ustomers like reliability, dependability and consistency. The success of your supply chain depends on your ability to do this well, and to do it profitably. Achieving this type of success can be a challenge, given that the business processes that go into delivering perfect orders cut across many functions within a company. This means that there are lots of places where orders can go wrong – starting with inaccurate replenishment and stocking strategies through to order entry mistakes or problems with delivery schedules.
The complex nature of the industrial supply chain, from its product diversity to multiple stocking points, only adds to this complexity. But whether you are a broad line distributor or specialist in janitorial and sanitation, improving your ability to deliver perfect orders isn’t just important, it’s a critical goal.
What Makes a Perfect Order?
Four separate factors contribute to achieving a “perfect order”: the delivery must arrive complete, on-time, undamaged, and with proper documentation. Organizations can apply a formula which includes all the contributing factors that are calculated to create a final score:
Perfect order performance = (percentage of orders delivered complete X percentage of orders delivered on time X percentage of orders received damage-free X percentage of orders with correct documentation) X 100
According to APQC Open Standards Benchmarking data, organizations that are midpoint performers on this measure have a perfect order index of 90.
How To Improve Your Score
Organizations that achieve high levels of perfect order performance have several best practices in common, most of which depend on technology and data:
- Plan for demand and use technology to help forecast trends. By analyzing purchasing patterns and sharing data of customers, businesses can understand what customers need and when they need it, so they can accurately forecast demand and schedule production to meet it.
- Share data with your suppliers. Open collaboration helps you work together to get products to customers. Tracking asset management data helps manufacturers keep up with preventative maintenance, preventing downtime and production interruption.
- Automate orders to avoid delays. Sales order automation eliminates data entry errors that can lead to inaccurate orders and shipping delays.
The processes involved in delivering the perfect order include all stages of the order to-cash cycle: from capturing the order, through sourcing, stocking and fulfillment to the collection of the receivable. To improve your perfect order rate, you need to improve these business processes. And since the processes involved in delivering the perfect order cut across many functions within your business, visibility along the cycle and across these functions is key to success.
Focus on your perfect order performance and you will see benefits that extend well beyond a loyal customer base. Streamlined, automated warehousing processes result in more accurate orders and fewer returns, reducing the cost of processing returns or re-shipping what you didn’t get right the first time. You can also expect to see operational efficiencies, increased sales and market share, and ultimately bottom line growth. You’ll also improve collaboration with your trading partners at both ends of your supply chain.