So, the fulfillment process that we are about to see involves Classy Furniture Inc., making sales of tables, and then, distributing them to the customer. The process starts when the customer makes an inquiry to Classy and ends when a customer makes a payment to Classy. Because of this fact that it starts with an inquiry and ends with payment, the fulfillment process is also known as inquiry to cash process. So, let's take a look at how this pans out within SAP. The process starts when a customer, for this case, the furniture store makes a call and inquires about coffee tables. The sales representative on the Classy side will pick up this call, create a customer record, and also details of the inquiry. Things like what tables to be bought, the amounts, and also the prices, and the expected delivery time will be created within the inquiry. The inquiry is an important document because the customer will be able to use this information and compare that with the other sales offerings made by competitors. If the customer decides that Classy is giving them a better deal, they will come back and ask for a quotation. Using the information that Classy has created in the inquiry, they will go on to make a quotation. Now, a quotation is different from an inquiry, because the quotation is legally binding on the seller. In this case over here, Classy needs to adhere to the prices and also the delivery time that they specify in the quotation to the customer. If the customer agrees to the terms made in the quotation, Classy will go ahead to create a sales order. In the same fashion, the sales order is also a legally binding document. Upon the delivery of the tables to the customer, the customer is binded by this document to pay up based on the amount that has been specified in the sales order. At this step, the system will also check to see that the customer's credit is at a suitable level before proceeding. If we were to take a look at the underlying information and the relationships within SAP, you'll see that quotations can actually be combined together to form a single sales order. At the same time, a single quotation can also be split up into multiple sales order, and the reason for that is because SAP wants to allow different flexibility for catering to different business scenarios. An example of the first case would be that a customer makes two calls within very close time intervals. The first quotation is for tables and then, a second quotation is created for chairs, and the customer decides that these two items can actually be shipped to the same location on the same day. For that purpose, we're able to combine these two different quotations into one single sales order. A second example in which a quotation might be split into two different sales order might be because the seller here, Classy, realizes that they do not have enough tables to meet the things they specify within the quotation. For that purpose, they would create two separate sales order. The first sales order will fulfill a partial fulfillment of the tables, and then the second sales order will fulfill the next batch of tables specified in the same quotation. Moving on, once a sales order gets approved, it gets routed to the distribution center, and this is where a delivery document is created. The delivery document identifies which material is to be shipped to which customer, at the same time it also specify how many of this material is needed. The delivery document is also needed to identify what materials are to be picked from the storage and to place them in the right staging area so that they can be packed up appropriately. Similar to the quotation, the sales order could also be combined into a single delivery document and a single sales order can be split into multiple delivery documents. So, there are two different business cases where these two different instances are being mapped out. So, in the first case, two sales order might be ready to be delivered and they are going to the same place. So, it makes sense for Classy to lump these two different sales order going to the same location as one single delivery document. This is to help to save causes on delivery time and also in terms of expenses. In the second scenario, customers might order multiple tables, but they want these tables to be shipped to different locations. If that's the case, a sales order might be split up into two different delivery documents to mirror two different delivery locations. So, once the delivery document is created and as picking is being performed, the delivery document would be updated. The next step involves the delivery truck coming to the warehouse, picking up the items into the truck, and then, shipping them to the customer's location. Once that is done, the warehouse manager would perform an important step known as the goods issue step. This step has an impact on the accounting module within the system. What it does in this step is that, the inventory account for Classy will be decreased to reflect the fact that the number of tables that they now own has dropped. At the same time the cost of goods sold will be increased to represent that sales have been made. This is an important step within the SAP system, because this is the first time that we get to say that Classy has indeed fulfilled the business responsibility. Because in this fulfillment step, they're responsible for packing and then shipping tables to customers. So, once the tables have left their facility, they are deemed to have fulfilled the outside of the responsibility. Whether or not the tables reach to customer successfully, that is the responsibility of the delivery company. In the next step, once goods issue has been performed in SAP, the accountant will get a notification and assist them to say that they need to start the billing process. This is where the accounting will be creating an invoice charged to the customer, and this step, the accounts receivable of the customer will be updated internally. At the same time this step recognizes revenue is being made by Classy. Similarly, we see that delivery documents can be combined into one single billing document and then, delivery documents can also be split into multiple billing documents. So, I'll leave this as an exercise for you to think about the possible scenarios in which these two cases might happen. This will be left as a homework at the end of this session. The very final step, the customer seeing the bill has been charged from Classy, pays the amount, and gets a receipt of the payment. This step will close off the entire fulfillment process. So, I hope you enjoyed our second session today, in which we look at a specific instance of a business process, the fulfillment process. At the same time we have learned about the three different types of data that is being used by SAP. I look forward to seeing you in our third iteration of the class. Have a good day.
