Chapter 4 The Fulfillment Process

Chapter 4 The Fulfillment Process - 1. Chapter 4: The...

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1. Chapter 4: The Fulfillment Process The fulfillment process or the order-to-cash process is the process through which SSB sells these products to its customers. The fulfillment process includes all the steps necessary to take an order from a customer; fill, pack, and ship it; and receive payment for it. 4.1 Key Concepts and Assumptions The fulfillment process differs greatly depending on the countries, industries, and products that the company must deal with. A company can chose from several strategies for fulfillment. Two of the most common strategies are sell-from-stock and configure-to-order. Sell-from-stock involves fulfilling customer orders directly from the company’s inventory of finished goods. Basically, customers are limited to purchasing only those products that are in stock; they can’t request special or customized products. Sell-from-stock is common among companies that sell directly to the consumer via retail. These tend to be high-volume, low- cost operation, such as grocery stores, office supply stores, and fashion retailers. Configure-to-Order usually involves taking a standard or base model of a product and then configuring it to meet the customer’s special needs by adding either special options or add-on parts. The configure-to-order strategy is common in low-volume, high-cost industries that require specialized products that must meet very specific needs. 4.2 A Basic Fulfillment Process
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4.2.1. Physical Flow The fulfillment process often begins when a customer sends an inquiry regarding the availability of the products he intends to purchase. It is then received by the sales department, who then creates a quotation and sends it back to the customer. Next, the customer sends a purchase order to the sales department (“receive customer purchase order”). When the sales department receives this order, they create a sales order and forward it to the warehouse for further processing. The warehouse then prepares the shipment. They gather the right quantities of the desired products from the storage shelves, put them in a box, seal them, and place an address label on it. They then send this box to the customer by some means, such as a truck or airline (“send shipment”). Next, accounting will prepare an invoice or bill and send it to the customer (“create and send invoice”). Hopefully the customer will send a payment, perhaps in the form of a check, which is received and recorded (“receive payment”). Companies use various documents to communicate and share data across the different processes. 4.2.2. Document and Data Flow The documents associated with the fulfillment process at SSB are: (1) customer inquiry, (2) quotation, (3) customer purchase order, (4)
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sales order, (5) picking document, (6) packing list, (7) customer invoice, and (8) customer payment.
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This note was uploaded on 11/18/2010 for the course MIST 2090 taught by Professor Piercy during the Fall '08 term at University of Georgia Athens.

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Chapter 4 The Fulfillment Process - 1. Chapter 4: The...

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