Even the most effective processes can be tightened up; supply chain is no exception. There are always ways to improve order fulfillment, even in a finely-tuned operation. Managers often strive to get more from their fulfillment and squeeze greater efficiency from their supply chain. However, with so many moving parts it can be confusing and tough to know where to begin.
By identifying the most common areas of concern and points for improvement helps a company prioritize improvements. From this broader point of view, you can then zero in on the high-priority items. Consider these five places to start your search for places to improve your fulfillment solution:
1. INFORMATION FLOW
With so many cogs in motion at every point of the supply chain, communicating critical information is the oil that keeps your operation moving smoothly. If any single link in this chain fails to communicate effectively with the next, things can easily slow down or seize up completely.
A scheduled audit of information flow from beginning to end should occur as a matter of routine, but spot checks on individual areas are also worthwhile.
Ask workers about frustrating elements in their daily routine. What tools or resources could they use to improve their job, for example? This is one way to highlight gaps in communication.
Often someone needs something but hasn’t asked for it, someone else doesn’t know they should be providing it, or sometimes both! Simply asking questions on the subject can help remove some basic information bottlenecks.
Other issues may require more complex solutions, such as new reports or communication systems. Either way, you’ll be able to highlight inefficiency and decide whether or not it’s critical to resolve.
2. COST ANALYSIS
Breaking down your processes into costs and comparing various stages of the supply chain helps to better understand where your largest fulfillment expenses are incurred. In some cases, the patterns will be exactly what you expect. Cost increases will occur at stages you know to be peak season and troughs in demand will drive expenses down. Nonetheless, flagging these fluctuations to team members serves to place a value on their particular functions and highlights the potential cost of mistakes.
Where costs diverge from expectation, it is particularly important to dig deeper. Spikes that are unexpectedly high provide a spotlight for closer research, focusing on both the underlying reasons and the potential to improve order fulfillment. Comparing costs across each fulfillment stage over time will also help to highlight any disproportionate increases. This might prompt a review of suppliers in that area of the supply chain. In some cases, an entire section of the supply chain could require a rethink. A cost fluctuation that appears isolated at first glance can lead to a recognized pattern of sub-par performance.
In either case, your business will be actively monitoring performance and applying cost analysis that allows you to flag areas to improve order fulfillment as they arise.
3. WASTE REDUCTION
Waste means much more than just what we throw in the trash. In our industry, money is essentially thrown away at any point where the supply chain process takes more time than is necessary or requires additional work that doesn’t benefit the overall process. Search for areas of the fulfillment process where actions take longer to achieve than you would expect. Also look for areas where there are frequent failures to deliver. An inefficient process might be in place or unnecessary rework could be to blame.
Some of the issues that arise will be quick fixes that immediately improve order fulfillment in your organization, as well as saving time and money. In transportation, areas of waste like empty journeys, waiting time, and outdated routes or schedules, should all be closely scrutinized for improvement potential. On the warehouse floor, pick patterns, assembly processes, and pack times are elements you can monitor to drive out inefficiency.
As with identifying information flow issues, anecdotal evidence can be an excellent source of ideas to reduce waste. Drivers and operations workers usually have comprehensive knowledge of their piece of the supply chain puzzle. Their information is invaluable as you develop a clearer idea of what the full fulfillment picture should look like.
4. REPORTING GAPS
If information flow concerns the fluidity of day-to-day operations, reporting provides the longer term picture of how these areas are performing. Supply chain managers – and those above them in the organization – need these reports to make strategic decisions on sourcing, service providers, employment, and many other broader business considerations. When reports are lacking, your organization could be making blind decisions or be working with incomplete information.
So how can you tell when this is a problem?
Listen for revealing phrases like “if only we knew…” or “what would that look like?” in team meetings. Sometimes reports exist but fail to answer key questions. If you hear the same thing being asked at every meeting without a comprehensive answer, the likelihood is that there’s a reporting gap to be filled.
Even when the numbers say your fulfillment solution seems to be working as expected, be sure to probe individual elements of any report. Metrics only show what’s happening on the surface and should always be validated, especially when crucial decisions are made on the back of them. A data-driven strategy is only effective when the calculations underpinning it are verifiable and trusted.
As a bonus, reporting glitches often prove to be like pulling a thread that unravels, revealing a variety of related areas for improvement.
5. REVIEW YOUR CUSTOMER PROMISES
What do you say you will do for your customers? The glib answer would be “Anything!” That’s not generally incorrect, but there are usually some very specific promises made by brands that truly matter to consumers. Fail to meet those self-defined expectations and anything else you offer will count for little. This is why regularly checking your brand promise – and the performance metrics that go along with it – is such a rich source of ideas for order fulfillment improvement. A simple metric to examine first is your on-time delivery rate. If you are telling customers they can expect a product within two days and then delivering 1 in 10 of them on day three, that’s an obvious disconnect between your brand promise.
Other failures to meet expectations may be less tangible. For example, if your promises are based on quality or a certain level of luxury, there might not be an easy metric to assess any problems. In these cases, you should look for qualitative indicators like common complaints and customer surveys to identify alternative places to improve order fulfillment.
To sum up, never be complacent in analyzing your supply chain and order fulfillment solutions! Poke around, probe areas of concern, and ask questions of your fulfillment team.
Begin with a wider focus that searches for potential sources of inefficiency, then get up close and personal with each problem area.
There are likely to be more ideas for order fulfillment improvement than you expected, which means greater visibility of where your operation can do better and plenty of room to enhance the customer experience in time for your next peak.
If you would like to know how Integral Strategic Solutions can improve your supply chain, contact us! We would love to hear from you.
This article was originally published by Capacity LLC.