By Jim D'Addario, Director Product Marketing SCM, Oracle
How do you get started on the road to Perfect Delivery – that ability to consistently deliver a complete order to the right customer, with the right products, in perfect condition, and on time? There’s no single formula or guide because every company is different, but here are a few strategies that have proven successful for companies across a range of industries.
If your mission is to always deliver a perfect order – or even doing it, let’s say, 98% of the time – start by looking for those areas where you are falling short and identify what’s preventing you from delivering flawlessly. Is it your current order management or warehousing processes that are standing in the way? Or are you having difficulty planning and securing your transportation options efficiently and fast enough? Focus on the areas that are causing the greatest pain – or that offer the biggest wins.
Reviewing key delivery performance indicators will help in this assessment. This would include metrics like order-fill rates – that is, how many orders you’re able to fill in full and on time. Track how well you’re able to deliver on the perfect order. Is it 92% of the time or 98% of the time?
Ensuring perfect delivery requires knowing the status of your inventory. That means you’ll want to gain visibility into your inventory across all of your warehouses, distribution centers, and other stocking locations. If you’re a manufacturer who builds products to order, you’ll also need to ensure visibility into your manufacturing planning systems, allowing you to know when the next production run is going to kick off and when your customer’s product will be ready to ship. This is crucial to your ability to promise the customer a reliable delivery date.
Your manufacturing systems should also be integrated with your logistics operations, providing visibility into the production pipeline and ensuring that orders can be shipped as soon as they come off the line. This will help minimize potential delays caused by the lack of carrier capacity or missing trade compliance and customs documentation.
To deliver perfectly, it helps to have a flexible warehouse and distribution system that can quickly shift inventory between sites and consolidate items to optimize fulfillment. Now you can combine those three widgets in one regional warehouse with the seven in a different distribution center to fulfill your customer’s order of 10 in a single delivery.
Companies may have once lived in a world where the competition was scarce, but that was long ago – and your customers know it. Today, buyers are just a few clicks away from switching vendors, and everything matters: price and quality of course, and increasingly, delivery performance and even sustainability. The situation isn’t any better in the brick-and-mortar world where stock-outs and empty shelves are a golden opportunity for your competitors. To quote one of my favorite analysts: “Customer service lives and dies in the supply chain.”
The best way to achieve perfect delivery is to adopt a customer-centric mindset where everybody’s focused on order-to-fulfill perfection. That includes your warehouse and loading dock people – the ones who pick items off shelves, package up orders, and put them on trucks – and your transportation managers who define the routes and choose the providers that take your products the last mile to your customer.
Supply chain people typically haven’t had to think this way in the past. Few have had the mindset of “We’re part of the whole value chain that delivers the right product, in perfect condition, at the right time.” That attitude must change. As you start on your journey to Perfect Delivery, everybody in your supply chain must be focused on the same mission and as committed to satisfying the customer as your most enthusiastic salesperson.
It’s also critical to ensure that your supply chain is fully integrated with the rest of the business – from product design and production to sales and marketing – and don’t forget finance. Sometimes providing visibility of your supply chain to internal groups can be as much of a challenge as providing it to external customers. If the rest of your business doesn’t understand where the supply chain fits into the overall strategy, it’s little wonder that promises made to customers often fall short.
When it comes to systems to support perfect delivery, ideally you should aim for natively integrated order management and logistics architecture. Relying on multivendor legacy systems bound together by custom integrations can sap staff productivity and morale, and make it hard to orchestrate orders across multiple product lines and distribution centers.
For many companies, though, it’s impractical to rip and replace all of their different legacy systems, many of which were designed and implemented back in the days when there might have been only one channel for customer orders. Since these systems were frequently geared toward serving individual customer segments or product lines, they often struggle to perform in today’s omnichannel supply chain environments. But even if you’re stuck with a mix of legacy and other siloed systems, you can unify and consolidate your distributed operations with Oracle Cloud Order Management, which can capture and orchestrate orders from across your existing order management systems.
Similarly, logistics systems such as Oracle Warehouse Management, Oracle Global Trade Management, and Oracle Transportation Management are all built to operate with almost any back-end ERP system you currently have, which means you can use these solutions to address logistics execution independently of your existing IT landscape. This allows you to rapidly focus on and improve those areas that mean most to your end customer – getting the right product into their hands, at the right time, with the right quality.