STAPLE YOURSELF TO AN ORDER ARTICLE 1

Manoj Patil @03279385

Amir Khan M @03279476
1.Explain the OMC chart shown on page 165 in terms of how coordinated integration between
the various business functions and processes in a firm can lead to smoother transitioning of
orders and related work-systems/processes through the 10 stages/steps of the OMC shown in that
chart.
OMC CHART :
An effective Order Management cycle can function only with collaborative effort and a very
transparent , frequent communication between all departments starting from receiving of orders
to fulfilment and delivery to customers and after sales service . The various steps involved in the
OMC chart are as follows :
ORDER PLANNING :
Order planning is the most initial and one of the most integral steps involved in order
management cycle . The most important function of the order planning process is to :

Analyse the order and create a suitable organizational goal / plan based on the given

order .
Identifying resources such as finance ( Investment ) required for the order and workforce

to be hired so that order could be completed successfully

Establishing Goal related tasks : This involves making specific goals , For ex : Goal is to
increase sales by 10 % . This should be taken as a primary task and all departments

should be notified and hence should work together to achieve this goal .
A strict timeline has to be designed for every task handled by every department and
every department should finish executing the designated tasks such as manufacturing ,
warehousing , shipping etc within the deadlines .

Should setup meetings with other departments such as sales team and Marketing team as
they are close to the customer and they would be able to communicate the needs of the
present customer better and planning could be done accordingly.

ORDER GENERATION :After Order acceptance by the company , They need to generate the accurate details about the
complete order to all departments .

Good co-ordination should be present between sales teams if not functionality becomes

low .They should work hand in hand to achieve the given order and not work separately .
Should have one common total order and not separate orders from marketing department
which generate orders even from the distributors . This way things can be systematic and
every department such as production department knows exactly what they need to
produce so transparency between sales marketing production departments in relation
with the Order generation process is very key .

Cost estimation

Accuracy in cost estimation is very integral as it can make or break a project .

Should involve exact estimation of costs and evaluating risks and overcoming financial

backlogs .
Collaborative team effort is required during costing between designers such as engineers
who design the article to the accountants in the accounting departments , The costing per
article should be acceptable by all departments including operations , Marketing ,
engineering(for design purpose) , purchasing and finance departments .

ORDER RECEIPT :

This step takes place at the Customer service department .

Customer service representatives need to be well trained and should be able to

communicate the needs and wants of the customers to top level executives of the
company , CS -Representatives are the people who are in direct contact with the

customers themselves so their inputs and viewpoint is integral .

So good collaboration should be present between top level executives and customer
service representatives .

ORDER PRIORITIZING :

Order prioritizing can give great benefits if linked with the business strategy employed .
They should know which orders to give high importance to and which comparatively
lesser importance . This Data should be transferred to all departments
Such as MARKETING OPERATIONS -FINANCE LOGISTICS CUSTOMER
SERVISE DEPARTMENT , So that they know which order has higher priority and which
they should work more on to achieve the target given and make sure customers are happy
with the product they receive .

SCHEDULING :

Scheduling or planning is also a very important function as it gives a step by step

procedural plan for every department to operate systematically .

Avoid conflicts between departments by setting up meetings between production
managers , marketing managers , sales team etc and devise a proper scheduled plan which

should include as to what changes also need to be made for the order.
What extra services to be provided .
Make separate schedule for each department which connects perfectly with the overall
target schedule .

FULFILLMENT

Manufacturers manufacture the product and it is sent to assembly unit were it

gets assembled and then at the end to a third party vendor who has to deliver the

product to the customer .

Communication is key here as operations people should be in touch with the
vendors who are delivering It and communicate effectively as they do not know

BILLING

anything about the product they are delivering .

Customer should be satisfied when he receives the order .

Finance team heads the billing department

Their main aim is to generate billing and get the collections as quickly as

possible .
Bill should be transparent and easily understood by the customer and the
customer should not be charged for some extra services which he has not

known or enrolled for .

Should work closely with customer support team so that the margin of
errors can be minimized in this sector .

RETURNS AND CLAIMS :

It is the process of customers returning their products when unsatisfied with the product

they received .
Should have good returns policy which can be achieved by having a good customer

service team through which customers can tell their issues with the product .
Sales team should have close ties with ware house , production , logistics and shipping /
transporting agencies so that they could immediately sort the issue and send the new
product back to the customer and win customers good will .

POST- SALES SERVICE :

This is one of the most important feature in terms of customer retention .

Good after sales service could make a customer loyal to the company .

Post sales or after sales service involves physical installation , repair and

maintenance or even customer training .

There needs to be good communication between service representatives (who are
direct in contact with the customers ) and the quality assurance team , production

team .
This way any production issues or defects in the product can be quickly
conveyed to the production department and they could make the necessary

changes promptly .
Marketing and sales departments should also be connected with the post sales
department as they could get valuable inputs about the products and their reviews
from customers .

2 ) Explain the difference between Horizontal Gap and Vertical Gap in the context of the
customer order management cycle. Use an example.
The Horizontal gap happens when there are hindrances in communication and process
gaps between different departments as the order flows from one to the next department , it also
faces the risks of falling into gaps. Vertical gap happens when people generally fail to understand
the strategy developed in top level managers or when the action taken by the departments are
different from the company strategy, this leads to improper functioning of the OMC therefore
cooperation among all departments and commitment to group success is essential to achieve
organizational goals.

EXAMPLE OF HORIZONTAL GAP:

At Indian regular grocery store , the marketing staff runs new campaigns every week where few
items are on sale to attract customers, these items on sale are usually regular moving items and
due to low promotional prices more demand is created when the product perfectly satisfies the
consumers. The crux of the scenario is that marketing people work with full coordination with
the purchasing and logistics departments. The purchasing department needs to well known about

the promotions in advance so that right quantities could be ordered and logistics also needs to
aware and make sure that right amounts of promotional items are proportional and available on
sale in the stores. If logistics bring in the items even one day late, a horizontal gap is created Or if
purchasing orders lesser amount of items, unaware of promotion, lot of customers unable to make purchase, will
be dissatisfied as they must deliver what they have promised or this will damage the goodwill
and profitability of the store.

EXAMPLE OF VERTICAL GAP:

Earlier Toyota Motors used to use traditional operating system and production methods for cars
which used to take a lot of time to assemble and manufacture and reach the customers at the end.
They were loosing marketing share compared to general motors , ford , Chrysler and others.
Taiichi Ohno an efficient engineer in the Toyota Production department invented the idea of Just
in time and ensure Zero defects in production. Ohno was successful in developing the way
organizations identify the wastes, with his "Seven Wastes" model that includes- Delay, waiting or
time spent in a queue with no value being added , Producing more than you need Over
processing or undertaking non-value added activity, Transporting Unnecessary movement or
motion, Inventory Reduction of Defects . this lead to operational efficiency and production was
increased in lesser time and multiple profits were made soon which made a big change in the
history of Toyota.

3 ) Explain the context of Order Based Pricing in the costs/profits estimation step of the
customer order management cycle to improve profitability.

The company needs to understand the opportunity and impact of the pricing as it acts as a bridge
between the customer requirements and a companys capabilities. It is a important part of the
OMC. Pricing at order depends on understanding the customer equity generated by each order

placed, evaluating the cost of filling each order, and instituting a system that enables the company to
price each order based on its value of each good or service and cost. The control of OMC gives managers
capability to practice the order based pricing .Salesman , Engineers and accountants should
work hand in hand in the cost estimation and pricing step. Engineers must do the estimation,
accountants calculate the costs and sales group develops the promotional activities and price. The
pricing process needs to be seamless in order that the customer gets the bids at expected time.
All the departments must work in hand in hand instead of questioning other departments and
creating a chaos each individual must realise his responsibility and work as a team motivating
other members to achieve personal as well as company goals by working towards the betterment
of the future in every step . A well tailored company will arrive at price in timely manner so that bidding
process can continue and the company gets orders from the customers on right time and right
work is to be done on time by all departments to ensure efficiency and effectiveness and meeting
the financial requirement purposes.