Supply chain processes order fulfillment

Most companies do not have the luxury to wait for demand to occur and then react to a customer order. Because of the intricacies of supply chain processes, they must plan to be ready to fulfill channel sales. This includes sensing demand signals, proactively shaping demand, and translating demand into the most effective supply response to meet customer orders. 

It is not unusual for the actual shipment date to be a few days different from the original promised shipment date due to uncertainty in supply chain processes. However, this unreliability might not be acceptable to relationship-based customers. Therefore, Dell offers a special service through Dell Premier accounts at premier.dell.com for business and public sector customers. The service not only provides reports and tools to assist purchasing, asset management, and product support, but also allows customers to hook up their ERP/EDI systems with Dell s to perform real-time computer systems procurement. Through Premier accounts, Dell commits to more responsive and reliable order promising and fulfillment solutions for its relationship-based customers with support from advanced IT systems (see Kraemer and Dedrick 2001). 

L. L. Bean executes all processes in the customer order cycle after the customer order arrives. All processes that are part of the customer order cycle are thus pull processes. Order fulfillment takes place from product in inventory that is built up in anticipation of customer orders. The goal of the replenishment cycle is to ensure product availability when a customer order arrives. All processes in the replenishment cycle are performed in anticipation of d and and are thus push processes. The same holds true for processes in the manufacturing and procuranent cycles. In fact, raw material such as fabric is often purchased six to nine months before customer demand is expected. Manufacturing itself begins three to six months before the point of sale. The processes in the L. L. Bean supply chain break up into pull and push processes, as shown in Figure 1-6. 

Classify the supply chain macro processes in a firm. All supply chain processes can be classified into three macro processes based on whether they are at the customer or supplier interface or are internal to the firm. The CRM macro process consists of all processes at the interface between the firm and the customer that work to generate, receive, and track customer orders. The ISCM macro process consists of all supply chain processes that are internal to the firm and work to plan for and fulfill customer orders. The SRM macro process consists of all supply chain processes at the interface between the firm and its suppliers that work to evaluate and select suppliers and then source goods and services from them. 

Supply chain management refers to the business process that encompasses interfirm coordination for order generation, order taking and fulfillment, and distribution of products, services, and information. Suppliers, distributors, manufacturers, and retailers are closely linked in a supply chain as independent but integrated entities to fulfill transactional needs. 

Some of the more fundamental processes in organizations in addition to order fulfillment include new product/service development and introduction, customer service, integrated supply chain, and the hiring/development/retention of people. 

These processes were identified in Figure 1. While the specific processes identified by individutil firms may vary somewhat from those above, supply chain management must consider five fundamental processes selling, customer order fulfillment, manufacturing flow, procurement, and product development. 

In an exploratory study involving 30 successful supply chain redesign practitioners, Hewitt found that companies identified between 9 and 24 internal business processes. The two most commonly identifiable processes were order fulfillment and product development (Hewitt 1994). 

Suppliers, power of, 39 Supply chain(s), 1690, 2110, 2115-2125, 2127-2133. See also Transportation management Warehousing and business processes, 2118-2125 customer order-fulfillment process, 2121-2122... 

The printing industry has annual revenues of over 210 billion. In the book supply chain, book printing is a 5 billion industry. The typical book supply chain operates as follows ([76]) Authors work with publishers to create content, who in turn place orders with printers. Printers print the physical books and ship them to wholesalers in full truckload quantities. These larger loads received at wholesalers undergo break bulk (i.e., they are broken down into smaller shipments) at their fulfillment centers. Bookstores order books from the wholesalers and then manage retail sales. As an example, Ingram Book Company, a wholesaler, processed over 115 million books through eleven fulfillment centers to serve... 

Channel-driven fulfillment is the redesign of order processes to become demand driven, not order driven, and the supply chain strategy used is based on service level agreement for pull-based replenishment to define an order. Replenishment decisions are evaluated continuously for each channel based on profitability and product placement goals. Supply chain velocity and demand visibility are key elements for a successful execution of channel driven. 

Operational processes The operational processes in Valvex s supply chain including production order fulfillment, purchase order fulfillment, and internal logistics flow were investigated. A knowledge base of finished products, rawmaterials and components, and production environment was prepared. 

Identify the ways a reconstituted supply chain should support the strategy. Set a high-level specification for the new supply chain and its role. Divide the supply chain into processes. Examples include order fulfillment, payments, inbound material, physical distribution, production control, and new product introduction. List possible changes to the processes needed to meet strategic requirements. 

Because supply chain improvement is very much process oriented, having the process owner be the sponsor might also make sense. This individual is the focus point for issues affecting his or her process. The owner need not be a line manager responsible for the process or part of it. It could be a senior executive with a stake in process success. For example, the marketing executive could be the owner of order fulfillment. ... 

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. 

We now describe the ATP system for a particular electronic product (denoted by EP) manufactured by Toshiba Corporation. The EP supply chain consists of multiple final assembly and testing (FAT) factories all located in Japan, which provide EPs delivered directly to domestic business customers. An ATO production framework is employed. The order promising and fulfillment process involves several thousand product models. Order sizes range from a very small number of units to a few hundred. Orders are generated by one of several sales units and are processed by a single central order processing system. The ATP system collects orders over a 1/2 hour time interval and returns commitments to the sales offices at the end of each ATP run (V2 hour interval), order commitments are booked up to ten weeks in advance of delivery. 

System scope - An order fulfillment process may involve different locations across a supply chain. Retailers, warehouses, manufacturers and even suppliers can be associated with alternate locations. In the more complex cases, determining how to satisfy a set of orders can represent a complex distribution management problem. 

A push process conforms to a conventional supply chain management system going through typical stages in sequence. As shown in Figure 3.2, orders arrive at or after the demand cycle but always before the planning and procurement cycle and process is activated by a forecast or demand plan. Both raw and packaging materials are stored before production and products are manufactured to stock. The order fulfilment is achieved from the inventory of finished products. 

There is no doubt that supply chain order fulfilment is the Achilles heel of the e-business economy. At the end of every e-commerce, on-line trading and virtual supply chain there is a factory, a warehouse and a transport. Internet has elevated the performance of information accessibility, currency transactions and data accuracy, but the real effectiveness of supply chain from the source to customer cannot be achieved without the physical efficiency of the supply chain. Web-based software and e-market places are increasing the alternatives available to e-supply chain managers in aU operations including the service industry. More opportunities may also mean more options and complexity. Therefore, it is vital that a process is in place to ensure the performance of e-supply chain for both virtual and physical activities. 

It is vital that a physical distribution process is in place to ensure the performance of e-snpply chain for both virtual and physical activities, but it is well recognized that supply chain order fulfilment is the Achilles heel of the e-business economy. 

As you know, the supply chains contain all processes and activities necessary for fulfilling customer orders, meeting targeted goals, completing production orders, and for material procurement. 

The complications associated with these weak practices have a great effect on supply chain operations and the financial results that accme as firms increase safety stocks to meet many contingency situations and cycle times are extended to accommodate information variability and inaccuracy. The advanced players do not accept this situation and expend time and effort to eliminate the problems and introduce new processes and systems that bring greater accuracy and efficiency to entering, planning, and fulfilling orders. 

To implement collaboration in a relationship, partners must agree on the purpose of collaboration and means of achieving it. Collaboration may necessitate certain changes in how the companies operate. It should be tailored to specific business processes such as, order placement, order fulfillment, logistics, and payment. Cisco Systems coordinated supply and demand across its supply chain with an intelligent-software for early detection of conflicts and their resolutions (Lee and Whang 2004). 

Ethan Allen makes customized furniture, such as sofas and chairs, for which customers select the fabric and finish. In this case, the arrival of a customer order triggers production of the product. The manufacturing cycle is thus part of the customer order fulfillment process in the customer order cycle. There are effectively only two cycles in the Ethan Allen supply chain for customized furniture (1) a customer order and manufacturing cycle and (2) a procurement cycle, as shown in Figure 1-7. 

---