Order entry and fulfillment at Fabrikam: an ERP walkthrough

Transcription

1 Order entry and fulfillment at Fabrikam: an ERP walkthrough In this exercise you will experience the look and feel of a modern ERP system: Microsoft Dynamics GP. You will play the role of an intern at Fabrikam who is assisting a customer in purchasing some computers. The steps you will go through (shown in Figure 1) highlight the integrated nature of ERP software. Towards the end of this assignment, the system will generate a report with your name and ONID id on it. If you have completed the steps, it will also list the transactional details from your walk through. Please turn in that report to your instructor to receive credit for this assignment. Accessing this Assignment You must run this assignment on one of the computers in the Bexell Hall labs as these are the only computers that have the required software installed. Before you start this assignment, reboot the computer! This will reset the database so that you will be working with a fresh copy of the data. Your Mission: Figure 1 - The workflow explored in this exercise Figure 2 Using Microsoft Dynamics (GP) ERP, conduct a hypothetical sales business process with the following activities: Sales generates orders, manages customers and if stock levels are too low, back orders inventory. The Warehouse receives shipments and updates stock levels, and enters vendor invoices that arrive with shipments. Once Sales has the inventory to complete an order, the warehouse will transfer stock out of inventory to be shipped to a customer, creating an invoice to the customer. Finally, Accounting receives customer payment, deposits it into the records and issues payment to vendors. P a g e 1

2 Launching Microsoft Dynamics GP To begin, launch the Microsoft Dynamics ERP system: Start - All Programs Microsoft Dynamics GP icon. This should bring up the login window. Login to the system with the following credentials (case sensitive) User ID: student Password: student sn050 Press the OK button P a g e 2

3 You will then be asked to login to the company (strange, GP-specific term). If it is not already selected, from the Company drop down menu, select Fabrikam, Inc. sn001 Next, you will receive a notification that the date is being set for the year Because Fabrikam is a hypothetical company, the data in the system have been developed around a set of dates in the future. Just be aware of this when you are working in Dynamics as you will not see date stamps for the current date. Press the OK button. P a g e 3

4 Initial Sales and Back Order In this section you will work with Sally in the sales department to place an order. She explains that her sales functions include taking orders, maintaining customer information, and purchasing stock from vendors. Normally, an ERP system enforces user controls by allowing users to perform only the activities that they have been authorized to perfrom. However, in this exercise, you will perform all functions using the student login. Tasks that Sally (and you) will perform in this section are: Start a new sales transaction order entry. Create a new customer record (you!), and add this customer to the order. Add 10 computers to the order, but discover that there is insufficient inventory in the warehouse so we must place them on back-order, Create a purchase order for the 10 computers and select a vendor from whom to purchase them. Submit your purchase order into the ERP system. On the home page, click Sales Transaction Entry under the Quick Links sn002 P a g e 4

5 This will bring up the following screen; choose Order (we are going to place an order for a customer) sn003 Note: since Dynamics enforces entering certain types of information in a specific sequence, using the Tab key can be useful as it jumps over the various required data fields in the required order. You may, of course, use your mouse to activate input fields, but when you do that and enter fields in the wrong order, Dynamics will complain. Using your Tab key, tab to Document No. field, Dynamics will automatically fill in the document number. Next, Tab to the Customer ID field, and type in your ONID ID. For example, if your ONID is cobstudent@onid.orst.edu, then your ONID ID is the part before sign. Once you have added your ONID ID, click on the new icon (the sheet-like icon to the right of the magnifying glass (see illustration below). sn004 P a g e 5

6 The following prompt will ask whether you want to add this customer record. Click Add. sn005 (Note: did the following window pop-up instead? If so, click on the new icon.) Sn18_part2 This will bring up an empty Customer Maintenance window, in which you will create a new record for yourself. Normally you would add the new customer record for the customer placing the order. However, in this exercise, you should create a customer record for yourself. At the end of this exercise, you will generate an invoice for this order which you will turn in for course credit. P a g e 6

7 In the Customer Maintenance window, for the Customer ID, insert your ONID Login ID, and add your Name. For Address ID, enter your ONID ID (just as you did for Customer ID). Then, if you like, you may use the College of Business Address, City, etc. (200 Bexell Hall, Corvallis, Oregon 97331) or make up your own. sn0076 Click the Options button to bring up the following Customer Maintenance Options screen. P a g e 7

8 sn007 Change the Credit Limit from No Credit to Unlimited. This will allow you to place an order for this customer without pre-payment. Thought question: Why might a customer like having a credit limit set and enforced by the system? Click OK and then save and close the Customer Maintenance window. sn008 P a g e 8

9 Back in the Sales Transaction Entry window, if the Customer ID is not filled in, press the magnifying glass and locate your new customer record (Your ONID-ID) and select this. sn010 P a g e 9

10 Using the Tab key, tab over to the Batch ID, click the magnifying glass and select SOP Orders (sales orders processed). Orders are often processed in batches (instead of one at a time) and Fabrikam usually saves its sales orders under the batch id SOP Orders which is assigned to sales that have not yet gone through the batch process. Later, when they are processed they will get an ID assigned such as: STDINV2266 for the 2266 th batch of sales orders processed. Tab to Site ID, and tab again. If Warehouse does not auto fill, then click the magnifying glass and select Warehouse. Tab to Currency ID and tab again so that Z-US$ is filled in. Tab again sn011 P a g e 10

11 Now you are ready to add some actual sales items to this order. Click the look up icon (the magnifying glass) next to the Item Number text, which will bring up the Items window. sn012 Type computer into the text box (see below), then press the Tab key. Select the COMPUTER item, then press the Select button. sn013 P a g e 11

12 You will now see that COMPUTER has been added to your new order (Line Items by Order Entered). Changes the quantities ordered to 10, and then press the Tab key. sn014 At this point you should see the Sales Quantity Shortage Options window open. Notice that the Quantity Available is zero! This means we do not currently have any of these in stock, so they must be ordered. Notice how ERP systems help make this process efficient by notifying that there is not enough stock on hand. To make this process even more efficient, the ERP system will now allow you to back order these items so that you can fill this order. Select Back Order All, and then press the OK button. NOTE: Did the Sales Quantity Shortage Options window NOT appear? If so, then it is possible that another student has partially completed the assignment on this computer. Did you reboot the computer before starting? If not, close GP and restart the computer. This will reset everything and you can restart the exercise (you will have to recreate the customer record and the order). P a g e 12

13 Once you have returned to the Sales Transaction Entry, we should review the order in more detail. The default view of this order is the summary view. To view this order details, expand the item details by pressing the Expand button (two down arrows on the far right side of the screen) to see the detail. sn015 P a g e 13

14 sn016 In the expanded view, under Quantity to Back Order you will see that the system now reflects the number of computers which must be back ordered. Thought question: Does it seem likely that in the real world and in large companies that the same person both back orders and buys the back ordered items from a vendor? (Hint: the exercise is simplified to demonstrate the interconnectivity of processes) P a g e 14

15 Once an item is placed on back order, it must be purchased from a vendor. To actually order this from a vendor, a Purchase Order (PO) must be created which will be sent to the vendor asking to send the item and promising to pay for the item. Now you will generate the purchase order to request the vendor ship the items in order to fulfill the order your customer s transaction. In the upper left hand corner of the Sales Transaction Entry window, select Actions Purchase. sn017 P a g e 15

16 You should see a new Purchase Orders Preview window. Click on the PO tab at the top. Next, click the Vendor ID look-up, then in the look-up window, find and select Cowley Engineering, which is one of the vendors who provides computers for Fabrikam. sn018 P a g e 16

17 Finally, select the order number (ORDST2235 in the display below, but your order number will be different) check box on the left hand side of the Purchase Orders Review window. When you check that box, the other boxes will automatically be checked. Next press the Generate button and the system will generate the purchase order. At this point, the ERP system will offer to generate a print out of the Purchase Order. For some processes, a copy of the document is required. However, for our circumstances, we do not need this document, so you should click the Cancel button and the window will close. sn020 P a g e 17

18 You can now close the Sales Transaction Entry window. Let s re-cap what you just did: you logged into Microsoft Dynamics, started a new sales transaction order entry, created a customer record, and added this customer to the order, attempted to add 10 computers to the order, but discovered that there was insufficient inventory in the warehouse, so you placed them on back order, created a purchase order for the 10 computers and selected a vendor from whom to purchase them, submitted your purchase order into the ERP system. Since a purchase order is a promissory note to pay for the items which are on the order and since Cowley is a vendor that Fabrikam has done business with in the past, the purchase order will be sent to them immediately. Once Cowley receives the PO, it will fulfill it and send an invoice with the shipment. Sally contacts the warehouse and asks them to contact you once the shipment arrives so that you can participate in the receiving process. Receiving Shipment in the Warehouse In this section you will work with Hank who is the warehouse receiving manager. He tells you that his job is to receive shipments and log them into inventory. When orders arrive with an invoice from the vendor, he will submit the invoice into the system along with the order so that accounting has both the invoice and a list of materials that arrived. When a shipment comes in, Hank attempts to match it with a purchase order in the system. You will help Hank with this process. Click SmartList under Quick Links on the home page. sn021 P a g e 18

19 In the SmartList window, expand the Inventory folder, and then expand the Item Quantities subfolder. Click on the Back Ordered Items list. This will display a list of all items on order at all sites and also break down the items by site. Scroll through the list on the right-hand side and find the order for computers that sales placed on backorder to be delivered to the Warehouse at the bottom of the list. sn022 Double click on this item to bring up the Items Quantities Maintenance window. P a g e 19

20 sn023 The warehouse would then verify that the received shipment corresponds to the PO from the same vendor. Make a note of the vendor ID, so that you can associate it with the shipment later. Close the Item Quantities Maintenance window, then close the SmartList. Now that you know to which vendor this shipment corresponded to we can receive the items into inventory. Under Quick Links on the home page, click Receivings Transaction Entry. sn024 This will bring up the Receivings Transactions Entry window. P a g e 20

21 sn025 Change the shipment Type to Shipment/Invoice (since this shipment also came with an invoice). Press the Tab key and the receipt number will be auto filled-in. However, you must enter a vendor document number (this would be the number on the vendor s invoice). Enter the following as the Vendor Doc No: COWLEY1234 sn026 P a g e 21

22 Once you enter the vendor document number, press the Tab key until the Vendor ID is selected. Press the look up icon to locate Cowley Engineering. sn027 Once you have selected the vendor, press the Auto-Rcv (auto-receive) button. We could manually type in the items Cowley has shipped to the warehouse, but using auto receive will allow us to select from items we already have on order with this vendor. P a g e 22

23 sn028 Once you press the Auto-Rcv button, a new window will open with all open Select Purchase Order Items for this particular vendor for you to select from. sn029 (NOTE: Did this window come up but NO purchase order number is showing? Most likely, you skipped the step on page 17. Go back and generate a new order with yourself as a customer and follow the instructions carefully.) P a g e 23

24 Once again, take a moment to recognize how an ERP system has made this process efficient. Instead of having to search through the company records to find the copy of the purchase order that Sales placed (which could take a while with a manual process), the ERP system automatically has saved that information and displays it to the warehouse employees. In this case there is only one open purchase order with this vendor. However in other cases, there might be several orders from which to choose. Check the invoice which corresponds to the computers we just received in the current shipment and the existing purchase order. Finally, press the receive button. The current window will close and you will be looking again at the Receiving Transaction Entry window. Note how this receiving event brings together the Fabrikam purchase order number (to track progress and set up for payment of the bill), the vendor number (to reference the vendor s contact information) and the vendor s document number (invoice) for this order (to facilitate communication if anything goes wrong). ERP systems need to organize a lot of data to support effective processes. Thought question: Are there any downsides to fact that no one was required to actually check how many computers the shipment contained and enter that into the receiving event? Do you think the people involved might simply assume that the correct amount of material has arrived and not check? Note how the information system can both contribute to improved efficiency but also might contribute to mistakes it s a balance. P a g e 24

25 In the Receivings Transaction Entry window, you will notice that the items and quantity were pulled from the purchase order and automatically added to the list of items being received. This is yet another example of the ERP system speeding up the process by saving the Warehouse from having to enter the items received. Next, the warehouse would review the screen and be sure that it is filled in properly. For example, it would compare the quantity received with the quantity ordered to be sure that this was accurate (for example, one or more items may have been damaged or missing). It would also compare the invoice total with the total from the purchase order (in some cases the prices may have changed). Press the Post button and this will commit the receipt of items and Cowley s invoice to the ERP system. Next, the sales staff will be able to complete the order they began earlier because sufficient inventory is available in the warehouse. The accounting staff will also see the new invoice and pay for the shipment. sn030 Close the Receivings Transaction Entry window. P a g e 25

26 Let s recap what you just did in the warehouse: Used the SmartList to look up items on back order. Created an shipment receipt and added the vendor invoice number. Located the vendor ID. Auto received the order and associated the received shipment with a previously issued PO. Posted the received items and the invoice to the system. Finalizing the Sales Transaction In this section, you will go back to Sally s office in the Sales department and finalize your original order. Now that the items we needed have been received, you can add them to your invoice. Normally, Sally would look for any open orders that she has not completed and check to see if they are ready to be completed. You will help Sally with this process by reviewing the open orders. Click on the Dynamics Home, and then select SmartList from the Quick links. sn031 P a g e 26

27 In the SmartList, expand Sales folder, then Sales Transactions, then click on Open Orders. In the right hand window, locate the order where your ONID ID is the Customer Number. sn032 Double click the order, and this should bring up the Sales Transaction Entry you were working on with Sally, so that she can now complete this order. Expand the order details by clicking on the two down arrows on the right hand side of Line Items by Order Entered. sn033 P a g e 27

28 By expanding the order details, we can see now that our quantity on back order has dropped to zero, and the quantity fulfilled and Qty to Invoice are the same as the Qty Ordered. Notice how the system took care of that automatically once Hank posted the shipment to inventory. sn034 Review the order, and verify that the Qty Ordered is the same as the Qty Fulfilled. Now that the order is ready to be completed, we would next invoice the customer and ship the items. To finalize the order, select Actions, then Transfer. This will bring up the Sales Transfer Documents window. Click on Transfer to Invoice, which will generate an invoice for the customer. sn035 Then click the Transfer button. P a g e 28

29 At this point the ERP system will bring up a window to print a report of the order. In some processes, these reports are necessary, but at this stage we do not need a report. Press the cancel button and the window will close. sn036 Back in the Sales Transaction Entry window, we will now post the order, which finalizes the sale in the ERP system, sends the invoice, initiates the shipment of items and removes the sold items out of the Warehouse inventory. Once again, take a moment to reflect on how efficient this process is thanks to the ERP system. In a manual process, completing this order might have required several phone calls, s or visiting other parts of the company where completing our process integrated with other processes in the company such as shipping and invoicing. However, with the ERP system, we only need to Post this order and the integration with other processes is automatically taken care of. First tab over to Batch ID and press Backspace to delete it. Since we are going to instantly process this order (instead of batch processing it) we have to remove this value. sn P a g e 29

30 Then to complete this order, select Actions, then Post. sn037 Close the Sales Transaction Entry window. Let s recap what you just did in Sales: Used the SmartList to look up an open order. Verified that items which had been on back order were now in inventory. Transferred the order to an invoice. Posted the order and the invoice to the system. P a g e 30

31 Accounting: Receiving Customer Payment and Paying the Vendor Now that you have seen how an order is created and items are received into inventory, Sally directs you to visit Fredrick in the accounting department. Fredrick explains that it is his job to receive payment from the customer for the order and to post that back to the company bank accounts. He also has to pay invoices, such as the one from Cowley for the computers they recently shipped. Normally, in large companies, Fredrick s work tasks might be divided among several different people. Here, we have been combined them into one role to make this exercise easy to follow. However, you should be able to recognize the need to have controls in an organization so that execution and control functions are spread over different people and/or departments. Note: At the end of this section you will generate an output report from the ERP software which you must turn in to receive credit for this assignment. Follow the instructions below. To begin, help Fredrick post the payment for the computers which you purchased. Open the SmartList, by clicking on the SmartList link on the home screen. sn031 P a g e 31

32 Expand the Sales folder, then Sales Transactions, then double click Posted Invoices. In the list of invoices on the right hand side, locate the invoice that was made under your ONID ID. Write down the Document Number and the Document Amount. You may have to scroll to the right to view this information. sn038 At this point, we will assume the customer (your ONID) has sent Fabrikam a check to pay this invoice in full. Once you give that check to Fredrick, you will help him record the payment and post it to Fabrikam s bank account. Close the SmartList. P a g e 32

33 Click Cash Receipts under Quick Links on the home screen. sn039 This will bring up the Cash Receipts Entry window. Use the customer look up and locate your record (hint: type your ONID into the search window, then press the Tab keytab key). Select your record and the press the Select button. This will add your name to the cash receipt. sn040 P a g e 33

34 Once you have selected yourself as the customer, enter the full invoice payment Amount as the payment received ($13,050.00). Next, click on the Apply button (lower right hand corner), which will open a list of all open invoices for this customer. Check the open invoice (check mark under Apply To) and finally post the payment using the Post button to commit this payment to the financial records. sn041 P a g e 34

35 sn042 After you post the payment, this will automatically bring up a new blank Cash Receipt Entry (in case you wanted to post another payment). P a g e 35

36 Close the Cash Receipt Entry window. Once you close the Cash Receipts Window, you will see the Report Destination window.. Note: follow the instructions carefully and be sure to save this report in a location that you will be able to find once you have finished. This report will be required in order to receive course credit for this assignment. sn043 P a g e 36

37 You will then see a copy of the report displayed on the screen; you can review the report to see the information which has been displayed such as payment amount, customer information and audit trail codes. sn044 Once you have finished, reviewing the report, close this window. P a g e 37

38 Now that you have received the customer payment, it is time to pay the vendor for their shipment. Open the SmartList by clicking on Dynamics GP, then SmartList. sn031 In the SmartList, expand Purchasing, Payables Transactions, and then Payables Due Today. On the right hand side, locate the outstanding invoice due to the vendor Cowley Engineering which must be paid. Write down the vendor s name and the amount due. sn045 P a g e 38

39 To generate payment, click Transactions, Purchasing, and then Manual Payments. sn046 This will bring up the Payables Manual Payment Entry window. In the Payables Manual Payment Entry window, click the vendor look up icon, then locate the vendor (hint: type COWLEY and in the search box and press the Tab key) and select the vendor by clicking on the vendor s name and pressing the Select button. sn047 P a g e 39

40 In the Payables Manual Payment Entry window, enter the amount to be paid out ($9,000), and then press the Apply button (lower right hand). This will automatically bring up a list of all outstanding documents for this vendor. P a g e 40

41 Check the invoice to apply payment to and then press the OK button, which will close the window. sn048 Now finalize the payment by pressing the Post button. sn049 P a g e 41

42 Let s recap what you just did in Accounting: Used the SmartList to look up open invoices and your invoice. Created a cash receipt for payment of your invoice. Applied the payment to your invoice and posted it to the general ledger. Reviewed a Cash Receipts Report the ERP system generated and saved it. Used the SmartList to find a vendor payment due. Generated a manual payment to the vendor for the invoice and posted it. At this point, you are finished with the assignment and can exit Dynamics. To receive credit for the assignment, turn in the Cash Receipts Report to your instructor. P a g e 42