Order Management Cycle - Research Paper Example

?Order management cycle is a process a company should use to meet satisfaction and increase its financial gains. It involves a series of tensteps; forecasting sales, generating orders, establishing the cost and pricing of a product, receiving and prioritizing orders, scheduling the production, delivering the order, billing the customer and handling returns and post-sale services. It can also include providing the customer with order status, informing the customer that his order has been shipped, creating supplemental orders, and monitoring the activities that support the order (Shapiro, July 1992). A company’s success hugely depends upon on how far it has been able to satisfy its customers. The OMC of a company influences a customer’s experience in a huge way and so it should be designed accordingly. A longer process involved in ordering as well as receiving the product or service will lead to customer dissatisfaction and result in huge loss for the company. If an OMC of a company is properly designed and activated, the whole process- from taking an order to delivering it on time, will not only lead to customer satisfaction and help in regenerating orders (Shapiro, July 1992). The OMC involves planning through its ten steps, drawing charts to establish the problems and maintaining interdepartmental coordination. The main aim of a company is customer satisfaction and financial gains. Customer satisfaction depends upon the order and so the order should be completed efficiently to gain financial profits. The OMC involves a process where each and every aspect of the order is looked after in details. Thus once an order is properly executed it will result in good feedback from the customer and help in regenerating orders which will increase the profit margin of the company. Thus we see that a company’s profit margin is influenced by the OMC to a large extent (Shapiro, July 1992). The best approach that a company can take to determine its problems and the root causes is through Analysis. The first step of analyzing is to build a systematic OMC and a related chart which shows a company’s performance through various levels. For example, a company had made a separate room where it had built a big chart showing the various order levels, the cracks that were created, and the problems between various levels and the steps that need be taken to overcome the problems. Through the analysis method, each and every employee of the company becomes aware of the ongoing progress and the various levels where work needs to be done to increase sales and profit as well. The second type of analysis is to make the OMC from the customer’s point of view. A manager should see an order from the customer’s eyes and execute it accordingly. It is said that “Every time an order is handled, a customer is handled and every time an order sits unattended, a customer is unattended.” An executive should be able to invent a product from a customer’s perspective and provide extraordinary service to them so as to enhance the profit as well the goodwill of the company (Shapiro, July 1992). Finally, there are various companies who have made customer satisfaction, higher profits and sustainable competitive advantage as their main goals to be successful. For this a manager of accompany requires to analyze its different types of customers, its different kinds of orders, geography and other relevant data in order to analyze the relation between its customers and competitors and also between its volume and pricing. To collaborate cross functional efficiency and design a performance metrics, projects should be initiated to improve the OMC which covers all the departments of a company. The company’s plans and strategies needs to be communicated to all the personnel involved and information technology should be used to integrate the different steps of the OMC (Shapiro, July 1992). A performance matrix of a company can give a wrong indication of a company’s OMC efficiency. For example, a company’s in house performance showed 98% successful delivery of orders but on receiving customer feedback it was known that 50% of them were not satisfied. On investigation it was revealed discrepancy on the time when a manger records its order delivery and the time when the customer received it. If an order consists of 100 items and 99 items has been shipped, the company records 99% perfect shipment but the customer recorded the same transaction as a complete failure. The customer didn’t receive his delivery on time. Thus the performance metrics showed positive results while the OMC survey revealed negative feedback. The discrepancy can be removed if a company tracks its delivery from the customer’s viewpoint (Shapiro, July 1992). The approach of system focus means putting the pieces together in a company and moving across boundaries. It means that OMC should be treated as a system. There are various ways in which the horizontal pieces in an organization can be put together as a whole. The first is introducing bonus and rewards in the company’s compensation system. Managers can announce joint order plans to encourage the employees to take a system wide view of the company’s performance. They can also introduce performance measurements where managers can grade the employees work through numbers. Another important tool used by the managers in starting inter-functional or interdepartmental investments in projects. As result of this, different departments come together and know about each others way of thinking. For example, when a CEO of a company personally keeps in touch with the sales department, it comes to know to about the various problems they are facing and he handles the situation accordingly. In this way he comes in direct contact with the customers which further help the company in increasing its financial gains (Shapiro, July 1992). Today computer have become an integral part of every organization. It is a very important tool for integrating the various steps in the OMC cycle. It helps in direct interdepartmental contact, direct contact with the customers, lowers the company’s costs and leads to better analysis. The manager can keep an overview of the various departments functioning below him. He can determine where the work is being done efficiently and where there is scope for further improvement. Thus a system approach of OMC tells us that the basic work of a company takes place across boundaries. All the pieces of OMC needs to be put together so as to achieve customer satisfaction and better financial gains for the company. There are various benefits that a company derives by improving their order management cycles. Firstly, a better OMC leads to improved customer satisfaction. A well organized OMC can help the company satisfy the customers and regenerate further orders. Secondly, it will reduce the various discrepancies that exist among the different departments of a company. And finally a systematic order management cycle will make the company more profitable. Thus to reap the benefits of customer satisfaction, interdepartmental unity and financial gains, a company needs to build a detailed, organized and systematic order management cycle (Shapiro, July 1992). References Shapiro P. Benson, Rangan V. Kasturi, Sviokla John J., July- August, 2004, Harvard Business Review,1992, viewed on 31 May, 2011, < http://www.hrbbeprints.org>. Read More