Company Background

Global Bike Inc., (GBI) is a world class bicycle company serving the professional and prosumer cyclists for touring and off-road racing. GBIs riders demand the highest level of quality, toughness and performance from their bikes and accessories.

Product development is the most critical element of GBIs past and future growth. GBI has invested heavily in this area, focusing on innovation, quality, safety and speed to market. GBI has an extensive innovation network to source ideas from riders, dealers and professionals to continuously improve the performance, reliability and quality of its bicycles.

In the touring bike category, GBIs handcrafted bicycles have won numerous design awards and are sold in over 10 countries. GBIs signature composite frames are world-renowned for their strength, light weight and easy maintenance. GBI bikes are consistently ridden in the Tour de France and other major international road races. GBI produces two models of their signature road bikes, a deluxe and professional model. The key difference between the two models is the type of wheels used, aluminum for the basic model and carbon composite for the professional model.

GBIs off-road bikes are also recognized as incredibly tough and easy to maintain. GBI trail bikes are the preferred choice of world champion off-road racers and have become synonymous with performance and strength in one of the most grueling sports in the world. GBI produces two types of off-road bike, a mens and womens model. The basic difference between the two models is the smaller size and ergonomic shaping of the womens frame.

GBI also sells an accessory product line comprised of helmets, t-shirts and other riding accessories. GBI partners with only the highest quality suppliers of accessories which will help enhance riders performance and comfort while riding GBI bikes.

For purposes of this assignment, we will focus on the process involved in sales of in-stock, standard, off-road bicycles. GBI uses an open invoice system to bill its customers; that is, the customer is billed and must pay for each order separately as opposed to the customer being billed periodically for all orders made during that period (usually referred to as cycle billing).

Standard Product Sales Business Process

Tasks within business processes may vary considerably depending on the level of automation and the associated technology. For instance, in a manual system, the task of recording a transaction may be accomplished by either entry into a journal or by the filing of a copy of a multi-copy form. In an automated system, recording entails the filing or storage of the transaction in the AIS. This is sometimes accomplished by pressing a save button after entering the transaction into the system. The order of the tasks will also differ depending on the extent of automation within the system.

Authors Contributors

Nancy Jones Dawna Drum

Jim Mensching James Marlatt

SAP ERP GBI Release 6.04 SOD Internal Controls

Version 1.0

Modified Susan F. Havranek 5/2016

Assume that GBI is currently working with a manual system. The company uses the following 26 steps when they sell standard goods to the customers:

A customer sends a purchase order for off-road bicycles to a GBI employee.

A GBI employee compares the customers purchase order to determine if the customers master data is in the system and is correct.

If the customer master data is not in the system or is incorrect, then the master sales and distribution data (such as company address, contact person, phone numbers, etc.) for the customer is entered by a GBI employee.

If the customer master data is not in the system or is incorrect, then the financial data (such as banking information and GBI reconciliation account number) for the customer is entered by a GBI employee.

If the customer master data is not in the system or if the customer would like to change credit terms or limits, then a GBI employee checks the credit rating of the customer and assigns a credit limit and credit terms.

A GBI employee checks inventory availability.

If the customer can be extended credit and inventory is available, a GBI employee creates a sales order.

A GBI employee creates an order acknowledgement and sends it to the customer.

A GBI employee records the sales order.

A GBI employee creates a picking ticket to fill the customers order.

A GBI employee picks the goods (the bicycles) from the picking ticket.

A GBI employee creates a packing slip and a mailing label.

A GBI employee puts the packing slip into a reinforced packing container with the goods, seals the container and adheres the mailing label to the container.

A GBI employee moves the goods from the inventory control area to the shipping dock.

A GBI employee creates a shipping manifest.

A GBI employee places the goods to be shipped on the truck.

A GBI employee gives the shipping manifest to the truck driver.

A GBI employee creates a shipping document to show that the goods have been shipped.

A GBI employee records that the goods have been shipped.

A GBI employee creates an invoice with a remittance advice and sends it to the customer.

A GBI employee receives the payment from the customer with the returned remittance advice.

A GBI employee records the payment from the customer.

A GBI employee takes all of the payments for that day and makes up a deposit slip for the bank.

A GBI employee deposits the cash in the bank.

A GBI employee records the bank deposit.

A GBI employee reconciles bank deposits with the cash receipts on a daily basis.

Important Note You are not allowed to change the above business process. That is, you cannot add, delete or modify any of the steps above.

REQUIRED:

Based on the information given above, is the manual system described an AIS and how does it meet or not meet the basic functions of an AIS.

Identify data and information entered and/or produced by the system. Be sure to note the step number where the data or information is used or produced.

Identify inputs, outputs and processes included in the system. Which of the multiple business processes or cycles introduced in lesson 1 does this appear to represent?

Create a context diagram of this manual system.

Create level 0, and level 1 DFDs for this system

Create a Document Flowchart for this system.

Create a System Flowchart for this system.

Create a process diagram.