Integrating the quote-to-cash process across the enterprise Serving customers faster at lower cost
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Stockholm, 11 February, 2010
Syncron International AB
Östra Järnvägsgatan 27
SE-111 20 Stockholm
Sweden
PHONE: +46 8 410 802 00
FAX: +46 8 21 96 54
E-MAIL: info@syncron.com
www.syncron.com
VAT. NO: SE556573889401
REG. OFFICE: Stockholm
Integrating the quote-to-cash
process across the enterprise
Serving customers faster
at lower cost
Issued by: Ulrika Olsson
Version: 2.0
Latest changed: 11 February, 2010
2 (20)
Executive Summary
As companies become more global in nature the ability to effectively manage
a network of warehouses is becoming a required core competency.
Unfortunately, a surprisingly high number of companies that currently
practice multi-site distribution are experiencing real challenges in this area
impacting profitability and customer service levels. One reason is that the
quote-to-cash process often spans across multiple organizations, geographies
and business systems but there is no end-to-end visibility or global
optimization. In such an environment, quoting, order promising, tracking and
fulfillment are complex and labor intensive.
Do You Recognize this Situation?
A company may have a rule that all orders for northern Germany are shipped
from the Hamburg DC. If that DC is out of stock of a certain item, it will be
back-ordered, and the customer must wait to receive it. Or, if the customer is
important enough, a manager may decide that the entire order will be routed
to another warehouse where there is stock, even though freight costs would
have been lower if the order had been split and shipped from two different
facilities. In the first case, customer service suffers; in the second, logistics
costs are disproportionate.
How to Automate the Quote-to-Cash Process
If the company had an automated and well integrated approach to their
quote-to-cash process in combination with defined business rules optimizing
the fulfillment options, money is saved and the customer is kept happy.
Syncron offers leading technology that has proven to improve the quote-to-
cash process from capturing customer request, converting them into orders,
through sourcing, and invoicing as well as payment tracking across trading
partners.
Our Global Order Management solution leverages your existing systems to
automate the quote to cash process. It provides the capability to manage
quotes and orders from multiple channels and coordinate fulfillment across
multiple inventory locations, suppliers, partners and business units. The
Business Process Platform helps model, automate and monitor the end to end
supply chain as well as establish — and meet — performance goals across
your key processes.
Results You can Achieve
Key benefits of automating and integrating the quote-to-cash process with
Syncron Global Order Management include:
Improved revenue and profit
– Improved cash operating cycle up to 50%
– Reduced quote-to-cash processing costs by up to 80%
– Free-up staff time by as much as 70% so they can focus more on
customer service
Improved responsiveness and customer service up to 40%
– Resolve problems faster with real-time visibility across your supply
chain
Shorten quote-to-cash cycles and achieve 99% perfect order
performance
Lower inventory levels by order brokering and direct shipment
Remember, a 3 percentage point better perfect order correlates with
1% of additional profit margin.
Issued by: Ulrika Olsson
Version: 2.0
Latest changed: 11 February, 20093 (20) Table of Contents 1 The need for Effective Quote-to-Cash Management ..................... 5 1.1 Primary Process in Focus: Quote-to-Cash........................................ 5 1.2 The Challenge ............................................................................. 5 1.3 The Potential ............................................................................... 6 2 Removing Obstacles for Automated Quote-to-Cash Processing ... 7 2.1 The Technical Evolvement ............................................................. 7 2.2 The Organizational Involvement .................................................... 7 3 First, a Streamlined, Easy to Understand Quote-to-Cash Process 8 3.1 What is Included in the Quote-to-Cash Process? .............................. 8 3.2 Basic Current State Process Components ........................................ 8 3.3 Issues with the Current Quote-to-Cash Process ............................... 9 3.4 Key Business Impacts .................................................................. 9 4 Automating and Integrating the Quote-to-Cash Process ........... 10 5 Syncron’s Solution ..................................................................... 11 5.1 Syncron Solution Portfolio ........................................................... 11 5.2 Syncron Global Order Management .............................................. 12 5.3 Why is Global Order Management Important to the Manufacturing Industry? ........................................................................................... 12 5.4 Key Components of Global Order Management .............................. 13 5.5 Syncron Global Order Management Benefits .................................. 16 6 Proof of success ......................................................................... 17 6.1 Case Study: Atlas Copco ............................................................. 17 6.2 Case Study: Volvo Construction Equipment ................................... 19 Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
4 (20) Abstract This white paper examines the challenges faced today by organizations that operate a manual quote-to-cash process across dispersed ERP installations, as well as the outcomes of an automated and integrated quote-to-cash process. It is a resource to help businesses gain efficiency and improve customer service in today’s competitive business environment. The document is structured to guide the reader through the quote-to-cash process with its main sub-processes. This paper is designed to assist CIOs, sales managers, order processing managers and ERP system administrators in learning about, planning for and evaluating quote-to-cash processing integration and automation. Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
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1 The need for Effective Quote-to-Cash
Management
In today’s business environment, processes and organizations rarely stay the
same long enough to release value from investments in monolithic IT
architecture, like ERP solutions. ERP systems are also, due to the complexity,
rather poor in interacting with other systems. Increasing requirements for
added connectivity, information transparency and, most importantly, speed in
change, have driven the need for reliable Business Process Management
(BPM) based solutions. Even the monolithic ERP strategy can, and most often
should, be supported by a BPM based solution to reduce cost and risk.
1.1 Primary Process in Focus: Quote-to-Cash
The quote-to-cash performance is at the heart of your business. Quote-to-
cash is a term used to encompass the business cycle that starts with
reception of a customer request generating a quote which can be turned into
a sales order and ends with collection of payment generated by the sale of
the product. There are several sub-processes within the quote-to-cash cycle,
including: creating quotes, receiving and validating orders, entering sales
orders, approving sales orders, fulfilling orders, generation of purchase
orders, billing for the orders and collecting payment.
1.2 The Challenge
Businesses face quote-to-cash challenges in the areas of visibility,
productivity, accuracy, cost control and implementation. Companies need to
know what goods are available where and to what price to be able to reply on
customer requests and achieve an optimal order fulfillment. Companies need
to be able to pull up orders and answer customer questions immediately as
well as eliminate non-value-added tasks and human errors that drive up
costs and customer dissatisfaction.
In today's economic landscape businesses need to deliver the expected levels
of customer service in order to retain existing customers and acquire new
ones. Highly effective order management is absolutely crucial to this
objective. Along with reducing operational costs, freeing staff to spend more
time on customer service activities, automation of the quote-to-cash process
gives companies higher order scores, less shortages and quality deviations in
the delivery process.
Key challenges companies are facing:
Disparate ERP systems resulting in
o a lack of a single repository for orders
o problems acting as one company to all customers —
worldwide
Mergers and acquisitions resulting in complexity in order
management processes due to disparate order processing systems
Order fulfillment processes that concentrate on individual orders
rather than the holistically viewing order fulfillment
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1.3 The Potential
When companies examine ways to gain efficiencies and competitive
advantages in a constantly evolving business world, the quote-to-cash cycle
emerges as an area offering significant potential for improvement. Any
incremental improvements resulting in improved order capture results in
sales revenue uplift. In addition, the process of capturing the order and
fulfilling the order is a major area of opportunity for cost improvements.
Following the progress turning orders into money in the bank offers strategic
benefits to the company while strengthening customer relationships.
Companies converting to an automated order processing system can realize
efficiencies throughout the quote-to-cash cycle.
By leveraging technology, industry best practices, and domain expertise, we
have helped supply chain leaders across industrial manufacturing sectors
achieve impressive results in their order fulfillment processes.
For example, a mining and construction company saw a substantial business
growth after integrating and automating the quote-to-cash process. The
managing director at one of the sales companies stated that the
business had grown 200% over the past years without having to hire
a single person in order administration. They can now focus on selling
and forget about administration. This was a direct result of the
implementation of a common platform that makes it possible to consume
data between different enterprise applications, unifying the order fulfillment
process, and enabling a single order interface for their customers via the
Group’s e-commerce solution.
All of the above factors help companies better manage customer
relationships, manage inventory and improve the order score, bring visibility
to business processes and improve overall profitability. The quote-to-cash
process is by far, the single-most important end-to-end process as it drives
the customer experience, revenues and margins.
Industry benchmark1 data reveals that quote-to-cash performance is strongly
linked to overall business performance, both for cost containment and
sustainable growth:
A single percentage point improvement in demand visibility
correlates with 2 percentage point improvement in perfect order
performance2. A 5% point better perfect order correlates with a
2.5% better Return on Assets, and a 3 percentage point better
perfect order correlates with 1% of additional profit margin. Finally,
a 2 percentage point better perfect order correlates with 10 cents in
Earnings per Share.
1
AMR Research Supply Chain Execution Software Is Vital to Delivering the Perfect Order
2
―Perfect Order‖ is a discrete measurement traditionally defined as the percentage of orders that are delivered in
full and on time to the request and/or commit date; arrive damage free with no product quality issues; and match
the customer documentation (invoice, PO, and receipt).
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2 Removing Obstacles for Automated
Quote-to-Cash Processing
2.1 The Technical Evolvement
The possibilities to automate and collaborate between ERP systems did not
exist some ten years ago. Over the last decade, interoperability standards
and technologies have emerged enabling the extended enterprise using
business process management technologies. Easy coupling and decoupling of
trading partners and systems in a constantly changing business environment
is now possible through common business process standards and
frameworks.
The industry analysts recognize that underperforming companies with limited
quote-to-cash capabilities perceive their competitor’s service level as a top
challenge. Their issues are related to complexity in quote-to-cash processing
due to disparate order processing systems and order fulfillment processes
that concentrate on individual orders rather than a holistic view of fulfillment.
These issues result in the need for an integrated quote-to-cash process.
Providing a common window to the end customer throughout the quote-to-
cash lifecycle is the key capability of this process. Aberdeen’s hypothesis is
that in response to increased customer service demands, high-performing
companies are using business process management technologies like
Distributed Order Management Software, Supply Chain Visibility Software,
and Multi-Site Warehouse Management Software to achieve superior levels of
customer service, while maintaining comparatively low levels of inventory. 3
2.2 The Organizational Involvement
Given that quote-to-cash management crosses functional and enterprise
boundaries, most sales process integration and automation initiatives need to
involve a coalition of participants collaborating across functional areas that
normally rarely work together. To succeed, this will require a common ground
for collaboration and a new attitude towards information sharing. Successful
companies realize that business improvement, and thus achieving a
competitive edge, is directly related to the willingness of sharing information
across the traditional organizational boundaries.
For example, an international industrial equipment company decided to
create completely transparent order information across each point in the
order-to-delivery chain. The objectives of this initiative were to achieve faster
order processing time and improve the delivery quality by automating the
process. Early warnings at deviations were crucial. Now, instead of passing
the orders between involved parties like hot potatoes, customers, sales,
customer service, procurement, logistics and shop floor staff have access to
the same transparent order tracking information and alerts at deviations.
3
Perfect Order, Happy Customer: Managing the Order-to-Delivery Cycle, Aberdeen Group, February 2009
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3 First, a Streamlined, Easy to
Understand Quote-to-Cash Process
3.1 What is Included in the Quote-to-Cash Process?
Quote-to-cash covers the business process for creating a quote for a prospect
or customer, order entry, fulfillment, order management, invoicing and
payment receipt. The functionality is highly integrated with Supply Chain
Management.
3.2 Basic Current State Process Components
The quote-to-cash process crosses multiple functional and enterprise
boundaries that often operate within their own silo. Using manual processes
to orchestrate quote-to-cash operations creates heavy administrative
burdens along with the potentially inefficient order fulfillment and cash
collection delays. Manual processing of sales orders is inherently labor
intensive, time-consuming and error-prone, requiring valuable resources to
manage each part of the process. The following are the basic current state
components and sub-processes for the quote-to-cash process:
Order Order Order Order Invoicing
Capture Validation Brokering Management
Order Capture
Quotes are computed manually by sales personnel or quoting specialists.
– New and existing customers have to be recognized with complete
billing and shipping address.
– Products are selected from product catalogues or are configured.
– Price and availability have to be validated to be entered on the quote
or directly on the order entry form.
Quotes are often manually converted to a sales order upon customer
acceptance.
Orders are created/booked in the local ERP system.
Order Validation
Pricing and contract confirmation for large customers has to be validated.
Finance need to check the customer credit for approval.
Complex product needs to be manually validated.
Products are checked for warranty regulations.
Order Brokering (fulfillment)
Orders are sent to one sourcing point for fulfillment.
Order promising including order acknowledgement and confirmation
takes in many cases longer than the customer accepts.
Orders are processed. This includes inventory reservation, picking and
packing, ship confirmation as well as distribution.
Generation of purchase orders for additional supplies when needed are
handed over to the purchase department.
Order Management
Customers call and request information in their order status.
Customer request order changes.
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Invoicing
The customer is billed for the products, services and shipment.
Account receivables are reviewed to validate settlement.
3.3 Issues with the Current Quote-to-Cash Process
Seamless and structured as they may seem, the steps involved in the quote-
to-cash process run into a number of challenges, owing to the number of
geographies and lines of business involved. The quote-to-cash process is
predominantly manual and siloed with no single owner, despite sales,
operations and finance playing key roles. The following is an overview of the
issues that companies often face in the quote-to-cash process:
Order Capture: The lack of data visibility of customers, products, product
availability, lead time and net prices creates the inability to serve the
customer effectively. The customer is often treated differently depending on
the sales channel used or due to personnel knowledge at the order desk.
Quotes cannot be converted into orders leading to extra administration. Since
no structured order capture process exist, customers sometimes shop around
to find the best price and service both within and outside of the company. All
this can lead to revenue leakage and lost customers.
Order Validation: This step usually contains many manual tasks conducted
by different departments. Risk exposures due to high credits or wrongly
configured product are costly mistakes.
Order Brokering: Companies engaged in multi-site distribution face a
number of challenging decisions regarding how to use their network of
distribution centers to effectively fill orders on a line-by-line basis. Making
sourcing decision, order splitting and allocation of orders across an extensive
supply network including local stock locations, distribution centers,
manufacturing plants, and suppliers, manually without full visibility is
impossible. Traditional Warehouse Management Software (WMS) and ERP
systems often do not offer adequate solutions to this challenge.
Order Management: Since many companies have dispersed IT systems and
operate in silos it can take days to gather throughout order status including
backorder recovery and delivery status. Exploring the possibility to accept a
request for order change may take many phone calls due to no visibility of
the order status. Inappropriate decisions may lead to production re-planning,
increased inventory and missed promise dates.
Invoicing: Invoice creation and payment review is done on a monthly basis
by accounting and finance which is a complex issue across multiple entities
and systems.
3.4 Key Business Impacts
Siloed quote-to-cash processes result in revenue leakage because of
inefficient order capturing, order fulfillment and order management
processes; higher cost-to-serve because of inefficient planning and execution
of orders; and increased working capital requirements driven by errors, and
delayed payments from customers.
According to Aberdeen Group, companies that implement an integrated and
automated order distribution based on business process management
concepts have reduced their order fulfillment costs year-over-year. These
companies have also reduced their inventory carrying costs year-over-year
as well as achieving 99% or more complete shipments4.
4
The Challenge of Multi-Site Warehouse and Order Management, Aberdeen Group, April 2007
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4 Automating and Integrating the
Quote-to-Cash Process
Incoming request for quotes or sales orders launch the quote-to-cash cycle.
Fast response to questions like, When can it be delivered?, What is my total
net price?, helps businesses increase customer satisfaction. When the sales
order has been placed it needs to be sourced and fulfilled in an optimized
way to ensure on-time delivery rendering timely customer payment. Up-to-
date information on the status of customer orders and inventory, no matter
which sales channel the customer turns to, is crucial for effective customer
service, sales management and forecasting.
To optimize the quote-to-cash processing in a heterogeneous IT environment
across departments, automation and integration is required. These essentials
must be considered:
Order Capture: All types of quotes and orders are entered through one
portal or are atomically collected from all other type of sources.
Customers and products are recognized automatically by workflows
containing defined business rules that are integrated with source
systems. Price and availability is checked in real time based on the
customer agreements, order type and class as well as the optimized
sourcing point for the product. The products are sold at the same price
no matter from which warehouse they are being sourced.
Order validation: Workflows and business rules automate the processes
of validating the products, customer credit approval, customer contracts,
and warranties.
Order Brokering: Leverage the entire network to fill orders and practice
sales order splitting. By filling orders on a line item basis, network
efficiency can be maximized while still meeting customer service
requirements. Companies with this flexibility can perform fulfillment line-
by-line, filling each component of an order in the most efficient way
possible, factoring in freight cost, lead time, and inventory levels at each
warehouse. This functionality is sometimes referred to as Distributed
Order Management (DOM).
Order Management: Starts with visibility of inventory, orders and
delivery. The order throughout status, order splitting and merging as
well as backorder and recovery is reported from a single point, and order
changes can be applied.
Invoicing: To speed up the collection process invoices are created
automatically and payment reception is tracked and traced.
Automation and integration minimizes the amount of manual labor and the
number of manual touch points required to complete order processing. By
introducing order splitting and merging the inventory levels are reduced as
well as the numbers of backorders. These capabilities can yield millions of
dollars in savings by minimizing the number of touch points at each step in
the process, and by providing the ability to optimize the inventory utilization.
And businesses can improve the customer experience by increasing speed
and responsiveness.
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Latest changed: 11 February, 200911 (20) 5 Syncron’s Solution There is no need to rip and replace existing systems that are managing a local process effectively. However, lack of centralized visibility and an optimized quote-to-cash process can hamper any enterprise-wide efficiency. Companies often choose to simply live with the problem rather than ripping out each application and replacing it with a single system. With the technology and best-of-breed solutions available on the market today which can be placed on top of the existing IT solutions there are alternatives to a monolithic IT architecture. The complexities of the quote-to-cash process spanning across technical and organizational borders can be addressed with a scalable business process management platform based on Service Oriented Architecture (SOA) with an integration framework. These applications are flexible and easy to configure to meet the customer requirements, no compromising, as well as reduce IT costs, decrease the time and effort required to modify applications, and drive business innovation through IT. In some cases, choosing a single ERP system might be the right choice. However these projects are most often proven to be costly both in time and money. Acquiring new businesses will again disrupt the single choice. In these situations a best-of-breed solution can be the answer ensuring that your quote-to-cash process is kept intact throughout the roll out of your ERP system and during your integration of new acquisitions. This way you can faster and with less risk get your quote-to-cash process up and running and then roll out a standard ERP minimizing the customizations needed thereby increasing speed and decreasing cost. 5.1 Syncron Solution Portfolio Syncron solution portfolio is an integrated and complete application set for deploying industry-specific supply chain processes across applications, leveraging existing enterprise IT assets. Syncron solutions are standard software developed to support complex supply chain processes and allow for agile design of workflows, business rules and system integration according to each customers unique requirements. It provides the tools, framework, and pre-built components needed to integrate disparate applications and link cross-departmental business processes. In today’s rapidly evolving business climate, a flexible reconfiguration of the business processes is a definite requirement. The drivers for this can be new business arrangements, new compliance regulations, outsourcing, meeting competition, mergers and acquisitions, just to mention a few. Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
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To meet these requirements the Syncron Business Process Platform (BPP) is
based on SOA and has strong Business Process Management (BPM)
capabilities. All Syncron products are built on the Business Process Platform
and utilize the platforms support for orchestrating the business processes
including monitoring, traceability and optimization of the business processes.
5.2 Syncron Global Order Management
Syncron Global Order Management (GOM) manages the global order
processing, in one unified process from quote to cash. Through a single order
interface, integrated with internal and external business systems, you can
provide your customers with real time Available To Promise (ATP), net pricing
and complete visibility no matter how complex your supply chain or IT
infrastructure is.
For Flexibility For Ef f iciency and For Responsiveness
and Reuse Quality and Optimization
Service Oriented Business Event &
Architecture Modeling of Performance
functions Monitoring
Global process orchestration
Order Order Order Order
Invoicing
Capture Validation Brokering Management
Integration and collaboration
5.3 Why is Global Order Management Important to
the Manufacturing Industry?
Syncron’s Global Order Management addresses several key issues the
manufacturing industry face and provides compelling benefits. It offers the
industry the best of both worlds — the ability to leverage existing IT
investments and the flexibility to easily incorporate acquired companies or
new applications as well as support quote-to-cash process innovation needed
in the evolving business environment. Key benefits of automating and
integrating the quote-to-cash process with Syncron Global Order
Management include:
Improve revenue and profit. All quotes and sales orders, independent
of sales channel, are placed and tracked in one system. Orders are
automatically routed securing an intelligent allocation and sourcing
decision, freeing up time to focus on selling.
Improve responsiveness and customer service. The Syncron Global
Order Management solution provides quick and consistent responses to
customer requests related to ATP, price, order status etc. The solution
has a complete follow-up on the sales and purchase ordering process,
from one single source.
Shorten quote-to-cash cycles. Enable collaboration, synchronization
and visibility across all trading partners involved in a customer-centric
fulfillment. Quotes can directly be converted to orders and all orders are
visible for involved parties allowing you to follow the progress on the
order from quote to payment.
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Lower inventory levels by order brokering and direct shipment.
Global availability of parts everywhere in the world in combination with a
strategic business model to source and fill orders line-by-line optimizes
inventory utilization. Incorporating your suppliers in the order process
gives possibility to have direct shipment to your customers.
5.4 Key Components of Global Order Management
Syncron Global Order Management leverages existing systems to automate
the quote to cash process. It provides the capability to manage quotes and
orders from multiple channels and coordinate fulfillment across multiple
inventory locations, suppliers, partners and business units. The solution
supports different order types in the common order book such as customer
orders, supplier orders, replenishment orders and return orders. Different
business rules are applied for managing the different order types in an
optimized way. All information from customer sales orders to the tracking of
payment is consolidated in the system.
Order Order Order Invoicing
Order Capture
Validation Brokering Management
• Customer • Product • Sourcing • Order Visibility • Invoicing
Recognition Validation
o Decision & o Throughout • Payment
• Product • Pricing and Splitting Status Tracking
Recognition Contract
o Cross-Docking o Order
Validation
o Catalogues Split/Merge
o Allocation
• Credit Approval
o Favorite parts o Backorder &
o Purchase
• Warranty Control Recovery
o Previous Order
Orders Generation • Inventory
Visibility
• Quoting o Drop Shipping
• Order Change
o Net Price • Promising
• Delivery Visibility
o Availability o Acknowledge-
ment
• Order Entry
o Confirmation
• Returns
In order to effectively embrace a quote-to-cash process, the solution offers
out-of-the-box integration capability. The Syncron Business Process Platform
has a well defined and extensive integration framework including standard
adaptors to ERP systems.
The quote-to-cash process flows through the following steps:
Step 1: Order Capture
Sales orders and quotations request can reach companies in many various
ways. Some customers call the internal order desk, others might use an
online ordering system, email or enter a store. Quotes and sales orders can
be entered in any existing system or through the Syncron interface. There is
a wide range of data which must be recognized, approved and monitored;
customer identification, product availability with supersession and replaceable
options, the pricing with discount options, are automatically looked up in the
source system by Syncron Global Order Management. Quotes can directly be
converted to orders when approved by customer providing the basis for
win/loss analysis. Immediate confirmation, with net price and delivery dates,
can be sent to let customers know that their orders have been received.
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Step 2: Order Validation
Based on your specific criteria, Syncron Global Order Management captures
sales order information and routes it to the corresponding source systems or
representatives for validation if necessary. Validations are done for warranty
control, product configuration, credit approval or pricing and contract
approval.
Step 3: Order Brokering
Order Brokering also referred to as Distributed Order Management (DOM),
optimizes order sourcing by routing the order to one or more sourcing points,
internal or external in the supply chain. This enables your business to
increase the on time deliveries and fulfill orders in the most cost efficient
manner. Syncron Global Order Management contains an order placement
model which consists of sophisticated rules used to define from which
warehouse the parts should be shipped to get the optimal sourcing set-up –
providing synchronization and control of all internal and external processes
tied to order fulfillment. The order routing model is flexible and easy to
reconfigure through a web based Graphical User Interface, supporting you in
enhancing and changing sourcing strategies over time.
Start
Try to Business specific
Get next Store all allocate allocation sequence
compatible allocation
part results
No Allocation Yes
ok?
Yes Any No
locations
left?
Create best
possible result
for item
Yes No Compare all
Any Split order
parts and
compatible lines where
choose the
parts left? needed
best
The order placement rules operate on a per order line basis, which means
that the goods can be sourced from various warehouses. Each order line
easily follows a unique process based upon any order-related attribute or
business rule. The solution will provide the capability to make intelligent
allocation, sourcing and re-ordering decisions based upon current stock,
current demand, in-transit inventory and fulfillment lead times. As important
as splitting the order is merging the order, keeping both the consolidated
order information updated as well as cross-docking for shipment.
The order placement model provides the support for splitting out order lines
containing for example hazardous materials which can only be stored in
certain warehouses or which are not allowed to be sent together with other
goods. Based on your requirements and supply chain set-up you can define
direct shipment from the external supplier to your end customer when
applicable. Syncron Global Order Management will automatically create the
required purchase orders and communicate them to the suppliers involved in
the fulfillment either by a direct integration, Electronic Data Interchange
(EDI) interface or via email.
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Latest changed: 11 February, 200915 (20) Order promising including order acknowledgement is done automatically when the sourcing decisions are made. The business rules are easily reconfigured so you can quickly respond to changes in the supply chain. This will optimize the stocking of goods, but also cut freight costs and support a green supply chain. Step 4: Order Management No matter how the order was placed Global Order Management captures all fulfillment activities throughout the supply chain, end-to-end, and provides a single transparent view of order information and order status across all parties involved in the fulfillment. This helps you react quicker to deviations in delivery, monitor delivery performance and consequently improve customer service. In complex demand driven supply chains, and particularly 'build-to-order' scenarios with long delivery lead-times, companies suffer from a poor overview of the delivery progress and an inability to quickly react to delays. As a consequence, delivery performance is poor and inventory cost tends to increase. Syncron Global Order Management provides you with a complete, transparent and real-time view of the delivery status and fulfillment activities as well as a consolidated view of the company's delivery performance. It enables companies to present a single face to the customer by allowing information about any order, from any channel or division, to be made available when and where a customer needs it. It also simplifies administration and maintenance of customer orders, allowing a single record to be accessed, modified or cancelled through simplified integration between any order capture system and the Syncron Global Order Management application. As important as order visibility is the inventory visibility which is a prerequisite for Order Brokering. Syncron Global Order Management collects or accesses and harmonizes information from all inventories, internal and external, across a dispersed and often outsourced supply chain. This provides an instant view of all inventories across multiple locations and in transit, both within the organization as well as those belonging to customers and suppliers. Immediate and accurate inventory information makes it easy to make re-distribution decisions and re-allocate orders in real time. The solution will provide you with a complete and accurate view of your worldwide inventories, in real time, across all your various business systems. Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
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Step 5: Invoicing
Receive faster payments by automated invoice generation to be sent at the
same time products are shipped to the customer. Syncron Global Order
Management triggers the finance system to have the invoice created and
populated with complete order information. The sent invoice is linked back to
Syncron Global Order Management consolidating the order view.
Payment tracking allows you to keep track of your customer payments and
having it fully linked to the order for reporting and credit approval. All
information and activity related to that order is now contained in a single
repository — presenting a single version of the record.
5.5 Syncron Global Order Management Benefits
Effectively eliminating manual processes and integrating dispersed IT
environments, Syncron Global Order Management optimizes the whole
process from quotation to sales order generation and fulfillment to payment
of the invoice. Businesses running Syncron Global Order Management placed
on top of their existing ERP applications are driving tangible results and are
able to:
Improve the customer service up to 40%
Improve the cash operating cycle up to 50%
Reduce quote-to-cash processing costs by up to 80%
Reduce lead time to end customers up to 40%
Free-up staff time by as much as 70% so they can focus more on
customer service
Increase order fill rates, achieving 99% or more complete shipments
Reduce capital tied up in inventories
Reduce number of backorders prolonging lead times
Reduce returns, which directly affects the bottom line
Increase the percentage of orders and order line items captured
electronically
Issued by: Ulrika Olsson
Version: 2.0
Latest changed: 11 February, 200917 (20) 6 Proof of success Syncron Global Order Management is a proven solution for sales order processing, with a long list of references and a solid track record of success in addressing challenges for companies within the industrial manufacturing sector. The application is used in make-to-stock and make-to-order as well in combination of the two scenarios. Two customer stories are presented in more detail, describing how Syncron Global Order Management has improved the efficiency of the company’s quote-to-cash process as well as increased the service level. 6.1 Case Study: Atlas Copco Atlas Copco is a global industrial group headquartered in Stockholm, Sweden. The Group, which was founded in 1873, employs today close to 33,000 people and manufactures products on 83 production sites in 23 countries on five continents. Atlas Copco companies develop and manufacture electric and pneumatic tools, compressed air equipment, construction and mining equipment, assembly systems, and offer related service and equipment rental. The products are sold and rented under different brands through a worldwide sales and service network reaching 160 countries. 6.1.1 Global solution unites Atlas Copco Group With multiple order systems serving separate market places, Atlas Copco had a very complex and inefficient ordering process. Syncron helped Atlas Copco to integrate their existing systems through a single global order management solution which led to increased customer service, significantly less order administration, and more efficient order management. Atlas Copco’s IT infrastructure comprising multiple ERP installations and supporting systems, had grown in complexity through acquisitions and organic growth. Kris Feys, Atlas Copco Group’s Enterprise Application Integration Manager reports, ―When serving different markets worldwide, it is important that Atlas Copco Group can act as one company to all our customers.‖ 6.1.2 Fragmented IT infrastructure Previously, each business area had an independent order management system, which created problems. ―Each time a customer placed an order with more than one area of the business, they had to access multiple systems. This caused fragmented ordering and a great deal of administration that affected our ability to deliver great customer service‖ explains Kris Feys. When Atlas Copco Group began to explore the different solutions to their problem, they had very clear criteria that they needed to meet. ―It was vital that the solution would be 100% reliable with no down-time, would require no administration work, and could be integrated with our existing systems‖ says Kris Feys. 6.1.3 Syncron - a perfect fit Atlas Copco selected the Syncron Global Order Management (GOM) solution as it fully met the pre-requisites of the project. The solution provides a common platform that makes it possible to consume data between different enterprise applications, unifying the order fulfillment process, and enabling a single order interface for their customers via the Group’s e-commerce solution. ―The business has grown 200% over the past years without having to hire a single person in order administration. We can focus on selling and forget about administration‖ Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
18 (20) 6.1.4 Clear results Atlas Copco now experience one global ordering process for their customers, which allows each of the Group’s business areas to work as one; customer orders are no longer manually entered into different systems. The Syncron Global Order Management solution receives peaks of 180,000 transactions per hour and 3 million transactions per day, which is increasing 20% year on year. The solution connects over 150 supporting systems and 5 main different ERP systems and is supported entirely by just two staff. ―Our close relationship with Syncron was a key factor in the project being successful‖ says Feys. ―We regard Syncron as a partner not as a supplier.‖ 6.1.5 Future plans The Global Order Management solution will continue to play a business critical role in Atlas Copco’s continuing growth. Kris Feys explains, ―Syncron are a key partner when it comes to our future growth. Our acquisitive strategy is now completely supported from an IT point of view because of the GOM solution.‖ Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
19 (20) 6.2 Case Study: Volvo Construction Equipment Volvo CE is a global enterprise headquartered in Brussels. Its product line includes wheel loaders, compact equipment, wheel-mounted and crawler excavators, motor graders, and articulated haulers. The company manufactures its products on four continents and distributes in more than 200 countries via dealerships and rental outlets. Volvo’s history of mergers and acquisitions created various order systems, which prevented efficient management of global ordering. 6.2.1 The need to act as one global company For Volvo CE, various order systems inhibited efficient management of global ordering. Syncron helped Volvo CE merge support systems in various regions, which led to increased customer service, less administration and improved order management. Now, Volvo CE has secured the necessary prerequisites for its future growth. Volvo CE is the oldest industrial company in the world that is still active in the construction machinery segment. Its fragmented IT environment was the result of many mergers and acquisitions; this made global order management difficult for Volvo CE staff and dealers. Kenneth Bergström, coordinator for Volvo CE’s Division Customer Support order system, reports: ―With our full product line, which is manufactured, serviced and supported worldwide, we must be able to act as one global company with a common order structure.‖ 6.2.2 Tough solution requirements Historically, all regional Volvo CE regions hosted their own independent order and warehouse systems, which created problems. Each time dealers wanted to place orders, they had to access several warehouses. Also when newly acquired companies were getting integrated into the enterprise structure, the process took too much time. When Volvo CE Division Customer Support started its search for a solution that could unify its diverse systems environment, it had already dismissed a joint ERP system. Why? Because an ERP implementation would have been an expensive, time-consuming and complicated process. Volvo CE’s Division Customer Support requirements were the opposite — it wanted a fast implementation with extraordinary capacity — a solution that enabled integration of a new warehouse system in no more than six months. 6.2.3 Easy and fast implementation After investigating various vendors, Volvo CE Division Customer Support selected Syncron and its Global Order Management (GOM) solution, whose main benefit was ease of implementation: it required no changes to internal procedures, it operates independently of IT infrastructure and ERP support systems, and it could be implemented at a fraction of the cost of an ERP solution. During 2004, the GOM solution was implemented at Volvo CE in Europe and shortly thereafter in North America, Singapore and Korea followed by China, India and Brazil. ―All in all, the implementation ran smoothly,‖ says Bergström. ―In Singapore, we literally swapped systems from one day to another, without problems.‖ One success factor was the excellent Volvo–Syncron teamwork. According to Bergström, Syncron made a true effort to understand Volvo CE’s specific requirements. Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
20 (20) 6.2.4 Clear results Volvo CE now enjoys one global process, which allows all geographically spread units to work as one company. Dealer orders are no longer tied to a specific warehouse: Syncron provided a single, integrated web interface to manage all ordering, price and availability, part information, order placement and status. Syncron’s solution also enables integration with Volvo’s suppliers. The GOM solution led to improvements in customer service—plus cost savings associated with more efficient order and maintenance processes. The solution is flexible so ―We can now change the Volvo CE environment according to our wishes – new and existing systems are effortlessly and seamlessly connected in various ways as the order process evolves‖ says Bergström. 6.2.5 Future plans Volvo CE’s assertive growth plans cannot be fulfilled through organic growth only, so acquisitions will continue. Going forward, managing the entire order structure during integration of these companies becomes business critical. ―Thanks to Syncron, Volvo CE Division Customer Support now has the necessary logistic prerequisites in place to easily grow and change its order structure,‖ says Bergström. ―And most important of all, the investment in Syncron secured our future growth.‖ Issued by: Ulrika Olsson Version: 2.0 Latest changed: 11 February, 2009
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