Order Entry / Sales Process

The client company is a typical retailing company which procures products from suppliers and sells them to customers. The order entry/sales (OE/S) process includes the some main steps in the order-to-cash process, viz., presales activities, sales order processing, picking and packing the goods, and shipping. In addition, the OE/S process also handles the billing and processes customer payment.

Functions of the OE/S process
The OE/S process reflects an interacting structure of people, equipment, activities, and controls that is designed to achieve certain goals. The primary function of the OE/S process is to create information flows that support the following:
• Repetitive work routines of the sales order department, credit department, and shipping department.
The OE/S process does these by capturing, recording and communicating sales-related data. For example, we need to know the identity of the customer and what the customer has ordered. These data will be used to determine the total amount of the order to decide whether credit should be granted and to inform workers in the warehouse that certain goods need to be picked and transported to the shipping department.
• Decision needs of those who manage various sales and marketing functions.
The OE/S process help marketing managers to make decisions by generating information like customer preferences, market demand changes, etc. Obviously, in addition to these managers, any number of people within a given organisation may benefit from the information generated by the OE/S process.

Organisational setting
Figure 1 and Table 1 present the relationship between the OE/S process and its organisaitonal enviornment. The figure shows the various information flows, depicted as documents, generated or captured by the OE/S process. The information flows are superimposed onto the organisational structures that are related to the OE/S process and the multiple entities with which the OE/S process interacts (customers, carriers, other business processes such as Billing/Accounts Receivable/Cash Receipts [B/AR/CR] and general ledger).

Fig. 1. Information flowchart of OE/S process

Table 1. Description of horizontal information flows
Flow No. Description
1 Customer places order
2 Sales order department requests credit approval from credit department
3 Credit department informs sales order department of disposition of credit request
4 Sales order department acknowledges order to the customer (4a), and notifies the warehouse (4b), shipping (4c), and the B/AR/CR process (4d) of the sales order.
5 Warehouse sends completed picking ticket to shipping
6 Shipping department informs carrier (6a), B/AR/CR process (6b), the general ledger process (6c), and the sales order department (6d) of the shipment.

Figure 1 and Table 1 reveal six information flows that function as vital communications links among the various operations departments, business processes, and external entities. Though the figure depicts these flows using a document symbol, most of them can be implemented using electronic communications and data stored in an enterprise database. The six information flows shown in Figure 1 and Table 1 are explained further as below.
• Flow 1 apprises representatives in the sales order department of a customer request for goods. This information flow might take the physical form of a telephone call, an entry on a Web site, or a faxed or mailed customer order.
• Flows 2 and 3 represent the credit check. These flows could be a form sent to and from the credit department, a phone call, a look-up on a customer’s master data, or a request routed by a system’s workflow module with the credit being authorised via an electronic approval.
• Flow 4a could be a form sent to the customer or a confirmation number delivered via a Web site or read by a clerk over the phone. With flow 4b, the warehouse picks the goods. Flow 4c informs workers in the shipping department of a pending shipment; this communication facilitates the operational planning and related activities associated with the shipping function. This information flow might take the form of a copy of a sales order, or it might be an electronic image appearing on a computer workstation located in the shipping department. Flow 4d informs the billing department that a shipment is pending (and that an invoicing process will soon be required).
• Flow 5 accompanies the goods from the warehouse to shipping.
• The shipping department prepares the shipping notice (flows 6a-6d) after matching flow 4c and flow 5. Flows 6a identifies the goods and their destination for the carrier. The billing department begins the invoicing process, after matching flow 4d and flow 6b. The general ledger uses flow 6c to update inventory and costs of goods sold for the shipment.

The OE/S process in a system perspective
Customers are often ongoing customers, and thus a customer master record including a credit limit is required to be maintained. In addition, one or more inventory master records including sales prices should be maintained. Different transaction data, such as order details, inventory transfer-in/out, etc., are maintained in different transaction databases, respectively.

Fig. 2. OE/S process flowchart
Figure 2 presents a systems flowchart of the model process. It starts with customer calls received in the customer service centre. When a customer has called in an order (or through internet, by fax, etc.), Customer service representatives (CSRs) will do a credit level check with the help of the credit department and check product availability.
The credit check requires a valid customer number (a new customer will need to register first to get the customer a number) and the total amount of the current order passed by the CSR. If the total amount of the current order, any open orders, and the outstanding receivable balance exceeds the customer’s credit limit, the department will reject the credit approval, otherwise will approve it.
Assuming the customer credit checking has passed, the CSR will retrieve certain standing data, such as the customer name, address, and credit terms, from the customer master data. The CSR asks the customer to confirm the name and address to ensure that the correct customer record has been retrieved. Next, the CSR enters the other data in the sales order, such as the part number, quantity, and price of each item ordered, total amount of the current order, expected delivery date, etc. If the balance shown on the inventory data is less than the quantity ordered, back order procedures are initiated.
After the CSR has finished entering the order data, the computer creates a sales order record, updates the inventory master data to allocate the inventory to the sales order, and gives the CSR a sales order number that the CSR relays to the customer. Simultaneously, a picking ticket, containing a bar code of the sales order number, is printed in the warehouse.
As each item is picked, warehouse personnel insert the picked quantities on the picking ticket. When all the goods have been picked, they compare the goods to the picking ticket, initial the ticket, and then move the goods and the completed picking ticket to the shipping department.
Shipping personnel scan the bar code on the picking ticket to bring the sales order up on their computer screen. After they confirm that this is the correct order and that the quantities are correct, they select the option to record the shipment. This action causes the computer to update the sales order, inventory, and general ledger master data to reflect the shipment, and to print a packing slip and bill of lading. The goods are packed, with the packing slip inside, the shipping label (bill of lading) is attached to the box, and the box is given to the carrier for delivery. The completed picking ticket is discarded.
Error routines are initiated if the customer record does not exist, the customer’s credit limit is not sufficient, the goods are not available in the correct quantity, the goods picked from the shelf do not agree with the picking ticket, or the goods to be shipped do not match the picking ticket and sales order.


  1. Read the given “Analysis Notes” in file “Analysis Notes 2019.dcox” to understand how the OE/S process works, and give a textual description of your designed OE/S process including involved process roles, activities, documents, etc. Extra research work is highly suggested, if you are not familiar with sales business processes. (Minimum 400 words)
  2. Create the corresponding BPMN diagram(s) for the described business process, including necessary activities, events, messages, data, etc. (Minimum 20 meaningful and non-trivial activities).
  3. Create a business process integration plan using the template introduced in our course to show how the created business process should be integrated into the current IT systems and organisational body of the host company. Make reasonable assumptions if needed. (Minimum 300 words)
  4. Put all above contents into a report. Your report should also contain sections of executive summary, introduction, conclusion, and references (APA6 or Havard style).

: Your report in an MS Word file, plus your BPMN file.

Give an oral presentation in class covering tasks 1-3 (with the help of a PowerPoint file).

2 mins ago