1. The sales order and purchasing processes MIS2101: Management Information Systems Based on material developed by C.J. Marselis

2. 2 Sales order process: The sales organization A sales organization is responsible for negotiating sales conditions and distributing goods and services It represents the top organizational level to which you sum sales figures

3. 3 Shipping Point A fixed location that carries out shipping activities. One plant can have multiple shipping points. A shipping point can serve multiple plants. Lead times for determining delivery dates are associated with shipping points.

4. 4 Customer Order Cycle Pre-Sales Activities Sales Order Processing Delivery Billing Inventory Sourcing Payment

5. 5 Pre-Sales Activities Sales Order Processing Pre-sales Customer databases Contracts Sales order processing Creation of a document regarding a sale Customer, materials ordered, delivery information, billing information, etc. Information is retrieved from Master (static) Data whenever possible

6. 6 Inventory Sourcing Getting the “stuff” for delivery Check availability (inventory) Where to get the product From the warehouse From the production floor From an external supplier

7. 7 Delivery It isn’t physical delivery – remember systems deal in data Provide delivery and packing information Goods issue Updating internal accounting and inventory data

8. 8 Billing and Payment Billing The invoice Created from sales order and delivery document Debits the customer’s accounts receivable and credits revenue Payment Posting payments against invoices Reconcile differences

9. 9 The Whole Process Quotation Contact Scheduling agreement Order DeliveryGoods issue Shipment Invoice Accounts Receivable Material Stock Account Inquiry Contract Pre-Sales Sales Order Processing Sales Order Processing Delivery/ Transportation Delivery/ Transportation Transfer Order Billing Payment/ Accounting Payment/ Accounting Materials Management Production Planning Inventory Sourcing Sales Information System

10. 10 Document flow Order Delivery Invoice Accounting The sales order process consists of a chain of steps Each step in the process causes the creation of a document used to track the progress of the order All changes to documents (sales orders, delivery, etc.) create a document to keep track of the changes Document Flow in a Sales Order: Order Delivery terms Transfer of goods Invoice Accounting

11. 11 Creating a customer order Sold-to party 2540-00 ItemMaterialQuantity 11400-500-00 30 21400-100-00 20 Material Master DB Customer Master DB The Order Remember, Master Databases are used by everyone in the company to ensure uniformity of data! An order is created from the Master Data AND the transaction data

12. 12 Shipping and Delivery The delivery date is a function of Time for inventory sourcing Time to “load the truck” (or train, etc.) Time in transit There are multiple ways to ship Air, train, truck Backward scheduling from a delivery date Forward scheduling to a delivery date

13. 13 Billing and Payment More complex than you might think You can have Multiple invoices per delivery Multiple deliveries per invoice Multiple payments per invoice Multiple invoices covered by a single payment

14. 14 The purchasing process In the sales process, the organization is the supplier In the purchasing process, the organization is the buyer The movement of goods from supplier to the end customer is the “supply chain” Supplier  Organization  Customer How do you think the supply chain relates to the value chain?

15. 15 Purchasing Process Create Purchase Requisition Where analysis/vendor selection occurs Create Purchase Order from Requisition Requisition items can be used to generate multiple purchase orders Create Goods Receipt Create Invoice Receipt Post Outgoing Payment There is no purchasing “document flow”

16. 16 Purchasing Process Goods Receipt Pay Invoice Purchase Requisition Purchase Order Invoice Receipt Internal Demand Customer Vendor

17. 17 Vendor Master Data Created for every vendor General data Name, address, phone number Company code data Accounting data: currency, payment terms Purchasing data Contacts, delivery terms Vendor data is like a company’s CRM data in reverse!