Order processing

Order processing is the process or work-flow associated with the picking, packing and delivery of the packed items to a shipping carrier. Order processing is a key element of order fulfillment. Order processing operations or facilities are commonly called "distribution centers".

Process

Automated picking

Sorting packages according to destination

Order processing is a sequential process involving:^[1]

• Picking: consists in taking and collecting articles in a specified quantity before shipment to satisfy customers' orders.
• Sorting: process that separates items according to destination.
• Pre-consolidation or package formation: includes weighting, labeling and packing.
• Consolidation: gathering packages into loading units for transportation, control and bill of lading.

SKU or Stock-keeping unit
Multi SKU Orders - single SKU Orders
Order processing methodologies
Information management systems in distribution

Picking

Case picking vs item or each picking
Single item picking
Pick to order
Batch pick to order
Batch pick and sort to order
Wave Picking
Waveless picking

Sorting

Sorting machines in distribution

Factors

The specific "order fulfillment process" or the operational procedures of distribution centers are determined by many factors. Each distribution center has its own unique requirements or priorities. There is no "one size fits all" process that universally provides the most efficient operation. Some of the factors that determine the specific process flow of a distribution center are:

• The nature of the shipped product - shipping eggs and shipping shirts can require differing fulfillment processes
• The nature of the orders - the number of differing items and quantities of each item in orders
• The nature of the shipping packaging - cases, totes, envelopes, pallets can create process variations
• Shipping costs - consolidation of orders, shipping pre-sort can change processing operations
• Availability and cost and productivity of workforce - can create trade-off decisions in automation and manual processing operations
• Timeliness of shipment windows - when shipments need to be completed based on carriers can create processing variations
• Availability of capital expenditure dollars - influence on manual verses automated process decisions and longer term benefits
• Value of product shipped - the ratio of the value of the shipped product and the order fulfillment cost
• Seasonality variations in outbound volume - amount and duration of seasonal peaks and valleys of outbound volume
• Predictability of future volume, product and order profiles
• Predictability of distribution network - whether or not the network itself is going to change
• Presence of small volume distribution
• Minimization of shipping costs

This list is only a small sample of factors that influence the choice of a distribution centers operational procedures. Because each factor has varying importance in each organization the net effect is that each organization has unique processing requirements.

The effect of Globalization has immense impacts on much of the order fulfillment but its impact is felt mostly in transportation and distribution.

References