The Perfect Order: Right Product

The first of Dr. Marien’s 8Rs of his Customer’s Bill of Rights is the Right Product. Per his original article, the Right Product was described as:

Customers are demanding products that meet tough performance specifications. They're in the front lines dealing with end users and consumers, so they have the feedback and knowledge of what's working and not working.

Suppliers must work with customers to develop and deliver the Right Product that meets buyer performance specifications. What this means is that manufacturers are working with dealers and distributors or, in the case of industrial durables, OEMs who want the best and most technologically developed products to meet user needs. Whether they participate in designing products or just in ordering products, they want the correct products delivered.

A complicating factor for logistics professionals is meeting the needs of customers who are ordering multiple items, kits and assemblies for use or installation. Allowing product substitutions to fill out orders must be negotiated to spell out exactly what the requirements of delivering the "Right Product" are.

I think Dr. Marien has given us insight in that we have to look at two distinct definitions of the Right Product, with a nod toward a bit of semantics.

First, the Right Product is one that the market wants or has a need for. In retail, this is a product that consumers will purchase because they desire it or because they require it.

Explainer: Identifying the right product

Product development by consumer goods companies often works in collaboration with retailers to determine or tweak product features that the brand and the retailer (brick-and-mortar or online) believe will be attractive to consumers. Sometimes this partnership uses product feedback leading to feature enhancement that the brand was unaware of, but the retailer is knowledgeable of because of the retailer’s direct connection to their customer (consumer) base. Other times it may be due to the retailer wanting exclusive product merchandise from the brand, customized to their specifications. Retailers will work with private labelers to create unique products that name‑brand companies do not offer but retailers have a good belief that consumers will purchase.

It is interesting that Dr. Marien called out “OEMs who want the best and most technologically developed products to meet user needs.” As recounted in a December 2020 Supply Chain Management Review magazine article titled “Are We There Yet?,” it was in the early 1990s when General Motors once financially abused their suppliers to the point where GM’s suppliers withheld technological advancements. It was only after the new purchasing chief began earnest supplier engagement which included long-term contracts that helped open up the trust and brain-trust with GM’s suppliers, with the results coming to fruition in 2017.

Second, the Right Product needs to be the right—and here, I mean the correct—product that is conveyed through the end-to-end supply chain suite of transactions (physically and electronically) once the buying party has made a commitment for the product to the selling party. In brief, don’t send (transmit or ship) the wrong item.

Master data management will be critically important in ensuring that the vendor’s internal item identifiers, GS1 identifiers (the GTIN‑12 here in the U.S. … you know … formerly the UPC, GTIN-13 if you’re going to sell in Europe, GTIN-14 for case packs), and cross-reference to the retailer’s item identifiers is all correctly established. Item and item shipping weight and volume must be accurate from the product to the carton to the pallet. Item sell description must be crystal clear and free of any special characters that could, and still can, upset legacy software systems in use. Master data is exchanged between the product’s owner (the selling party) and their customers (e.g., retailers), their contract manufacturers, their freight forwards, their distributors, and their contract 3PLs, so getting it right is imperative to ensuring that the Right Product is selected.

Where throughout the end-to-end supply chain does the product have to be right, and here again, I mean “correct”? By everyone everywhere, including:

• Purchase order receipt. If the customer sends only their item identifier, the seller must be able to cross-reference it correctly to its own item identifier.
• Sales order entry. Use automation to reduce, or preferably eliminate, mistakes, but don’t just trust automation for importing, use automation for checks-and-balance audits.
• Picking and packing. Good lighting in the warehouse, an organized distribution center, use barcode labeling and scanning (or RFID) with the appropriate fulfillment software. Look-a-like products in their design or packaging need to be distinguishable so that they are correctly picked and packed per the customer purchase/sales order.
• Shipping. It’s no use picking and packing the Right Product if it doesn’t get to where it needs to go; make certain that all of it gets shipped to where it needs to go; again, barcode labeling and scanning (or RFID) really helps here.
• Invoicing. Make certain that the items ordered are the items shipped and the items invoiced.

Ensuring that the Right Product—the correct product—is conveyed transactionally (electronically and physically) throughout the supply chain depends upon master data management, software that supports operations, well-defined operational procedures, the right employee staffing, employee training, and a work environment that enables people to be successful.

With the definition of the first customer right, the Right Product, we can move on to the second customer right. Up next: The Right Quantity.

SC
MR