What is an Internal Order?
Internal Orders vs. Customer Orders
When we typically think of orders for equipment or materials, we think about an external entity (the customer) ordering from a website or through a CSR and receiving the items directly. This is especially true with the growing volume of eCommerce sales. However, for many businesses, especially service businesses, internal orders come from employees for a job/customer.
Internal orders have many of the same processes as an external order, but the reasoning behind them is different, and the KPIs are different.
Internal Order Examples
Orders for a customer in a service business
This applies to a wide range of services, but a couple of good examples are cable and telecommunications, plumbing, home security, etc. In these cases, a customer account will be paying for the materials, but the order is coming through a service technician.
The internal order process is detailed below:
A technician will initially visit the site/home to determine what is needed. They will begin the order creation process to provide a quote to the customer. Ideally, the order can be submitted into an orderingsystem (like SCORE), pending approval so that it only has to be completed once. If the quote is accepted, the order is accepted and the job is scheduled.
If the technician has everything they need on their service truck, the inventory can be deducted from the truck inventory and the job can be completed. It’s important to think of the service truck as a mobile warehouse because in this case, the truck inventory will need to be replenished. Otherwise the order will be sent to the warehouse for them to pick and prepare. Check out our blog on this subject here.
Orders for Internal Infrastructure or Large Construction Jobs
This often applies to utility companies, cable and telecommunications companies. Infrastructure and construction is a longer process, so job costing is a key metric that needs to be tracked. In these cases, orders come in from construction teams and linked to a job. These orders can even come directly from a company’s architectural planning software.
With new construction and infrastructure, the timeline is much longer and the orders are much larger. Ordering and scheduling are keys to success.
Ordering for Internal Use
Not as prominent, but just as important for monitoring costs and order management. This can apply to virtually any business. The internal order centers around internal purchases when one business unit or department orders supplies or new equipment. In these cases, the order management software is used for efficiently placing, preparing, and reconciling the items necessary for the internal order.
Key Considerations for Order Management Software
Many of the orders in a service business can utilize an order form template to make the ordering process quicker. For cable, this could be a new cable installation order consisting of a modem, set-top boxand cord kit. For electricians, this could be everything typically used in installing a breaker box.
The order templates can be expanded to larger processes. If the company is involved in hotel or apartment construction, each room type can utilize its own order form template.
Ideally, the order management system is integrated with the WMS and ERP. This gives all systems access to real-time data, projections, lead times, etc.
Additional integrations could include your:
- architectural planning application
- CRM for customer communication
- billing system (cable)
Approvals and Validations
One key benefit to internal orders is that you control both sides (ordering and fulfillment). This means you can validate orders to make the ordering process more efficient.
One example of this is what we call equipment family codes. When customers order something from an eCommerce site, they expect to receive that exact itemHowever, when technicians order something for a customer, they typically need something that works, but it does not need to be exact.
In the cable industry, this can be different modems. For most homes, many modems will work, so if the ordered modem is out of stock, it can be replaced with a different modem.. This means a customer is not waiting for something when something else works just as well.
Other examples could be manager approvals of orders over a specific value or outside contractor approvals.
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