The Perfect Order: Right Time

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

In an environment of just-in-time or time-definite deliveries, the right time must be set by buyer, seller and 3PLs to meet the schedules for use or sale. Guaranteed freight delivery times have become very prevalent. However, not all items need to be delivered as fast as possible. Many customers are perfectly happy with weekly delivery schedules to meet restocking or usage needs.

Low TCO solutions when considering transportation, planning and ordering, inventory carrying, warehousing, and cash transfer costs should be cooperatively developed by users, buyers, sellers and providers to meet time-definite delivery requirements. More customers are sharing plans and operations schedule. Customers are sharing product sales and usage data so providers are not blind-sided as to what is really going on in the front lines. Sharing information is crucial in timing the flow of orders and shipments as orders progress from needs conception to point of use or sale and ultimately to cash settlements.

Pickup and delivery times established on time-definite requirements are especially critical with today's hours of service regulations. Another important aspect of shipment timing is associated with order and shipment security. Many times, shipments are delayed because of required government or business inspections or security breaches. Shipment track and trace execution systems are a necessity in a global economy.

Explainer: Finding the Right Time

Well … where to begin … how about with a short story?

It was a little over 20 years ago (and now I have Sgt. Pepper playing in my head) that I was helping a consumer product company with X12-EDI with its big-box retail customers for B2B fulfillment orders to the retailer distribution centers. During this time, the company had engaged a lean manufacturing engineer to help in the reorganization of the manufacturing area and warehouse. The lean engineer was implementing a just-in-time system that would supply raw materials to the manufacturing area and would provide just enough finished goods to the warehouse to satisfy a couple of days of pending orders.

When I was asked about this plan, as it was partially being implemented, I smiled at the executives and lean engineer (we all got along rather well) and said that I was going to disrupt the plan with two words: vendor compliance. As I explained the short purchase order notification time window, the shipment scheduling for LTL and TL, the carton and sometimes pallet barcode labeling requirements, and the occasional palletization requirements, it was clear to the group that just-in-time inventory was insufficient. (I also showed them the chargebacks for non-compliance which completely sold my side of the conversation.) Instead, the company ensured additional inventory for retail orders was always at the ready to compensate for the order/shipment preparation time.

This company had an advantage: it was performing the manufacturing and distribution itself, right there in the same location. The right time means that the raw materials had to be delivered at the right time, the finished product had to be manufactured at the right time, the finished goods had to be delivered and available for fulfillment at the right time all to allow for sufficient time to get each shipment scheduled and together the way each specific retailer required it.

As Dr. Marien stated, companies can help to ensure that goods move at the right time by sharing data with their supply chain partners. This is something that companies have been reluctant to do but are starting to come around to the idea of. Trust doesn’t come easy, but in the right relationships, it is an embedded part. Sharing sales and inventory use and allowing suppliers to help with replenishment order recommendations instead of just pushing purchase orders is a more collaborative methodology of engagement and can help to keep product flowing on a timely basis. Vendor-managed inventory (VMI) partnerships work like this.

Retailers have been narrowing the purchase order (e.g., X12-EDI850) timeframes over the past several years, requiring vendors to ship sometimes within a day or two for B2B fulfillment orders. B2C orders are required to ship “right away,” (you know, because people are impatient and Amazon set the immediacy expectation for everyone else to follow), but there can be a catch: some retailers grant the consumer a 30-minute order cancellation window, so if the vendor ships within this window and the consumer cancels, the vendor eats the order. Thus, the “Right Time” here for some retailer B2C orders is not too soon but not too late. Whereas it was once okay to just look at dates, we’re now down to analyzing dates and times.

At the Right Time is when the customer requires or expects the item. Based on this, the timing of the preparation and transportation to get the item to the customer needs to be thought through to ensure that all operational steps have sufficient time to be performed, and that if anything could go wrong there is time to recover and still get the item to the customer as much on time as possible. Certainly, some risks will not be able to be avoided, but those that can be, should be.

With a more insight into the sixth customer right, the Right Time, we can move on to the seventh customer right. Up next: The Right Documentation.

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