Secrets to Successful Order Fulfillment

This is an excerpt of the original article. It was written for the November 2013 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2013

Sales & Operations Planning is both a science and an art. Like any science, it relies on principles, rules, methodology, and specific measurable outcomes. But an S&OP implementation also calls for creative, incremental thoughts to address challenges.

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The Supply Chain Council defines perfect order fulfillment as “the percentage of orders meeting delivery performance with complete and accurate documentation and no delivery damage.” The concept seems straight forward in practice, but it is often very difficult to accomplish. Leading contributors to this problem are outdated planning processes and disconnected execution systems that are too slow to respond to increased demand volatility; they lack visibility, increase supply chain risk, and cannot react quickly to unexpected supply chain events.

Take the example of a large, multinational manufacturer that had siloed back office systems, multiple distribution centers, scores of inventory locations, and a diverse mix of suppliers. They faced challenges around how to standardize business processes in order to gain visibility into inventory levels and the order fulfillment process; build a more efficient supply chain; and ultimately, improve customer satisfaction in an increasingly competitive environment.

Their initial thought was to “rip and replace” their existing legacy systems; however, this ambitious choice would have been extremely time-consuming, expensive, and disruptive. Value would only have emerged at the very end of a lengthy process. They also considered integrating the systems, an effort that might address today’s problems but lead them into the same situation down the road when their business processes changed again. The company ultimately determined that they needed the flexibility to change their business processes without the hassle of changing out all the systems in which they had invested during the last 30 years.

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