GOAL OF ORGANIZATION STRUCTURE WORKSHOP

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. AGENDA Definition of Organization Structure • 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

3. Integrated Business Process Review Business Overview • Company’s Mission Statement • Markets • Customer Base • Products and Services • SAP Implementation Drivers

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. Integrated Business Processes Overview Procurement Logistics Planning Sales Logistics Production Finance / Asset Management

6. Integrated Business Process Overview Production Fore-cast Sales Oper Planning MPS MRP Manufacturing Execution Order Settlement Inventory Capacity Costing Financial and Managerial Reporting and Analysis

7. Organizational Structure Review Organizational Structure Chico Creek Brewery 3000 US 90 Pale Ale 93 Stout Business Area 4000 Australia 3000US #1 Purchasing Organization Division/ Plant 90 Pale Ale 93 Stout 3000 US 3000 US Sales Organization 3000 US Distribution Channel 03 Wholesale 93 Stout 90 Pale Ale Division

8. Finance Management /Accounting & Reporting FINANCIAL ACCOUNTING (FI / AM) FINANCIAL REPORTING (FI) MANAGEMENT REPORTING (CO) COST CENTER ACCOUNTING (CCA) ACCOUNTS SD RECEIVABLE INTERNAL ORDER ACCOUNTING (OPA) PROJECT ACCOUNTING GENERAL LEDGER NATURAL ACCOUNT ACCOUNTS MM PAYABLE PRODUCT COSTING PROFIT CENTER ACCOUNTING (PCA) ASSET MANAGEMENT PROFITABILITY ANALYSIS (PA)

9. Organizational Elements - FI Company • 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

10. Organizational Elements - FI Companies for Name of Customer • 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.

12. Organizational Elements - FI Operating Chart of Accounts • 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

13. Organizational Elements - FI Operating Chart of Accounts = General Ledger • 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.

14. Organizational Elements - CO Controlling Area • 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.

15. Organizational Elements - CO Linking of FI and 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.

16. Organizational Elements - CO Profit Center Accounting • 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

17. Organizational Elements - CO Profit Center • 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

18. Organizational Elements - CO Profit Centers for Chico Creek Brewing • 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..

19. Organizational Elements - CO Cost Centers • 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

20. Company Code 2000 United States Company Code 4000 Japan Company Code 5000 Canada Company Code 6000 Singapore (Planned) Company Code 3000 Australia 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 Organizational Elements - CO Chico Creek Brewing Company, Company Codes and Profit Centers Operating Concern CCBC Controlling Area 1000 Controlling Area 1000

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 CC 2101 Water purifier CC 2310 Sales, US CC3310 Sales, AU CC4310 Sales, JP CC 5310 Sales, CA CC 6310 Sales, SP CC 2140 Finished Goods CC 2250 Insurance US CC 2500 Merchandise CC6350 Distribution,SP CC 2350 Distribution, US CC 4350 Distribution,JP CC 5350 Distribution, CA CC 3350 Distribution,AU CC 2210 Accounting US CC 2260 HR US CC 2106 Malt Mill CC 2130 Kegging CC 3200 AU Administration 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 2400 Taproom (Pub) 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 3220 Legal AU Organizational Elements - CO 10/08/98 Chico Creek Brewing Company, Cost Centers

22. AM - Depreciation Areas USA Canada Australia Japan Chart of Depreciation Chart of Depr. Chart of Depr. Chart of Depr. Depr. Areas Depr. Areas Depr.Areas Depr. Areas Company Code Brewery Pub/ Taproom Merch. Company Code Canada Company Code Australia Company Code Japan

23. AM - Asset Number Structure

24. Asset Classification

25. IM - Hierarchical Structure Investment Management Program Orders (CO) Projects (PS)

26. Organizational Elements - MM Purchasing Organizations and Plants Chico Creek Brewing Co. United States Canada Singapore Japan Australia Purchasing organizations Brewery Tap Room Retail Tap Room Plant Brewing Plant Retail Plant Plants Dry Inventory Wet Inventory Storage

27. Organizational Elements - MM Purchasing Organization • Responsible for procurement for the brewing, tap room and retail plants • Responsible for negotiating pricing and delivery terms with vendors for each purchasing organization

28. Organizational Elements - MM Purchasing Organization for Chico Creek Brewing Co. • 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

29. Organizational Elements - MM Plant • 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

30. Organizational Elements - MM Plant (Cont.) • 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

31. Organizational Elements - MM Plant for Chico Creek Brewing Co. • Plant: There are three plants: brewing, tap room and retail • Benefits: Being able to keep track of the profits and costs of each plant

32. Organizational Elements - MM Storage Location • A location within a plant where inventory is stored

33. Organizational Elements - MM Storage Locations for Chico Brewing Co. • 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.

34. Organizational Elements - SD Sales Organization, Distribution Channel and Division Chico Creek Brewing Company 3000 US 4000 Australia Sales Organization 3000 US Distribution Channel 03 Wholesale 93 Stout 90Pale Ale Division

35. Organizational Elements - SD Sales Organization • 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

36. Organizational Elements - SD Sales Organization for Chico Creek Brewing Company • 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.

37. Organizational Elements - SD Distribution Channel • 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)

38. Organizational Elements - SD Distribution Channels for Chico Creek Brewing Company • 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.

39. Organizational Elements - SD Division • 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

40. Organizational Elements - SD Division for Chico Creek Brewing Company • 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.

41. Organizational Elements - SD Sales Area • Sales Area is a Combination of: • Sales Organization • Distribution Channel • 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) • Links the Order Entry System(SD) to the Financial/Managerial System(FI/CO)

42. Sales Area for Chico Creek Brewing Company US Merchandise Tap Room Wholesale Stout Pale Ale Porter Hefe Weisen Seasonal Stout Direct sale Hats Pale Ale Tee shirt Porter Sweatshirts Hefe Weisen Seasonal Retail Stout Pale Ale Porter Hefe Weisen Seasonal

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

44. Human Resource Structure

45. Organizational Structure Review Organizational Structure Chico Creek Brewery 2000 US 90 Pale Ale 93 Stout Business Area 3000 Australia 3000US #1 Purchasing Organization Division/ Plant 90 Pale Ale 93 Stout 2000 US 2000 US Sales Organization 2000 US Distribution Channel 03 Wholesale 93 Stout 90 Pale Ale Division