ERP software system processes, ERP processes in SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING module.

ERP Business Processes Contained in the SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING ERP Software Module
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To view the business processes supported under a different ERP software system module view the ERP Software Modules page and click the link to the appropriate module. The ERP business processes listed on this page pertain to SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING.

ERP software systems comprise a variety of software modules, each of these ERP modules houses a set of business processes that the particular ERP software package supports. A useful starting point for compiling an ERP software system spec / RFQ / RFI / ITT is listing the required system functionality, or business processes, that an ERP software system would need to support in order to be considered as viable for ERP system selection and implementation. The list of ERP business process listed below relates to the SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING module of ERP software packages. View the high level ERP Software Modules page to see a list of other ERP system modules that encompass the various business processes required of a modern integrated ERP software package.

The standard ERP system business processes for SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING are tabulated later on this page - the ERP business processes are descibed in more detail than on the ERP System Processes page. Next to each description of the ERP processes for SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING here are the explanations as to why each particular business prcess may be important / relevant.

Central to any ERP software package is the SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING software module - it is the cornerstone of an effective and integrated ERP software package. The below list of business processes can be used as first pass list of ERP software system functional requirements for your business in the area of SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING that can be utilised to arrive at a broad brush ERP system spec of required functionality to assist your ERP selection process and subsequent implementation.

SALES ORDER PROCESSING (SOP) and DEMAND FORECASTING ERP Business Processes
ERP Business Process
ERP Process Explanation
Allocate lower level component stock to orders.  Carried out to assign part finished goods to orders to estimate due dates and facilitate available-to-promise type functionality. 
Allocate finished goods inventory to orders.  Carried out if there are finished goods which are in storage, waiting to be allocated to an order (i.e. sell-from-stock environment). 
Assess the technical and commercial viability of order enquiries.  Carried out to manage and schedule the assessment of complex order enquiries with many multiple effects and the possible need for engineering design etc. 
Calculate and project market trends (and seasonal patterns etc.).  Carried out if there is insufficient forward view of customer demand; and if it is reasonable to forecast orders from market trends. 
Compare forecasted demand with actual demand.  Carried out to measure demand forecast error to provide feedback information that can be used in future forecasts. 
Carry out complex order dispatching (i.e. not a simple relationship between the order and its dispatch).  Carried out where multiple orders occur on one dispatch, multiple orders need to be co-ordinated and / or the dispatch of the order depends on many elements (i.e. co-ordinate the supply of many items). 
Co-ordinate returns processing and integrate it with manufacturing.  Carried out to deal with large numbers of returns (either poor quality goods or recalls). 
Detailed forecasting of customer orders.  For instance, forecasting demand against customer, product etc. 
Estimate lead times per order (i.e. due dates).  Carried out in situations where lead times are irregular (non-standard products etc.) and standard lead times are not used. This can be done by looking at backlogs, planning loads, stock levels, part finished goods etc. 
Generate quotes (job approach to estimation management).  Carried out to provide quotes for orders which are for standard products or variants. Need to handle negotiations on price, discounts, delivery, quantity etc. and utilise standard formats for quotes. Communication with engineering may be required. 
Maintain sales history records (for demand forecasting purposes etc.).  Carried out to record orders made, quantities, performance, repeat orders, new orders etc. as this information is vital for demand forecasting etc. 
Establish and maintain close relationships with customers.  This may be done in order to improve the accuracy of information that is used to forecast demand. 
Monitor customer complaints.  Records of any complaints made by customers should be kept. These should include details of what the problem actually was, how many units were affected by it, what actions were taken to resolve the problem, the current status of the problem etc.). The complaint details can be trended to elicit any recurrent or serious problems with products or processes (i.e. quality, due date compliance). 
Monitor customer delivery performance.  Carried out as a performance measure (due dates, quality etc.) and to update lead times parameters where necessary. This feedback on performance needs to be communicated to planning. 
Process order backlogs (i.e. to deal with customer orders awaiting planning and / or allocation to stock).   
Produce bids for tender (project approach to estimation management).  Carried out to provide quotes alongside designs for one-off type orders which require significant engineering effort and possibly involve long planning lead times. 
Monitor variances between quoted price and actual costs of products.  Carried out as a link to the financial system, to check performance and monitor when it exceeds predefined limits. 
Monitor performance of the sales order processing function.  Carried out to monitor accuracy and speed of order processing by looking at order backlogs and delivery performance. 
Use market information / management judgement to forecast demand.   
Operate the appropriate pricing and discounting procedures.  Simple procedure: carried out if simple rules and guidelines are used (e.g. standard prices) which do not affect manufacturing or planning in any way. Complex procedure: carried out if verification, guidelines and / or authorisation are required, to deal with large numbers of one-offs or pricing as a highly competitive weapon. Extensive communication with engineering, top-level planning and accounts may also be required. 

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The 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used to fulfil three purposes, firstly, it is a vehicle to recruit engineer to order manufacturers to take part in the research project concerned with improving how ETO manufacturing companies plan production and manage their jobs / projects. Secondly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used a means of disseminating the results of the research project as well as good practices employed by successful engineer-to-order manufacturers. Thirdly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO site will be developed into a portal site for ETO manufacturers.

 

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Please contact Austen Jones with any questions, comments or suggestions.

Last Updated: 27-Mar-2008