The Order Fulfilment Process by Keely L.

. Croxton (Ohio State University) Order fulfilment process involves generating, filling, delivering and servicing customer orders. It involves designing a network and a process that permits the firm to meet customer requests while minimizing the total delivered costs. Supply Chain Management is the integration of key business processes from end user through original suppliers that provide products or service, and information that add value for customers and other stakeholders. Eight key business processes that must be implemented within and across firms: Customer Relationship Management Customer Service Management Demand Management Order Fulfilment Manufacturing Flow Management Supplier Relationship Management Product Development and Commercialization Returns Management Order fulfilment process:

Strategic Order Fulfilment Process:

Review Marketing strategy, Supply Chain Structure & Customer Service Goals: o Seek to understand role of customer in overall strategy of business o Customer service audit o Throughout the fulfilment process, the tea needs to trade-off the costs of the solution with the benefits to the customer and the impact on the financial performance of the firm, and its customers and suppliers. Define requirements for order fulfilment o Review of order-to-cash cycle, understanding the supply capabilities, defining lead time of the product and customer service requirements. o Other operational and legal requirements o Categorization of key customers such that there many different sets of requirements Evaluate logistics network o Involves checking whether the logistics network can handle the load once the capabilities are matched with requirements. o Each customer is also assigned to a particular plant and is to be serviced from there.

Responsible for ensuring that new network is implemented and communicated appropriately Define Plan for Order Fulfilment o Determining how orders from various customers or segments of customers will be taken and filled. o Outsourcing decisions, payment terms and allowable order sizes are also decided here. o Decision on how the flow of order information will take place. Develop Framework of metrics o Metrics are always tied back to Economic Value Added (EVA) o A streamlined order fulfilment process can reduce overheads like freight, handling and others. o However the implementation of the fulfilment process also has its advantages. Operational Order Fulfilment Process:

Order fulfilment begins with the customers orders, so it is natural to integrate with key customers to streamline the order-to-cash cycle and make it as cost-effective for the supply chain as possible.

Effect of technology tremendous EDI (Electronic Data Interchange), Internet, ATP (Available to promise), CTP (Capable to promise)ERP (Enterprise resource planning) and APS(Advanced Planning and Systems), TMS (Transportation Management Systems)

Generate and communicate order: o Key functions here are marketing, logistics and sales areas o Streamlining order processes help a great deal in reducing errors. Herman Miller imbibed sales process into their order fulfilment using internet Enter Order: o Errors in receiving and entering the orders can be very costly o Process team can work with sales force or event he customers to improve order quotes so as to streamline the order receiving o Data regarding the orders are relayed back to customer service management and demand management processes. Process Order: o First step is to check the customers credit. o After this inventory levels are checked and order flow is planned Distribution Requirements Planning (DRP) Handle Documentation: o Order acknowledgement, Bill of lading, picking instructions, packing slips and the Invoice. o Nowadays documentation is being updated regularly on the Web so that the customer can also visibly see the status of the product. Fill Order: o Occurs on plant floor or in the warehouse and involves packing, picking, staging and load configuration. o Should also examine whether the material handling and the warehouse layout is efficient Deliver Order o Shipping docs are prepared, transportation plan is executed delivery is confirmed, and freight bill is audited and confirmed. o Advanced Shipping Notices (ASNs ) should be sent o Here control of the order is relinquished to transport companies Perform Post Delivery Actions and Measure Performance o Here payment is received and posted, discrepancies are addressed and bad debt expenses are recorded. o Two most important metrics to measure are Order-to-cash cycle and Customer Cycle Time. o Order-to-cash cycle time elapsed time from the receipt of the customers orders to the time that the proper payment is posted o Customer cycle time elapsed time from order being placed to the receipt of the order in the customers inventory. o We should measure the average duration and the variability of these two times.

Variability of Customer Cycle time is more important to the customer as they need to hold more safety stock when there is high variability

Research Opportunities Further examine the use of technology to streamline the process and integrate firms into the supply chain Understanding information flows in the supply chain; who should share what information with whom Developing metrics that can be used to evaluate the performance of order fulfilment beyond the borders of the firm Implementing order fulfilment across multiple firms in supply chain and how obstacles were overcome. Conclusions: Not only transactional, but also strategic and across functions At strategic level: o Understanding internal and external requirements and assuring that system has the required capabilities o Have a responsive process in place where demand exceeds supply and orders cannot be fulfilled o Designing the metrics such that they are consistent in improving the overall financial performance of the entire supply chain Order fulfilment might be a logistical activity but the process cannot be designed without inputs from other functions Integrating key customers and suppliers can help streamline and improve the fulfilment process. Single firm process to a supply chain management process

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