The contractors we have cooperated with so far have drawn our attention to a great deal of processes in the steel industry. They mentioned, among others, difficulties with a proper register of attestation certificates, discrepancies between standard values and the actual weight of the material, the need for access to the information on a number of blocks or sheets which contain a given amount of material. Our solution to some of the problems is presented below.

Differences between the standard and the actual amount of the merchandise leaving the warehouse

Problem: One of the common problems that companies from the steel industry face is to organize the work of the warehouse and the sales department in a way that will allow easy control over the amount of the merchandise leaving the warehouse.

Example: A customer comes to PEK to purchase 100 running meters of rod of 12 mm diameter. The card file of the product specifies that the standard weight of 1 running meter of that rod is 3 kg, thus, a seller issues an invoice or a warehouse receipt for 100 running meters x 3 kg which equals to 300 kg of rod. When the customer goes to the warehouse holding the document issued by the seller to receive the merchandise from the warehouse, it turns out that the actual weight of the rod purchased differs from the standard values. In such a case, the only thing to do is to send the customer back to the seller who will manually correct the invoice issued or will write it off. The other option is to let the warehouseman to change the document issued by the seller. However, it seems that neither of the options should be applied by PEK if the company really cares about the good opinion of customers and the proper management of the warehouse.

Solution: SAP Business One has a system which is ideal for the circulation of documents in the steel industry. Having received a customer’s order, a seller issues a Sales Order. This document is generated giving the standard values, but it is not an accounting document so no corrections will be necessary. On the basis of the Sales Order, a warehouseman prepares the merchandise to be released out of the warehouse. Having done that, he issues a warehouse receipt specifying the actual amounts of the merchandise released. The Sales Order remains unchanged. Thanks to it, the management of the company has access to the information on the differences between the standard and the actual amounts of the merchandise leaving the warehouse, whereas the customer has a document correctly issued at one go.

Additional advantage: if it happens that at a given moment there is not enough merchandise in the warehouse needed for the fulfillment of a customer’s order, the Sales Order may be partly fulfilled, while the rest will be dispatched after the warehouse receives the missing part of the merchandise ordered.

Attestation Certificate Register

Problem: Each batch of steel sold shall be accompanied by the attestation certificate earlier obtained from the supplier.

Example 1: A dealer calls a branch of PEK to purchase 10 tons of steel. As usual, he needs it urgently. What is more, an end-customer demands that the attestation certificate should be provided with the delivery of the steel ordered. In such a case, 90 % of the time devoted to serving such a customer is spent searching for the proper attestation certificate at the main office of the company.

Example 2: PEK has tons of steel from one of Scandinavian steelworks in stock. For 3 weeks the Buying Department with no success has been trying to obtain the attestation certificate. For obvious reasons, at the same time, steel is being sold on a regular basis, while the sellers make notes of the customers to whom attestation certificates will have to be sent. The time spent on reprocessing the orders fulfilled a week, two weeks, or even a month ago is a waste of time for two reasons. Firstly, the sellers should rather spend time generating the sales. Secondly, a lot of mistakes might occur as a result of reprocessing the orders.

Solution: SAP Business One makes it possible to add any document in an electronic form (e.g. a scan) to any batch of merchandise entering or leaving the warehouse. What is more, it allows automatic printing of proper attestation certificates to accompany each invoice or warehouse receipt. A special report will help to find out all the sales documents which have been issued without the attestation certificate.