Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

17.1 Order Data in Sales, Distribution, Production, and Procurement

Intended learning outcomes: Present the data structure of customers and suppliers. Describe the general data structure of orders in sales and distribution, production, and procurement. Disclose the data structure of the order and partial order header as well as the order position.


The order business object was introduced in Section 1.2.1. It describes all types of order within the supply chain. This section describes in detail the order objects used in sales and distribution, production, and procurement. Section 17.5 (The Management of Product and Engineering Data) describes the R&D order in greater depth. Stock status and statistics are also discussed in this section since they are related to order objects.


17.1.1 Customers and Suppliers

The business partner business object of a company was introduced in Section 1.2.1 as a general term to describe an external or internal customer or a supplier. In terms of their property as business objects, both customer and supplier may be defined as a specialization of business partner. The customer and supplier classes are thus both specializations of the business partner class. Most of the attributes of the customer object class correspond to those of the supplier object class. The most important common attributes are

  • The business partner ID. This ID is generally “not meaningful” (see also Section 20.3.2). Changes to the identification should be avoided during the life of the business partnership. The business partner ID is unique and acts as the primary key for the class.
  • Business partner name, address, and country, and optionally a deli­very address: these attributes act as “secondary keys” enabling a particular customer to be easily traced within the class.
  • Communication details (telephone, fax, e-mail, and Web site).
  • Various codes used to classify the business partner.
  • Credit limit, bank details.
  • Codes for handling the business partner with respect to the tax authorities.
  • Codes for order processing, shipping, and incoming goods.

Various types of sales statistics are kept for each business partner. These are generally administered in separate object classes.

Business partners may be incorporated into an overall company hierarchy.

A combined bill of material is the set of all business partners belonging to a combined business partner.

This bill of material enables general analyses (consolidations), for example, to be carried out for all the companies in exactly the same way as for the individual business partners.

Aspects of computerized administration: The business partner is normally identified by a dummy identification, which is allocated by the information system. A business partner entity, as a data set, may not be physically deleted while it continues to appear in an order or in statistics. A business partner ID is normally allocated for many years, even if the connection with that business partner no longer exists.


17.1.2 The General Structure of Orders in Sales and Distribution, Production, and Procurement

The examples in Figures 1.2.1.1 and 1.2.1.2 show that the order is a relatively complex business object. The individual order data that combine to form the order business object include:

  • The order header: This is the data that appear at the top or bottom of each order, including the principal, contractor, and the order validity date. Each order has precisely one order header.
  • The order line or order position. An order may contain any number of this object. Each is assigned a suitable position number and appears in a specific order. Every line describes an object that must be scheduled or controlled within a company’s logistics, or may be used for text only.

In Figure 1.2.1.1, these objects are, without exception, order positions (of the) item (type) that pass from the supplier to the custo­mer. From the supplier’s viewpoint, they are (item) issues, whereas a customer regards them as (item) receipts or entries.

Figure 1.2.1.2 also shows item issues, although in this case the contractor — the garage — also supplies order positions (of the) work or order operation (type). This means individual pieces of work that the customer purchases as part of the service, but which never assume the character of a product. In this case, they are carried out directly on the object that characterizes the order, that is, the car. The other positions listed under the “Work” heading are an item issue (small items and cleaning materials) and an order position (of the) production equipment (type). A courtesy car was provided to fulfill the order. The courtesy car is an investment on the part of the garage, just like any other device, machine, or tool.

Figure 17.1.2.1 shows the general structure of an order in sales and distri­bution, production, or procurement that arises from these obser­va­tions.

Fig. 17.1.2.1       The general structure of an order in sales and distribution, production, or procurement.

Here, the observations from the examples in Figures 1.2.1.1 and 1.2.1.2 are supplemented with a further level.

A partial order is an order object within an order, which is complete with respect to content but is not regarded as a separate business object.

Several partial orders may logically be combined under a single order.

  • For example, the partial orders in a sales or procurement order may be sets of order positions that will be procured at different times, but together form a whole, for example, with respect to order billing.
  • In addition, certain partial orders in a production order may result in semifinished goods, which, in turn, may appear as item issues in other partial orders. In this case, a first partial order is used to produce a lower structure level, for example. Its result is not stored temporarily, but rather is immediately used in the partial orders for the upper structure levels. This creates a network of partial orders.

In principle, all types of order position may appear in sales, production, and procurement orders.

  • Sales orders generally relate to item issues, although in service companies they may also involve work and the production equipment used.
  • Procurement orders generally contain item receipts, although pur­cha­sed services can also involve the work and equipment types.
  • Production orders are more complicated from the viewpoint of a firm’s logistics: There is often only one item receipt, that is, the manufactured and salable product. This goes either into store or to shipping and thus is passed on to the sales department, which placed the order. In other situations, the item receipt is a semifinished good that is placed in stock. It is also possible for several different item receipts to arise from the same production process (see Chapter 8).

From the logistics viewpoint, the commodities used in the production process are also item issues; for example, issues from the raw materials or semifinished goods store. A production order is characterized by operations and the production equipment used, that is, tools, devices, and machines.

Figure 17.1.2.2 contains a formalized order structure with the same content as Figure 17.1.2.1, in this case as an entity or object model for an information system. For the definition of these terms, and all other tech­nical terms of the domain of information management, see Chapter 20. The special graphical structures are defined as follows:

  • , or whole-part hierarchy. An object of the order class consists of n different objects of the partial order class, and an object of the partial order class consists of n objects of the order position class.
  • . An item receipt, item issue, or work or production equipment is a specialized order position.

Fig. 17.1.2.2       The basic object classes in an order database.

The individual object classes that make up the order business object are discussed in depth later in this chapter.


17.1.3 The Order and Partial Order Header

The order header class combines all the data that represent the order as a whole. Its attributes can essentially be divided into the following subsets:

Firstly, attributes that describe the business partner. For a sales order, this is the customer. For a procurement order, it is the supplier; for a production order, it is the sales, R&D, or logistics department. These attributes include:

  • Business partner ID and the address of the business partner
  • Business partner’s object for which the order is used

Secondly, attributes used to administer the order. These are attributes associated with the status of an order, typically:

  • Order ID, that is, the order identification
  • Validity date of the order (tender date, date on which order was issued, etc.)
  • Kind of order (e.g., customer, procurement, production, or overhead order)
  • Costing unit of the order (in order to combine orders to compare costs against profits) and other attributes to prepare for job-order costing
  • Billing address
  • Order status, that is, the administrative status of the order (e.g., in preparation, scheduled, released, started, cancelled, completed, inspected, deletable)
  • Order conditions and other information that appears at the bottom of the order; allo­cation to the order header means that a separate order footer class may be omitted

Thirdly, the attributes that concern planning & control of the order include:

  • A flag to indicate whether it is a simulated or effective order
  • The order priority
  • The order urgency
  • The order start date and the order end date or order completion date
  • A flag indicating whether the dates are firm or may be postponed

The partial order header object class essentially incorporates the same attributes as the third subset of attributes for the order header class, plus the order ID, partial order ID (generally a consecutive number that supplements the order ID), and a description of the partial order.


17.1.4 The Order Position

The order position class is comprised of all the attributes (information) that appear on each line of an order. One object is stored in each order position. The attributes may be divided into the following subsets:

Firstly, the identifying attributes, which include

  • Order ID
  • Partial order ID
  • Order position ID, generally a number; for work, it may correspond to the sequence in the routing sheet, whereas for items or production equipment it is a relative position within a picking list determined using suitable logic (e.g., the order in which they are taken from stock)
  • Type of order position: item receipt, item issue, work or production equipment
  • Position status, that is, the administrative status of the position (e.g., scheduled, reserved, released, partly executed, fully executed, administration complete)
  • Flag to indicate whether the dates are firm or may be postponed

Secondly, specific attributes that differ according to the type of order position. For the item order position, that is, for item receipts or item issues, these include:

  • Item ID
  • Reserved or allocated quantity
  • Quantity issued or effective quantity
  • Billed quantity
  • Reservation date or the earliest start date
  • Item description, a set of attributes that may be used for more detailed identification and classification (see Section 17.2.2)
  • Position-specific item description within the current order; that is, the position of an electronic component
  • Information for stockkeeping and accounting, which generally means a set of the attributes described in detail in Section 17.2.2.
  • Work order position ID, that is, the operation ID for which an item issue is required or which results in an item receipt

The following attributes apply to the work order position (or order operation):

  • Work center ID (or capacity ID), that is, the identification of the location or group of machines where or with which this operation is used for production
  • Work description
  • Standard load in capacity units (defined in the same way as the load of an operation in Sections 1.2.4 and 13.1.2)
  • Setup load and run load
  • Actual load in capacity units
  • Billed load in capacity units
  • Lead time and, if necessary, lead time components
  • Start date (the operation start date), for example, the earliest, latest, or probable date
  • End date (the operation due date), for example, the earliest, latest, or probable date
  • Work center description and other data used to identify and classify the organizational unit carrying out the work; see also Section 17.2.4
  • Costs and availability data for the work center; this is a set of the attributes described in detail in Section 17.2.4

For a production equipment order position, it relates to the specific attributes of:

  • Production equipment ID
  • Reserved or allocated quantity
  • Quantity issued or effective quantity
  • Billed quantity
  • Production equipment description and other attributes for identifying and classifying the production equipment
  • Work order position ID (the operation ID that uses the production equipment)
  • Costs per issued quantity and other attributes used for billing
  • Start date, for example, the earliest, latest, or probable date
  • End date, for example, the earliest, latest, or probable date
  • Quantity of available production equipment, their costs, and other attributes used for billing; see also Section 17.2.6

Any amount of text may be assigned to each order position object.


17.1.5 Inventories and Inventory Transactions

The following objects are grouped into logical units (object classes) for the purposes of administering inventories:

  • Storage location for administering the various stock locations within the firm. The attributes of this object class are the location ID, description, various classifications, attributes for modeling the different features described in Section 11.1.1, and so on.
  • Physical inventory for administering the various stocks of storable items for accoun­ting purposes. The attributes of this object class are the identifications of the admini­stered item and of the stock location, the quantity stocked expressed in the unit of measure for the item, date of the last receipt into and issue from stock, and so forth.

These two classes are not sufficient on their own to represent stocks of batches or variants, however. The extensions required for the processing industry and for production with a wide range of variants are discussed in Section 17.4.2. According to [Schö01], Ch. 8, a stock of batches or variants ultimately becomes a specialization of an order position.

All item movements, particularly the inventory transactions, are defined in a transaction class. See also Section 11.1. This class may be analyzed using any number of criteria, e.g., consumption, sales, or bid statistics (see Section 11.2). The attributes of this class include:

  • Transaction date
  • Item ID or item family ID
  • Moved quantity
  • Persons responsible for recording the transaction
  • Two customers, production, or procurement order positions or stock level positions concerned (“from” and “to” positions associated with the transaction)


Course sections and their intended learning outcomes

  • Course 17 – Representation and System Management of Logistic Objects

    Intended learning outcomes: Describe order data in sales, distribution, production, and procurement. Explain in detail master data for products and processes. Disclose extensions arising from the variant-oriented and the processor-oriented concepts. Produce an overview on the management of product and engineering data.

  • 17.1 Order Data in Sales, Distribution, Production, and Procurement

    Intended learning outcomes: Present the data structure of customers and suppliers. Describe the general data structure of orders in sales and distribution, production, and procurement. Disclose the data structure of the order and partial order header as well as the order position.

  • 17.2 The Master Data for Products and Processes

    Intended learning outcomes: Describe master data of products, product structure, components, and operations. Explain the data structure of item master, bill of material, and where-used list. Disclose the data structure of work center master data, the work center hierarchy, as well as for operation, routing sheet, production equipment, bill of production equipment, and bill of tools.

  • 17.3 Extensions Arising from the Variant-Oriented Concept

    Intended learning outcomes: Produce an overview on expert systems and knowledge-based systems. Explain the implementation of production rules. Present a data model for parameterized representation of a product family.

Print Top Down Previous Next