Diagrammatic Representation of Specific Business Processes

Three specific processes covered here are;

I. Customer order fulfillment



I. Customer Order Fulfillment 

(i) The process starts with the customer placing an order and the sales department creating a sales order.

(ii) The sales order goes through the Credit & Invoicing process to check credit (an activity) is it OK? (a decision gateway).

(iii) If the customer’s credit check is not OK, you would move to the step ‘credit problem addressed’ (an activity), followed by a decision ‘OK?’. If, ‘No’ the order will be stopped.

(iv) If the customer’s ‘credit check’ response is ‘yes’, and if stock is available, an invoice is prepared, goods shipped and an invoice is sent to the customer. If the stock is not available, the order is passed to ‘production control’ for manufacture and then shipped to customer with the invoice.

(v) The process ends with the payment being received from customer.

II. Order to Cash (O2C)

Note: It should be noted that this is only a simple example to illustrate the concept. However, in large enterprises the main processes, sub processes and activities could be much more.

(i) Sales and Marketing (SM)

        Advertises and markets the company’s products and books sales orders from customers.

(ii) Order Fulfillment

        Receives orders from SM.

        Checks inventory to establish availability of the product. If the product is available in stock, transportation is arranged and the product is sent to the customer.

(iii) Manufacturing

        If the product is not available in stock, this information is sent to the manufacturing department so that the product is manufactured and subsequently sent to the customer.

(iv) Receivables

        The invoice is created, sent to the customer, payment received and the invoice closed.

        It should be noted that under each sub process, there could be many activities.

For example:

Main Process - Order Fulfillment

Sub Process – Receive Orders

ActivitiesCheck correctness and validity of information in order, enter order in computer system, check credit worthiness of customer, check credit limit, obtain approval for any discrepancy etc

III. Procure to Pay (P2P)

(i) User Department

        A user in an enterprise may require some material or service. Based on the need and justification, the user raises a purchase request (PR) to the Procurement department.

(ii) Procurement Department (PD)

        PD receives the PR and priorities the request based on the need and urgency of the user.

        It is then the responsibility of the PD to find the best source of supply, for the specific material/service. PD will then request the potential vendors to submit their quotes, based on which negotiations on price, quality and payment terms, will take place.

        The purchase Order (PO) will then be released to the selected vendor.

(iii) Vendor

        The vendor receives the PO and carries out his own internal checks.

        Matches the PO with the quotation sent and in the event of any discrepancy will seek clarification from the enterprise.

        If there are no discrepancies, the vendor will raise an internal sales order within the enterprise.

        The material is then shipped to the address indicated in the PO.

        The Vendor Invoice (VI) is sent to the Accounts payable department, based on the address indicated in the PO.

(iv) Stores

        Receives the material.

        Checks the quantity received with the PO and quality with the users. If there is any discrepancy the vendor is immediately informed.

        The Goods Received Note (GRN) is prepared based on the actual receipt of material and the stores stock updated. The GRN is then sent to the Accounts payable department for processing the payment.

            A Material Issue 1ote is created and the material is sent to the concerned user.

(v) Accounts Payable (AP)

        AP will do a ‘3-way match’ of PO/GRN/VI. This is to ensure that the price, quantity and terms indicated in the VI matches with the PO and the quantity received in the PO matches with the GRN quantity. This check establishes that what has been ordered has been delivered.

        If there is no discrepancy, the payment voucher is prepared for payment and the necessary approvals obtained.

        If there is a discrepancy, the VI is put ‘on hold’ for further clarification and subsequently processed.

Finally, the payment is made to the vendor.8

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