1. SCM Customer Service Operations LB 3
The Order Process

2. Learning Block Objectives
Demonstrate knowledge of the overall order management process
Understand how order management and order processing are accomplished
Recognize how firms track and monitor orders throughout the supply chain
Execute the steps in the order fulfillment process
Implement key aspects of using different technologies, systems, and tools in the order process
Evaluate the impact of effective customer service, especially in issue resolution
Create good practices for the order process
LO1

3. Systems and Technologies
The order management process starts with customer request/arrival
Customers call, write, , or ask-in-person questions regarding the following:
Product specifications
Price
Availability
Potential discounts
LO1

4. Order Management Systems (OMS)
OMS supports the order process through automation
OMS provides constantly updated information on:
Inventory
Vendor database
Customer database
Database of customer refunds and returns
Information about billing and payments
Order processing records
General ledger information
Quality OMS improves sales visibility, better customer relations, and efficient order processing with minimal delays and backorders
LO1

5. Ecommerce Order Management
E-commerce involves selling and buying goods and services using the internet to transmit information and transfer funds
E-commerce and retail OMS help companies:
Improve order processing
Track inventory
Sell online
Most online retail businesses have some kind of OMS
LO2

6. Order Management Technology
Technology supports the entire order process, ensure effective and efficient return process
The following technologies support the order management process:
Telephone, Fax, Mail
Internet
Electronic Data Interchange (EDI)
Barcoding
Point of Sale (POS) technology
OMS
LO2

7. Order Management Technology
Internet - Used for placing & tracking orders. Its use varies based on industry, products, and services
EDI – Electronic Data Interchange – Direct exchange of information between computers
EDI has replaced faxing and mailing. Examples of EDI transactions include:
Buying company transmits order specifications to a seller
Selling company transmits order invoice information to a buying company, e.g. cost of payment terms
LO3

8. Barcoding
Barcodes provide information in visual patterns that machines can read
Barcodes are used throughout the supply chain for:
Vehicle manufacturing
Document tracking
Time control
Security access
LO4

9. Point of Sale (POS)
POS or checkout is where sales transactions are completed
Businesses use
Weigh scales
Scanners
Electronic cash registers with this technology
Information from the POS appears on a screen at the register and print out receipt
Modern POS systems updates inventory immediately
LO4

10. Customer Orders
Customer order process begins when customer interacts with a retailer or wholesaler
Key steps in the customer order process are:
Customer request/arrival
Customer order entry
Customer order fulfillment
Customer order receipt
Customer order invoice
LO5

11. Customer Request/Arrival
B2C – Order process starts when customer arrives. Customer service focuses on product selection…variety, prices, specifications.
Same process for phone or website inquiries
B2B – The order process starts with a sales call or site visit
Customer may also access supplier’s website
LO5

12. Customer Order Entry
Involves customer informing retailers and suppliers of goods about the products they wish to purchase
The main aim of the order entry process is to ensure accuracy, timeliness, and clear communication throughout the supply chain
Customer Order Fulfillment includes the steps in ensuring customers receive:
The correct products
In the right quantities
At the scheduled time
At an appropriate level of quality

13. Customer Order Fulfillment
Order fulfillment includes
Entering orders
Filling orders
Invoicing
Shipping
Tracking
Handling returns
Providing after-sale services

14. Customer Order Receipt
Involves customers receiving and accepting orders
Customers check product quantity and quality
If product is deficient, supplier is notified and payment withheld
When corrective action is taken, customer confirm receipt

15. Customer Order Invoices (B2C)
When customers place an order, they receive an invoice
When orders are shipped to customers, they are accompanied with an invoice which states:
The amount owed and payment terms
The number of days customers have to pay the invoice
Any discounts for paying early
Penalties for late payment
Form of payment required

16. Customer Order Invoices (B2B)
Companies use Purchasing Cards (Pcards).
Pcards are company charge cards used to purchase goods and services without using traditional purchasing processes and eliminate the need to issue invoices
Used for goods and services with low product value

17. Order Tracking and Monitoring
It is the responsibility of the company receiving the order to ensure they are filled on time, in full and at the highest quality
Steps to fulfilling customer orders:
Customer initiates order
Orders are validated for correctness
Orders are entered in the system
Inventory management confirms availability
Picking slips are initiated
See Page 34

18. Customer Service Representatives (CSR)
CSR – responsible for order tracking and management
Correct issues in the order process as they arise
These issues may require:
Returning orders
Refunding customer fees
Replacing shipments
Expediting shipments for delayed items

19. Order Process Improvements and Metrics
Successful companies in order fulfillment minimize activities that are wasteful and add little or no value
Information Systems & Order Fulfillment
Technology supports order fulfillment by providing record integrity
Record integrity ensures that the amount of material on hand equals the amount of material recorded in the computer system

20. Order Fulfillment Performance Metrics
Perfect order is delivering the product to the right place, at the right time, in the right condition, in the right package, in the right quantity, with the right documentation and the right invoice
Indicators which provide guidance on fulfilling the perfect order are:
Order Fill Rate, Order Cycle Time, On-time Delivery, Inventory Accuracy Indicators, and Order-to-cash cycle time

21. Metrics: Key Performance Indicators (KPI’s)
Metrics should focus on customer needs and expectations
Order-picking errors
Product shipping errors
Standard or planned order cycle time
Average time to complete an order
Number of orders returned
Order costs

22. Best Practices in Order Management
OMS can reduce cost and improve customer satisfaction. An effective OMS speeds up the order & fulfillment process.
Best practices in order management include:
Communication with customers
Consolidation of orders
Inventory Management
Automation of the process