Fulfillment, fulfillment, fulfillment (fulfillment or satisfaction) of orders, is a term used in logistics, to define the process that includes all the stages of planning, manufacturing, storage and distribution from when an order is received from the customer, until it is delivers the final product.
According to Sanglás (p.59), Fulfillment is the set of policies, procedures, personnel, forms and productivity, involved in the handling of an order, from a direct marketing action, such as: the processing of orders received by mail or telephone, maintenance of a database, storage of products, transport of goods, resolution of claims after delivery, invoicing, stock control, management and statistical assessment of returns and shipments. etc.
Alarcón and others (p.8) explain that the Order Fulfillment process is complex because it is made up of several activities, executed by different functional entities, and a great interdependence between tasks, resources and agents involved in the process. This process requires the coordination of various activities such as sales engagement, credit checking, manufacturing, logistics, receipt of invoices, and relationships with external suppliers for purchasing or shipping, which typically take place in several different business units. The main activities of the Order Fulfillment process can be summarized as follows: 1. Order management, through which orders are received from customers and commitments are reached. 2. Manufacturing, which includes production scheduling, materials planning,capacity planning and plant control. 3. Distribution, which considers logistics in relation to inventory and transportation.
The Order Fulfillment Process (OFP hereinafter) is a crucial process in supply networks. With regard to the customer, the good management of these networks influences the compliance of the promised delivery times and, in addition, that these are the lowest possible. Facing the supply network itself, it influences the flow of materials throughout it, being able to reduce the amount of unnecessary stocks or idle resources due to lack of materials, and ultimately, directly influencing production costs. It begins when an order is received and ends when the order is delivered to the end customer. This process involves the coordination of various activities, such as production, logistics and relationships with suppliers, among others. Since,Normally, companies are organized in supply networks because this allows their specialization and facilitates outsourcing, the OFP will therefore be an integrated process in the supply network, so that the decisions made by a company about its OFP will affect the other companies in said network, and vice versa. Since the number of companies participating in a supply network is generally high, it is difficult to know a priori the effects that decisions regarding the OFP taken within a company may have on the rest of the supply network.so the decisions made by a company about its OFP will affect the other companies in that network, and vice versa. Since the number of companies participating in a supply network is generally high, it is difficult to know a priori the effects that decisions regarding the OFP taken within a company may have on the rest of the supply network.so the decisions made by a company about its OFP will affect the other companies in that network, and vice versa. Since the number of companies participating in a supply network is generally high, it is difficult to know a priori the effects that decisions regarding the OFP taken within a company may have on the rest of the supply network.
According to Dominguez and others (p.2), the main tasks that make up the Order Fulfillment Process (OFP) are:
- Order management, which encompasses the receipt of orders from customers and the placing of orders from suppliers Production, which includes production planning, materials planning, capacity planning and workshop control Distribution, which consider logistics tasks such as inventory control, transportation, etc.
Following Dominguez and others (p.2), the main objectives of the OFP are summarized in the following:
- Delivery of quality products that satisfy customer orders at the right time and place. Adequately deal with internal and external uncertainties. The main sources of uncertainty are demand (volume and composition), process (throughput, machine downtime, transportation) and supply (quality of batch, reliability of deliveries). Inventories are typically used to protect the supply chain against these uncertainties.
References
- Alarcón Valero, Faustino and Others. Order promising and associated concepts: review of meanings and interpretations and proposal for their classification. CIGIP, Polytechnic University of Valencia. Agent-based architecture for modeling and simulation of supply networks: development, implementation and validation. In: http://bibing.us.es/proyectos/abreproy/70282/fichero/Cap%EDtulo+0%252FCap%EDtulo+0.pdf Dominguez Cañizares, Roberto and others. Review of the State of the Art in Modeling the Order Fufillment Process using Multi-Agent Systems. Sanglás Noirjean, Tony. Direct Marketing for Mass Consumption. New Practical Applications of Success, Netbiblo, 2008.
