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

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

Intended learning outcomes: Explain the general data structure of an order in sales and distribution, production, or procurement. Disclose the basic object classes in an order database.

The examples in Figures and 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 item 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, 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 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 shows the general structure of an order in sales and distri­bution, production, or procurement that arises from these obser­va­tions.

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

Here, the observations from the examples in Figures and 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 contains a formalized order structure with the same content as Figure, 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:

Fig.       The basic object classes in an order database.

  • The “fan” symbol describes a component hierarchy, 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.
  • The way in which the item receipt, item issue, and work and production equipment class symbols are nested within the order position class describes a specialization hierarchy. An item receipt, item issue, or work or production equipment is a specialized order position.

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

Course section 17.1: Subsections and their intended learning outcomes

  • 17.1.4 The Order Position Data

    Intended learning outcomes: Produce an overview on the object class “order position”. Present in detail the attributes of the object class “order position”.

  • 17.1.5 Inventories and Inventory Transactions Data

    Intended learning outcomes: Produce an overview on the object classes for inventories. Present in detail the attributes of the object class “inventory transaction”.