Sales & Distribution

This QuickStart enables rapid business analysis for a range of end-user analysts: Sales Managers, Marketing Managers and Management Accountants.

Data is extracted from the following SAP R/3 module: SD (Sales & Distribution).

The Sales and Distribution QuickStart focusses on the Sales Order handling and the outbound logistics. SAP ERP has obviously been designed to deal with the transaction processing. The queries and reports that are required to support that transaction handling are available (e.g. the delivery due list) but there is not really something in  SAP ERP that allows you to step back and look at these important processes from a little distance. The QuickStart has been designed to fill that gap. It allows you to analyze your sales order handling and logistics not to figure out what the next transaction needs to be  but it helps you to understand patterns, spot bottlenecks and find exceptions.

Analyze sales order -, picking - and delivery quantities.

NewFrontiers has designed a data model that allows you to look at the order and logistics data from a series of view points (dimensions). Obvious measures are sales order quantity,  picked quantity, delivered quantity. This allows you to build reports that show how much of your products/services that have been ordered must still be delivered. And you can group this information by customer, service or product or organizational objects like the sales organization.  To facilitate these kind of requirements sample reports have been developed which can be easily adjusted to your needs.

Note that where it says quantity it could also be value (in currency).

Analyze sales – and distribution streams (count events)

Whereas the reports of the previous group are still very straight forward the next level of analytical capability is already more advanced an designed for more analytical purposes. The events are analyzed over longer period of time.

For example we count the number of sales orders, deliveries and calculate the average sales order value, year to date value, previous year value etc. The obvious questions that you can answer are what was ordered last year compared to this year by customer and product. Or how many orders placed customer A last year? What was his average order value? Let’s say that you have figured out that the customer has placed more orders (positive) but of a lower value (negative) you may want to contact the customer and find our why that is. It obvious that the less sales orders your logistics have to handle to lower your operating costs.

The data that comes from these analysis is obviously what is needed as driver for processes like Activity Based Costing.

Find unexpected / undesired behaviour

Unexpected behaviour can have a significant impact on the operational costs of your logistics. For example the constant changing of sales orders by your customers could result in your internal planning needed be updated more often than you would like.  A late cancellation of a sales order could have as a consequence that you have missed the opportunity to sell the product to another customer as it was reserved by your SAP ERP available to promise (ATP) process.

SAP ERP with it’s focus on transaction processing does not really spot this not desired behaviour. So trying to prove a feeling that customer A continuously cancels orders and should only under strict conditions be allowed to place an order can be very difficult.  

This NewFrontiers solution provides the capability to spot order (and even line item) changes and cancellations and pin point them to customers or your own account team (user!). Our solution is quite unique in this as finding changes and deletions in SAP ERP is not very easy.

Some of our customers use these kind of analytics to drive better logistics and as a result lower costs. Others use these capabilities to find people in their own organization that place large orders to block for their customers, having a negative impact on the whole company, and by doing that bypass the SAP ERP logic.

Order and delivery performance

Try to imagine how your customer sees you. If your customers orders a certain quantity than that is obviously what the customer wants to receive. In SAP ERP Sales Orders are often changed due to a variety of reasons.  This is why the “initially confirmed sales order quantity” is stored as a measure. This you can compare to the “latest” sales order quantity and as such get an impression of the perception of your companies reliability.

 You can also look at the same metrics but than in value from an internal view point. What has been ordered by the customer versus what has been confirmed (i.e. allocated)? I.e. if the value is significantly lower than you have missed potential revenue… 

In this same category delivery performance is measured, what is late and once delivered was the delivery in time? This trend information can be of great value when you want to improve the perception your customers may have of your company.

Early revenue and margin reporting

Revenue is what has been invoiced to your customers and what has been posted in your financial ledger, accounts receivable. A dedicated QuickStart exists for Revenue Analysis which enables you to look at revenue from many different view points (customer, product, organization, etc.) and at the same time reconciles with Finance.

So why do revenue (Sales Order Value) and margin (Sales Order Margin) calculations also in this subject area. 

The sales order registration is an early step in the Order to Cash End to End process. Sales Orders that for example show negative margins can indicate an error in the internal process or maybe a trader selling with a loss! The sooner you can react to such a situation the better. Like a fixed/hidden speed camera next to a motor way. Imagine that you don’t know about it and the authorities take a month to send you the first fine you maybe unpleasantly surprised receiving more occurred during the elapsed period. Would you have known on day 2 you would probably have driven at the allowed speed earlier!

The other view point is that confirmed sales order value says something about future revenue. At the beginning of the period sales managers can not do much with the invoice based revenue reports for that month whereas the “Confirmed Sales Order Value” gives them more insight.