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Order processing: definition & important aspects for buyers
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Order processing in a nutshell:
Order processing covers all process steps from order entry to the complete delivery and invoicing of an order. Efficient order processing is essential for purchasing, as it has a direct impact on delivery performance, process costs and customer satisfaction.
Example: By introducing a digitalized order processing system, an automotive supplier reduces the throughput time of its standard orders from an average of 5 to 2 working days and lowers the process costs per order from 35 to 12 euros.
Contents
What is order processing?
Order processing covers the entire process from receipt of a customer order to delivery of the goods or services. It ensures that customer requirements are fulfilled efficiently and promptly. This includes the processing of orders, inventory management, production control, logistics and customer service. The aim is to ensure a smooth process and maximize customer satisfaction.
Core elements of order processing
Significance for purchasing
Order processing is of central importance for purchasing, as it directly influences the demand for materials and services. Efficient order processing enables purchasing to plan requirements precisely, determine optimal order quantities and strengthen supplier relationship management. Close integration with logistics and production planning can reduce costs and improve delivery performance.
Guide: Optimizing your order processing for greater efficiency and customer satisfaction
Order processing: from manual processes to digital transformation
Order processing is at the heart of any company that offers products or services. Based on theoretical principles, it encompasses all steps from order entry to final delivery. In practice, it is clear how crucial efficient processing is for customer satisfaction and the company's success. In the face of increasing competition and the demands of digitalization, there is an urgent need to rethink and modernize traditional processes.
Old: Manual order processing
Traditional approach: In traditional order processing, orders were usually received manually - by phone, fax or email. Employees recorded data manually in different systems, which was time-consuming and prone to errors. Inventory checks were often done through physical checks or in separate Excel spreadsheets, and communication between departments was heavily paper-based. Delays and loss of information were commonplace. These manual processes led to longer lead times, increased costs and reduced flexibility, limiting the ability to respond quickly to customer requirements.
New: Automated order processing
Order Management System (OMS): Modern companies rely on automated systems to optimize order processing. An order management system integrates all steps of the process into a central platform. Orders are received electronically and automatically transferred to the ERP system. Real-time data enables immediate stock checks and resource planning. The use of artificial intelligence improves forecasts and identifies bottlenecks at an early stage. Automated workflows coordinate procurement, production and logistics efficiently. The implementation of an OMS leads to a significant reduction in errors, faster response times and increased transparency across the entire process.
Practical example: Digital transformation at ABC GmbH
ABC GmbH, a leading mechanical engineering company, was faced with the challenge of increasing the efficiency of its order processing. By implementing an order management system, the average processing time per order was reduced from 24 hours to 2 hours. The error rate for data entry fell by 80% and the on-time delivery rate increased from 90% to 99%. In addition, stock accuracy improved by 95% thanks to real-time updates. These optimizations resulted in cost savings of 15% per order and a significant increase in customer satisfaction, which was reflected in a 10% increase in sales within one year.
Conclusion on order processing
Order processing is a complex but crucial process for a company's success. By integrating modern technologies, efficient process flows and close coordination between all departments involved, companies can increase their competitiveness and maximize customer satisfaction. Well-structured order management not only enables cost savings, but also creates the basis for sustainable growth and digital transformation.
