Order Management for Industrial Commodities
This customization was created for the US import division of a global steel manufacturer. Sales of industrial commodities present a number of challenges to a discrete distribution system such as Dynamics GP. Each product type is defined by multiple attributes (e.g. Length, Width, Diameter, Alloy, Sieve size) and others (Grade, Tests) are defined during the PO Receiving process.
Profit margins are very competitive and the costs associated with delivery (Loading, Ocean Freight, Customs Clearance, Demeurage, Barging, etc) have a significant impact on profit margins and are often not confirmed until weeks after delivery.
The client's current system was paper based and had become very difficult to manage. They had investigated several Tier 1 systems but found the cost and implementation schedules to be prohibitive.
A flexible item attribute definition system was developed which could be configured for each steel type and then used during Order Entry. Since each Order is unique, all items were set to Back Order status and this was used to automatically generate a Purchase Order which carried the Sales Order item specifications. When the Purchase Order was received, the system created an Item Lot which matched the Sales Order and was linked to the product attributed records. Use of Lots also enabled inventory costs to be directly linked to each Order without distortion by normal cost conventions.
Creation of the Purchase Order also triggered the creation of a Project in the Mekorma/Encore Project Costing system which was used to accrue estimated costs for the sale and then to capture the actual transportation costs when logistics invoices were ultimately received.
The system was designed to use the same reference number for Sales Order, Purchase Order, Item Lot and Project, greatly simplifying reporting and analysis. Since Item Attribute information was discrete and standardized, it could be used to generate reports showing Shipments by attribute, both for sales analysis and to comply with US anti-dumping legislation.