Instance-Level Reporting for Improved Process Management
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Instance-Level Reporting for Improved Process Management
174 CHAPTER 5 The Fulfi llment Process
C H A P T E R S U M M A R Y
The fulfi llment process involves the activities required to receive and respond to a customer inquiry, process a sales order, ship goods, and bill and receive pay- ment from customers. A company’s fulfi llment process is typically optimized for the type of goods it sells and the sales channels (wholesale or retail) that it utilizes. The fulfi llment process is the lifeblood of any company due to its clear focus on generating revenues and driving
requirements for many other processes such as production and purchasing. In addition, the company must make certain that all revenues resulting from the fulfi llment process are prop- erly refl ected in the fi nancial
statements and that billing and receiving payments from customers are carried out effi ciently.
The fulfi llment process consists of fi ve key steps: (1) receipt of a cus- tomer inquiry or RFQ, (2) preparation of a quotation in response to the inquiry, (3) sales order processing, (4) shipping, and (5) billing and payment
processing. Many types of data are required to execute these steps properly and to account for the goods and fi nancial impact of the fulfi llment process.
Sales area, shipping point, and credit control area are categories of organi zational data that are unique to the fulfi llment process. A sales area is a combination of three additional organizational data: sales organization,
distri- bution channel, and division. The confi guration of these data for each company is a refl ection of the industry, the product, and any customer requirements that a company must meet.
Figure 5-55: Example of standard analysis
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Key Terms 175
In contrast, the material master data and customer master data are more operational in scope. These data are used to execute the various steps of the fulfi llment process and can vary among customers, plants, and sales
organiza- tions to meet the specifi c requirements of those situations.
Customer master data are critical to ensure that (1) orders are shipped to the correct location, (2) customers have suffi cient credit to pay for orders, and (3) invoices are sent to the proper accounts payable group for prompt payment. In addition, pricing conditions are master data that are maintained for specifi c materials, quantities, or individual customers, depending on the specifi c con- tractual and business conditions.
Transaction data are collected at each step of the fulfi llment process to enable process and instance-level reporting for improved process management. Multiple lists and reports are generated to provide management with
operational visibility into every aspect of the fulfi llment process.
K E Y T E R M S
Accounting data
Availability check
Backward scheduling
Bill-to party
Contracts
Credit control area
Credit management master record
Customer master data
Customer-material information record
Delivery document
Distribution chain
Distribution channel
Division
Document fl ow
General data
Inquiry
Item category
Outline agreements
Output conditions
Partner functions
Payer
Post goods issue
Pricing conditions
Quotation
Sales area
Sales area data
Sales order
Sales organization data
Sales organizations
Sales plant data
Schedule lines
Scheduling agreement
Shipping point
Ship-to party
Sold-to party
Transfer of requirements
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176 CHAPTER 5 The Fulfi llment Process
R E V I E W Q U E S T I O N S
- Briefl y discuss the organizational levels relevant to the fulfi llment pro- cess. Be sure to explain the relationships among the various levels.
- What is a distribution chain? How is it relevant to the fulfi llment process?
- Explain the relationships among the following organizational levels: sales organization, distribution channel, division, and sales area.
- What is a credit control area? Explain the difference between a centralized and a decentralized model of credit control areas.
- Briefl y discuss the master data relevant to the fulfi llment process.
- Explain the relationship between the master data and organizational data in the fulfi llment process.
- Describe, with examples, the data in the three segments of a customer master.
- At what organizational levels are the material master defi ned as it relates to the fulfi llment process? Provide examples of data in the material master.
- Explain the role of each partner function in the fulfi llment process.
- What is the purpose of a customer-material info record? Provide exam- ples of the types of data it contains.
- How is pricing determined in the fulfi llment process? Provide examples of data relevant to pricing.
- What is the credit management master record? How is it related to the customer master record?
- Describe the steps in the fulfi llment process in terms of triggers, data, steps, and outcomes.
- Describe the structure of the following documents
- Sales order
- Delivery document
- Billing document
- Explain the relationship between each of the following pairs of key elements of the fulfi llment process:
- Quotations and sales orders
- Sales orders and deliveries
- Deliveries and transfer orders
- Deliveries and billing documents
- Explain how the steps in the fulfi llment process impact the general ledger accounts.
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Exercises 177
- How do companies manage payments that are less than the amount of the invoice?
- Briefl y describe the credit management process. Which steps of the fulfi ll- ment process are relevant to credit management?
- Briefl y explain how the fulfi llment process is integrated with other processes.
- What is a document fl ow?
- Provide examples of works lists and online lists associated with the fulfi ll- ment process.
- Provide an example of reporting using standard analysis in fulfi llment. Make certain to include the concept of drill down.
E X E R C I S E S
Exercises for this chapter are available on WileyPLUS.
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Instance-Level Reporting for Improved Process Management
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