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CR (2004) Prentice Hall, Inc.

Order Processing and Information Systems. The difference between mediocre and excellent logistics is often the firm’s information technology capabilities. Dale S. Rogers Richard L. Dawe Patrick Guerra. Chapter 5. CR (2004) Prentice Hall, Inc.

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CR (2004) Prentice Hall, Inc.

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  1. Order Processing and Information Systems The difference between mediocre and excellent logistics is often the firm’s information technology capabilities. Dale S. Rogers Richard L. Dawe Patrick Guerra Chapter 5 CR (2004) Prentice Hall, Inc.

  2. 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 Ord. Proc. & info. sys. . proc. & info. sys • • . . Location Strategy Location Strategy • • Location decisions Location decisions • • The network planning process The network planning process CR (2004) Prentice Hall, Inc.

  3. Typical Elements of Order Processing CR (2004) Prentice Hall, Inc.

  4. 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 CR (2004) Prentice Hall, Inc.

  5. Order Filling (Cont’d) 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 CR (2004) Prentice Hall, Inc.

  6. Commerce Through the Internet CR (2004) Prentice Hall, Inc.

  7. Factors Affecting Order Processing Time • Processing priorities • Parallel versus sequential processing • Order-filling accuracy • Order batching • Lot sizing • Shipment consolidation CR (2004) Prentice Hall, Inc.

  8. The Logistics Information System CR (2004) Prentice Hall, Inc.

  9. Order Management System Module • Elements • Stock availability • Credit checking • Invoicing • Product allocation to customers • Fulfillment location CR (2004) Prentice Hall, Inc.

  10. Warehouse Management System Module • Elements • Receiving • Putaway • Inventory management • Order processing and retrieving • Shipment preparation CR (2004) Prentice Hall, Inc.

  11. Transportation Management System Module • Elements • Mode selection • Freight consolidation • Routing and scheduling shipments • Claims processing • Shipment tracking • Bill payment and auditing CR (2004) Prentice Hall, Inc.

  12. Operating Components of the LIS CR (2004) Prentice Hall, Inc.

  13. Exploded View of the LIS CR (2004) Prentice Hall, Inc.

  14. Information System Examples • A retail system • Vendor managed inventory • E-commerce • A decision support system CR (2004) Prentice Hall, Inc.

  15. Item sold Item sold Item sold Sales Sales Sales counter counter counter Bar code Bar code Bar code item at store item at store item at store Customer Customer Manual Manual Bar code Bar code credit credit register register scanning scanning verification verification input input Transmission Transmission Transmission In In - - store computer store computer Regional center main Regional center main • • Credit data Credit data computer computer • • Payroll Payroll • • Corporate payroll Corporate payroll • • Accounting Accounting • • Corporate Corporate • • Merchandising Merchandising accounting accounting Deliveries from Deliveries from Deliveries from supplier supplier supplier • • Corporate credit Corporate credit • • Inventory Inventory management management Corporate Corporate Corporate Purchase Purchase Purchase sales sales sales order order order report report report Department Department Department manager review manager review manager review Supplier Supplier -- -- Coffee Coffee EDI EDI EDI makers makers LIS for a Large Retailer

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