Logis (Pre-Finals) 3

Order management or Order fulfillment

It refers to the set of activities that occurs between the time a company receives an order and the time a warehouse is notified to ship the goods to fill that order.

Processing priorities

Order-filling accuracy

Order batching

Lot sizing

Shipment consolidation

Factors affecting order processing time

Receiving

Processing

Delivering

Activities involved in Order management

Order cycle or Lead time

The actual time it takes to perform the order management activities.

Order-to-cash cycle

Some organizations expands order cycle to include this customer payment.

Customer Relationship Management (CRM)

It involves focusing on customer requirements and delivering products and services.

Order Placement

Order Processing

Order Preparation and Loading

Order Delivery

Stages of Order management

Order Placement

It is the series of events that occur between the time a consumer sends an order and the time seller receives the order.

Person

Mail

Telephone

Fax

Electronic Data Interchange (Internet)

Various methods of order placement

Order Processing

It refers to the time from when the seller receives an order until an appropriate location or warehouse is authorized to fill the order.

1. Checking for completeness and accuracy

2. Customer credit check

3. Entering orders manually or electronically

4. The marketing dept. crediting the salesperson

5. The acct dept. recording the transaction

6. The inv dept. locating the nearest warehouse

7. The transp dept. arranging for the shipment of the order

Steps of order processing

Processing priorities

Similar to short-term scheduling, this can be FIFO or shortest lead time.

Order-filling accuracy

The more precise the order is received and input, the less time will be spent correcting it.

Order batching

It may be more efficient to batch orders for picking in a warehouse.

Lot sizing

Full pallet orders may be processed faster than case or unit pick.

Shipment consolidation

Full truckload orders will be delivered faster than less than truckload.

Order Preparation and Loading

This includes all activities from when an appropriate location is authorized to fill the order until goods are sent aboard an outbound carrier.

This can be one of the best places to improve the effectiveness and efficiency of an order cycle.

Radio Frequency Identification (RFID)

It is a device used to identify and track tags attached to items automatically.

Voice-based order picking

It is a voice prompt system used to direct warehouse operators for activities related to order picking.

Pick to light

It is an order fulfillment technology using alphanumeric displays and buttons at storage locationd to guide the manual picking and recording of items for shipment.

Order Delivery

This refers to the time from when a carrier picks up the shipment until the customer receives it.

Customer service

It is which companies try to differentiate their product, sustain customer loyalty, increase sales, and improve profitability.

Price

Product quality

Service

Main elements of customer service

Time

Dependability

Communication

Flexibility

Dimensions of customer service

Percent of sales on backorder

Number of stock outs

Percent of on-time deliveries

Number of inaccurate orders

Examples of customer service metrics

Time

It refers to the company's entire order fulfillment cycle time.

Dependability

It refers to the company's ability to provide fixed delivery times of accurate and undamaged orders.

Communication

It offers ease of order taking and queries response.

Flexibility

It provides ability to recognize and respond to a customer's changing needs.

Pre-transaction elements

These are the activities that arise before the actual transaction takes place.

Transaction elements

These are activities directly related to the physical transaction and those that are most commonly concerned with logistics.

Post-transaction elements

These are the activities that occur after the delivery has taken place.

Service quality

It is a measure of the extent to which the customer is experiencing the level of service that they expect.

It is the match between what the customer expects and what the customer experiences.

Backorders

These are the items demanded by the customers that are temporarily out of stock.

Percent of sales on backorder

High percentage of this decreases dependability of service.

Number of stock outs

This measures the number of items that are out stock at the time a customer places an order.

Percent of on-time deliveries

This measures supply chain efficiency and delivery performance of the business.

Number of inaccurate orders

This measures the number of items shipped and delivered incorrectly in terms of expected product/recipient.

Service

Engagement

Intimacy

Levels of focus where customer satisfaction can be achieved

Service

This is the stage where a particular business offers a product/service and a customer needs that product/service.

Engagement

This is about building a relationship and loyalty so that when a customer is ready to buy, they will immediately purchase from the company.

Intimacy

This occurs when companies are close enough to their customers that they can begin to anticipate a customer need and respond accordingly.