Automation of Intercompany Sales

Posted on: January 15, 2010 | By: SuperUser Account | QAD Business Process

Recently we rolled out and implemented an additional site (the fifth of 12) as part of a successful ERP implementation at a major manufacturer and supplier of heavy equipment. One of the key elements of the implementation was the automation of the intercompany flow of purchasing and sales orders entry activity.

The client, a large manufacturer and distributer, produces many key products by way of vertical integration – one manufacturing facility “feeds” another facility with one of the chief goals being to control the quantity, cost, and quality of the product’s raw materials and ultimately timely distribution of the finished goods. This process entails a fair amount of intercompany processing due to a mandate that the transactions be arms length PO’s and SO’s. In order to streamline the business process and reduce the transactional overhead, we had to reduce the manual (and sometimes error prone) non-value added steps associated with their upfront intercompany activity – manual Purchase Order entry, e-mail or fax the Purchase Order data for conversion to Sales Orders by manual entry.

The strategic decision was to implement an automated export of manually entered Purchase Orders from one facility via EDI and then convert the Purchase Orders to Sales Orders at a second facility via an automated EDI import. Initial testing was successful and the process was truly streamlined. Time spent on sales order data entry can now be productively spent on analyzing inventory accuracy issues or material requirement issues to support the overall production and distribution process. The correct business and strategic decision was to go live with this business process in conjunction with the QAD ERP system conversion.



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