Role of ABC Analysis in the Process of Efficient Order Fulfillment: Case Study

Abstract

In today’s world, every company is competing to enhance its time-based competitiveness. The time it takes to complete all activities of the order cycle is an important part of customer service. Accurate and fast order processing is a hallmark of high quality of service. This paper addresses the most time-consuming and costly factor of ordering process—order filling. According to the several researchers, order filling is composed of the physical activities for: acquiring products through stock retrieval, purchasing or manufacturing; packing products for consignments; scheduling the consignment for delivery; and preparing shipping documentation. Usually these series of activities in order-filling process need space of warehouses, making them a central part of company’s logistics system. This paper is based on a case study to identify how some simple approaches built in theory can be applied to firm’s current practice to enhance order-filling process. Specifically, a short plan consisting of ABC analysis and relocation of current positions of inventory is tested, and a long-term plan for redesigning the layout of warehouse is proposed.