Order processing includes all formal processes such as order transmission, data processing and order control; measured from the time the order is placed to the receipt of the so-called shipment documents (invoice). The physical receipt of the goods is not necessarily part of this order processing.

In principle, order processing begins with the transmission of the order. This can be done by letter, fax, telephone, via the Internet or by personal contact (sales representative). It is followed by order processing, order compilation, production, shipping and billing (invoicing) including the payment transaction, if applicable. So every process taking place in the warehouse has a formal section; a sub-function:
For example:

  • Order transmission – order form
  • Order processing – order and customer information is linked, followed by the order confirmation
  • Order fulfilment – manufacturing, inventory, external procurement
  • Packing and shipping – preparation of shipping documents
  • Transport logistics – Confirmation and transport of the dispatched goods
  • Order processing – invoicing, transaction


Order processing in practice

In practice, especially at the beginning, several work steps are necessary to complement the correspondence, also to solve possible obstacles for the following processes. For example, each order must be supplemented with previously missing information, such as queries about delivery modalities, the creditworthiness of the customer, but also details about the stock and the customer file (customer information). If, for example, the article is not available, production can be started via the delivery service or a partner can be commissioned for delivery. In rare cases, the order is canceled.
For this reason, inventory planning is an important key point in order processing: It ensures the necessary delivery capability through optimal stock-keeping; in other words, it guarantees the fulfillment of the sales order in the end.

You can find more information on this topic under Order throughput time.

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