The Supply Chain...

 

is a set of processes a company runs to produce and distribute its products to customers. Relevant stakeholders along supply chains are producers, vendors, warehouses, transportation companies, distribution centers, and retailers.

 

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:

  1. Order Management:

INBOUND

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.

  • Customer value   in terms of visibility for customer. Customers may plan ahead and improve their supply chain.

  • Stock & Production Planning

  • Delivery Planning

what value is this for the customer?  

 Hope the new version clarifies. 

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?
Let’s have a look at some “Do’s” and “Don’t’s” of Inbound Order Management

Do
Centralizeyour channel to receive inbound order information. E.g. online shop or centralized order management system.

Consolidate P/O’s. By knowing what your customers ordered as soon as possible in a structured way you may consolidate different P/O’s to ship efficiently (click here for details).

Integrate with your Stock / Warehouse Management to know how (quickly) to fulfill customers’ orders.

Integrate with your Transport Management to better plan fulfillment options, cost and lead times. Let your logistics department know as early as possible what needs to be shipped.

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)

Don't
Avoid decentralized and unstructured order intake, e.g. via e-mail or phone and throughout different teams.

Not having a “global” overview about your orders will limit you in increasing efficiency – which will result in unnecessarily higher freight and transport expenses.

Not knowing stock levels when planning your order fulfillment limits your automation potential and in your fulfillment accuracy.

The later your logistics teams and your service providersknow about current orders, the more difficult and expensive transports will be. Not sharing transport capacities and costs will lower your service quality.

Not looking at real-time demand data will lead to unnecessarily higher inventory and production cost and longer fulfillment times.

Not being transparent along the fulfillment cycle will lead to misinformed and disappointed customers.

 
 
 

OUTBOUND

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 manufactureproducts to be exported globally, you’ll send out 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.

  • sending something means that we will receive something?  

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 lots, each called Ref XYZ. Difficult to maintain overview.

 
 
 
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