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Order To Cash Cycle Group 1

The order-to-cash (O2C) process refers to a company's process for managing customer orders from receipt through payment. It involves key stakeholders such as buyers and service providers. The general process flow includes a customer placing an order, order fulfillment, shipping, invoicing, payment, and recording the payment. The document then describes the O2C process flow designed for an oil company, outlining the roles of production, human resources, materials management, quality control, finance, and marketing in the process. It also lists key performance indicators to measure the success of the O2C cycle such as meeting demand forecasts and sales targets.

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368 views4 pages

Order To Cash Cycle Group 1

The order-to-cash (O2C) process refers to a company's process for managing customer orders from receipt through payment. It involves key stakeholders such as buyers and service providers. The general process flow includes a customer placing an order, order fulfillment, shipping, invoicing, payment, and recording the payment. The document then describes the O2C process flow designed for an oil company, outlining the roles of production, human resources, materials management, quality control, finance, and marketing in the process. It also lists key performance indicators to measure the success of the O2C cycle such as meeting demand forecasts and sales targets.

Uploaded by

AswinAni
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Order to Cash Cycle

Group 1

The order-to-cash, also known as the O2C or OTC, process, refers to a company’s business
process for the entire order processing system. This is a set of business processes to manage
from sales order right through to customer payments. It helps define the success as a company
and the organizations relationships with customers. Optimizing this process eliminates
inefficiencies and can produce benefits seen throughout the entire business.

Key Stakeholders of an O2C process are buyers and service providers.

General Process flow in O2C

Customer Places an Order → Order is Fulfilled → Order is Shipped → Invoice Created and
Sent to Customer → Customer Pays Invoice → Payment is Recorded in General Ledger

Best practices of O2C business process are:

• Establish standards throughout the company


• Integrate all the systems
• Regularly monitor and evaluate the process

Process Flow Designed in BPCL

1. AI demand forecast:
The AI tool forecasts the demand using the previous data available. The MIS will be
handling the AI software and giving the data to the marketing team and also push the
data to the data base.

2. Demand forecast by the Marketing team:


The Marketing team gets the AI generated demand and also does a market research and
gets the market demand. The demand is been validated by the marketing team and there
is a demand forecasted by the marketing team which is been sent to the data base.

3. Role of Production in O2C:


The forecasted details are moved to the planning phase in the production department
for manufacturing of the product. The production plan details are been updated in the
data base. There is a decision making that comes into picture based on the demand
whether to have extra man power or not. If No then the production starts with the
existing manpower. Once the product is finished the goods are moved to storage and
the details are again put back in the data base by which the marketing team gets an
access to both the MIS and the production team. If Yes then the details are sent to the
data base from which the Human Resource team comes into the process.

4. Role of HR in O2C:
There is extra man power required there is a check done whether or not they are
available. If yes, is the existing man power skilled enough to be pushed to the
production. If yes then send in the details and move to the employees to the production
unit. If there is no enough skilled man power, training needs to be given and then they
need to be deployed to the production area. If no extra man power then the existing
employees may have to work on multiple shifts and the pay and the allowance will be
again decided by the HR.

5. Role of Materials management in O2C:


Once the demand is been sent to the production team the MM unit gets the details of
the raw materials required to manufacture the product. Procurement details from
production plan is been given to the MM and there is an inventory check. The
procurements for crude oil are sent to the refinery and the stocks are been updated in
the MIS.

6. Role of Quality Control in O2C:


Quality Control unit plays a major role in any business process. Here the initial check
is done when the crude oil enters the refinery. If the quality is as per the standards then
it is been approved else it been sent back to the Material Management team. Then once
the Finished product is ready there is a quality check done. If it as per the parameters
then it is approved by the QC and moved to the storage else it is sent back to refinery
to redo or analyse the quality variation.

7. Role of Finance in O2C:


Once there is approval from the quality control department and the marketing
department, the invoice validation will take place to check if there are any duplicates
of the same, if there are any duplicates the same will be taken care of and then approval
is given for dispatch followed by the taxation and government procedures if the refinery
is sent for export, excise duty etc will be taken care of. Once the marketing team
confirms the details of payment, the payment is received and the same is updated in the
dealer account to easily monitor if there are any pending payments or dues. The finance
department plays a major role in checking and keeping a track of all the payments and
receivables that take place in the process and also helps in updating the system on a
timely basis with the help of MIS.

8. Role of Marketing in O2C:


Order from customer or agency is taken by the sales team and the invoice is been
generated and a copy is given to the finance department and the order is pushed to store
once the invoice is been approved from finance department. Distribution of the picked
item is done the delivery note is taken and the payment is initiated and the details are
update in the data base and given to the Finance department and once the payment is
done the account is been updated and the Order to cash flow is been updated.

Key Performance Indicators:

1. AI forecasting the demand from existing data base and Market Research demand
forecast having the same numbers. This means customer base is not reduced also the
demand for the product is also not reduced.
2. Parameter check by quality of the finished product.
3. Meeting market demand target.
4. On time distribution of product.
5. Sales target met by the marketing team.

The database is the ERP where the entire O2C is been integrated. The MIS is the ERP system
which is a single point integration for the whole process and transition. The flow is through the
database which is also a user interface by which each department have an access and also have
been integrated to be connected to interact with each other. Also, all the details are reflected
throughout the system and the data is transparent in this system.

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