1. Order management refers to the management of activities associated with the order cycle from when a customer places an order to when goods are received. It describes everything a merchant does after an order is placed online, such as picking inventory, shipping, and sending notifications. 2. Order transmittal is the time from when a customer places an order until the seller receives it. There are five possible transmittal methods: in person, mail, telephone, fax, and electronically. 3. Order processing is the time from when the seller receives an order until an appropriate location is authorized to fill it. It involves checking accuracy, credit, entering the order into systems, and determining inventory location.

1. Welcome to an
IBMS112 Group A Presentation
Logistics - Chapter 7
Order
Management

2. Learning Objectives
To understand the linkage between order
management and customer service.
To examin the order cycle and its four
components.
To understand the four dimensions of Order
Management.

3. What is order
management?
Order management:
Refers to management of the various activities associated
with the ordercycle;
refers to the time from when a customer places an order to
when the goods are received.
In the ecommerce context, Order management describes
everything that the merchant does after a customer has placed an
order on the webstore. The typical steps involved are: 1. Pick
inventory from the warehouse and ship it to the customer 2. send
a email of notification to the customer that the order is on its way.

4. However, things are not that simple for most orders. (This
could be due to)
1. The merchant may be short on some items of stock that the customer wishes to
place an order on. In that case, the merchant may ship out only part of the order
with the items that are in stock. Then, at a later stage, they would ship the
remaining items. This is the idea behind Partial Shipments.
2. Sometimes, the merchant may not stock all the items in the warehouse. For
example, a merchant who sells toys online, may decide to not stock the heavy
doll-houses in her warehouse. Anytime a customer orders a doll-house on their
website, she will ask the doll-house manufacturer to ship it out directly from the
manufacturer’s warehouse to the customer’s address. This process of shipping
directly from the vendor to the customer without going through the retailer’s
warehouse is called Drop Shipping.
3. Some merchants use Outsourced Fulfillment Warehouses to avoid carrying
any inventory. (In simple words), the merchant uses a third party warehouse to
store the inventory for them. When an order is placed on the website, the
information is then forwarded to the third party warehouse, where it is then
shipped directly to the customer.

5. To make it
more clear
DropShipping method

6. Order Transmittal
Order transmittal refers to the time from when the customer
places an order until the seller receives the order. There are
five possible ways to transmit orders:
in person, by mail, by telephone, by fax machine and/or
electronically.
Each method of order transmittal has advantages and
disavantages and each performs differently with respect to
the cost of ordering, time to order, the potential for order
errors, and ordering convenience.
Although Electronic ordering, which includes Electronic data
interchange (EDI) and the Internet, can be
fast, convenient, and accurate, praticularly those orders
involving scanners and bar codes.

7. To make
more clear
EDI model

8. Order processing
Ordering Processing refers to the time from when the seller
receives an order until an appropriate location is authorized to fill
the order.
Advances in technology has allowed most firms to automize
many aspects of their order processing system.
Until the order can be made there are a lot of different stages to
be completed.__ these include: accuracy, checking the buyer’s
ability to purchase, entering the order into the system, crediting a
salesperson with a sale, recording the transaction, determining
inventory location and arranging for outbound transportation.
There also are order triage activities. It refers to classifying
orders according to preestablished guidelines so that a company
can prioritize how orders should be filled.

9. Order Picking and
Assembly
Order picking and assembly is the next stage of the order
management process, and it includes all activities from when an
appropiate location is authorized to fill the order until goods are
loaded aboard an outbound carrier.
Order piece picking methods: there are several ways to pick an
item from a warehouse. You can use handy equipment to find and
reach the specific item.
Voice based order picking- refers to the use of speech guide
order-picking activities.
Pick to-light technology in whichn orders to be picked are
identified by lights placed on shelves or racks.

10. Examples of peice picking methods and equipment:
- Basic order picking: Pick your order manually by walking
towards the item you need.
- Static Shelving: A common management method used for
storage piece picking operations. Using static shelves
where the product is placed (as seen in the picture).
- Pick-to-light: A handy way to locate and reach an item
using LED lights to find the right item and the correct
quantity of that item.
- Bar-code scanners: Scan an item to get high accuracy
rates in order picking. You will find your product directly.

11. Order Delivery
Order delivery refers to the time from when a
transportation carrier picks up the shipment until it is
received by the customer.
An example:
A customer orders a product, this product will be
transported by a carrier. When the carrier picks up the
product and delivers it to the customer, this is the order
delivery process.
In order to deliver products fast, depends on the flexibility
of a company and the carrier. Depending on the products it
could be deliverd in a day till several weeks.

12. Customer Service
Companies strive to keep their customers happy, it is
easier to keep an existing customer than it is to acquire
new customers.
Customer service will be defined as “the ability of logistics
management to satisfy users in terms of
time, dependability, communication and convenience”.
Customer service can also be an excellent competative
weapon. It is more difficult for competitors to imitate
services. Your prices of products could be the same, but
how you receive your customers, deliver your products
vary with each company. This is where companies differ.

13. Example Bol.com
Ordering process when someone purchase something
1. Customer goes to the webshop Bol.com. And put the product in
the shopping cart.
2. Bol.com receives your order, and will send you automatically a
confirmation mail of your purchase. And thank you for your
purchase.
3. Bol.com will check if the product on stock if not they will
order it.
4. The logistics department will check the product on visible
damages. If not they give it a clearance. And the product will
continue its process.

14. 6. The products will be selected and put it on a large
conveyor belt. Everything will be coded with barcodes or
RFID sticker.
7. The products will be labelled, the order will be printed out
and the bill included. Bol.com will choose a right sort of
carton box. The box will also be labelled. The address of
the customer will be stated on the box.
8. Contacting delivery service like TNT and UPS. They will
deliver the products to your home.

15. 9. Bol.com will send you a letter of shipment and they will
provide you a tracking number, which the customer can
clearly see where the package is.
10. The delivery of the products in the Netherlands will
always be between 1 to 3 days and EU between 1 to 5 days.
11. Customer receives the product, when there is a
damage the product can always be sended back. Within 30
days you can get a refund. Besides they have a good
warranty service. And in the Netherlands there are
regulations about warranty. So the consumer will mostly
be protected.

16. Extra video Bol.com
Process
Click on the link below to get a better idea
http://www.youtube.com/watch?v=K8f8hpVYtm4

17. Excerise
To understand the topic well
write a essay about order management and give
a example
requirements: 1000 words

18. Open and Multiplec.
Questions
10 questions about this topic
3 open questions
7 multiple choice
2 minutes allowed per question

19. Open questions
1. What are the typical steps of order
management?
2. Draw the EDI model
3. What can you do as a customer when an order
isn’t delivered on time?

20. Multichoice questions
1. ____ refers to the management of various activities associated with
the order cycle.
a. Logistics
b. Order processing
c. Demand management
d. Order management

21. Multichoice questions
2. Which of the following is false?
a. order cycle lengths continue to get shorter
b. the order cycle should be analyzed in terms of total cycle time and
cycle time variability
c. order management has been profoundly impacted by advances in
information systems
d. order management and the order cycle are vitally important to the
perfect order concept
e. all are true

22. Multichoice questions
3. Order transmittal is:
a. the same thing as an order cycle
b. the series of events that occur between the time a customer places
an order and the time the seller receives the order
c. the series of events that occur between the time the customer
perceives the need for something and the time the seller receives the order
d. the series of events between the time a customer places an order and
the time the order cycle begins

23. Multichoice questions
4. In general, there are ____ possible ways to transmit orders.
a. six
b. five
c. four
d. Three

24. Multichoice questions
5. ____ refers to the time from when the seller receives an order until an
appropriate location is authorized to fill the order.
a. Order processing
b. Order cycle
c. Order management
d. Order transmittal

25. Multichoice questions
6. Order picking and assembly is:
a. the most important component of the order cycle
b. the way a customer decides what he needs to purchase
c. the component that follows order processing
d. the most computerized part of the order cycle

26. Multichoice questions
7. The ability of logistics management to satisfy users in terms of
time, dependability, communication, and convenience is the definition of:
a. customer satisfaction
b. the order cycle
c. perfect order
d. customer service

27. Multiple Choice Answer
1. D
2. E
3. B
4. B
5. A
6. C
7. D