Even though the above schema might already look confusing; it is still only a heavily simplified picture of supply chain reality. Join us on a journey through challenges of supply chain management:
Whenever your business is successful, your many many customers will place many many orders. This touchpoint with your clients is extremely important as it has massive impact on your customer service; how your customers place an order, how much transparency do your customers get about product availability and delivery times, how will you update them about the fulfillment? Simultaneously, incoming orders affect your Supply Chain Management directly as stock planning, production planning, and delivery planning are obviously influenced by your incoming orders. Hence, you want to be in the know and in control of your incoming orders as early in the process as possible.
Unfortunately, in B2B world, most orders are being placed via e-mail, phone, WhatsApp, fax, WeChat or similar channels. The difficulty: there’s no data structure standard and orders come in in a very decentralized way. Even if orders are gathered in a central place, e.g. an ERP system; global corporates have to overcome the challenge that oftentimes single regions or even countries work in different IT systems. Furthermore, it is a usual process that (inside) sales teams receive orders, but the actual fulfillment is carried out by logistics or supply chain management teams. A “disconnect” is very likely.
A “best-practice-example” most of us can relate to as consumers is: Amazon. Why do consumers at Amazon always know how whether a certain product is available and when it will be delivered? Why is Amazon’s supply chain widely considered as one of the best-structured out there?
Do's & Don'ts
Centralize your channel to receive inbound order information. E.g. online shop or centralized order management system.
Integrate with your Stock Warehouse Management to know how (quickly) to fulfill customers’ orders.
Integrate with supply planning to streamline production planning and/or sourcing and delivery of raw materials.
Involve your customer in the process by requiring as many specific information as possible and updating them along the way (e.g. delivery tracking)
Have decentralized and unstructured order intake, e.g. via e-mail or phone and throughout different teams.
Limit your efficiency by not having a “global” overview about your orders – which will result in unnecessarily higher freight and transport expenses.
Delay informing your logistics teams and your service providers about current orders. Transports will be more difficult and expensive. Not sharing transport capacities and costs will lower your service quality.
Avoid looking at real-time demand data. This leads to unnecessarily higher inventory and production cost as well as longer fulfillment times.
Be non-transparent along the fulfillment cycle, leading to misinformed and disappointed customers.
To be able to get sell your great products to your customers you need to create them first; whether you are importing goods to a certain region to sell them there or whether you manufacture products to be exported globally, you’ll send outbound orders to your suppliers to source raw materials or commodities. Handling those outbound orders and making sure your incoming goods arrive in time is called Outbound Order Management. Your outbound orders do not necessarily have to be in chronological line with your inbound orders. Depending on whether you follow make-to-order or make-to-stock principals, in- and outbound order management may be separate processes.
Outbound orders usually trigger incoming shipments. These outbound orders are essential for stock and inventory management and production planning.
Hence, it is a must to know exactly about each outbound order / incoming shipment in terms of status and delivery timeline.
Common challenge is: usually suppliers talk their “own” language, also do transport partners talk their “own language”.
Example: company orders and tracks the order internally as Reference 123. Freight Forwarder might split the order and deliver it in three slots, each called Ref XYZ. Difficult to maintain overview.