Back-to-Back Order – How to
Back-to-Back Order is very useful functionality in Oracle Applications.
Key Business Drivers
- Data integration
- Lower inventory cycle time
- Lower inventory cost
- Link supply to specific demand
- Can offer a variety of product to customer
- Used heavily in contract manufacturing environment where the product is standardized and the company plans to focus more on product design rather than manufacturing
Many times business suffers a loss when data is transferred between quotations, orders, purchase orders or invoices?
Damage to any business due to data loss or corruption is always very high. This can be due to a simple user error or data corruption. During the manual transfer of data, the input of incorrect information or staff errors are very real risks. This can have a profound impact as your business grows and staff are under more pressure to process orders in a market where the client expectation is no longer to have their order processed in days or hours but in real-time.
Back to Back order process allows you to process information and orders in very logical manner ensuring a simplistic and efficient process. The integration between quotations, order processing and stock management means that all orders can be processed in real time and you are no longer dependant on a manual process to be run.
e.g. When the PO is received, reservation gets applied automatically against the Sales Order. This prevents allocating material to some other demand.
The key behind the integration of a system is the ability to seamlessly integrate different pieces of information, this leads us to back-to-back order processing.
The key areas that are focused on as part of the back to back process are:-
- Quotations
- Orders
- Requisition
- Invoices (in ‘Oracle Accounts Payable’ and ‘Oracle Accounts Receivable’)
- Purchase Orders
Back to back order processing provides an integrated seamless link from the quotation stage, through to the purchasing of stock (or services), to dispatching, delivering and invoicing your client and the receipt and payment of invoices. It is also extended to invoicing (against PO/receipt) and payment to your supplier. All this process is done using Oracle Work-Flow, standard work flow is given by Oracle but if you want you can modify the same to fulfill business needs. Approval processes are also taken care by Work-Flow.
The entire process can be performed in the minimal amount of time without any redundancy. Each document has reference of some other document so it doesn’t get lost in between. Below are the steps in Back to Back order.
- Quotations are created and sent to the client.
- The client places the order and all required acknowledgements are sent.
- Requisitions / Purchase Orders are automatically created for the required stock.
- Management of awaiting stock from suppliers.
- Tracking and managing supplier and customer communication.
- Receiving of stock and handling of part deliveries.
- Dispatching the order to your customer with management of delivery locations and methods.
- Customer Invoicing.
- Supplier payment.
Some of the important documents that gets created automatically through the different stages in this cycle include (automatic creation of document/s depends on setup).
Quotations, Order Acknowledgements and confirmations, Invoices and Proforma Invoices, Purchase Orders, Stock Receipt Slips, Stock Transfer Slips, Dispatch Notes, Packing to name a few.
For demo please visit two links given below:
- Back-to-Back Order Cycle http://functionalguy.blogspot.com/2009/02/back-to-back-order-cycle.html
- Requisition to Pay Cycle (Procure to Pay) in Oracle http://functionalguy.blogspot.com/2009/02/requisition-to-pay-cycle.html
