Every part of any Supply Chain Fulfillment Logistics involves a lot of activity and movement, and at every step there is a potential for errors, waste of money and consequent delays. The logistics involved in fulfilling supply chains is so complex, that for any order to be fulfilled correctly, the odds against doing so perfectly are overwhelming.
Perfect fulfillment of orders requires orders to be delivered to the person or entity, to whom it is addressed, delivering the right product within the promised time, in the right packing and condition. The product also has to be delivered in the right quantity, with the relevant invoice, and with the required documentation, and at the right place. A failure in any one of these areas can lead to an order not fulfilling the criteria of perfect order fulfillment, as defined by the Supply Chain Logistics Management.
The logistics of the supply chain to maintain perfect orders can be quite daunting and is considered a challenge. The perfect rate of order fulfillment is an important indication of the performance of a company’s supply chain, and companies can achieve high rates, if proper attention is paid to each aspect of the logistics required for supply chain fulfillment. One great advantage that accrues to companies, which have high perfect order rates, is that they carry lower inventory, which can be a great help for maintaining cash flows. The control that they have also translates into not having problems of stock outs, or, exhaustion of inventory and this helps in dealing with competitors.
When the rate of perfect orders is low, and there are more imperfect orders, labor costs and shipping costs can increase, inventories can build up, warehousing can be a problem, and above all you have dissatisfied customers, and consequently loss of sales and probably revenue even from sales already made. Companies can increase the chances of increasing their perfect order performance if care is taken to take a comprehensive view of the entire chain of supply fulfillment logistics. All data produced during a supply chain has to be integrated across the disparate systems they are on, and allow for measurement of efficiency.
When you measure performance, it is possible to judge it as per laid down standards. Every area of the supply chain has to be so measured and areas, where standards are not up to the mark, must be highlighted. This enables action to be taken to improve performance. Problem areas can be isolated and a decision taken as to whether the poor performance is confined to a particular process, a particular location or geographical area, or even specific personnel or agencies. Action then has to be taken to apply possible corrections which can lead to better performance. Vendors may need to be changed, equipment upgraded, or personnel retrained, once the remedial action is decided on.
Implementation strategies have to be in place for increasing the percentage of perfect orders, and every aspect of the supply chain has to be measured and compared to laid down standards. At times, such analysis, may even point to some part of the supply chain having very lax standards, which though still ensure a perfect order. This can result in unnecessary warehouse time, delay in receiving payments and other things, which if tightened up, can ultimately lead to higher profits. This often happens when new technologies or equipment are used, which actually reduce the time requirement for a particular segment of the supply chain, but where old standards continue to be followed.
Performance measurements and standards in supply chains must be constantly reviewed, and the time between warehousing of a production item and its final delivery, must sought to be reduced. Success in order management and fulfilling them is highly dependent on decision making which brooks no delays, There is a need to continually monitor, how these decisions impact various levels in an organization, and this requires real time reporting, which allows for all processes to be kept in view. The objective in any supply chain fulfillment logistics has to be to ensure that the customer must get their products as soon as possible and in the right condition. Customers must never be kept waiting and all quoted delivery times must be realistic and nether pessimistic or optimistic. If a product is delivered at a much earlier time than promised, it may lead to satisfied customers, but it does indicate lacunae in the planning process, which if properly looked at, can reduce warehousing time, and probably lead to lower costs.
The great impact of e-commerce has led to third party service providers being given the responsibility of ensuring the supply chain. While this does reduce the problems for managing deliveries, poor performance here can affect a company in the long run. It is very necessary to ensure that such service providers are continually monitored and the progress on every order constantly monitored by the parent company.
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