1. Order Processing and Information Systems
CHAPTER 4
Order Processing and Information Systems

2. A Customer's Perspective
Total Order Cycle:
A Customer's Perspective
Key:
1. Order preparation and transmittal days
2. Order received and entered into system day
3. Order processed day
4. Order picking/production and packing days
5. Transit time days
6. Warehouse receiving and placing into storage day
Total order cycle time days
1. Customer places order
6. Order delivered to customer
5. Order shipped to customer
2. Order received
3. Order processed
4. Order picked and packed

3. Total Order Cycle with Variability
2. Order entry
and processing
Frequency:
1. Order preparation and transmittal
3. Order picking
or production
TOTAL
3.5 days days
5. Transportation
6. Customer receiving

4. The Path of a Customer’s Order
Warehouse
withdrawal
Inventory
file
Production
schedule
Check
credit
available
Ship
customer
order
Customer
delivery
Order
transmittal
Enter
Invoice
Back
Transportation
scheduling
Shipping
documentation
Process

5. Traditional Supply Chain Flows
Demand flow
Product flow
Supplier
Retailer
Distributor
Manufacturer

6. Information-based Supply Chain Flows Timely, accurate information flow
Supplier Manufacturer Distributor Retailer
Smooth, continual product flow
matched to demand

7. Definition of EDI
Interorganizational exchange of business documentation in structured, machine-processable form.
Unstructured
Structured
Fax EDI
Order entry
Person-to-person Computer-to-computer

8. EDI Versus Traditional Methods
BUYER'S PURCHASING
APPLICATION
SELLER'S ORDER
ENTRY APPLICATION
PURCHASING
POST OFFICE
BUYER'S
COMPUTER
EDI FLOW P O
SELLER'S
ORDER
ENTRY
Source: Margaret A. Emmelhainz, Electronic Data Interchange: A Total Management Guide (New York: Van Nostrand Reinhold, 1990), p. 5.

9. Typical EDI Configurations
Manufacturer
Supplier
Third- party vendor
Proprietary system
Value-added network (VAN)
SOURCE: GE Information Service, as reported in Lisa H. Harrington, "The ABC's of EDI," Traffic Management 29, no. 8 (August 1990), p. 51.

10. Decision Support System
User
data-bases
Information results
Public data-
bases
Data acquisitions
Data
preprocessing
Planning/
analysis
models
User inputs
Data presentation
Data processing
Operating