The Order Fulfillment Process

Page 19 Order fulfillment involves generating, filling, delivering and servicing customer orders. In some cases, it is only through this process that the customer interacts with the firm, and therefore, the order fulfillment process can determine the customer’s experience [1]. To accomplish these tasks, management must design a network and a fulfillment process that permits a firm to meet customer requests while minimizing the total delivered cost. This requires integration of logistics, marketing, finance, purchasing, research and development, and production within the firm, and coordination with key suppliers and customers. At the operational level, the order fulfillment process focuses on transactions, while at the strategic level, management can focus on making critical improvements to the process that influence the financial performance of the firm, its customers and its suppliers. For instance, order fulfillment directly affects product availability which influences total sales volume. An optimized network minimizes total delivered costs, including sourcing costs. A streamlined process reduces the order-tocash cycle which frees up capital, and reduces the delivery lead-time which allows for reduced inventory levels. Thus, order fulfullment can affect the financial performance of the focal-firm, as well as other members of the supply chain. In this paper, the framework for implementing the order fulfillment process is developed. The process is described as it would be implemented at a firm in the middle of the supply chain, for instance a manufacturer or distributor. For a retailer, the process is similar in some respects, but it would need to be adapted before being implemented. Before describing the order fulfillment process, a background is provided on the eight supply chain management processes identified by The Global Supply Chain Forum, a group of leading global firms conducting research in supply chain management. This background is important because order fulfillment is one of the eight processes and it requires interfaces with the other seven. The strategic and operational processes that comprise order fulfillment are then described, including the sub-processes and their activities. In addition, the interfaces with the corporate functions, the other supply chain management processes and other firms are identified. Finally, opportunities for future research and conclusions are presented.