Hats 60 Shirts 70 Sweatshirts

44. R  SAP America, OS.PPT - 10/13/97, Slide 44 Human Resource Structure

45. R  SAP America, OS.PPT - 10/13/97, Slide 45 Organizational Structure Review 3000 US #1 90 Pale Ale 90 Pale Ale 93 Stout 93 Stout 2000 US 2000 US 2000 US 2000 US 2000 US 2000 US 90 Pale Ale 90 Pale Ale 90 Pale Ale 93 Stout 93 Stout 03 Wholesale 93 Stout Business Area Purchasing Organization Division/ Plant Distribution Channel Division Sales Organization Organizational Structure 2000 US 3000 Australia 3000 Australia Chico Creek Brewery