Supply chain complexity is challenging manufacturers to find ways to provide superior customer service.
In an economic downturn, the ability to ensure superior customer satisfaction is a key to survival. Companies must provide superior responsiveness and outstanding reliability in meeting fulfillment needs to ensure customer loyalty and outrun competitors.
Recent survey results show that although reducing sourcing and manufacturing costs remains a short-term top priority for European manufacturing enterprises, timely responses to customer fulfillment needs and improved visibility along the supply chain follow as a close second and third.
Many variables can positively or adversely affect a manufacturer’s ability to provide superior customer satisfaction. Success depends largely on the timely and accurate flow of information throughout the supply chain. However, the complex, elongated, and multi-tiered nature of today’s supply networks creates a lack of visibility, which hinders the ability to optimize order-to-cash processes.
This complexity can prevent a manufacturer from accessing information when it’s needed. And the lack of visibility can delay the discovery of anomalies or problems in the supply chain management process that require attention, resulting in delays or higher costs of fulfilling customer requests.
Therefore, manufacturing companies must integrate trading partners along the value chain to achieve multi-enterprise, end-to-end processes that create visibility and linkage between orders and fulfillment capabilities.
These issues call upon manufacturers to develop the ability to provide their customers with “perfect orders.” Manufacturing Insights defines the perfect order as follows:
• A perfect order is a measure that calculates the accuracy of service in fulfilling a customer order.
• It considers all stages of the order-to-cash process, from the moment of order capture, through sourcing, manufacturing, fulfillment, invoicing, and reverse logistics.
• The metric is typically a combination of items, including order entry accuracy, warehouse pick accuracy, on-time delivery, shipments without damage, and correct invoices.
The need to achieve the perfect order arises from the goal of maintaining the highest possible customer-service level, a target made all the more elusive by the number of challenges triggered by the increasing complexity of value chains. In addition to the elongated and multi-tiered nature of supply networks — somehow taken as the given baseline of today’s global economies — supply chain complexity is attributed primarily to the number of products and product configurations that a manufacturer must manage and to the long delivery times that result from the extensive use of offshore manufacturing locations.
