Better Processes for all.

Process Reference Models  -  Industry Best Practices  -  On Demand

LEARN MORE ABOUT BUSINESS FLOWS >

ORDER TO CASH > Sales of Stock products (Make to Stock)

Scenario Description

The Sales-of-Stock Products scenario describes the sales process of products, which are held on stock. The products have been typically produced or purchased previously based on a supply plan (Make-To-Stock production model) or replenishment plan. This scenario usually applies to products, which can be sold to many different customers or a long term commitment from a single/small number of customers exists. Product availability check at sales order placement is performed either against goods physically on stock, against incoming transit or planned production/placed purchase orders, or defined replacement times. In case of stock-outs a backorder processing is applied to handle orders which could not be confirmed. Additional value-added-services such as labelling or packing (costly packaging materials), which are carried out in the warehouse might be part of the actual product sale and can be priced and included into sales orders as line items.

End-to-End Process Flow

Click on the example "Receive customer order and capture sales order data" to see more details.
 

Process Descriptions

Receive customer order and capture sales order data - Receiving the customer order and capturing it in a format necessary for further processing are the key first steps to all sales processes.  

Check availability to promise at sales order entry - The Available-to-Promise check (ATP check) against stock verifies whether the required quantity of finished goods can be sold to the customer at the requested date. The check is carried out against actual or projected finished goods inventory. 

Determine product price and conditions - Once confirmation is provided that the customer order can be fulfilled, the product price must be calculated (or extracted from the system) taking into account relevant conditions (e.g. rebates, shipping condition, customer price groups).

Perform dangerous goods check - The purpose of this process is to prevent shipping of dangerous goods which will harm dangerous goods regulation.

Perform chemical compliance check - Country specific regulations state that, above a certain quantity of chemicals and other hazardous substances, it is required to register with the authorities the maximum quantities of these substances that are planned to be purchased, imported, produced, sold, or exported within a certain period. By comparing the recorded quantities with the limit values, the system signals that a limit value is close to being exceeded; if a limit value is exceeded, the system can also block the respective business process.  

Perform global trade check - Global trade compliance ensures due diligence with trade regulatory programs and cross-border customs requirements. Global trade checks are required for international business operations.

Execute credit management - Credit management helps to control the company’s exposure to credit risk. Credit management must be aligned taking into account several factors including sales targets, stock levels, and customer payment history.

Confirm sales order - Approval of the sales order is given through the confirmation and represents a commitment to fulfil the order. 

Create outbound delivery - An outbound delivery is the central object of the goods issue process - all shipping activities including picking, packing, transportation and goods issue are initiated based on the outbound delivery.

Check availability to promise for delivery - Availability to promise check (ATP check) for delivery verifies whether goods included in the outbound delivery document are available on stock on the delivery date (or necessary ship-out date) and can be delivered.

I2O Outbound logistics - Outbound logistics describe warehousing processes required for issuing products from inventory and making them ready to be transported to customers, other sites or subsidiaries, or other business partners. The scenario is initiated by an outbound delivery request. Depending on the incoterms used in the underlying sales transaction, transportation of products to the customer can be organized by the customer (pick up) or by the organization's transportation department. In the latter case the outbound transportation scenario is performed in parallel with outbound logistics.

Create customer invoice - The creation of a customer invoice provides documentation of the financial obligation related to a customer order. The customer invoice is created from a sales order.

Manage incoming payment - The process ensures that payment from a customer is captured and documented appropriately.