7/30/2019 Su Pot 27255211190

1/32

1

Chapter 3

Marketing Information Systems

and the Sales Order Process

7/30/2019 Su Pot 27255211190

2/32

2

Chapter 3 Learning Objectives

Describe the unintegrated sales processes of Fitter

Snacker

Explain why unintegrated Sales and Marketinginformation systems lead to company-wide

inefficiency, higher costs, lost profits, and

customer dissatisfaction

Discuss sales and distribution in SAPs R/3

system, and explain how integrated data sharing

increases company-wide efficiency

7/30/2019 Su Pot 27255211190

3/32

3

Chapter 3 Learning Objectives

Describe how SAP R/3 processes a standard sales

order

Describe the benefits of Customer RelationshipManagement software, a useful extension of ERP

software

7/30/2019 Su Pot 27255211190

4/32

4

Marketing Personnel make

decision on: What products should we produce?

How much of each product should we

produce? How are our products best promoted and

advertised?

How should our products be distributed? What price should we charge?

7/30/2019 Su Pot 27255211190

5/32

5

Problems with Fitter Snackers

Sales process: Sources:

Three unintegrated systems

Sales Order System

Warehouse System

Accounting System

Manual handling of transactionsInformation not available in real time

7/30/2019 Su Pot 27255211190

6/32

6

Fitter Snackers Sales Process

Quote

Quote

Sales

Order

Sales

OrderPick,

Pack and

Ship

Pick,

Pack and

Ship

Invoice

Invoice

Payment

Payment

Returns

Returns

Sales

Warehouse

Accounting

Receiving

Fitter Snackers

Sales Process

7/30/2019 Su Pot 27255211190

7/32

7

Sales Quotations and Orders

Sales call

Hand-written quote on 3 sheet form faxed to sales

office Customer calls 800 number to place order

7/30/2019 Su Pot 27255211190

8/32

8

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

7/30/2019 Su Pot 27255211190

9/32

9

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.

7/30/2019 Su Pot 27255211190

10/32

10

Warehouse/Order Filling

Packing lists/shipping labels manually

sorted

Small order process and large order process

Inventory managed by Access database

7/30/2019 Su Pot 27255211190

11/32

11

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 scheduleWait until full order can be shipped

7/30/2019 Su Pot 27255211190

12/32

12

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

7/30/2019 Su Pot 27255211190

13/32

13

Payment and Returns Problems

Customers dont always include copy of

invoice with payment

Invoice may not match payment-

reconciliation required

Returned Material Paper process,

sometimes no RMA #

Improper dunning letters

7/30/2019 Su Pot 27255211190

14/32

14

Sales and Distribution with ERP

SAP Sales and Distribution Process

Pre-Sales ActivitiesSales Order Processing

DeliveryBilling

Inventory Sourcing

Payment

7/30/2019 Su Pot 27255211190

15/32

15

Pre-Sales Activities

Inquiry or Quote (binding)

Marketing Activities

Tracking Contacts

Sales Calls

Visits

Mailings

7/30/2019 Su Pot 27255211190

16/32

16

Sales Order Processing

Activities required to record a sales order

Incorporate data from inquiry or quote

Automated Pricing and Discounting

Automate Credit Check

7/30/2019 Su Pot 27255211190

17/32

17

Inventory Sourcing

Check of inventory, orders and production

to see if order can be delivered when

customer desires Includes shipping and considers

weekends/holidays

7/30/2019 Su Pot 27255211190

18/32

18

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

7/30/2019 Su Pot 27255211190

19/32

19

Billing

Sales order data copied to invoice

Can be printed and mailed, faxed or

transmitted electronically

Accounting records updated

7/30/2019 Su Pot 27255211190

20/32

20

Payment

Payment may be physical check or

electronic

Cash debited and customer account credited

Quick processing avoids credit check

problems

7/30/2019 Su Pot 27255211190

21/32

21

Sales Order Entry in SAP R/3

Sold-to party

P.O. Number

Required Delivery Date

Material

Order Quantity

7/30/2019 Su Pot 27255211190

22/32

22

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

7/30/2019 Su Pot 27255211190

23/32

23

Organizational Structures

Organizational structures allow the R/3system to control the sales order process

pricing, minimum orders, etc. Distribution Channel defines the way that

materials move between the company andcustomersWholesale Distribution Channel

Direct Sales Channel

7/30/2019 Su Pot 27255211190

24/32

24

Document Flow in SAP R/3

All documents related to

original sales order

7/30/2019 Su Pot 27255211190

25/32

25

Document Flow

Sales order process creates numerous

documents

- Sales Order - Invoice

- Delivery - Payment

- Goods Issue - RMA

Document Flow links all documents relatedto a sales order

7/30/2019 Su Pot 27255211190

26/32

26

Discounts in SAP R/3

7/30/2019 Su Pot 27255211190

27/32

27

Discount Pricing in SAP R/3

R/3 system can be accommodate various

discounting schemes

Calculates correct discount based oncustomer and material

7/30/2019 Su Pot 27255211190

28/32

28

Integration of Sales and

Accounting Sales order processing transactions make

appropriate accounting entries at time of

transaction-automatically

7/30/2019 Su Pot 27255211190

29/32

29

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

7/30/2019 Su Pot 27255211190

30/32

30

CRM Benefits

Lower Costs due to better use of sales and

marketing resources

Higher Revenue by improving theeffectiveness of marketing efforts

Improved strategy and performance

measurement by changing management andstaff focus

7/30/2019 Su Pot 27255211190

31/32

31

Chapter Summary

Fitter Snackers unintegrated information

systems lead to inefficiencies and reduced

customer satisfaction An ERP system like SAPs R/3 views sales

as a process, providing timely, accurate data

and automating error-prone tasks

7/30/2019 Su Pot 27255211190

32/32

32

Chapter Summary

Configuration decisions must be madeduring installation to match the companys

practices and policies The ERP systems central database

maintains master data used by all areas ofthe company

CRM software builds on ERP data toimprove marketing effectiveness