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Magal and Word | Essentials of Business Processes and Information Systems | 2009 1 Chapter 4: The Fulfillment Process

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Outline Magal and Word | Essentials of Business Processes and Information Systems | 2009 2 A Basic Fulfillment Process Role of Enterprise Systems in the Fulfillment Process Exercise Using Simulated SAP

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A basic fulfillment process Magal and Word | Essentials of Business Processes and Information Systems | 2009 3 Definition Order to cash Quote to cash Inquiry to cash All the steps needed to fill a customer order Key concepts and assumptions Conceptual Framework Physical flow Data and Document Flow Information Flow Financial Impact

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Key Concepts and Assumptions Magal and Word | Essentials of Business Processes and Information Systems | 2009 4 Sell-from-stock High volume, low cost products Little choice for buyer Example: iPod Configure-to-order Low volume, high cost products Base model + options Example: computer (Dell, Mac) SSB uses sell from stock

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Physical Flow Magal and Word | Essentials of Business Processes and Information Systems | 2009 5 What is the trigger? What are the steps? What is the purpose of each step? Who is involved in each step? How is communication and coordination accomplished

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Magal and Word | Essentials of Business Processes and Information Systems | 2009 6 A Basic Fulfillment Process

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Document Flow Magal and Word | Essentials of Business Processes and Information Systems | 2009 7 Customer Inquiry Quotation Customer Purchase Order Sales Order Picking Document Packing Document Customer Invoice Customer Payment Key questions regarding documents What is the purpose? What are the key data? General: Who, when, what, where Process / step specific: varies How does data change across the process? Who is responsible for the data?

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Customer Inquiry Magal and Word | Essentials of Business Processes and Information Systems | 2009 8

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Quotation Magal and Word | Essentials of Business Processes and Information Systems | 2009 9

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Customer Purchase Order Magal and Word | Essentials of Business Processes and Information Systems | 2009 10

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Sales Order Magal and Word | Essentials of Business Processes and Information Systems | 2009 11

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Picking Document Magal and Word | Essentials of Business Processes and Information Systems | 2009 12

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Packing List Magal and Word | Essentials of Business Processes and Information Systems | 2009 13

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Customer Invoice Magal and Word | Essentials of Business Processes and Information Systems | 2009 14

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Information Flow Magal and Word | Essentials of Business Processes and Information Systems | 2009 15 Instance-Level Information Status of a customer inquiry / order Has the order been acted on? Which step of the process is it in? Have goods been shipped? When? Where are the goods? If not, when can we expect shipment? If shipped, has an invoice been sent? Has payment been received? Process-Level Information How well is the process doing? How much time does it take on average? Per material? Per customer? Which customers are prompt in payment? Who habitually pay late? What do we sell most? Which customer(s)?

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Financial Impact of the Fulfillment Process Magal and Word | Essentials of Business Processes and Information Systems | 2009 16

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Financial Impact Magal and Word | Essentials of Business Processes and Information Systems | 2009 17 Impact on balance sheet and income statement accounts Example: Customer orders $500 in materials. Process stepB/SI/S Customer inquiry Quotation Customer PO Picking Packing Shipment Customer Invoice Customer Payment

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Role of Enterprise Systems in the Fulfillment Process Magal and Word | Essentials of Business Processes and Information Systems | 2009 18 Execute the Process Create Quotation Create Sales Order Prepare Shipment Send Shipment Create and send Invoice Receive and process payment Capture and Store Process Data Monitor the Process Instance-Level Information Flow Process-Level Information Flow

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Enterprise System in Fulfillment Magal and Word | Essentials of Business Processes and Information Systems | 2009 19

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Customer Order (not in the book) Magal and Word | Essentials of Business Processes and Information Systems | 2009 20

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Delivery Due List Magal and Word | Essentials of Business Processes and Information Systems | 2009 21

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Picking document (Not in book) Magal and Word | Essentials of Business Processes and Information Systems | 2009 22

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Billing Due List Magal and Word | Essentials of Business Processes and Information Systems | 2009 23

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Process monitoring (Information flow) Magal and Word | Essentials of Business Processes and Information Systems | 2009 24 Instance level status information Status of a customer order (order history) Process level aggregate information How is the process doing?

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Order history Completed Order Magal and Word | Essentials of Business Processes and Information Systems | 2009 25

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Order history Payment Pending Magal and Word | Essentials of Business Processes and Information Systems | 2009 26

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Process Level Information Magal and Word | Essentials of Business Processes and Information Systems | 2009 27

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Exercise Using Simulated SAP Magal and Word | Essentials of Business Processes and Information Systems | 2009 28 The exercises will take you through the following steps that have been discussed in this chapter: receive customer inquiry create quotation receive a customer purchase order create a sales order prepare the shipment (pick and pack) send the shipment (post goods issue) create a customer invoice receive a customer payment