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Chapter 3

Chapter 3. Marketing Information Systems and the Sales Order Process. Chapter 3 Learning Objectives. Describe the unintegrated sales processes of Fitter Snacker

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Chapter 3

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  1. Chapter 3 Marketing Information Systems and the Sales Order Process

  2. Chapter 3 Learning Objectives • Describe the unintegrated sales processes of Fitter Snacker • Explain why unintegrated Sales and Marketing information systems lead to company-wide inefficiency, higher costs, lost profits, and customer dissatisfaction • Discuss sales and distribution in SAP’s R/3 system, and explain how integrated data sharing increases company-wide efficiency

  3. Chapter 3 Learning Objectives • Describe how SAP R/3 processes a standard sales order • Describe the benefits of Customer Relationship Management software, a useful extension of ERP software

  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?

  5. Problems with Fitter Snacker’s Sales process: • Sources: • Three unintegrated systems • Sales Order System • Warehouse System • Accounting System • Manual handling of transactions • Information not available in “real time”

  6. Warehouse Sales Order Pick, Pack and Ship Quote Sales Fitter Snacker’s Sales Process Receiving Returns Invoice Accounting Payment Fitter Snacker’s Sales Process

  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

  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

  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.

  10. Warehouse/Order Filling • Packing lists/shipping labels manually sorted • Small order process and large order process • Inventory managed by Access database

  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 schedule • Wait until full order can be shipped

  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

  13. 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

  14. Sales Order Processing Pre-Sales Activities Inventory Sourcing Payment Billing Delivery Sales and Distribution with ERP • SAP Sales and Distribution Process

  15. Pre-Sales Activities • Inquiry or Quote (binding) • Marketing Activities • Tracking Contacts • Sales Calls • Visits • Mailings

  16. Sales Order Processing • Activities required to record a sales order • Incorporate data from inquiry or quote • Automated Pricing and Discounting • Automate Credit Check

  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

  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

  19. Billing • Sales order data copied to invoice • Can be printed and mailed, faxed or transmitted electronically • Accounting records updated

  20. Payment • Payment may be physical check or electronic • Cash debited and customer account credited • Quick processing avoids credit check problems

  21. Sales Order Entry in SAP R/3 Sold-to party P.O. Number Required Delivery Date Material Order Quantity

  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

  23. 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

  24. Document Flow in SAP R/3 All documents related to original sales order

  25. Document Flow • Sales order process creates numerous documents • Sales Order - Invoice - Delivery - Payment - Goods Issue - RMA • Document Flow links all documents related to a sales order

  26. Discounts in SAP R/3

  27. Discount Pricing in SAP R/3 • R/3 system can be accommodate various discounting schemes • Calculates correct discount based on customer and material

  28. Integration of Sales and Accounting • Sales order processing transactions make appropriate accounting entries at time of transaction-automatically

  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

  30. 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

  31. 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

  32. 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

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