Supply Chain Management Review (SCMR) identified perfect order deliveries as the second leading supply chain trend to watch in 2018. The 48×40-inch pallet has been a favorite piece of material handling equipment since the 1960s, and the perfect order has been a metric of note since the year 2000. But 18 years we find that order fulfillment is once again a big problem.
Perfect order performance has been stressed by increasing complexity, evolving customer requirements, incomplete supply chain visibility, and systems that are still siloed.
According to a Supply Chain Quarterly from the year 2000, "the most important KPI is what UPS Logistics calls ‘the Perfect Order’… Simply stated, it is defined as having the right product, in the right place, at the right time, and for the right price. The Perfect Order is the best example of customer-focused measurement as it incorporates the performance of all parties involved. It provides a balanced view of how well the supply chain is functioning from the customer’s perspective."
Kushal Nahata wrote in SCMR that according to a recent survey, only 84% of all orders can be classified as perfect orders. The other 16% represents a significant opportunity for improvement. To make substantial gains, he said, technology will be required.
When orders fall short of the mark, they represent inefficiencies such as lost sales, unsaleable merchandise or costly returns. They can also result in dissatisfied customers.
So what can be done to improve perfect order metrics? Most experts recommend making improvements to the supply chain systems. One practical word of advice is for trading partners to come to an understanding of the performance. Agree what constitutes a perfect order at the start of a relationship because this definition can vary from company to company.
There are many practical ways to improve perfect order performance, such as thorough training, effective supervision, outbound order audits, frequent stock taking and customer service logs. Root cause analysis may also help.
These solutions may be highly manual and therefore expensive. They may also cost valuable time when a speedy adjustment is necessary. Legacy systems are typically more vulnerable to error, and more likely to fall short of ensuring stock is available when needed for order assembly.
Experts believe that advancing supply chain systems is crucial. As one article states, "success in order management and fulfillment relies on the speed of decision making and continuous monitoring of the impact of those decisions at all levels in the organization. This can be achieved with advanced systems…which enable best-in-class processes across all order management and fulfillment processes."
Perfect order fulfillment represents one of this year’s leading opportunities for supply chain improvement. Start your perfect order journey by reaching out to a specialist to help you measure and understand your supply chain metrics to achieve perfect order success.