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Chapter 3 Notes

ERP

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26 views4 pages

Chapter 3 Notes

ERP

Uploaded by

ibraheem.szd
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 3

## Concepts in Enterprise Resource Planning


### Fourth Edition
### Chapter Three: Marketing Information Systems and the Sales Order Process

#### Objectives

By the end of this chapter, you will learn:

- How the fictitious company Fitter Snacker manages its sales processes without
integration.
- The negative impacts of disjointed Marketing and Sales systems on efficiency,
costs, profits, and customer satisfaction.
- How SAP ERP improves company-wide efficiency through integrated data
sharing in sales and distribution.
- The process of handling a standard sales order in SAP ERP.
- The benefits of using Customer Relationship Management (CRM) software.

### Introduction

**Fitter Snacker (FS)** is a fictional company that makes healthy snack bars. It
faces challenges due to its fragmented information systems, especially between
Marketing and Sales (M/S). This lack of integration causes inefficiencies across its
sales order, warehouse management, and accounting processes, leading to
errors and customer dissatisfaction.

### Overview of Fitter Snacker

FS produces two types of snack bars, branded as NRG-A (advanced energy) and
NRG-B (body building proteins). The company divides its sales force into
Wholesale and Direct Sales divisions, each managing different order volumes and
pricing terms. Despite branding efforts, FS packages its bars in store-brand
wrappers for certain retail chains.

### Problems with Fitter Snacker’s Sales Process


FS encounters several issues with its sales process, including pricing errors, order
processing delays, missed delivery dates, and excessive customer inquiries.
These problems arise from using separate systems for Sales, Warehouse, and
Accounting, along with manual handling of transactions and a lack of real-time
data availability.

### Sales Quotations and Orders

Sales at FS involve providing price quotes and taking orders through various
channels such as phone calls, visits, and faxed forms. Despite an 800 number for
customer orders, inefficiencies persist in determining delivery dates, checking
credit statuses, and entering orders into the system.

### Order Filling

Order fulfillment at FS includes generating packing lists and shipping labels twice
daily, which are manually sorted into small and large orders at the warehouse.
Inventory management relies on a PC database to track frequent changes
throughout the day, complicating decision-making for order picking and
fulfillment.

### Accounting and Invoicing

Invoicing at FS involves manually transferring data from the sales order system
to the accounting department's PC software. This process is error-prone and
leads to delays and inaccuracies in billing. Adjustments for partial shipments are
also managed manually, potentially resulting in late or incorrect invoices.

### Payment and Returns

FS faces challenges in processing payments due to errors in the sales process,


resulting in incorrect invoices and difficulties in reconciling payments. Returns
management is also problematic, with issues such as missing return
merchandise authorization (RMA) numbers and unclear instructions leading to
delays in crediting customer accounts.

### Sales and Distribution in ERP


Enterprise Resource Planning (ERP) systems like SAP ERP streamline sales
processes by reducing data entry errors and providing real-time information
across departments. SAP ERP's Sales and Distribution module manages the
entire sales cycle, from pre-sales activities and order processing to inventory
management, delivery, billing, and payment.

### A Standard Order in SAP ERP

In SAP ERP, a standard sales order is processed efficiently, starting from


customer inquiries or quotations. The system automates pricing, checks
inventory availability, schedules deliveries, and generates invoices promptly. This
ensures accuracy and timeliness in handling customer orders.

### Taking an Order in SAP ERP

SAP ERP uses a structured order entry screen where customer and order details
are validated and stored centrally in the ERP database. Master data, including
customer information and product details, is maintained centrally and shared
across all SAP ERP modules, facilitating streamlined order processing and
customer service.

### Integration of Sales and Accounting

ERP systems integrate Sales and Accounting functions, updating financial records
automatically upon completion of sales orders. This integration ensures accurate
financial reporting and supports informed decision-making across the
organization.

### Customer Relationship Management (CRM)

CRM software enhances customer interactions by streamlining sales activities,


managing customer contacts, and supporting marketing campaigns. SAP's CRM
tools within ERP integrate transactional data for improved customer service and
strategic decision-making.

### The Benefits of CRM

Implementing CRM alongside ERP systems reduces costs, increases revenue, and
improves customer service quality. CRM tools support personalized marketing,
sales automation, campaign management, and customer service enhancements,
leading to enhanced customer satisfaction and loyalty.

### Summary

FS's challenges with fragmented information systems highlight the inefficiencies


and costs associated with manual processes and data silos. Implementing SAP
ERP can streamline sales operations, improve data accuracy, and integrate
business functions. CRM software further enhances customer relationships and
service capabilities, contributing to organizational efficiency and profitability.

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