from “sand to customer”

For readers who are not familiar with ERP systems and the processes that such a system must be able to support, the following happens every day in the manufacturing industry:

• A Customer Order leads to the demand for an end product;
  • a finished product is usually produced on the basis of a finished product work order;
  • a work order is handled based on a list of required materials and components (a bill of materials or BOM);
  • these components are either made by the production organization itself as a semi-finished product via a semi-finished product work order or
  • purchased via a Purchase Order if inhouse manufacturing is not an option.
• A Purchase Order ultimately leads to the delivery of materials, components and raw materials, which is accompanied by a receipt document at Forwarding or in the Warehouse. This means that the goods can be stored in the warehouse and entered as stock in the ERP system.
• The supplier sends an invoice based on this receipt, which is then processed in the ERP system and the supplier can be paid if the receipt is complete and in line with the Purchase Order.
• When the end product work order is ready, end products can be delivered to the customer.
• A shipping document or packing slip is created which activates the delivery.
• One or more shipping documents can lead to one or more invoices for the customer and the customer pays the invoice if the shipment is in accordance with their Customer Order.
• This makes the circle complete; from order receipt to sending the invoice to the customer and payment by the customer.

The system works “from sand to customer”, as is often quoted in the ERP world.