Posted in Operations and Supply Chain Terms, Total Reads: 388
Definition: Order Fulfillment
Order Fulfillment is defined as the complete process that starts from the point of sales and ends at customer satisfaction. It is also referred to as order processing and may also include processing of returns and re-adjustment of records.
The below flowchart shows the three main steps of the Order Fulfillment process:
Order Fulfillment helps to determine demand in a supply chain. It helps in an accurate analysis followed by a hypothesis of whether it is forecast driven or demand- driven. Sometimes, both these types can intersect as well. Typically, the higher the P:D ratio, the more the firm relies on forecasts and inventories. Hal Mather suggests three ways to tackle this "planning dilemma":
1.Improve forecasting accuracy
2.Provide for flexibility
3.Build a process to recognize forecasting errors and quickly correct production planning
The order fulfillment strategy also determines how a company deals with product variety. It will lead the foundation of concepts such as modularity, bundling, configuration.