Intercompany Transactions in a Global ERP Environment
The mantra today is best cost manufacturing rather than "low cost" manufacturing. The idea is to serve the customer at the best cost from best possible location. Most such corporations are deploying or have already deployed some form of ERP solution to manage intercompany transactions in the most efficient way in their ERP systems.
Intercompany transactions get invoked when order is booked in one geography and fulfilled by enother entity in a second geograpahy. It may also include procuring the material from an internal location and shipping from another location to fulfill the customer demand. It may also involve taking the order in the first entity, routing the transaction through the second enity for securing tax benefits and finally shipping from the entity in a third geography to the end customer.
Intercompany transactions have a greater deal of complaxity compared to standard sales order transactions. In my subsequent entries I will cover how Intercompany transactions can be managed in any ERP environment to derive maximum benefit from a global ERP deployment.
