Sunday, June 8, 2008

Order Management Hubs: 20 Steps to a Perfect Order

A Perfect Order still means many things to many people
Recent studies show that enterprises who deliver perfect orders have a direct correlation to positive customer satisfaction scores. Despite the stakes, success in consistently delivering a perfect order continues to elude many enterprises because existing systems lack the flexibility to move orders across the order management cycle.

Process views should trump functional fiefdoms
One source of confusion stems from the lack of clarity in what the components of a perfect order should entail. Confusion often stems from a functional perspective which may be predisposted from an ERP, CRM, eCommerce, or Supply chain heritage. Tossing out the three letter acronyms, order management hubs are about 4 key business processes:
  1. Opportunity to order capture - all the stuff to capture information for the order and send it on to the next step
  2. Order capture to order fulfillment - the guts and logistics of fulfilling an order from pick,pack, ship to TMS, WMS.
  3. Order fulfillment to order completion - the processes that may occur before an order is satisified such as returns, after market service, installation scheduling, and warranty claims.
  4. Order completion to order settlement - invoicing, AP/AR, financial stuff.

Moving from 10 steps to 20 steps towards a Perfect Order
The basic notion is a stakeholder gets an order and they have their expectations to have this filled every time, without question and with minimal effort. In previous discussions on Perfect Orders, 10 steps were identified. The definition has now been expanded to cover 20 key steps which include the delivery of an order:




1.
Through any channel at any time
2 .
Multiple types of stakeholders can
3 .
Engage in a consistent brand experience by
4 .
Selecting the right product or service with
5 .
The correct quantity and configuration that
6 .
Meets the acceptable levels of quality for
7 .
The stakeholder's entitled pricing policy
8 .
Supplied from the agreed upon sources
9 .
Delivered to or installed with the right customer within
10 .
An agreed upon period of time to
11 .
The correct locations in
12 .
The most appropriate packaging that
13 .
Includes the right documentation over
14 .
The right frequency with
15 .
An accurate invoice that can be
16 .
Collected and efficiently settled and/or
17 .
Returned via any channel for
18 .
Warranty claims against defects and/or
19 .
Scheduled for repair based on
20 .
Agreed upon service contracts


The bottom line for end users
Achieving a perfect order requires enterprises to revisit how existing order processes support multiple selling channels, multiple fulfillment scenarios, across functional areas. Ultimately, these business processes must be measured against metrics and key performance indicators (KPIs) such as:
  1. Availability to promise visibility
  2. Order status across all stages
  3. Picking error rate
  4. On-time delivery percentage
  5. Cases shipped vs. ordered ratios
  6. Type and percentage of unsellables
  7. Days of supply
  8. Order cycle time
  9. Shelf level service ratios
  10. Warehouse to store fill rate
  11. Order accuracy percentages
  12. Accurate and timely invoices percentages
  13. Percentage of data synchronization
  14. Stakeholder satisfaction
  15. Lifetime monetary value of stakeholder.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R "Ray" Wang. All rights reserved

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