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Chapter 6: Integrated Processes

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1 Chapter 6: Integrated Processes
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

2 Outline Integrated Processes Additional Intra-Company Processes
Fulfillment + procurement + production Only process supported by ES; no manual process Additional Intra-Company Processes Extended (Inter-Company) Processes Exercise Using Simulated SAP ERP Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

3 Integrated Processes Key Concepts and Assumptions Conceptual Framework
Regarding fulfillment, procurement, production Conceptual Framework Physical Flow Document and Data Flow Information Flow NO Financial Impact Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

4 Assumptions regarding processes
Fulfillment Sell from stock Materials are available to fill customer orders Procurement Procure to stock Production Make to stock Necessary raw materials are available Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

5 New assumptions Fulfillment Procurement Production
Sell from stock -> sell to order Materials are available to fill customer orders -> materials may not be available Procurement Procure to stock -> procure to order Production Make to stock -> make to order Necessary raw materials are available -> may not be available Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

6 Physical Flow 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 Magal and Word | Essentials of Business Processes and Information Systems | © 2009

7 Physical flow The Fulfillment Process: initial Steps
Review Inventory of Finished Goods The Production Process: initial Steps Review Inventory of Raw Materials The Procurement Process The Production Process resumed and completed The Fulfillment Process resumed and completed Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

8 Integrated Process Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

9 Customer Purchase Order
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

10 Step 1: Fulfillment process
Assume inquiry and quotation Receive PO 100 standard skateboards (STSB2000) Create Sales Order in the ES Prepare shipment Do we have enough in inventory? Check stock status Previous assumption: stock is available Inventory report Stock requirements list (SRL) Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

11 Inventory Report – STSB200
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

12 SRL STSB2000 – with Sales Order
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

13 Step 1: Fulfillment process
Assume inquiry and quotation Receive PO 100 standard skateboards (STSB2000) Create Sales Order in the ES Prepare shipment Do we have enough in inventory? Check stock status Not enough material - what next? Can’t continue with fulfillment (prepare shipment, etc.) Need to acquire material STSB 2000 How does SSB acquire STSB 2000 (Buy or make?) Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

14 Step 2: Production Process
Create planned order How many to request? (100) Convert to production order How many to produce? Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

15 SRL STSB2000– with Planned Order
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

16 SRL STSB2000– with Production Order
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

17 Step 2: Production Process
Create planned order Convert to production order Issue raw material to production Do we have enough? Check stock status Inventory reports Stock requirements list for each material Use truck assembly (STTA 2100) as an example Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

18 Inventory Report - Raw Materials
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

19 Step 2: Production Process
Create planned order Convert to production order Issue raw material to production Do we have enough? Check stock status Inventory reports Stock requirements list for each material Not enough material - what next? Can’t continue with production Need to acquire raw material How does SSB acquire these? Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

20 Step 3: Procurement Create requisition Create purchase order
For how many? Create purchase order Goods receipt Example: Track progress of truck assembly Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

21 SRL STTA2100 – after P Req Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

22 SRL STTA after PO Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

23 SRL STTA2100 - after production
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

24 Step 3: Procurement Create requisition Create purchase order
Goods receipt Now we have material to produce STSB2000 Return to production process Continue with the rest of the procurement process Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

25 Step 4: Production Process resumed
Create planned order Convert to production order Issue raw material to production Do we have enough? Yes, we just completed procuring them Produce product Move to finished goods Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

26 SRL STSB2000 – After Production
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

27 Step 4: Production Process completed
Create planned order Convert to production order Issue raw material to production Do we have enough? Yes, we just completed procuring them Produce product Move to finished goods Done with production Now back to fulfillment Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

28 Step 5: Fulfillment process resumed
Assume inquiry and quotation Receive PO 100 standard skateboards (STSB2000) Create Sales Order in the ES Prepare shipment Do we have enough in inventory? Yes, we just completed producing them Pick and pack Send shipment Send invoice Receive payment Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

29 SRL STSB2000 – During Delivery
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

30 SRL STSB2000 - After Delivery
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

31 Outline Integrated Processes Additional Intra-Company Processes
Fulfillment + procurement + production Only process supported by ES; no manual process Additional Intra-Company Processes Extended (Inter-Company) Processes Exercise Using Simulated SAP ERP Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

32 Additional Intra-Company Processes
Human Capital Management Asset Management Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

33 Human Capital Management Process
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

34 Asset Management Process
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

35 Extended (Inter-Company) Processes
Supply Chain Management (SCM) Supplier Relationship Management (SRM) Product Lifecycle Management (PLM) Customer Relationship Management (CRM) Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

36 Plan-to-Produce Process in SCM
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

37 Source-to-Settle Process in SRM
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

38 Idea-to-Market Process in PLM
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

39 Demand-to-Order Process in CRM
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

40 Exercise Using Simulated SAP
The exercises will take you through the following steps that have been discussed in this chapter: receive a customer inquiry create a quotation receive a customer purchase order create a sales order review the inventory of finished goods create a planned order convert the planned order to a production order review the inventory of raw materials create a purchase requisition for a number of raw materials convert the requisition to a purchase order receive goods from the vendor Magal and Word ! Essentials of Business Processes and Information Systems | © 2009


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