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Fitter Snacker’s
Sales Process
Receiving
Returns Accounting Invoice
Payment
Sales Quotations and Orders
• Sales call
• Hand-written quote on 3 sheet form faxed to sales
office
• Customer calls 800 number to place order
Sales Quotations and Orders
Problems
• Salesperson error in preparing quote manually
• Customer call reaches sales office before faxed
quote
• Faxed copy is illegible
• Delivery data requires call to warehouse
• Warehouse provides delivery date estimate
Sales Quotations and Orders
Problems
• Initial credit check uses paper process
• Credit check for established customers using
accounting printout that may be a week old.
Warehouse/Order Filling
• Packing lists/shipping labels manually
sorted
• Small order process and large order process
• Inventory managed by Access database
Warehouse/Order Filling
Problems
• Picker may not report breaking case down
for small order
• Perishable product requires low inventories
• Out of stock decision:
– Partial shipment
– Change production schedule
– Wait until full order can be shipped
Accounting and Invoicing
• Sales order data transferred by disk to
PeachTree program 3 times per week
• Clerks must make manual adjustments for
partial shipments and other errors.
• Invoices may not always match actual
product shipped
Payment and Returns Problems
• Customers don’t always include copy of
invoice with payment
• Invoice may not match payment-
reconciliation required
• Returned Material –Paper process,
sometimes no RMA #
• Improper “dunning” letters
Sales and Distribution with ERP
• SAP Sales and Distribution Process
Payment
Billing Delivery
Pre-Sales Activities
• Inquiry or Quote (binding)
• Marketing Activities
– Tracking Contacts
• Sales Calls
• Visits
• Mailings
Sales Order Processing
• Activities required to record a sales order
• Incorporate data from inquiry or quote
• Automated Pricing and Discounting
• Automate Credit Check
Inventory Sourcing
• Check of inventory, orders and production
to see if order can be delivered when
customer desires
• Includes shipping and considers
weekends/holidays
Delivery
• Releasing documents to warehouse to
initiate pick, pack and ship
• Sequenced and grouped for warehouse
operation efficiency
• Materials Management module carries out
picking, packing and shipping
Billing
• Sales order data copied to invoice
• Can be printed and mailed, faxed or
transmitted electronically
• Accounting records updated
Payment
• Payment may be physical check or
electronic
• Cash debited and customer account credited
• Quick processing avoids credit check
problems
Sales Order Entry in SAP R/3
Sold-to party
P.O. Number
Required Delivery Date
Material
Order Quantity
Master Data
• Master data is stored in a central database
that is accessed by all modules
• Customer Master Data and Material Master
Data are primary data sources for Sales
Order Processing
Organizational Structures
• Organizational structures allow the R/3
system to control the sales order process –
pricing, minimum orders, etc.
• Distribution Channel defines the way that
materials move between the company and
customers
– Wholesale Distribution Channel
– Direct Sales Channel
Document Flow in SAP R/3
Sold-to party
P.O. Number
Required Delivery Date
Material
Order Quantity
Discount Pricing in SAP R/3
• R/3 system can be accommodate various
discounting schemes
• Calculates correct discount based on
customer and material
Integration of Sales and
Accounting
• Sales order processing transactions make
appropriate accounting entries at time of
transaction-automatically
Customer Relationship
Management (CRM)
• ERP provides means to manage all data relating to
a customer to improve the quality of the
interaction
• CRM Activities include:
– One-to-One Marketing
– Sales Force Automation
– Sales Campaign Management
– Marketing Encyclopedias
– Call Center Automation
CRM Benefits
• Lower Costs due to better use of sales and
marketing resources
• Higher Revenue by improving the
effectiveness of marketing efforts
• Improved strategy and performance
measurement by changing management and
staff focus
Chapter Summary
• Fitter Snacker’s unintegrated information
systems lead to inefficiencies and reduced
customer satisfaction
• An ERP system like SAP’s R/3 views sales
as a process, providing timely, accurate data
and automating error-prone tasks
Chapter Summary
• Configuration decisions must be made
during installation to match the company’s
practices and policies
• The ERP system’s central database
maintains master data used by all areas of
the company
• CRM software builds on ERP data to
improve marketing effectiveness