Order fulfillment time

The project was completed in 15 months at a price of 570,000. As a result of reengineering, rework and cost overmns have been reduced by 1.6 million annually. Per order costs have decreased by 75%. Personnel costs have been reduced by 400,000 annually. Order fulfillment time has been reduced by 50% from 180 days to 90 days. The number of tasks required in the order-fulfillment process was reduced from 250 steps to 9. 

The firm has created real-time integration between its sales configurator and its scheduling system. The firm also developed an application to attract customer orders that get published on the site. This integration, combined with improved supply chain planning, has enabled Miller SQA to reduce order fulfillment time from 21 days to fewer than 5 days. The most advanced networks are now hard at work on collaborative planning, forecasting, and replenishment (CPFR). 

Actual versus requested order fulfillment lead time... 

The purpose of inventory management is to maintain the integrity of data to ensure that it accurately reflects the physical inventory (location of compound, amount available, and condition). Inventory management should be associated with all transactions such as archiving, order fulfillment, and sample removal so that the inventory always reflects samples in real time. Inventory management should also allow system auditing and error correction. 

As part of the solution, older mainframe units with isolated PCs were replaced with Windows NT servers tmd networked PCs. Client/server softwme was purchased along with appUcation software that allowed the compemy to share database information among its geographically dispersed offices. Shared, replicated databases provided a more streamlined, real-time update process. Electronically stored specifications allowed quicker access and thus quicker order fulfillment. 

In the day-to-day operation, Valvex needed to interact well with its customers. These interactions were in the form of quotations, pricing, ordering, product specification confirmation, shipping, order fulfillment inquiry, and customer service. A large number of employees were dedicated to dealing with customers. Such a system was time consuming, inefficient, and prone to human error. 

The fundamental business role of the ATP function is to provide a response to customer order requests based on resource availability. In order to make a reliable response to a customer order, an ATP system must insure that the quantity promised can be delivered on the date promised. Thus, an ATP system must include both order promising and order fulfillment capabilities. In addition, an ATP system should be able to dynamically adapt resource utilization and to prioritize the customer orders so as to coordinate supply and demand in a way that maximizes profit. By its very nature the ATP system should operate within a short-term operational environment where most resource availability is considered fixed because of procurement lead-time limitations. This distinguishes ATP systems from traditional plannings scheduling and inventory management processes. 

As shown in Figure 11.1, any production framework actually defines a production process push-pull boundary across the order fulfillment cycle. On the left of the boundary, we have the production resources made available by the push-based planning processes. Customer orders arise, on the right of the boundary, to compete for these limited short-term production resources. The ATP system executes at the interface of the push-driven flow and pull-based flow systems. It plays a critical role in making best use of available resources, including raw materials, work-in-process, finished goods, and even production and distribution capacities, to commit customers order requests over a period of time across a supply chain. By doing so, it coordinates activities across the push-pull boundary of a supply chain. 

As an order promising and order fulfillment engine, a pull-based ATP model is responsible for quoting a committed quantity and a due date for each order, for scheduling production to fulfill promised orders, and for configuring finished products at the component instance level. As mentioned earlier, customer orders are collected over a batching interval, the time lapse between successive ATP executions. The major decision variables in the advanced pull-based ATP models include ... 

For ease of discussion, let us consider only five items, as specified in Table 3.12. Since sales are concentrated in the relatively temperate Southeastern United States, we can assume that aggregate demand for tractors and accessories is reasonably steady across the year. Daily demand, however, exhibits some imcertainty. Although detailed standard deviation data for demand is currently not available, Milo s has historically used a coefficient of variation (standard deviation divided by mean) of 0.3 to estimate the uncertainty in daily demand in its past inventory planning. The order fulfillment lead time from the manufacturer DC (DJC) to the retailer DC (Milo s) is a fairly consistent 3 days. Both DCs operate 365 days per year. 

Option 1 F.O.B. destination, freight prepaid terms, provided that the supplier can use its preferred truckload (TL) carrier to make full truckload shipments of 3200 units, on whatever schedule you require—i.e., shipping any day of your 365-day operating year. The order fulfillment lead time is 3 days, 1 day of which covers transit time from the supplier s facility in Memphis, TN. The TL carrier charges the supplier 2.25/mi, or 882 for the Memphis-to-Atlanta shipment. 

The demand cycle is the cycle of time covering from when a customer buys or orders from a retailer or wholesaler. The demand cycle can also be based on the forecast of demand. If the retailer holds the product in stock then the demand cycle will comprise of order request, order fulfilment and order receiving. However, if the product is not readily available then the customer order request wiU form a part of demand forecast which also includes predicted demand, market inteUigeuce and promotion of the product. 

This represents the measure of time taken to recognize and react to changes in demand. For the Supply Chain Council perfect order fulfilment only occurs when aU orders are delivered in the quantities required, on the agreed delivery date, and documentation is complete and correct, and the goods are received in perfect condition and meet specification. 

The prime objective of the GSC was to enable forecasting, stock replenishment and visibility of real-time data amongst supply, sites trading partners and market sites. IMP focused on ensuring S OP and order fulfilment of individual sites. 

Delivery performance to request (percent) Order fulfillment lead-time (days)... 

The customer s order cycle refers to the length of time that the customer is prepared to wait, from when the order is placed through to when the goods are received. This is the maximum period available for order fulfilment. In some cases this may be measured in months but in others it is measured in hours. 

The effect that such groups can have is often dramatic. Because all the key people in the order fulfilment process are brought together and linked around a common entity - the order - they are better able to sort out problems and eliminate bottlenecks. Order cycle times can be dramatically reduced as teamwork prevails over interdepartmental rivalry. New ways of dealing with problems emerge, more non-value-added activities are eliminated and customer service problems - when they arise - can quickly be resolved, since all the key people are in close connection with each other. 

Xu, P., Allgor, R., Graves, S. (2009). Benefits of reevaluating real-time order fulfillment decisions. Manufacturing and Service Operations Management, 11, 340-355. 

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