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Few companies automate an entire business process all at once. A Ship-from-Stock and Debit business process may be implemented in multiple steps, as represented by the component business models contained in the scenario. Some companies may decide not to automate some parts of the process if an ROI analysis indicates that automating that part is not cost-effective.
Activity Diagram (See also Narrative):
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Narrative (see also Graphic):
|A.||At start state A, the buyer and seller have a pre-established relationship. See Assumptions on the overview page for this model.|
A distributor's margin (profit on a resale) for a product drops below a desirable level, due to the fact that the distributor is holding stock for a component supplier, purchased from that component supplier at a price that no longer reflects actual market price. The Distributor requests a post-sales (component supplier selling to distributor) reduction in cost from component supplier in order that the resale of the product will meet competitors' pricing; the Distributor may send a Discrete request for a Debit Authorization (Pre-Order Model 6), a Blanket Request for Debit Authorization (Pre-Order Model 7), or may include it in a Request for a "Meet Competition" Quote (Pre-Order Model 4) sent to get a reduction in pricing for backlog (Distributor's open orders to the component supplier) and future orders sent from the Distributor to the component supplier. See appropriate model (per hyperlink references above) for details.
At end state B, the authorization acceptance or rejection is pending. The distributor should expect a follow-on response within an agreed, configurable period of time indicating authorization acceptance or rejection.
Note that the model does not have the "pending" state trigger the subsequent follow-on response. For the distributor the sub-process is ended and the buyer waits for the follow-on acknowledgement. If the supplier has set the authorization status to "pending," the supplier should have logic in the back-end process that triggers them to initiate another instance of the response sub-process when the cause of the pending status is resolved and sends another response message with an updated status.
The distributor may launch an exception notice if the supplier's follow-on response is not received within the agreed, configurable period of time.
|2.||The distributor opens a file or creates a data base to track status of Debit Authorizations -both those approved by the component supplier, those where the request was rejected by the component supplier, and those where authorization status is still pending.|
|3.||The distributor enters into pre-order negotiations with its customer.|
|C.||Start state C occurs when information requested (e.g. from inside sales for a blanket authorization, different customer, different part, credit/re-bill, authorization not on file) or distributor wants to perform audit, or transactions between distributor and customer may trigger request to confirm authorization status.|
|4.||The distributor may launch a request for an authorization status report, or the component supplier may send an updated report periodically. See component model Pre-Order Model 8 for details. The distributor uses the report to perform audits, check counts, check expiration dates, etc.|
|D.||At end state D, no authorization for a debit exists. The distributor is ineligible for a debit claim when reselling the component supplier's product.|
|5.||The distributor reports point-of-sales transactions to the component supplier, per the appropriate Sales Reporting Scenario. Sales may be matched to debit claims; for product returns, POS triggers reversal of debit granted to distributor. Timing is important to reconcile SSD claims with POS data. This step is optional because the timing of SSD claims and POS reporting are often different; for example, SSD claims may be sent weekly and the POS report monthly, or the POS reporting could be daily and the SSD claims done monthly.|
If eligible, the distributor may submit a debit claim upon reselling the
component supplier's product. The component supplier will send a
response that confirms or denies the claim. If the debit claim is
approved, the distributor debits the appropriate amount from what the
distributor owes the component supplier for other transactions. See
component model Debits and Credits
Alternatively, since debit authorizations already exist, after reviewing the POS report, the component supplier may automatically award a debit claim approval to the distributor (the distributor does not have to submit a claim). See component model Debits and Credits Model 6 for details.
|E.||End state E is reached if the sales report indicates that no products which the distributor resold at discounted prices have been returned by the distributor's customer.|
If, in reviewing Point-of-Sales
(POS) report, the component supplier sees that the end customer has returned
material, the component supplier may send a credit claim to the distributor to
back-out the cost reduction. This is also know as "Bill up-to-book."
The distributor then adds the credit (to the component supplier) to the amount
owed component supplier from other transactions. If needed, the
distributor may send a response that confirms or denies the credit claim.
See component model Debits and Credits
Alternatively, when the distributor's customer returns products, the distributor may give a credit to the supplier automatically. See component model Debits and Credits Model 8 for details.
|F.||At end state F, the distributor has accepted the component supplier's claim. All claims have been processed by both parties and both parties know the status and disposition of the claims.|
|G.||At end state G, the distributor has sent a response as required under the Terms and Conditions Agreement. All claims have been processed by both parties and both parties know the status and disposition of the claims.|
Last updated 04 January 2003