Identify “bad” customers which cost you more than they buy

Having a lot of clients? Producing by Make-To-Order? We can help you to identify customers which change their Sales Orders frequently and evaluate the damage, done by cancellation or change of the Sales Orders during the “no changes allowed” periods.

For the MTO related companies, changes made to Sales Orders could have significant impact on various aspects of the business. Specifically it can impact the following:

  1. Purchasing of components and/or finished goods
  2. Production planning (in case, of a production company)
  3. Inventory planning
  4. All other aspects related to the process of sales

Regularly the company will define together with a customer, under what terms change or cancellation of Sales Orders will be considered as valid action (usually the terms are stated in the SLA agreement). Among other things, the SLA agreement states the period, which when passed, no changes allowed to be made to the Sales Order (FROZEN PERIOD) because the company has already started the logistic process (production or purchasing of ordered goods), so changes or cancellation of Sales Order during that period will most probably lead to a financial loss.

This alert divides the future time line into 3 periods:

  • FROZEN PERIOD (period closest to delivery date – changes to Sales Order are not allowed)
  • SLUSHY PERIOD (period prior to FROZEN – changes in Sales Order should be validated with production planner)
  • OTHER PERIOD (period prior to SLUSHY – changes in Sales Order can be performed without any coordination or supervision)

This alert will help companies to discover and analyze changes in Sales Orders during the aforementioned periods.

The alert is distinguishing between 4 types of changes:

  • Sales Order cancellation – reason for rejection is set to relevant sales order line
  • Sales Order quantity modification – ordered quantity was changed
  • Sales Order delay – agreed delivery date was changed to the later date
  • Sales Order advance – agreed delivery date was changed to the earlier date

Each type of change has its own FROZEN and SLUSHY parameters and could be defined separately. The alerts present either detailed or aggregated information:

  • DETAILED – the data will be presented in the most detailed (Scheduled Line) level
  • AGGREGATED – the presented data can be summarized by Sold-to-Party/Sales Org./Plant/Distr. Channel/Division/Country

 

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