Preview - Original paying document published on : http://expertplug.com/materials/training/global-trade-management-gtm GTM overview. You can find many more SAP training material on www.ExpertPlug.com. ExpertPlug is an SAP marketplace for training materials and an online community of experts. We offer a simple way for the global SAP workforce, consulting companies and industry to market their skills and find quality information. As an SAP Expert, you can also market your SAP skills and make extra cash by publishing SAP documents on www.ExpertPlug.com.

1. GLOBAL TRADE MANAGEMENT ..................................................................................................................... 2
1.1 MAIN PROCESS ....................................................................................................................................... 2
1.1.1 Trading Contract Management .................................................................................................... 2
1.1.2 Expense Management ................................................................................................................. 2
1.1.3 Trading Execution Management ................................................................................................. 2
1.1.4 Position Management .................................................................................................................. 3
1.1.5 Risk Management......................................................................................................................... 3
1.2 BUSINESS SCENARIO MAPS .................................................................................................................... 3
1.2.1 Global Trade Management: Association Process ...................................................................... 3
Description ............................................................................................................................................................... 3
1.2.1.1 Create trading contract (purchase-sided) .............................................................................................. 6
1.2.1.2 Create trading contract (sales-sided) ..................................................................................................... 6
1.2.1.3 Association .............................................................................................................................................. 6
1.2.1.4 Plan expenses ......................................................................................................................................... 6
1.2.1.5 Control profit and loss ............................................................................................................................. 6
1.2.1.6 Initiate currency hedging ........................................................................................................................ 6
1.2.1.7 Hedge currency ....................................................................................................................................... 6
1.2.1.8 Cash flow planning.................................................................................................................................. 6
1.2.1.9 Create sales order and purchase order ................................................................................................. 6
1.2.2 Global Trade Management: Back-to-Back Trading Process ..................................................... 7
Description ............................................................................................................................................................... 7
1.2.2.1 Create trading contract (back-to-back) .................................................................................................. 8
1.2.2.2 Plan expenses ......................................................................................................................................... 8
1.2.2.3 Control profit and loss ............................................................................................................................. 9
1.2.2.4 Create sales order and purchase order ................................................................................................. 9
1.2.3 Global Trade Management: Long Position Trading Process .................................................... 9
Description ............................................................................................................................................................... 9
Hedge currency ....................................................................................................................................................... 11
1.2.3.1 Hedge commodity ................................................................................................................................. 11
1.2.3.2 Create purchase order .......................................................................................................................... 11
1.2.4 Global Trade Management: Short Position Trading Process .................................................. 11
Description ............................................................................................................................................................. 11
1.2.4.1 Create sales order................................................................................................................................. 12
Prepare by – Sudarshan Phatak +91 8007011199

2. Global Trade Management
1.1 Main Process
Covers all the logistics processes required by trading companies. Combines and controls all the usual
purchase and sales processes from a trading perspective. Enables users to plan and control profits for
each deal more accurately. Leads to a considerable reduction in costs due to fewer automated process
steps. Offers potential savings, which means that implementing Global Trade Management (GTM) pays off
quickly. Lets management use informative reports as a reliable basis for any decision to be made.
Provides a clear advantage over the competition with SAP by integrating logistics, treasury, and finance,
an advantage that will be increased when additional developments are made in the areas of reporting and
commodity hedging.
1.1.1 Trading Contract Management
PROCESS FEATURE
Integrates information from purchasing and sales seamlessly. Uses the main
document as the trading contract, which forms the basis of all purchasing, sales, and
expense processes and provides users with a clear overview of all business
transactions. Allows companies to use the trading contract to perform a profitability
simulation immediately as it takes account of purchasing prices, sales prices and
Comments
planned expenses. Supports both back-to-back transactions and one-sided
purchasing and sales transactions using the unique trading contract. Lets users
pinpoint commodity risks at any given time via the option to evaluate one-sided
purchasing transactions. Lets users trade with vendors and customers via the Internet
using the Web-based trading contract, thus speeding up the entire process.
1.1.2 Expense Management
PROCESS FEATURE
Uses the trading contract to estimate costs in trading incurred through storage,
shipping, freight, insurance, and customs, and then compares the planned costs with
the actual costs that arise. Lets users distribute costs in the ensuing settlement of
Comments
actual costs to several different transactions, depending on the origin of the costs.
Allows companies to make informed statements regarding profits as a result of this
classified assignment of expenses.
1.1.3 Trading Execution Management
PROCESS FEATURE
Provides a unique form of trading execution management that helps traders to control
and monitor all logistics processes, whether import or export processes, stock
shipments, or drop shipments. Defines these processes in a flexible manner and then
makes them available, as standard, throughout the company. Allows a set sequence
Comments
of process steps to ensure that the necessary letters of credit have been created
before a sale is entered, for example. Automates and shortens traditional logistics
processes by up to 60%. Lets users post deliveries, goods issues, and billing
documents for several contract items in one single step.

3. 1.1.4 Position Management
PROCESS FEATURE
Lets users associate material quantities with single-sided purchase and sales
contracts on an item level with GTM‘s Position Management. Supports multiple
relationships between purchases and sales, e.g., associates one purchase order with
Comments multiple sales orders. Gives the company the information it needs for long/short
analysis in risk management. Links purchasing contracts and sales contracts at an
early stage to reduce possible commodity risks, while increasing the reliability of
delivery promises.
1.1.5 Risk Management
PROCESS FEATURE
Adds Treasury and Risk Management, a component of Financial Supply Chain
Management, to ensure that currency risks are completely hedged. Requires no
Comments
manual involvement to make changes to quantities; values, or deadlines in a deal,
and makes all future cash flows immediately visible in financial planning.
1.2 Business Scenario Maps
Global Trade Management: Association Process
Global Trade Management: Back-to-Back Trading Process
Global Trade Management: Long Position Trading Process
Global Trade Management: Short Position Trading Process
1.2.1 Global Trade Management: Association Process
BUSINESS SCENARIO MAP
Description
Global Trade Management (GTM) covers all the logistics processes required by
trading companies. All the usual purchase and sales processes are combined and
controlled from a trading perspective.
The association process is characterized by one-sided Trading Contracts, having
either vendors delivering one or more customers, which are not known when the deal
is contracted (long position) or customers delivered by one or more vendors, which
are not known when the deal is contracted (short position). A later association of
Summary sales-sided with purchase-sided contracts is required.
The main concern of this process is to find matching material-vendor-combinations
also in regard of other properties, such as quality, region, trading responsibility and so
on. Further more the postponed fulfillment very often requires the hedging of
currencies.
The Position Management of GTM allows the association of material quantities
between one-sided contracts on an item level to a later time. With a linkage to the

4. Transaction Manager of FSCM currency hedging in form of micro or macro hedging is
available. Forward contracts can be created with a link to the logistic contracts. A fully
integration to accounting and financial processes, such as actual cash flow, is
guaranteed. This gives you the information you need for long/short analysis in risk
management
GTM enables you to plan and control profits for each deal more accurately. Fewer
automated process steps lead to a considerable reduction in costs. Potential savings
mean that implementing GTM pays off quickly. Management can use informative
reports as a reliable basis for any decision to be made. By integrating logistics,
Comments treasury and finance, SAP offers you a clear advantage over the competition, an
advantage that will be increased when additional developments are made in the areas
of reporting and commodity hedging. The scope of functionality includes
Trading Contract Management, Expense Management, Trading Execution
Management, Position Management and Risk Management.

6. 1.2.1.1 Create trading contract (purchase-sided)
SAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.
You can enter all information in a single user interface, with flexible status and workflow management. You
can capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the trading
contract, you can create subordinate documents according to your supply chain processes.
1.2.1.2 Create trading contract (sales-sided)
SAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.
You can enter all information in a single user interface, with flexible status and workflow management. You
can capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the trading
contract, you can create subordinate documents according to your supply chain processes
1.2.1.3 Association
With GTM’s Position Management, you can associate material quantities with single-sided purchase and
sales contracts on an item level. The solution also supports multiple relationships between purchases and
sales. For example, you can associate one purchase order with multiple sales orders. This gives you the
information you need for long/short analysis in risk management. Linking purchasing contracts and sales
contracts at an early stage reduces possible commodity risks, while increasing the reliability of delivery
promises.
1.2.1.4 Plan expenses
SAP GTM unifies management of expenses such as freight, customs insurance, and banking charges
across applications. You can allocate expenses to a single contract or distribute them across multiple
contracts. You get a clear picture of planned, unplanned, and settled expenses, so you can see the impact
of expenses throughout a deal's life cycle.
1.2.1.5 Control profit and loss
The main document is the trading contract. This forms the basis of all purchasing, sales and expense
processes and provides you with a clear overview of all business transactions. As it takes account of
purchasing prices, sales prices and planned expenses, the trading contract allows you to perform a
profitability simulation immediately.
1.2.1.6 Initiate currency hedging
Transactions created in trading contracts can be hedged in order to eliminate or at least minimize the risk
related to volatile currency markets. The close link between the logistical transaction in the trading contract
and the financial transaction in the FSCM Treasury & Risk Management makes sure that risks are under
control even if quantities, values and deadlines are changing.
1.2.1.7 Hedge currency
Currency hedging tightly integrates the trading contract in logistics with currency hedging in financials.
Hedges can be automatically created whenever a foreign currency is used in a trading contract and are
kept up to date when quantities, values or deadlines of a deal are changed. The creation of hedges can be
limited to certain currencies or amounts exceeding a threshold.
1.2.1.8 Cash flow planning
All hedging information is available immediately for cash flow planning and accounting (investment of liquid
funds, financing of planned investments).
1.2.1.9 Create sales order and purchase order
With SAP GTM, you have control over supply chain processes. You can use predefined processes or
model your own processes. Modeled processes contain standardized process steps such as purchase and
sales orders, inbound and outbound deliveries, and invoice and billing documents. These processes can
be automated, avoiding manual steps and reducing costs.

7. 1.2.2 Global Trade Management: Back-to-Back Trading Process
BUSINESS SCENARIO MAP
Description
Trading Companies are basically huge business coordinators - they connect suppliers
with customers, then take percentage of the contract value from both sides as a
commission/finder’s fee. Essentially, trading companies make their profits by
facilitating transactions between companies. One main / core process is the back-to-
back business, which is when we have a known customer and vendor when the deal
Summary
is contracted.
Global Trade Management supports this business with a new contract management.
Key object is the Trading Contract, a new document including purchase and sales
information.
GTM enables you to plan and control profits for each deal more accurately. Fewer
automated process steps lead to a considerable reduction in costs. Potential savings
mean that implementing GTM pays off quickly. Management can use informative
reports as a reliable basis for any decision to be made. By integrating logistics,
Comments treasury and finance, SAP offers you a clear advantage over the competition, an
advantage that will be increased when additional developments are made in the areas
of reporting and commodity hedging. The scope of functionality includes
Trading Contract Management, Expense Management, Trading Execution
Management, Position Management and Risk Management.
Global Trade Management: Back-to-Back Trading Process

8. 1.2.2.1 Create trading contract (back-to-back)
ACTIVITY
SAP GTM supports the trading contract, a leading document that links purchasing, sales, and expenses.
You can enter all information in a single user interface, with flexible status and workflow management. You
can capture back-to-back contracts as well as single-sided purchasing or sales contracts. From the trading
contract, you can create subordinate documents according to your supply chain processes.
1.2.2.2 Plan expenses
ACTIVITY

9. SAP GTM unifies management of expenses such as freight, customs insurance, and banking charges
across applications. You can allocate expenses to a single contract or distribute them across multiple
contracts. You get a clear picture of planned, unplanned, and settled expenses, so you can see the impact
of expenses throughout a deal's life cycle.
1.2.2.3 Control profit and loss
ACTIVITY
The main document is the trading contract. This forms the basis of all purchasing, sales and expense
processes and provides you with a clear overview of all business transactions. As it takes account of
purchasing prices, sales prices and planned expenses, the trading contract allows you to perform a
profitability simulation immediately.
1.2.2.4 Create sales order and purchase order
ACTIVITY
With SAP GTM, you have control over supply chain processes. You can use predefined processes or
model your own processes. Modeled processes contain standardized process steps such as purchase and
sales orders, inbound and outbound deliveries, and invoice and billing documents. These processes can
be automated, avoiding manual steps and reducing costs.
1.2.3 Global Trade Management: Long Position Trading Process
Description
Global Trade Management (GTM) covers all the logistics processes required by
trading companies. All the usual purchase and sales processes are combined and
controlled from a trading perspective.
The business scenario of long positions is characterized by purchase-sided Trading
Contracts, having one vendor delivering one or more customers, which are not known
when the deal is contracted (long position). A later association of sales-sided
contracts is required. The main concern of this process is to find matching material-
vendor-combinations also in regard of other properties, such as quality, region,
Summary
trading responsibility and so on. Furthermore the postponed fulfillment very often
requires the hedging of currencies.
The Position Management, described in the process above allows the linkage
between one-sided contracts to a later time. With a linkage to the Transaction
Manager of FSCM currency hedging in form of micro or macro hedging is available.
Forward contracts can be created with a link to the logistic contracts. A fully
integration to accounting and financial processes, such as actual cash flow, is
guaranteed.
GTM enables you to plan and control profits for each deal more accurately. Fewer
automated process steps lead to a considerable reduction in costs. Potential savings
mean that implementing GTM pays off quickly. Management can use informative
reports as a reliable basis for any decision to be made. By integrating logistics,
Comments treasury and finance, SAP offers you a clear advantage over the competition, an
advantage that will be increased when additional developments are made in the areas
of reporting and commodity hedging. The scope of functionality includes
Trading Contract Management, Expense Management, Trading Execution
Management, Position Management and Risk Management.

10. BUSINESS SCENARIO MAP

11. Hedge currency
Currency hedging tightly integrates the trading contract in logistics with currency hedging in financials.
Hedges can be automatically created whenever a foreign currency is used in a trading contract and are
kept up to date when quantities, values or deadlines of a deal are changed. The creation of hedges can be
limited to certain currencies or amounts exceeding a threshold.
1.2.3.1 Hedge commodity
Commodity Futures are bought or sold at the commodity specific exchanges in order to compensate the
movements in the markets. The distinct products traded in the Trading Contract are mapped against the
generic products traded in the exchanges. The decision to buy or sell Commodity Futures is made in the
analytical risk management component of GTM within SAP Business Intelligence. The execution of the
transaction is made in FSCM Treasury & Risk Management. It is not planned to support a physical
settlement of futures, so they must be always set off before maturity.
1.2.3.2 Create purchase order
With SAP GTM, you have control over supply chain processes. You can use predefined processes or
model your own processes. Modeled processes contain standardized process steps such as purchase and
sales orders, inbound and outbound deliveries, and invoice and billing documents. These processes can
be automated, avoiding manual steps and reducing costs.
1.2.4 Global Trade Management: Short Position Trading Process
BUSINESS SCENARIO MAP
Description
Global Trade Management (GTM) covers all the logistics processes required by trading
companies. All the usual purchase and sales processes are combined and controlled
from a trading perspective.
The business scenario of short positions is characterized by sales-sided Trading
Contracts having one customer delivered by one or more vendors, which are not
known when the deal is contracted (short position). A later association of purchase-
Summary sided contracts is required. The main concern of this process is to find matching
material-vendor-combinations also in regard of other properties, such as quality,
region, trading responsibility and so on.
The comprehensive Position Management of GTM enables you to link not only one-
sided trading contracts but also their follow-on documents by its Association
Management. Using the Portfolio Management, another part of the Position
Management, the properties of the association can be defined at item level.
GTM enables you to plan and control profits for each deal more accurately. Fewer
automated process steps lead to a considerable reduction in costs. Potential savings
mean that implementing GTM pays off quickly. Management can use informative
reports as a reliable basis for any decision to be made. By integrating logistics, treasury
Comments and finance, SAP offers you a clear advantage over the competition, an advantage that
will be increased when additional developments are made in the areas of reporting and
commodity hedging. The scope of functionality includes Trading Contract Management,
Expense Management, Trading Execution Management, Position Management and
Risk Management.

12. BUSINESS SCENARIO MAP
1.2.4.1 Create sales order
ACTIVITY
With SAP GTM, you have control over supply chain processes. You can use predefined processes or
model your own processes. Modeled processes contain standardized process steps such as purchase and
sales orders, inbound and outbound deliveries, and invoice and billing documents. These processes can
be automated, avoiding manual steps and reducing costs.

13. Preview Original paying document published on :
http://expertplug.com/materials/training/global-trade-management-gtm
You can find many more full SAP training material and SAP jobs on http://expertplug.com/.
ExpertPlug is an SAP marketplace for training materials and an online community of experts. We
offer a simple way for the global SAP workforce, consulting companies and industry to market their
skills and find quality information.
As an SAP Expert, you can also market your SAP skills and make extra revenue by publishing SAP
documents on http://expertplug.com/.