What is Order Processing?

Malcolm Tatum

Order processing is the term used to identify the collective tasks associated with fulfilling an order for goods or services placed by a customer. The processing procedure begins with the acceptance of the order from the customer, and is not considered complete until the customer has received the products and determined that order has been delivered accurately and completely. Companies often invest a great deal of time and effort in designing an efficient strategy for processing orders, thus increasing the possibility of establishing a long-term working relationship with its customers.

Order processing is not complete if goods are damaged in any way.
Order processing is not complete if goods are damaged in any way.

The actual approach to order processing will vary, depending on the complexity of the order, and the type of products that are being ordered. In some cases, it can be almost instantaneous. For example, if a buyer places an order for a software download or an e-book, the order processing usually involves nothing more than the buyer rendering payment for the product, the seller registering the sale and accepting the payment, and the immediate delivery of the e-book or software by means of a download.

The order process may begin when a customer calls to place an order.
The order process may begin when a customer calls to place an order.

When physical goods are involved in order processing, a more complex approach is commonly employed. Customers may place orders by submitting a written request, by phone, or by using online order forms that are routed directly to the seller. Each order is then routed to a distribution center, where the type and quantity of items requested by the customer are collected and prepared for shipping. In order to facilitate this process, larger companies often operate multiple distribution centers that are strategically located, allowing for the shipment to be delivered to the customer as soon as possible.

Once the order is received, the customer completes the order processing by inspecting the items that are delivered. If the items are in fact what the customer ordered, and are not damaged in any way, then the order processing cycle is considered complete. Should the received items be incorrect, or are damaged in any way, then the processing is not considered complete until the issues are resolved.

Efficient and accurate order processing is essential to the success of any type of business. A truly efficient system will require that orders must be verified with customers to ensure there are no questions about what the customer wants. Once the order is verified, the items needed to fill the order accurately must be collected in a timely fashion. After collecting the necessary products, they must be packaged securely and delivered to the customer within the time frame promised. Failure to efficiently manage any of these tasks increases the chances of disappointing the customer, and thus losing any possibility of repeat business.

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