Order fulfillment

In the broader sense, it refers to the way firms respond to customer orders.

The first research towards defining order fulfilment strategies was published by Hans Wortmann,[1] and was continued by Hal Mather[2] in his discussion of the P:D ratio, whereby P is defined as the production lead time, i.e. how long it takes to manufacture a product, and D is the demand lead time.

D can be viewed as: Based on comparing P and D, a firm has several basic strategic order fulfilment options:[3] In the broader sense, the possible processes in a logistic-production system are:[4] The order fulfilment strategy also determines the de-coupling point in the supply chain,[5] which describes the point in the system where the "push" (or forecast-driven) and "pull" (or demand-driven see Demand chain management) elements of the supply chain meet.

Hal Mather suggests three ways to tackle this "planning dilemma":[2] It has become increasingly necessary to move the de-coupling point in the supply chain to minimise the dependence on the forecast and to maximise the reactionary or demand-driven supply chain elements.

[6] Strategies that can be used to mitigate the impact of product variety include modularity, option bundling, late configuration, and build to order (BTO) strategies—all of which are generally referred as mass customisation strategies.