The current global business environment has changed drastically with the need to increase competitive advantage and productivity and profitability of an organization. The increased globalization and internationalization of business activities have led to a shift in the latter. In addition, the development of information and technology has led to the development of new methods and platforms of doing business in the global market. For example, the creation of online stores is a phenomenon that has led to a shift in various business practices. These include the issue of logistics management, which has been made complex with the development of online stores. The latter resulted in the fact that an organization has been faced with the challenge of availing its products in the diverse global market. It leads to the issue of customer focus and satisfaction, as an organization has to ensure the timely delivery of products in the global market.
In the development of a new online retail initiative, any business has to consider various issues affecting management of orders to ensure efficient customer service. The issues concerning distribution and packaging centers and material handling are of great importance, when an organization considers the development of an optimal logistic management system. In addition, physical distribution facilitates the delivery of products to customers, and hence the logistics management system should develop a system that ensures the timely delivery of products. The business environment can be described in terms of flows; these include the flow of raw materials and finished goods to customers. The flow of information also follows a reverse direction, when it flows from an organization to the end users and from customers to the organization. Information flow is essential in providing the organization with information and data useful in the decision-making process.
Order Management and Customer Service. Order management involves the development of an operating system based on forecasting demands. It involves organization’s influence during the management of orders, where the organization makes attempts to influence the customer’s pattern of placing orders. The management of orders also includes the execution of the orders received from customers with the aim of ensuring the timely and correct delivery of orders. The order management system should focus on customer requirements in various ways. These include the timely delivery of the product to the customer. It ensures the satisfaction of the customer received from the product. The order management system should also ensure the correct products are delivered to customers in the right quantity and quality. The measure of the supply chain logistics performance is the availability of the product timely, in the right quantity and quality to customers. An ineffective order management system and supply chain will lead to high stock-out costs, which may affect organization’s productivity and profitability. Stock-out costs are incurred when the buyer is run out of the product and has to wait until the product is made available. The buyer may also backorder the product, or lose the current revenues that could have been obtained if the products were delivered in time. Customer focus and service occurs in the supply chain management and the marketing of the product. In addition, it includes the flow of information cash and invoices between the customer and an organization. The organization should have a commitment to ensure customer focus and satisfaction through the delivery of a superb customer service. Customer focus requires specific performance, which addresses various strategic operational and tactical aspects in the order management system. The organization should take the customer service as an activity, which must be performed to satisfy the order requirement of the customer.
The organization should facilitate the management of customer relationships through strategically positioning customers to ensure profitability and facilitate the relationship between the firm and the customer. Various actions taken by customers affect the operational costs of the organization. These include such actions as order quantity, the time of making the order, mechanisms used by the customer to make an order and the time when the customer requires the quantity of the product ordered. To ensure the development of the proper customer relationship management system, the organization has to ensure a strategic approach to the system (customer service). These include market and customer segmentation based on the profitability of customers. It will facilitate the organization to identify the best product for each customer and service delivery to each segment of customers. Market and customer segmentation is essential for the organization development and the execution of the best processes to provide services to customers. The organization should also facilitate a continuous review process to measure the performance of the system, as well as to facilitate the improvement process.
Order management and demand forecasting are highly interrelated, since firms do not just wait for orders from customers to start the production process. An organization should perform forecasts of the demands for its products to ensure the satisfactory fulfillment of the orders made by customers. Efficient forecasting of demands by the organization will facilitate the reduction of the order cycle. The latter is the time lapse between the point when the customer makes an order and the time when the product is delivered. The order cycle is an important parameter used to measure customer service. In addition, it has been used by organizations to create a competitive advantage, since the shorter the order cycle is, the more competitive the organization is considered to be. There are various elements of customer service delivery, which include consistency and dependability of the order management system. A consistent order cycle should ensure the safe and complete delivery of products. A complete order ensures the delivery of safe products meaning that the product should not be damaged when it is delivered to the customer.
The strategic logistics management of the supply chain involves the development of distribution centers, which will facilitate the availability of the product to customers. Distribution centers are also essential in facilitating supply chain management, which is an important component of the logistics management of an organization. Material handling and packaging of products are essential in the organization and an important part of logistics management. With the development of information and technology, there has been a shift in the approaches used in logistic management practices, such as material handling and packaging. In addition, packaging has been an important factor in the modern lifestyle. Therefore, the lack of up-to-date information on the developments in the packaging sector affects the operation of an organization. Packaging aims at protecting, preserving, containing and informing the customer of the content of the package. The concept of packaging has been an important factor in history. The development of industrialization has led to a shift in the approach used in the packaging of materials. In the current global world, packaging is produced more rapidly and efficiently than in the past. It has also evolved from small, heavy and rigid containers made of wood and steel to semi-rigid and flexible packaging options, which are made of specialized lightweight materials (Packaging Council of Australia n.d.). The use of lightweight materials in the practice of packaging has enhanced the flexibility of various activities of packaging, such as the ease of opening, dispensing from the package, resealing, storing and disposing packaging materials after use.
An organization needs to have a clear understanding of the various types of packaging based on its target. These include consumer packaging, which is also referred to as primary packaging. It constitutes the sale unit to the final user of the product (Frost 2005). In addition, there is grouped packaging, which is also referred to as secondary packaging. It constitutes grouping of a certain number of products. These are sold to such business units as supermarkets or wholesalers either to replenish their shelves or as additional stock. The last type of packaging is transport packaging, also referred to as tertiary packaging, which facilitates the transportation of several products to the market. Increasingly, manufacturers have been developing strategic means of merging and coordinating the functions of the different methods of packaging to facilitate cost reduction and increase profitability.