The speed and efficiency with which customers’ orders are processed and progressed have impact upon both profitability and marketing success. Time lags within the company in handling orders increase overall distribution costs because they necessitate larger inventory holding, and possibly faster transportation, if customer service levels are to be maintained. Larger inventories (and faster transportation) give rise to greater working capital requirements and operating costs. It follows that effective communications can eliminate some of these costs. This chapter considers the activities involved in order processing and handling, such as order acquisition and entry, document and materials processing, delivery and invoicing. An important part of the chapter is consideration of the means by which the process can be managed through the application of information technology. Information transfer through EDI, EPOS and EFTPOS (electronic funds transfer at point of sale) systems will be reviewed from a cost/benefit approach. The chapter will commence with a discussion on the role of information for decision-making and consider how the information flows within the communications activity enhances decision-making.
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