Customer Relationship and Order Management
This domain tests the order-to-cash process, order promising logic, and the service metrics that connect supply chain performance to the customer.
Order-to-cash
Typical steps: order capture (EDI, API, portal, EDI 850 purchase order), validation and credit check, availability check, allocation, pick-pack-ship, invoice, and payment collection. Available-to-promise compares uncommitted supply against orders; capable-to-promise checks whether production can be rescheduled to meet a date. Allocation rules decide who gets scarce stock: first come first served, priority customer, fair share by historical volume, or margin-based. Each choice creates a different service outcome and a different argument.
Service metrics
Fill rate can be measured by unit, line or order; order fill is the strictest. OTIF counts orders both on time and in full. The perfect order index requires on-time, complete, damage-free and correct documentation together. Others: order fulfilment cycle time, request-date versus commit-date performance, cancellation and return rates, cost to serve, and customer satisfaction or net promoter score.
Worked example: why the perfect order index is harsh
A supplier reports 94% on-time, 91% complete, 97% damage-free, 96% correct documentation. Each looks acceptable. Assuming roughly independent events, the perfect order rate is 0.94 x 0.91 x 0.97 x 0.96 = 0.797, about 80%. So one in five customers experiences a failure even though no single measure falls below 90%. Improving the weakest component by five points to 96% lifts the index to 0.94 x 0.96 x 0.97 x 0.96 = 0.840, a four-point gain from one targeted fix. That is why perfect order is the headline metric in service reviews.
Segmentation and cost to serve
Customers differ in profitability. Cost to serve allocates order handling, delivery frequency, returns and small-order penalties, exposing accounts that look large in revenue but lose money. Service-level agreements should specify the measurement point (order date, ship date, delivery date) because definitions change the score dramatically.
Traps that cost marks
Averaging the four perfect-order components instead of multiplying them. Mixing case fill with line fill. Promising from ATP when only CTP can meet the date. Measuring on-time against ship date rather than customer request date. Reporting service without cost to serve. Ignoring that scarce-supply allocation rules create their own demand distortion from customers ordering early.