CR 2004 Prentice Hall, Inc'

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Order Processing and Information Systems
The difference between mediocre and excellent
logistics is often the firms information
technology capabilities. Dale S. Rogers Richard
L. Dawe Patrick Guerra
Chapter 5
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Order Processing and Information Systems in
Planning Triangle
Inventory Strategy
Inventory Strategy

Forecasting

Forecasting
Transport Strategy
Transport Strategy

Inventory decisions

Inventory decisions

Transport fundamentals

Transport fundamentals

Purchasing and supply

Purchasing and supply

Transport decisions

Transport decisions
Customer
Customer
scheduling decisions
scheduling decisions
service goals
service goals

Storage fundamentals

Storage fundamentals

The product

The product

Storage decisions

Storage decisions
ORGANIZING
ORGANIZING
CONTROLLING
CONTROLLING
PLANNING
PLANNING

Logistics service

Logistics service
Ord
. proc. info. sys
Ord. Proc. info. sys.

.

.
Location Strategy
Location Strategy

Location decisions

Location decisions

The network planning process

The network planning process
CR (2004) Prentice Hall, Inc.
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Typical Elements of Order Processing
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Order Filling

• Processing rules affect order filling speed
• First-received, first-processed
• Shortest processing time first
• Specified priority number
• Smaller, less complicated orders first
• Earliest promised delivery date
• Orders having the least time before promised
  delivery date

Order fill rate lower than item fill rate
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Order Filling (Contd)
Question Suppose that an order contains five
items, each having a stocking probability of 93.
What is the probability that the order will be
filled complete?
Answer
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Commerce Through the Internet
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Factors Affecting Order Processing Time

• Processing priorities
• Parallel versus sequential processing
• Order-filling accuracy
• Order batching
• Lot sizing
• Shipment consolidation

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The Logistics Information System
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Order Management System Module

• Elements
• Stock availability
• Credit checking
• Invoicing
• Product allocation to customers
• Fulfillment location

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Warehouse Management System Module

• Elements
• Receiving
• Putaway
• Inventory management
• Order processing and retrieving
• Shipment preparation

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Transportation Management System Module

• Elements
• Mode selection
• Freight consolidation
• Routing and scheduling shipments
• Claims processing
• Shipment tracking
• Bill payment and auditing

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Operating Components of the LIS
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Exploded View of the LIS
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Information System Examples

• A retail system
• Vendor managed inventory
• E-commerce
• A decision support system

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LIS for a Large Retailer