1. CHAPTER 4
Order Processing and Information Systems
2. Total Order Cycle:
A Customer's PerspectiveKey:
1. Order preparation and transmittal 1 days
2. Order received and entered into system 1 day
3. Order processed 1 day
4. Order picking/production and packing 1 days
5. Transit time 3 days
6. Warehouse receiving and placing into storage 1 day
Total order cycle time 8 days 1. Customerplaces order 6. Orderdelivered tocustomer 5. Ordershipped tocustomer 2. Orderreceived 3. Orderprocessed 4. Order pickedand packed
3. Total Order Cycle with Variability2. Order entry
and processingFrequency:1 2 31. Order preparation and transmittalFrequency:1 2 33. Order picking
or productionFrequency: 1 9Frequency:TOTAL3.5 days 8 20 days5. TransportationFrequency:1 3 56. Customer receivingFrequency:.5 1 1.5
4. The Path of a Customer’s OrderWarehousewithdrawalInventoryfileProductionscheduleCheckcreditInventoryavailableShipcustomerorderCustomerdeliveryOrdertransmittalCustomerorderEntercustomerorderInvoiceBackorderProductionTransportationschedulingShippingdocumentationProcessorder
5. Traditional Supply Chain Flows
Demand flow
Product flow
SupplierRetailerDistributorManufacturer
6. Information-based
Supply Chain Flows Timely, accurate information flowSupplier Manufacturer Distributor RetailerSmooth, continual product flow
matched to demand
7. Definition of EDIInterorganizational exchange of business documentation in structured, machine-processable form.UnstructuredStructuredFax EDI
E-Mail Order entry
Person-to-person Computer-to-computer
8. EDI Versus Traditional MethodsSource: Margaret A. Emmelhainz, Electronic Data Interchange: A Total Management Guide (New York: Van Nostrand Reinhold, 1990), p. 5.BUYER'S PURCHASINGAPPLICATIONSELLER'S ORDERENTRY APPLICATIONPURCHASINGPURCHASINGPOST OFFICEBUYER'SCOMPUTEREDI FLOWPOPOSELLER'SCOMPUTERORDERENTRY
9. Typical EDI ConfigurationsSOURCE: GE Information Service, as reported in Lisa H. Harrington, "The ABC's of EDI," Traffic Management 29, no. 8 (August 1990), p. 51.ManufacturerManufacturerManufacturerManufacturerSupplierSupplierSupplierSupplierSupplierSupplierThird-partyvendorProprietary systemValue-added network (VAN)