The “Order-to-Cash” Process: Part I, Marketing and Sales (M/S) Chapter 10 The “Order-to-Cash” Process: Part I, Marketing and Sales (M/S) Copyright © 2004 South-Western. All rights reserved.

Learning Objectives To describe the business environment for the M/S process To analyze the effect of enterprise systems and other technologies commonly used in traditional implementations for the M/S process To analyze how the integration provided by enterprise systems and e-business add-ons can improve effectiveness and efficiency of the M/S process Copyright © 2004 South-Western. All rights reserved.

Learning Objectives (cont’d) To describe the logical and physical characteristics of the M/S process and its support of management decision-making To describe and analyze controls typically associated with the M/S process Copyright © 2004 South-Western. All rights reserved.

The Order-to-Sales Process Copyright © 2004 South-Western. All rights reserved. FIGURE 10.1

A Horizontal Perspective of the M/S System NOTES: 1. The pyramids represent the organizational structures within which the sales order, credit, and shipping departments reside. 2. The horizontal lines numbered 1–9 represent information flows generated by the M/S. As mentioned earlier, these information flows support the repetitive work routines of the four departments depicted. A short explanation of each flow is provided in Table 10.1. Copyright © 2004 South-Western. All rights reserved. FIGURE 10.2

M/S Horizontal Information Flows Customer places an order. Sales order department requires credit approval from credit department. Credit department informs sales order department of decision. Sales order department acknowledges the customer order. Sales order department notifies shipping department of the sales order. Copyright © 2004 South-Western. All rights reserved.

M/S Horizontal Information Flows (cont’d) Sales order department notifies warehouse, revenue collection process, payroll process, and general ledger. Warehouse sends completed picking ticket to shipping department. Shipping department informs sales order department of shipment. Shipping department informs carrier and revenue collection process of shipment. Copyright © 2004 South-Western. All rights reserved.

A Vertical Perspective of the M/S Process NOTES: 1. This figure represents a partial organization chart of the marketing function. 2. The broken lines represent vertical information flows (often in the form of management reports) based on data generated or captured by the M/S process. Copyright © 2004 South-Western. All rights reserved. FIGURE 10.3

The M/S Process—Context Diagram Copyright © 2004 South-Western. All rights reserved. FIGURE 10.4

The M/S Process—Level 0 Diagram Copyright © 2004 South-Western. All rights reserved. FIGURE 10.5

Dissemination Documents Picking ticket Authorizes warehouse to “pick” goods, send to shipping. Has warehouse location. Packing slip Attached to outside of carton; identifies customer and goods. Customer acknowledgement Notifies customer of acceptance of order; shipping date for order. Copyright © 2004 South-Western. All rights reserved.

Dissemination Documents (cont’d) Sales order notification Internal form sent to billing department re pending shipment Bill of lading Contract between shipper and carrier Carrier gets copy, shipper keeps copy. Copyright © 2004 South-Western. All rights reserved.

Logical Data Descriptions Marketing data Customer master data Inventory master data Accounts receivable master data Sales order master data Completed picking ticket file Shipping notice file Copyright © 2004 South-Western. All rights reserved.

Sample SAP Sales Order Entry Screen Copyright © 2004 South-Western. All rights reserved. FIGURE 10.6

M/S Process Flowchart FIGURE 10.7a Copyright © 2004 South-Western. All rights reserved. FIGURE 10.7a

M/S Process Flowchart (cont’d) Copyright © 2004 South-Western. All rights reserved. FIGURE 10.7b

M/S Process Flowchart (cont’d) Copyright © 2004 South-Western. All rights reserved. FIGURE 10.7c

Modified M/S Process TI 10.3 BCL = Sales order bar code label (one per carton) BCT = Bar code ticket (one for each product item) SO = Sales order Copyright © 2004 South-Western. All rights reserved. TI 10.3

Sample SAP Sales Analyses Report FIGURE 10.8 Copyright © 2004 South-Western. All rights reserved.

Control Matrix for the M/S Process Explanation of cell entries – see Exhibit 10.1. KEY: Possible operation process goals are (not intended to be all-inclusive): A—Provide timely responses to customer inquiries. B—Provide timely acknowledgment of customer orders. C—Provide assurance of customer’s creditworthiness. D—Provide timely shipment of goods to customers. E—Comply with the fair pricing requirements of the Robinson-Patman Act. IV = input validity IC = input completeness IA = input accuracy UC = update completeness UA = update accuracy Copyright © 2004 South-Western. All rights reserved. FIGURE 10.9a

Control Matrix for the M/S Process Explanation of cell entries – see Exhibit 10.1. KEY: Possible operation process goals are (not intended to be all-inclusive): A—Provide timely responses to customer inquiries. B—Provide timely acknowledgment of customer orders. C—Provide assurance of customer’s creditworthiness. D—Provide timely shipment of goods to customers. E—Comply with the fair pricing requirements of the Robinson-Patman Act. IV = input validity IC = input completeness IA = input accuracy UC = update completeness UA = update accuracy Copyright © 2004 South-Western. All rights reserved. FIGURE 10.9b

The M/S Process—Diagram 1 Copyright © 2004 South-Western. All rights reserved. FIGURE 10.10

The M/S Process—Diagram 2 Copyright © 2004 South-Western. All rights reserved. FIGURE 10.11

The M/S Process—Diagram 3 Copyright © 2004 South-Western. All rights reserved. FIGURE 10.12

Entry-Relationship (E-R) Diagram for the M/S Process Copyright © 2004 South-Western. All rights reserved. FIGURE 10.13

Selected Relational Tables (Partial) for the M/S Process FIGURE 10.14 Copyright © 2004 South-Western. All rights reserved.