Nowadays, there is a growing tendency of supply chain management integration to the organization system of companies, as it is successfully applied in manufacture. The integrated type of the organizational relationships proved the increase of performance, promotion, and sales volumes. The connection between the separate functions of a company and its impact on the market segmentation and the international economy is the core principle of organizational issues within the supply chain structure. In that regard, in the interrelation system where the companies are concentrated on the effective production and distribution, order management is one inherent part that of successful business conduct that is responsible for the effective promotion and distribution of the outputs among the customer (Mentzer 3). The more the companies produce goods and services, the more importance is gained by the order processing so that such aspect as order planning, scheduling, and monitoring are crucial.
Supply Chain Management (SCM) concentrates on the specific business strategies aimed at successful information, material, and financial flows within the companies’ network (Knolmayer et al 3). It plays an important role in large-scale decision-making and integral cooperation. This strategy appeared to be rather attractive for numerous companies, as it considerably simplifies business supervising. Due to the SC introduction, both internal and external processes improved their values and performance that contributed to a better organization of upstream and downstream flows of information and material. The supply chain management is impossible to exist without the decent facilities for manufacturing, as it determines the performance level of the activities taken. It also affects the decisions pertaining to the flexibility of the order manufacturing within the supply chain. Next, the facility potential is defined according to its allocation and thus the level of its capacity. The allocation issue largely predetermines the product demand, as the manufactures’ success is directly connected with appropriate allocation of the markets and the suppliers to each facility. The fact is that facility could only perform a single function to a single market and it is, therefore, difficult for each facility to conform to the constant changes of the customers’ demand. In that regard, it is necessary to introduce some changes to the domain of order management.
As the supply chain management undergoes constant changes in terms of market demand, order acquisition and processing is central operation within the customer service domain where, as it displays the significant part of the fulfillment control. To carry our order processing successful, it is necessary to follow the basic stages and principles successfully. Order management is the activity that presupposes the information flow from the customer to the sales representative and vice verse through supply chain; it is the information interchange between the retailers and distributors. This presented data current comprises the delivery conditions and product placement, back orders, and order cancellation. The process also includes the use of telecommunication devices and paper documentation such as purchase and sales orders, packing lists and invoices, bills of lading and shipment documentation (Hugos 84). A well-organized order network is the half a success that plays a significant role in supply chain management framework.
Based on the above, it should be stressed that order management also includes the material flow within and beyond the supply chain organization. Such activity as management handling covers such operations as the goods transmission from the warehouses to the retailers and to the planets. The proper material management can largely reduce the product damage and spoilage. In addition, the introduction of the modern materials is a successful attempt to reduce time of the production. On of the techniques is called ‘unit loading’ (Pride et al 418). This method lies in the application of boxes of smaller size united in a convenient load of standard size. Such load can be easily handled by the any kinds of shipment devices. It should also pointed out that the introduction of the modernized material requires the involvement of the advanced inventory. Therefore, there arises the contradiction pertaining dependence of the quality of the final output on the quality of the inventory (Pride et al. 418).
The initial stage that should be taken in order administering is the order preparation (Mentzer 239). This step presupposes the filling of an order form by a customer. The order forms, in their terms, should be carefully analyzed by the sales clerk who is responsible for the data storage. In that regard, the information should be entered to the computer base but once. It is important that the electronic data should strictly conform to the original order form. It is better if the customers themselves transfer their orders to the electronic order entry system (Hugoes 89).
Automated order preparation proved its effectiveness due to the rapid introduction of advanced technological systems and modern equipment. In that regard, an emphasis should be made on the constant introduction of management software that would accelerate the order acceptance and its further transmittal. Therefore, the manual application should be minimized in order to avoid the errors in the order system. This system usually exists in the form of encoded bars, and excels tables. In addition, this stage also implies the telephone communication and a good command of the appropriate equipment such as scanners and laptop computers. Hence, the introduction of the computer software is paramount importance due to the incessant progress of the technology.
The next stage involves the order transmittal implying the transition of the order from its starting point to the point of destination. This type of operation could be carried both manually and electronically. In the first case, it excludes the electronic data transfer where either the customer or sales representative mails the order. Thought this method is rather time consuming, it is still the cheapest one. Besides, another shortcoming also lies in the validity of the order fulfillment, as the information may be distorted. In that regard, the electronic transmission acquires more popularity as the safest method of the data transfer. The computer transfer systems guarantee the high level of information accuracy and reliability so that, currently, it completely replaces the manual application within the supply chain management (Mentzer 240). Certainly, the computerized approach could not fully exclude the emergence of some order mistakes but still, it helps to eliminate them much faster and to facilitate an effective handing.
The following step in order management includes the order entry, which the heart of the whole process, as it is related to the validity of the information accepted to the database. In that regard, this stage deals with the monitoring the accuracy of the order information such item description and identification number, price and quantity (Mentzer 239). Then, acquisition representative must prepare a standard back order and order cancellation for the customer to assure of the security of the order processing. It is important for this documents to be prepared, as it is decreases the chances of the failed orders and reduce time, in case the order is withdrawn. A special consideration requires the fulfillment of the information about the customer such phone number, addresses as well as particular account numbers and details of the potential problems that might occur while carrying out this order (Scholtz 90).
While handling this stage, the security factor is of special consideration, and therefore a special concern requires the incessant updating and introduction of the innovated software. Nevertheless, on-line systems of order operations are much more fruitful than manual handling, as it assures a high level of information integrity. Furthermore, as customers’ choice directly depends on the product prices and description data, there should be a constant virtual communication between the customer and sales representative. Order entry also includes the order information encoding and billing procedures in case shipment services are required. This step implies a combination of manual and automated implementation. This reduction of the manual interference with the order entry excludes the probability of mistakes in calculation and the digital detail about the orders. With the help of the information flow system, it is possible to ling the purchase data with customer access security (Knolmayer et al. 106).
The efficient order management within the virtual network depends on certain aspect of computerized procedures. Thus, the accuracy of the order executing depends on the appropriate fulfillment of the electronic order form; the order should be sent to relevant location at the relevant time. Next, it is necessary to make the order visible to the customer, namely the order status that will be analyzed further. Such a technique guarantees that the customers could see all the stages of the order processing whenever they want. The electronic framework could not exist without its explicit connection with other integrated systems within the supply chain structure.
It is necessary to mention that virtual communication with customers is rather crucial due to the rapid development of the e-commerce branch of marketing. This kind of activity directly influences decision-making process while communicating with customers. The virtual supply chain efficiency is much higher so that the introduction of on-line technologies greatly contributes to the acceleration of the order processing and therefore the supply chain management. Considering the advantages of the World Wide Web, internet communication enhances the inventory process supervising thus reducing the work and increasing accuracy. Moreover, the implementation of e-service grants the possibility for the order executing stuff to determine the exact quantities of the order items, which may vary in the course of the negotiation with the customers. Therefore, this innovated device could also eliminate additional expenditures and to simplify the overall process (Sabri et al. 47). It is naturally that customers who are regularly informed about the order process are more likely to become a constant consumer of the products. Finally, the internet communication also facilitates the business relations both within the company and supply chain network.
Order filling is one of the final processes engaged in the order management. These activities are fully subjected to the physical application thus including the item acquisition with the help of stock withdrawal, production and purchasing (Mentzer 239). During this stage, it is also obligatory gather and to pack the product details and to work out the accurate delivery operation schedule. Finally, preparing the shipment documentation is of paramount importance for the order to be successfully fulfilled. This activity could be executed simultaneously with other order stager in order to reduce an overall processing time.
It should be admitted that the shipment and the delivery terms are the most time-consuming as it is the matter for the in-stock quality services. The transit span of time could be significant in case it is carried out concurrently with other stages of the order processing. In that regard, there are some ‘not-moving’ order stages such as documentation fulfilling. Another problem may appear when in case the transportation service is not available. These disappearances could also lead to the problems with pickup appointment at the point of destination so that the order might be even cancelled. Such problems lead to wasting the driver time and lessening the equipment quality that are hard to reimburse. Here, it is necessary to take in consideration of the human factors where the large part is relied on the diligence of the shippers (Goldsby et al. 44). In order to avoid the transport bias, it is obligatory to work out the delivery and shipping schedule where the sales personnel should define the most reliable modes of transport the most appropriate conditions for delivery. In addition, the delivery scheduling also implies the consideration of direct delivery quantities requiring certain calculations (Hugos 91).
The appropriate delivery policy could also eliminate the unnecessary expenditures. Therefore, the most efficient method of transportation is the direct delivery and cross docking where the goods are shipped directly from the manufacturer to the end-customer (Ghiani 8). This kind of delivery is especially suitable for the transporting perishable goods where the time really matters. Another methods of delivery such as warehousing would be appropriated for goods with long term of retention.
The closing step of order status reporting that provides and brief summarizing information about the order purchase and the basic details of line items. This stage also includes invoice activity and the data about the expected quantity and the committed quantity (Knolmayer 105). The order report serves to insure the customers of the quality of the goods and services granted by the company; it implies the observing of the whole process of order cycle and informing the customer about the each status of the product on the assembly line. In addition, this kind of activity, though, does not have a considerable impact on the total order processing line, but functions as a controlling stage. At this stage covers predominantly the documentation procedures. It should be mentioned that this status carries out the recording about confirmation and execution status as well as the billing status. Despite the little importance of this stage in comparison with others, it significantly influences the success of the order purchase and the profitability of the supply management in particular. The negligence here may lead either to the emergence of delivery problems or to the order cancellation. Hence, the documentation must be fulfilled in the strict order (Schonsleben 18).
The effectiveness of this stage largely depends on the customers’ capability to pursue the order status from manufacturing to the distribution. Sometimes, it is better for the producer to work the automated system of electronic notifications for the customer to be confident in a consistency of order processing stages. Here, the fleet management has a direct relation to it, as it is responsible for information security and software reliability.
The order processing supervising is closely connected with the system of logistic control. In that regard, the successful arrangements of order activities influences both the improvement of customer services and the inventory level decrease (Mentzer 241). According to Mentzer, such a phenomenon is called the ‘bullwhip effect’ (241) that lie in the exaggeration of the order packing volumes resulting in irregular order batching. The best solution to the problem will be the decrease of the lot sizes in accordance with the processing activities. This method will not only allow to overcome the boost effects but also to promote the high level of inventory investment.
The above shows the inevitable connection of order management and inventory management, which is the key point of the logistics organization. Hence, the main goal of the inventory management is to minimize the costs of the order production and to meet the customers’ requirements pertaining to the quality of the order. In that regard, the producer should consider such aspect as the customers’ needs, the economic and business strategy. It also concerns the transportation conditions and the manufacturing process flexibility. In addition, the inventory management also influences the quality of the product and thus the high degree of the company’s competitiveness and respectability (Ghiani 8). Together with order management, distribution and transportation management, it forms the supply chain on-line management that is integrated with the supplier and other members of the organizational system.
It is natural that the trade within the companies and the supply chain framework in particular should be accomplished with the application of the civil. Studying the order management as the main tool of logistics, certain legal issues are also applied to the order processing at each stage of progress. The agreement concluding within and among the companies insures the safety of the operation and its successful fulfillment. Here the contract serves as one of the insurant instruments supporting the safe service performance as well as delivery and shipment conditions. It also helps to prove a certain quantity of the goods, the date and time of delivery and terms of payment. To enhance the safety of the agreement it is possible for the third party to participate in the negotiation between the supplier and the buyers of the goods. As it could be viewed, the introduction of law into the order management could facilitate the production provided all the terms of the agreement are observed. However, there might appear cases leading to the order cancellation due to the unforeseen complications (Schonsleben 135).
The order management within supply chain framework is much more efficient than lean management owing to the fact that senior managers could easily pursue all steps of order production. The so-called horizontal view management insures the high-level performance and logistic effectiveness; it also fosters the assessment of customer service and the ration of orders that successfully passed through every step of the order processing without substantial errors. Furthermore, such exceptional organization also allows to minimize the manual interventions and to maximize the supervising network. As a result, there is a growing tendency of companies’ reconstruction striving to exclude the unnecessary steps form the order circulation and to insert a more functional application to the total procedure (Mentzer 241).
It is obvious that a successful order management is crucial in terms of the maintenance of fruitful relations with customers as well as with business partners. Therefore, the major goal for the supply chain companies lies in the reduction of the order circulation time and its improvement, decrease of the inventory requirements. It is vital to align the virtual communication with customers thus boosting the profitability and respectability of the company. As order operations are greatly influenced by the security and validity of information, it is also necessary to work the on-line security system protecting order entries from alien invasion.
Order processing plays a significant role in the sphere of marketing services, as it provides the ground for the vigorous competition of the producers. People who buy goods and services often express their great concern with the ability of the supplies respectability and promptness in order activities. This promptness usually suggests the low level of inventory expenditure and the high capability to order the goods on time. Needless to say that internet considerably ameliorated the order fulfillment and decision-making thus improving the communication services as well. The thorough consideration of this process proved that the successful order management depends on numerous factors that could generally divided into the human, or manual handling of the process, and the automated aspect including the introduction of effective software and hardware equipment.
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