Definition of Order Processing

Order processing follows a flowchart.

Order processing tracks orders from customers with suppliers. Order processing produces the end result of order fulfillment. The order process is documented through a flowchart or process flow diagram. It shows the sequence of action in order processing, products or services leaving or entering and the decisions that must be made to reach order fulfillment.

Receipt of Order

Process of ordering begins with receiving a receipt of order from a customer. Orders are received through telephone or through the mail. Orders may also be placed over the Internet. Once orders are received they are entered into a database system.

Credit Check

Once receipt for order is produced a credit check is performed. If credit is good, the order moves on the next stage of order processing. If credit is bad, the supplier refuses the order and notifies the customer of the credit denial.

Inventory

Once an order passes credit check, inventory is conducted to determine if the product is available. If materials are not readily available, production must be scheduled. If inventory is available, shipment is scheduled and a delivery date is confirmed with the customer.

Production and Shipment

It may be necessary to produce, in case products are depleted. The manufacturer creates and inspects the products. If a product passes inspection, it moves on to shipment and delivery confirmation with the customer.

Billing

Once a product is shipped, suppliers prepare a billing statement. The supplier then verifies the billing statement and mails a detailed statement to the customer.

References

• Britannica: Order Processing
• ASQ: Order Processing