Last month I participated in Oracle’s Perfect Delivery Virtual Summit, along with Matt Leonard from Supply Chain Dive, Marcelo de Matheus from Tramontina, and Mohamed Absar from DP World. The point of the virtual summit was to discuss how streamlining the order-to-fulfillment process achieves perfect delivery, improves customer loyalty, and reduces costs. Below are some key take-aways from my segment.
What is the Perfect Delivery Metric?
The perfect delivery includes four elements: order completeness, timeliness, condition, and documentation. This means the order is delivered on-time, in-full, not damaged, and with the appropriate invoice.
As supply chain complexity increases, perfect deliveries become more difficult. Improving on this metric will always involve a focus on people and processes, but often also includes implementing new, more robust, supply chain applications. The wrong metrics drive suboptimal behaviors and metrics can often be manipulated.
It is also not uncommon for logistics to be blamed for late deliveries, as it is the end of the process. However, when the end-to-end order fulfillment process is broken down and measured, it is frequently found that logistics is not performing that badly.
When it comes to measuring customer loyalty, the Net Promoter Score survey is typically a best practice. Net promoter score is correlated with revenue growth and calculated based on a response to a single question: how likely are you to recommend this company, product, or service to a colleague or friend?
When a company’s net promoter score falls, usually the company will begin a process of discovering why the score has fallen, and then try to fix the problem.
What Pressures are Companies Facing?
There are three main pressures that companies are facing today. First is creating a unified buying experience across channels. Customers are not necessarily looking for a similar experience across channels; each channel has its own interaction point and is designed to deliver a different experience. However, customers need to be able to find the product they are looking for in the appropriate channel.
Second is the ability to capture orders easily. With a wide variety of selling channels available, and differing flow paths for different business models, companies need to be able to easily and accurately capture all order information.
The third pressure is to deliver orders rapidly. Customer expectations for expedited delivery are becoming more commonplace, in both the B2B and B2C world. And as the lines continue to blur between B2B and B2C, and the model expands to a B2B2C focus, order fulfillment processes become more complex. As a result, this is putting added strain on fulfillment operations.
Perfect Delivery and Omni-Channel Technology
One of the most important technologies for omni-channel is distributed order management. Distributed order management allows an organization to capture all information in the order management process across all relevant channels. This includes the entry of the order, sourcing, payments, and fulfillment. It also spans all channels of sales operations. The benefit is that it does not matter where an order originates; all fulfillment channels have access to the information and the retailer can appropriately allocate the inventory depending on stock levels, demand requirements, and timing of fulfillment.
Changing the Order-to-Fulfillment Value Chain
For B2B companies, their supply strategy is built on three pillars. First is to connect demand to supply in real time. Second is to ensure the right product is in the right place at the right location. Third is to deliver on time.
Getting these strategies in place is incredibly difficult to achieve. When a consumer needs an item, they often will go to a retailer who in turn depends on a number of suppliers to keep items in stock. For each item, there are a number of SKUs they may have. This SKU proliferation makes it nearly impossible for retailers to have all the products they need on hand. Technology is the key enabler in all three of these pillars.
Order-to-Fulfillment Value Chain Applications
The most critical applications are order management orchestration, warehouse management, transportation management, and global trade management.
Order management orchestration is not a singular technology addressing a singular problem. Instead, it is a combination of solutions that allow an organization to fulfill orders received from multiple systems through a variety of channels.
A warehouse management system’s primary mission is to manage a warehouse’s resources, including inventory, space, labor, equipment, tasks, and material flows. Essentially it is the backbone of moving goods from point A to point B.
A transportation management system helps companies move freight from origin to destination efficiently, reliably, and cost-effectively, and it includes 2 types of solutions. Planning and execution is focused on freight moves involving a carrier. And fleet Management involves freight moves with transportation assets owned by the company.
Finally, global trade management optimizes and streamline business processes related to cross-border trade. The modules include restricted party screening, trade compliance, customs management, global trade intelligence, and estimated landing costs.
You can watch the full video below.