Collaboration Is the Key to Efficiency

As market forces change the way companies conduct business, increased communication among partners, vendors and customers remains the order of the day. Increased communication up and down the supply chain creates the need to share real-time information among systems and use that information to make critical business decisions — ultimately providing a competitive advantage.

The question being asked in executive suites and boardrooms around the world is, “How do we set up a network to share information with our business partners and beat the competition?”

This task is so daunting that many organizations get stuck in “analysis paralysis,” with nothing being accomplished. Other companies attack the problem too quickly, rushing to modify legacy systems to provide a level of supply chain visibility – only to be disappointed with the results.

As with most technological changes, the path to success involves the evolutionary adoption of revolutionary technologies. The key is to understand the ultimate target and map out the best path to get there. With e-fulfillment, one of the key goals for an e-business should be the open sharing of information among partners and complete supply chain visibility for all partners and customers. Beyond the sharing of information, using this information in real time to make critical fulfillment decisions ultimately drives inventory out of the supply chain while actually increasing your ability to deliver a higher level of customer service.

Imagine not having enough product to fulfill a customer order and, in real time, having a system redirect the order to a supplier to direct ship to the customer.

By collaborating up and down the supply chain you can achieve this e-fulfillment nirvana.

The path to nirvana isn’t a mystic journey, but a series of steps a company must take. The first step involves getting your own house in order. You’re only as good as the accuracy of your fulfillment data. Giving your partners and, more importantly, your customers visibility to inaccurate or dated information will cause more harm than good. The biggest adjustment for many companies to this is the realization that while visibility allows you to see into your partners’ and suppliers’ world, your customers will now be a fly on the wall, in essence watching you work. Embracing this mind-set is the first crucial step. Companies that embrace the concept of visibility and take the steps to continually improve will come out on top.

After making the decision to allow your suppliers, partners and customers to see into your operation, there are four steps to getting the most out of your e-fulfillment processes: fulfillment execution systems, fulfillment system integration, order visibility exchanges and collaborative fulfillment optimization.

• Fulfillment execution systems manage the day-to-day fulfillment transactions in real time. These systems include warehouse management, transportation management and yard management. These systems are tools that manage and optimize the execution of order consolidation, carrier selection, carrier appointment management, order filling and shipping. These systems provide not only day-to-day management of the transactions, but also are the key to collecting accurate, real-time data from within the network. This real-time data capture is the foundation of CFO.

• Fulfillment system integration is the next step. Integration of your execution systems allows streamlined coordination between distribution centers and the transportation network, ensuring that carriers arrive on time and shipments leave on time. This internal integration is a fundamental requirement. You must be able to integrate inhouse before embarking on the task of integrating with other organizations.

• Following integration of your execution systems, order visibility exchanges remove the blindfold limiting you to only viewing data from one source at one location. These tools allow you to view real-time activity that goes beyond the four walls of the individual distribution center, past the yard, through all the other distribution centers in your supply chain, including those outsourced to third parties. You, your partners and customers can view the exact status of orders and incoming/outgoing shipments. Users can be automatically notified when events happen and – equally important – don’t happen. Ultimately, these tools give you the ability to advance from operating in the traditional reactive mode of business, to an intuitive, proactive mode where you deal with potential problems and eliminate them – long before they become an issue to your customer.

• Only after you’ve accomplished the previous steps can you venture into collaborative fulfillment optimization. With CFO, you continually analyze your data, draw correlations between current activities and historical trends, and make decisions to correct, modify or prevent activities that could lead to potentially critical issues. Achieving CFO means implementing systems that react in real time, changing priorities, routing orders, managing labor, adjusting transportation schedules and diverting product. In effect, these systems will perform the data-to-information conversion using knowledge of your supply chain to optimize your fulfillment activities.

With this map, maximizing your e-fulfillment potential is achievable and, in fact, necessary. The key is knowing that sooner or later you’ll need to begin this journey, if you haven’t already. Those that follow the right map and begin the journey first will reap the benefits, becoming the leaders in fulfillment.

• John Pulling is chief operating officer at Provia Software, Grand Rapids, MI. Reach him at [email protected]

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