K&B Enterprises is a publicly held medical instrument distributor that sells items throughout North America and Europe. The corporation uses SAP for it’s core ERP functions, but uses SalesForce.com for it’s order processing. The sales offices are located in Los Angeles, while the warehousing, logistics, and inventory operations are located in Vernon, CA.

Sales are initiated either when customers request quotes via the company’s eCommerce site housed in SalesForce.com or through direct sales orders placed with internal sales representatives. If the quoting system is leveraged, a quoting specialist prepares the quote and sends it to the customer after obtaining sales manager approval. All sales are on credit, FOB destination. During the past year, sales have increased dramatically, but 10% of sales have had to write off as uncollectible, including several large orders to first-time customers who denied ordering or receiving the merchandise.

Once a customer order is approved by the credit manager, sales orders are picked in the warehouse and sent to logistics, where they are placed near the loading dock in reverse zip code sequence based on shipping destination so the closest ones can be delivered first.

The increased volume of sales has resulted in a number of errors where customers were sent the wrong items. There have also been delays in shipping because items showing SAP as in stock could not be found in the warehouse. Although a perpetual inventory is maintained, there have been limited physical inventories taken over the last year. When items are missing, a warehouse clerk writes the information down in a log book. Each week, the warehouse staff uses the log book to update the inventory records.

SAP is configured issue a sales invoice only after shipping employees enter the actual quantities sent to a customer, thereby ensuring that customers are billed only for items sent and not for items on backorder.