12 Order Fulfillment Along the Supply Chain

Activity 1: Making sure the customer will pay. Depending on the payment method and prior arrangements, the validity of each pay- ment must be determined. In B2B, the com- pany’s finance department or a financial institution (i.e., a bank or a credit card issuer, such as Visa) may do this. Any holdup may cause a shipment to be delayed, resulting in a loss of goodwill or a customer. In B2C, in many countries, the customers usually prepay, frequently by credit card or by using services such as PayPal (Chapter 11). In other coun- tries the customer may go to a payment station (e.g., a convenience store) and prepay there.

Activity 2: Checking for in-stock availability. Regardless of whether the seller is a manufac- turer or a retailer, as soon as an order is received, an inquiry needs to be made regard- ing stock availability. Several scenarios are possible that may involve the material man- agement and production departments, as well as outside suppliers and warehouse facilities. In this step, the order information needs to be connected to the information about in-stock inventory availability or manufacturing capability.

Activity 3: Arranging shipments. If the product is readily available, and it is paid for, it can be shipped to the customer right away (otherwise, go to activity 5). Products can be digital or physical. If the item is physical and it is readily available, packaging and ship- ment arrangements need to be made. It may involve both the packaging and shipping department and internal shippers or outside

logistics services. Digital items are usually available because their “inventory” is not depleted. However, a digital product, such as software, may be under revision, and unavail- able for delivery at certain times. In either case, information needs to flow among sev- eral partners.

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