Order Processing

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Order Processing is the series of steps taken to manage and fulfill customer orders.

It starts when an order is received and ends when it is delivered to the customer.

This process can include verifying customer information, authorizing payment, preparing goods for shipment, and tracking the order once it has been shipped.1

Visual Representation

order processing visual representation

Key Stages

  1. Order Placement: The customer selects products or services and completes the purchase on the website. This stage may include selecting items, choosing delivery options, and making payments.
  2. Order Confirmation: The system automatically generates an order confirmation once the order is placed. This confirmation is sent to the customer, typically via email, acknowledging receipt of the order.
  3. Payment Processing: The customer’s payment is processed. This involves verifying payment details, authorizing the transaction, and ensuring a fund transfer from the customer to the business.
  4. Order Fulfillment: This stage involves picking, packing, and preparing the order for shipment. In the case of digital products or services, this stage might include preparing access to a service or digital delivery.2
  5. Shipping and Delivery: The order is shipped to the customer using the selected delivery method. Tracking information is often provided to the customer to monitor the progress of the delivery.
  6. Customer Service and Support: Customer service plays a crucial role in handling inquiries, returns, exchanges, or feedback related to the order after delivery.

Importance

  • Customer Satisfaction: Efficient order processing enhances the customer experience by ensuring accurate and timely delivery.
  • Operational Efficiency: Streamlining order processing reduces errors, minimizes delays, and optimizes resource utilization.
  • Revenue Growth: Effective order processing can increase sales and customer retention by providing a reliable service.3

Example

Consider an online bookstore.

When a customer orders a book, the order processing system kicks in:

  1. Order Placement: The customer selects a book and completes the checkout process.
  2. Confirmation and Payment: The customer receives an order confirmation, and payment is processed.
  3. Fulfillment: The book is picked from the inventory, packed, and prepared for shipment.
  4. Shipping: The book is shipped to the customer, and tracking information is provided.
  5. Customer Support: Customer support is available for any queries or issues after delivery.

Related Terms

References:

1. Wikimedia Foundation. (2023, December 2). Order processing. Wikipedia. https://en.wikipedia.org/wiki/Order_processing

2. Leung, K. H., Choy, K. L., Siu, P. K., Ho, G. T., Lam, H. Y., & Lee, C. K. (2018). A B2C e-commerce intelligent system for re-engineering the e-order fulfilment process. Expert Systems with Applications, 91, 386-401. https://www.sciencedirect.com/science/article/abs/pii/S0957417417306280

3. Reynolds, J. (2004). The Complete E-Commerce Book: Design, Build & Maintain a Successful Web-based Business. United States: CRC Press. https://www.amazon.com/Complete-Commerce-Book-Successful-Web-based-ebook/dp/B00SC8HPZ0/

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