Empower Your Business Sales Process for Manufacturing with airSlate SignNow

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so today in this training session we will again cover business process how it happens in manufacturing industry so now it in a bit more detail because we now know the documents which are associated in with each process with each entity so first of all let it let us draw a simple a simple company process so first of all let us say this is a company called TMT and their business is selling TMT bars iron rods using construction industry so they are manufacturers they are manufacturing so what organization what department this organization can have so first of all we will start with the basic departments one is purchase one is sales and there will be one which is account and there will be on one another department which we call inventory so these are the departments that this manufacturing company has so now we need to check or we need to ensure what kind of business process this company need to have also this company has production plants so we will say so this is their production plant they have two factories for an example one factory is in Kolkata another Factory is in Jamshedpur and through this their business is going on similarly Kolkata Factory has some inventory and JumpShip your factory has some inventory so inventory exists in Kolkata factory inventory exists in Jamshedpur factory for raw materials and inventory exist they have a separate inventory for finished goods which is only there in Kolkata for example and this is for Kolkata this one is for finished goods only so this is their business now how the business is happening so first let us start with the purchase process so when we talk about purchase process there are some vendor so this is their their business now let's clean and let's start with one by one so first their purchase process so let's first remove this so this is the business diagram a drum diagrammatic representation of the company's business now we will start with each process how the process is happening and how is going on so the process starts with so I will again draw a simple diagram let's say this is the company this is their purchase department and this is the Accounts Department purchase department has some purchases employees and some probe purchase manager there is inventory in three places Kolkata and in Jamshedpur Kolkata has two kind of inventory one as I mentioned is for finished goods another one is for raw materials Jamshedpur only has raw material so whatever production happening in Jamshedpur the output of the production that means the finished goods are shipped to finished goods inventory of Kolkata so now how the purchase process is basically going on so purchase process can start from many points purchase employee II one is checking the inventory regularly specifically the raw materials raw materials inventory they might be using some ERP system so they are using ERP so purchase employing him ERP he has access to inventory module and purchase module so purchase employees like regularly checking the inventory of the raw materials of both the production plant he saw one day that the you entry is less for production the purchase employee might get input from other sources like sales some salesperson of this company is trying to sell 50,000 pieces of a TMT bar to one customer when he sending the sales order he saw that there is no you know there is not 50,000 pieces available in the inventory so he request purchase department to purchase raw material and then produce it or he might request the inventory guy that I need this amount of inventory inventory guy saw that this amount is not available this quantity is not available within the inventory so what inventory guy does inventory high requests purchase department to occur the raw materials so that production can happen so there can be multiple input there is no fixed point of input there can be multiple input depending on the type of business or the business process might be one business let's say for an example for this business sales employee trying to sell 50,000 pieces doesn't saw enough inventory so he requests the inventory guy that I need this inventory by 25th of July so that I can send it to the customer now inventory guy checked - and so this amount of inventory is not available in finished goods in Kolkata so he requests the production department production to produce production saw that there are no not enough raw materials available so production requests purchase that I need this amount of to achieve fifty thousand pieces they have a material requirement plan that to achieve fifty thousand pieces of the rod they need three tons of iron ore they need fifty kilo of some chemical compound so whatever is required to produce this fifty thousand pieces of rod the production if production saw that there is shortage in raw material production will instruct purchase Department to initiate the purchase and a cooler the raw material so this is the input point I am NOT saying from which point versus Department got this input there can be multiple point of inputs in anyway purchase Department got a request or purchase Department saw the raw materials is not enough now what purchase Department will do so there are vendors associated so let's say there is vendor v1 v2 and v3 these are vendors so purchase Department what it do purchase employee will send purchase request to all the vendors it's a purchase request it's not an official document kind of it might be a for telephony call that I need this amount of pieces this amount of the raw material from you guys coat me send me the quotations to whom this purchase employee will request vendor has sales department and sales employee so they will request it to vendors sales department but purchase Department of TMT is associated with the sales department of the vendor so they will ask the vendor sales department to court now all three vendors now all three vendors send the scales quotation in return sales quotation they are sending to this purchase purchase employee or purchase department they are sending sales petition now the purchase department will get pricing different quotations and different prices they will start negotiation with the vendor and they will ultimately they will agree at a point that okay we are good with vendor v1 they provided us good payment or on credit they provided us on-time delivery in history and now also they are committing that they will deliver within for an example fifth of July which is highly required for my production so that I can produce and supply fifty thousand pieces within twenty fifth you like so they committed that they will send by fifth of July all the raw materials and they are providing good payment on so purchase Department agreed to this point so now what purchase Department will do now purchase Department will confirm them so now when purchase Department is confirming them that means they need to confirm through a valid document so this document will be called purchase order so purchase department of this company TMT will send a purchase order through which it is committing that okay I will I am ordering you and confirming you this number of raw material I require and this amount so they will create this purchase order through their ERP and they will just pray or get a PDF copy of that they will send it to the vendor now what this vendor will do vendor will get this purchase order they will convert it to a sales order okay it's their internal process so first let's clean the other vendors who are not selected who have coated but their quotation is not up to the mark so they were not selected for this operation so now the vendor will get a skills order convert the purchase order into a sales order within their own company systems or manually they will because purchase order in this case will be a document a PDF document if it's in soft copy or a printed document if it's in hard copy so the vendor will convert it find sales order and then the vendor will send the sales order for further processing within his company for further processing - - which departments vendor will send it to their purchase or production department so that they can get this material so that they can dispatch it to the customer TMT because purchase for TMT is as I mentioned earlier sales for the vendor so a vendor how the vendor will actually material which they require like three tons of here I mentioned three tons tons of iron ore and 50 kg of some chemical compound so three tons of iron ore might be they will get from their mining operation and chemical compound they need to purchase from another global vendor so they will purchase as well as they will produce something to fulfill the order of 10 D also the sales order will be sent to the Accounts Department of the vendor so that Accounts Department can take care of the commercial now what Accounts Department will do of the vendor side what Accounts Department will do Accounts Department will create an AR invoice or it might be a our down payment invoice if the client will pay some advance so by any mean the accounts will simply create an invoice so we will say an invoice there can be payment or mine before there can be partial payment there can be payment weally on credit fully for now on credit they will pay after they get the this thing within their inventory these raw materials there can be multiple payment terms plus simply the Accounts Department of the vendor will create an invoice and they will send this invoice to the Accounts Department of the customer in this case TMT they will send this invoice they will send this invoice to this Accounts Department of the customer so that accounts Department of the customer can take care of the payment okay can take care of the payment so both accounts Department of the customer and Accounts Department of the vendor will take care of the payment terms but razer production department will get the materials now when the materials is received the sales order will now reach to shipment department of the vendor shipment Department will already received we've already saw that the items has been heard so now what shipment Department will do it will create a delivery document and will send this shipment of the materials to directly the inventory of the customer side so as this is raw materials this is required in Kolkata inventory as well as this is required in Jamshedpur inventory for production so they will send this amount that means 3 tons might be divided into 2 plus 1 ton to tons and to Kolkata 1 tons and 2 said poor 50kg might be divided into 30 plus 20 30 kilo to kolkata plant and 20 kilo to Jamshed so they will send the delivery might be slick delivery to and send it to different locations so this is a shipment once the inventory guy of the TMT received this deliveries they will sign up on the delivery document and they will send it back to the vendor so vendors shipment or courier service will come with the shipment of the raw material along with the document which is delivery document and we'll get it signed by the inventory guy as their acceptance that yes you have received we have this proof so that in future TMT inventory guy cannot provide put up any question regarding the delivery of this so that's why it's a legal document they will come up with delivery document and they will get it signed when they are delivering the items so this process is over at the vendor site now what will happen in the company side in the TMZ company side so the company now they what will do their purchase department when it is received inventory will intimate purchase department radius we have received this shipment how they will intimate this is to purchase department through generally the intimation is done through a document called GRP your Goods received purchase order so Goods received purchase order can be created by inventory or can be created by horses itself so if not by inventory then inventory guy will intimate purchase department that you have ordered this is the purchase order that you send to the customer and we have received this shipment so purchase department on the basis of that they will create a g RP o in there ERP GRP Oh means they have received this amount or quantity of raw material successfully within their inventory they need to let the system know how otherwise how ERP knows that you have received something within your own warehouse the Acme is not artificial intelligence so you need to enter through some document and that document is GRP oghuz receive purchase order purchase department or inventory guy updates the system using this document and then in ERP you will see this talk of the raw material increase previously if it's swing thirty thousand you know thirty tons of iron ore now it will show 33 tons of iron previously if it's showing to two hundred kilos of chemical compound now it will show two fifty kilo of chemical compound when you add this GRP or done Accounts Department when the payment is over with the customer Accounts Department will create an AP invoice for their internal record ap means house payable invoice for their internal records which keeps track that they have filled this amount to this vendor they have paid this amount through this vendor so ap invoice will be created for their own record and nothing else so now again we will concentrate on the other operation which he seems how it happened so we have again the same company TMT producing TMT bars for construction industry building construction another construction industry so they have now they have a department of its sales process so they will have a sales department under which there are sales persons associated there is again Accounts Department there is inventory so inventory is directly associated with their production plant inventory has Kolkata they have finished goods inventory so we will only consider finished goods here not other inventory because here the client will only sell finished goods so production replenishing the inventory of Kolkata it's the finished goods inventory whatever is produced sent to Kolkata production is happening in two places in Kolkata and in Jamshedpur but all finished goods sent to the Kolkata inventory okay so this is let's start with the sales process now so there are sales process there are customers instead of vendor there will be customers customers will also have two departments which will be associated with my all transactions one department will be purchase because customers purchase process with new sales process and another is accounts so your account will be connected with customers account department your sales people will be connected with therefore cheese people and nothing else so let's start how it happened let's start about start about a thing called requirement customers require 50,000 pieces this customer require 50,000 pieces of TMT bar what this customer will do how it can approach you so there can be multiple ways of scenes Versailles cannot happen you know from one source might be this customer has a history with you has a relationship with you because this is for manufacturing all is happening for b2b it's a b2b sales so they have TMT has always have you know loyal customers and no long relations with the customers whom with whom they are maintaining and long-lasting relationships because b2b is all about relationship selling so they will so it is a it has a customer let's take the simple logic customer already associated to it TMT and let's say customer has done some previous business with them so what customer will do customer require 50,000 pieces of TMT bar customer might be this customer might be some you know builder or some construction company they regularly purchase the empty bars so what this customer will do customers purchase department will send a request that okay we need 50,000 pieces so it will request your sales department that we need through any mean it can be through phone it can be through email by visiting your office or your cells employees visiting customers office or your sales employee met with the customer in some event in anyway customer requests for 50,000 pieces off the empty bar and customer requests what will be the delivery date and what will be the price so first of all what this ins person will do what s1 will do it's one will first check inventory because they are using ERP as we assumed before starting this you know session we are using some ERP so s1 will first check within their ERP system whether they have sufficient inventory or well check if s1 finds out that ok inventory is fine we can supply 50,000 B so they will simply respond if s1 saw that no there are no sufficient inventory so they will intimate the inventory guy the inventory department or the personnel who is looking after the inventory that I need 50,000 pieces within the month of July and when 25th of July customer requested for the delivery what do you say so inventory guy it's not something which they can purchase it's something which they need to produce it's the empty bar so inventory guy will be coordinating with the production that I will be needing 50,000 pieces of TMT bars within the date of 10th July because after that there will be some quality check of the TMT bar and then after quality check the TMT bar will be sent to customers so they need some time for that so they are requesting production department so production department will check they saw that Kolkata is already producing some order please customer so it's not possible for the Kolkata plant to take up this 50,000 pieces order but jump shampoo plant is not fully you know occupied Jamshed pour plant has the potential to increase its production numbers so it will be they decided that okay Jamshed portland we will produce this production department will require raw material for that they will go to the previous process which i explained or purchase they will request purchase department to get the raw materials for this 50,000 pieces but in us that separate subject we have already discussed so simply production department decided that in Jamshedpur plant they will produce this 50,000 pieces and production department replied to inventory that okay by 5th of july my 5th of July we can provide to you might be 40,000 pieces and by 10th of July the rest 10,000 pieces so inventory guy will notify the sales person that yeah we you can take the order but my 5th of July we get 40,000 by 10th of July we will get 10,000 so sales person got the information that ok we can deliver it now what's this person will do sales person will send an official quotation sales quotation to the purchase department of the customer regarding the pricing and regarding the delivery date now purchase department is opening of the customer is ok with the delivery date but they said no you are charging 1200 rupees 4 per empty bar can it be done at thousand rupees so after some negotiation might be they agreed they sales employee agreed at 1100 rupees which is accepted by the customer also so they will again update the sales quotation and we send it again purchase department now agreed that yeah that's fine fifty thousand pieces by twenty fifth of July this is fine for us so they will confirm the sales department of TMT company through a purchase order sales department will get this purchase order that means the deal is confirmed they will create a sales order they will generate a sales order they will send it to their Accounts Department so that that so that their Accounts Department can take care of the commercial aspects and they will send it to their inventory guy that ok we got the order this is the sales order get the you know get the quantity of this product inventory we'll send it to production plant and the production will be started when the production is over then it will be transferred to the Kolkata finished goods inventory ok and there will be one shipment department who is take care of all the shipments so when production transfer it to Kolkata inventory inventory guy will forward that details details means here in terms of sales order to the shipment department that against this order we have this inventory which we need to ship to the customer shipping can happen through any transportation it can be by Road it can be you know as this is the empty bar it should be either by Road by train or by you know like ship or something like that they need to send it to customer now shipment Department when they are ready shipment Department when they are ready they will send this shipment to the customers inventory place where the inventory is there this will be customers inventory this will go to so they will they will send it to inventory that means to the customers warehouse by sending through a delivery document so they will send the shipment along with a document called delivery they will deliver it to customers inventory where the customers inventory that means India in the warehouse so customer will the customer's inventory guy will document and send it back as for their records okay Accounts Department so we left with this cycle now what Accounts Department will do when they receive the sales order they will create an a our invoice it's called account receivable invoice I am about to receive this amount from you and they will send this AR invoice to this Accounts Department this AR invoice they will send it to this Accounts Department that he we women can be split payment payment can be partial payment payment can be all advance payment or payment can be fully on credit in manufacturing payments can be of many types but this is the policy so this Accounts Department of the customer will settle up the payment with the Accounts Department of the company so in this way the sales process going on within a manufacturing company and typically it's a b2b sales you