Business Subsystems and Core Processes
Business Subsystems
In organizations, major subsystems contain secondary subsystems. The main processes—collection, payments, production, purchasing, and sales—are essential.
Purchasing Process
Starts when a need is identified (input). This includes a purchase order. This process is often divided into sectors, potentially based on material type (e.g., productive material) or volume/value (e.g., very large volumes and high values). This goes to an authorizing party for approval. Stock is then checked. Purchasing chooses a supplier, controls the order, searches for fees, etc.
A purchase order is issued. This is a key legal document where the supplier undertakes to sell and the buyer to buy. It verifies the details of the purchase. For the supplier, it is legal proof of what to produce, including quantity, price, and delivery method. If the supplier cannot meet the terms, the enterprise may pursue legal action.
The documentation bundle (order, authorization, and purchase order) is sent to finance/treasury.
The process closes when the merchandise is received or delivered to the customer. A cross-check is performed between the purchase order and the received goods/invoice. Purchase orders can be fulfilled completely (documentation goes to treasury for archiving) or partly (remain open until fully fulfilled). The process ends with the documentation bundle being finalized in finance/treasury.
Payment Process
Finance/Treasury checks that the documentation bundle is complete. A payment order is issued and must be approved by the head of treasury, and potentially the general manager for large amounts. The authorizing party verifies everything is correct. The process concludes when the payment is finalized, i.e., the check is paid or funds transferred. Verification is made that the payment was actually processed.
Sales Process
Starts with a customer request, which can be electronic or physical. The request contains details such as product characteristics, quantity, payment terms, and agreed delivery deadlines. The order is entered for stock management checks and reviewed by those authorized to approve sales orders. Upon verification of creditworthiness, the process moves to invoicing and dispatching the goods to the client.
A copy goes to the warehouse. The sales management area, part of the commercial department, controls stock, credit, settlement of fees, etc.
The warehouse prepares the shipment (dispatch note). Accounting/Sales Administration handles invoicing and confirms delivery.
The customer verifies the received merchandise against the dispatch note, and the sale process concludes.
Collection Process
If payment is not made immediately (cash), the collection process begins for credit/account sales.
The collection process is initiated based on the invoice and dispatch note and is handled by the accounting department responsible for payments/receivables.
Production Process
Linked to systems that apply to:
- Serial Production System
- Continuous Manufacturing (e.g., oil, petrochemicals, operating 365 days)
- Batch or Order-Based Production (materials provided according to specific orders)
- Assembly (focuses on assembling components rather than fabricating individual parts)
- Service Production (three elements interact: people/staff, hardware/facilities like store location and land use)
Customers can be passive (accepting standard service) or active (requiring greater service customization).