|5. Sales and Distribution
5.1.1 Sales Organization
Business in the Philippines is divided into two sales organizations, one for the ABC Motors International and one for AMI Marketing. Each sales organization is responsible for negotiation and fixing of conditions and characteristics of business transactions.
5.1.2 Distribution Channels
Both the ABC Motors International and AMI Marketing sales organizations use two distribution channels through which to sell their goods:
The products of ABC Motors International are divided into three groups. All product lines can be sold through both distribution channels by both sales organizations.
It has been decided to use sales offices to differentiate the sales made by the various regions. This will allow easy reporting of business volume by office. The following sales offices must be defined:
5.1.5 Distribution Centers
As discussed earlier, Laguna is responsible for all manufacturing. The other locations Cebu, do not manufacture any products.
Inventory at the Cebu distribution center is replenished through plant transfers that result from sales forecasts. There is no accounting implication since ABC Motors International owns both locations.
The Marketing Company (AMI Marketing) purchases inventory in Cebu from ABC Motors International according to annual agreement. This agreement is in the form of a scheduling agreement, which outlines quantities and dates.
ABC Motors International serves as a vendor for AMI Marketing, and AMI Marketing is defined as a customer of ABC Motors International. Therefore a scheduling agreement is created by ABC Motors International for the delivery schedule of their customer AMI Marketing. The lines in the scheduling agreement appear as demand in the Laguna distribution center.
5.1.6 Shipping Points
Each plant has two shipping points that are responsible
for the processing deliveries. For normal delivery there is a shipping
point which processes the bulk of the deliveries. In addition ABC Motors
International offers its customers an express delivery options using Guaranteed
Overnight Delivery (G.O.D) which guarantees delivery in one day anywhere
in North America. This shipping point represents a special shipping area
reserved for express deliveries.
Pricing used during order entry and invoicing is the responsibility of each sales organization. Therefore any material pricing, discounts and surcharges can vary depending on the sales organization. It has been decided that each sales organization is to have a separate pricing procedure to reflect its own pricing policy. Therefore certain condition types procedure used for Canadian customers.
Furthermore, the distribution channel also influences pricing. A special discount is to be defined for wholesale customers, which reduces the gross price of the product. It has been decided that the price group field in the customer master will be used to determine if a wholesale discount applies. It would be possible to simply make the discount dependent on the distribution channel alone, but the use of the price group field was decided upon since it allowed for multiple discount rates based different price groups.
The following conditions apply to pricing at ABC Motors International:
Both ABC Motors International and AMI Marketing., would like to track each requirement generated by a sales order separately. This means that individual requirements will be passed for the materials. The alternative would be to accumulate demand into collective requirements for a day or a week but then the details of the source of the requirements is not available.
The data required for shipping should be defaulted as much as possible by the system. Areas where this determination is to be automated included shipping point, and picking location determination.
18.104.22.168 Shipping points
The shipping point is specified for every order item. In the determination tables, one shipping point is specified as default and others can be specified as alternates. The default shipping point is influenced by the shipping condition from the customer master, loading group from the material, and delivery plant. Ensure that two shipping conditions, one for regular and one for express delivery are defined as well as the related determination table. A single group can be used since all materials are located onto trucks using a forklift.
The shipping point should be determined as follows:
5.3 Additional Sales Information
Configure the system to satisfy the following requirements:
The shipping must be processed optimally and quickly. The shipping team has decided the standard functionality is adequate and that the standard delivery document type will be used for sales orders.
Consider the following billing related requirements:
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