Seminar 5

Despite of the late post, this journal was actually completed on time. But the later ones have not been consolidated from the notes yet, due to all kinds of projects and quizzes these weeks. I will finish them as soon as possible! :)

Seminar 5 Procurement to Payment

Review on OTC process

Another morning starting with OTC! We were given a business flow chart again, but this time we were not to find the problems of it but just to suggest some general improvements. Actually, after going through the flow chart, my group thought it was a standard OTC process. But there should be some changes with SAP coming in. A Chinese saying goes: “There are always swift horses, but there are not always good busters for them.” Many companies have integrated with SAP system, but never made full use of its power. In the example given here, the inventory clerk is redundant. Once the information has been updated in the system, salesperson can check the inventory directly without approaching to the inventory clerk. Although not shown here, this is the same for credit check that the salesperson can access to the credit report directly on the system. Also, it’s ridiculous to keep an excel sheet to record all the shipping information with the existence of SAP. To check the delivery orders that are due for shipping tomorrow, there are some ways in SAP to do so. What James recommended was the VL10 series functions.  For example, VL10A can be used to check the sales orders that are due for delivery. Our group found that VL10G could do the similar jobs.

I was wondering why we are learning manual business process in an ERP course. Of course there are some more official reasons. But I think one point is for us to appreciate the beauty of SAP. The OTC process which has overwhelmed us for the last few weeks, was just a few inputs and clicks of mouse when doing the lab after class. All the normal, reasonable steps seem stupid in the eye of SAP users.

                                           http://iss.leeds.ac.uk

Student-led Session: Procurement to payment

I was glad that Sunshine was doing the similar class activities as our group did last time, which means that at least I could grab some candies! Actually I think their presentation is very organized like a whole. Also, they are providing a lot of informations, from which I tried to get some points shown below.

The upstream activities are the preparation work the company need to do before actually making a purchase. These are quite like the pre-sales activities in OTC process (I think I would be haunted with OTC forever. Just joking haha, but it's sort of hard to forget.), but they are obvious a lot more important. The difference is that now you are paying money out instead of receiving it! Of course you would be more careful!

What I’ve experienced in the class activity told me that: don’t think your price is competitive enough, because some employees don’t care about prices but only their own benefits! The procurement department of our group chose Hawaiian vendor just because he wanted to go to Hawaii to take a holiday, and I was that poor Vietnam vendor! Also, must choose reliable people to work in the warehouse to avoid unnecessary inventory loss!

Some Insights

In P2P process, we need to do a lot of checking, about the quality, quantity of the goods, and the price and discount. Any errors would be troublesome, and we have to avoid further communication with the vendors.

There are some additional points to be noted. When creating the supplier’s master data, it’s like creating customer master data, where not all the customers are the same. We should create the master data according to some analysis. For example, we need to consider if it is an important customer or not, and if a long-term relationship is necessary or not. Applying these considerations in SAP will save some time and help make the business process under control. And when posting purchase orders, instead of expecting the materials to be received on time, we have to think about some other situations: what if suppliers also don’t have inventory? What if there are some accidents so the goods are not shipped? So we should make a thoughtful plan beforehand to avoid a “real” stock out, and an alternative supplier may be needed. 
There are also some problems that can’t be solved with SAP. For example, a request to purchase need the confirmation from other departments, which is time consuming but not omissible. Again, since we are paying out money, the process control becomes more important than process automation. Another problem is about the invoice. Issuing of the invoice is at the same time with shipping, but some defects or disparities are not found until the goods are received. This can result in troubles for both the company and the supplier. So some companies send the invoice to the suppliers based on the real goods received. This can solve the current problem, but some new problems might emerge.