The Fulfillment Process

Lecture Introduction A few state and OFBiz status notes Behavioral interaction diagrams Sequence and state chart The sales process in detail

A Review of UML Diagrams

Introduction to State We have talked about a system’s structure through class diagrams We have described system behaviors through use case and activity diagrams Some objects and their processes have a state

UML And State An snapshot of attribute values and relationships between objects at an instance in time A purchase order is awaiting approval A purchase order is approved Some attribute do not affect state Events take place causing state transitions And order is received triggering accounting transactions to be posted

State and the Sales Objects Four parts to the order-to-cash process Ordering ORDER_STATUS Shipping SHIPMENT_STATUS Invoicing INVOICE_STATUS Payment PMNT_STATUS

ORDER_STATUS

SHIPMENT_STATUS

INVOICE_STATUS

PAYMENT_STATUS

Magic Occurs Here

Steps in the Fulfillment process The fulfillment process involves Creating customers Creating sales orders Receiving purchase orders from customers Shipping orders Sending and processing invoices Processing payments Managing credit

Master Data (Customer) Contains all information about a customer Every customer must have a master record General data (name, address, account number) Contact information Shipping information, e-mail contact, etc. Login information (access to catalog) A store

Master Data (Material) Remember that vendors sell us materials These are the same materials discussed in the previous chapter Trading goods We make materials for resale too Finished goods We don’t work with them here but there are also consignment goods

The Fulfillment Process Presales activities (these are optional) Quotations Outline agreements Sales activity Generate sales order Shipping Picking documents, packing, delivery, goods issue Invoicing and payment

Pre-sales Activities Sales support and CRM Quotation It’s our offer to the customer to supply selected products at a specific price with specific delivery instructions

Sales Order It’s the acceptance of binding contract between our company and the customer Created though Internet orders Existing contracts Sales quotations (just discussed)

Sales Order (Contents) Customer specific Contains customer information, pricing, and material information Order specific Pricing Shipping point Material information Delivery information Credit limit check MRP transfer

Delivery Scheduling Orders don’t necessarily ship immediately We must often request a delivery date This delivery date must be “possible” The system helps perform the delivery scheduling and availability determination Scheduling is performed using backward and forward scheduling rules More in the topic of warehouse management

Shipping and Routing Information Determines the shipping point for each line item (material) An order can be shipped from multiple warehouses The route determination is used to define the transit time from the shipping point to the destination We will not talk much about route determination

Order Pricing Contains all pricing information for each specific material Taxes and freight can be calculated automatically based on internal rules

Shipping (Deliver) The process begins when the sales order delivery documents are created The process is make up of Picking Packing Loading Confirmation (post goods issue) More detail on this process later when we get to warehouse management

Picking Quantities are based on delivery note Assigned date when picking should begin Supports serial number/lot number tracking and batch management

Packing and Loading Identifies and updates accounts associated with returnable packaging We will not work with returnable packaging Tracks the packed product by container Insures weight/volume restrictions are enforced All packed items are assigned to the required means of transportation

Shipping (steps) Generates packing proposal Calculates weight and volume Checks scheduling Considers partial deliveries Updates route assignment Assigns picking location Updates sales order Determines batches Quality check (if needed)

Goods Issue It’s the change of ownership of our products from our company (Inventory) to their company (FI) Goods are transferred from inventory to cost of goods sold GL accounts are updated The shipping process ends

Billing (Introduction) The data is gathered from the sales order and delivery documents Types of billing Order-based billing Delivery-based billing Outcome is the customer’s invoice Credit status is updated

Common Billing Methods Delivery-based 1 invoice per delivery Collective-based 1 invoice for several deliveries Split invoicing Multiple invoices for one delivery

Billing Documents When posted, Accounts receivable is debited Revenue accounts are credited The document is passed to financial accounting (FI) awaiting payment

Payment Payment is the final step in the sales order process, this step is managed by the Financial Accounting department. Final payment includes: Posting payments against invoices Reconciling differences between payment and invoice Payment will create a posting clearing the liability in the A/R account and increases your bank account