Chap 004
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CHAPTER 4 Order Processing and Information Systems
Total Order Cycle: A Customer's Perspective 1. Customer places order
2. Order received
6. Order delivered to customer
5. Order shipped to customer
3. Order processed
4. Order picked and packed
Key: 1. Order preparation and transmittal 2. Order received and entered into system 3. Order processed 4. Order picking/production and packing 5. Transit time 6. Warehouse receiving and placing into storage Total order cycle time McGraw-Hill/Irwin
4-2
1 days 1 day 1 day 1 days 3 days 1 day 8 days
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Total Order Cycle with Variability 1. Order preparation and transmittal
2. Order entry and processing
Frequency:
1
3
1
5. Transportation
6. Customer receiving
Frequency:
Frequency:
1
McGraw-Hill/Irwin
3
5
.5
1
3. Order picking or production Frequency:
Frequency:
2
4-3
2
1
3
9
TOTAL Frequency:
1.5
3.5 days
8
20 days
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Path of a Customer’s Order Ship customer order
Customer delivery
Customer order
4-4
Order transmittal Inventory available Enter customer order
Check credit Production schedule
McGraw-Hill/Irwin
Back order
Inventory file
Production
Invoice
Process order
Shipping documentation
Warehouse withdrawal
Transportation scheduling
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Traditional Supply Chain Flows
4-5
Demand flow
Supplier
Manufacturer
Distributor
Retailer
Product flow
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Information-based Supply Chain Flows
4-6
Timely, accurate information flow
Supplier
Manufacturer
Distributor
Retailer
Smooth, continual product flow matched to demand
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Definition of EDI
4-7
Interorganizational exchange of business documentation in structured, machineprocessable form. Unstructured Fax E-Mail Person-to-person
McGraw-Hill/Irwin
Structured EDI Order entry Computer-to-computer
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
EDI Versus Traditional Methods
BUYER'S COMPUTER
PO
POST OFFICE
ORDER ENTRY
PO
SELLER'S COMPUTER
EDI FLOW
PURCHASING
PURCHASING
McGraw-Hill/Irwin
4-8
BUYER'S PURCHASING APPLICATION
SELLER'S ORDER ENTRY APPLICATION
Source: Margaret A. Emmelhainz, Electronic Data Interchange: A Total Management Guide (New York: Van Nostrand Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Reinhold, 1990), p. 5.
Typical EDI Configurations Proprietary system
4-9
Supplier
Manufacturer
Supplier Supplier
Value-added network (VAN) Manufacturer Manufacturer Manufacturer
McGraw-Hill/Irwin
Supplier Thirdparty vendor
Supplier Supplier
SOURCE: GE Information Service, as reported in Lisa H. Harrington, "The ABC's of EDI," Copyright © 200129, byno. The McGraw-Hill Inc. All rights reserved. Traffic Management 8 (August 1990), p. Companies, 51.
Decision Support System User data-bases
User inputs
Public databases
4-10
Data acquisitions
Data preprocessing Planning/ analysis models
Operating models
Information results
McGraw-Hill/Irwin
Data processing
Data presentation
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Total Order Cycle: A Customer's Perspective 1. Customer places order
2. Order received
6. Order delivered to customer
5. Order shipped to customer
3. Order processed
4. Order picked and packed
Key: 1. Order preparation and transmittal 2. Order received and entered into system 3. Order processed 4. Order picking/production and packing 5. Transit time 6. Warehouse receiving and placing into storage Total order cycle time McGraw-Hill/Irwin
4-2
1 days 1 day 1 day 1 days 3 days 1 day 8 days
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Total Order Cycle with Variability 1. Order preparation and transmittal
2. Order entry and processing
Frequency:
1
3
1
5. Transportation
6. Customer receiving
Frequency:
Frequency:
1
McGraw-Hill/Irwin
3
5
.5
1
3. Order picking or production Frequency:
Frequency:
2
4-3
2
1
3
9
TOTAL Frequency:
1.5
3.5 days
8
20 days
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Path of a Customer’s Order Ship customer order
Customer delivery
Customer order
4-4
Order transmittal Inventory available Enter customer order
Check credit Production schedule
McGraw-Hill/Irwin
Back order
Inventory file
Production
Invoice
Process order
Shipping documentation
Warehouse withdrawal
Transportation scheduling
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Traditional Supply Chain Flows
4-5
Demand flow
Supplier
Manufacturer
Distributor
Retailer
Product flow
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Information-based Supply Chain Flows
4-6
Timely, accurate information flow
Supplier
Manufacturer
Distributor
Retailer
Smooth, continual product flow matched to demand
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Definition of EDI
4-7
Interorganizational exchange of business documentation in structured, machineprocessable form. Unstructured Fax E-Mail Person-to-person
McGraw-Hill/Irwin
Structured EDI Order entry Computer-to-computer
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
EDI Versus Traditional Methods
BUYER'S COMPUTER
PO
POST OFFICE
ORDER ENTRY
PO
SELLER'S COMPUTER
EDI FLOW
PURCHASING
PURCHASING
McGraw-Hill/Irwin
4-8
BUYER'S PURCHASING APPLICATION
SELLER'S ORDER ENTRY APPLICATION
Source: Margaret A. Emmelhainz, Electronic Data Interchange: A Total Management Guide (New York: Van Nostrand Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Reinhold, 1990), p. 5.
Typical EDI Configurations Proprietary system
4-9
Supplier
Manufacturer
Supplier Supplier
Value-added network (VAN) Manufacturer Manufacturer Manufacturer
McGraw-Hill/Irwin
Supplier Thirdparty vendor
Supplier Supplier
SOURCE: GE Information Service, as reported in Lisa H. Harrington, "The ABC's of EDI," Copyright © 200129, byno. The McGraw-Hill Inc. All rights reserved. Traffic Management 8 (August 1990), p. Companies, 51.
Decision Support System User data-bases
User inputs
Public databases
4-10
Data acquisitions
Data preprocessing Planning/ analysis models
Operating models
Information results
McGraw-Hill/Irwin
Data processing
Data presentation
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
