Many companies strive for faultless order management because lives may depend on it. Take, for example, the need to provide parts to repair medical diagnostic equipment, maintain aircraft, or ensure that first responders are well equipped. Every step of the order management process requires precision and perfection — from initial order intake to manufacturing, from warehouse operations to fulfillment completion.
But investing continuously to achieve 100% perfection for every order every time is an expensive proposition that may offer diminishing returns as the ultimate goal approaches. Organizations need to decide when perfection is essential, and whether incremental improvements might be good enough. Most distributors operate with slim margins and might find it more practical to focus on improving efficiency and reducing process errors that disrupt value-chain performance.
For many companies, it might be more practical to make sure the right customers receive the best service, based on criticality, order size and profitability.
Whether the goal is perfection or incremental improvement, digital order management solutions and robotic process automation (RPA) can help companies fundamentally retool their value chains and improve customer satisfaction without sacrificing profits.
Understanding the perfect order
A perfect order, as defined by the Warehouse Education and Research Council, is one that is delivered complete, damage-free, on time, and with the correct documentation. While such perfection is a worthy goal, there are situations in which it isn’t an essential priority. For example, if a pallet ships with the wrong quantities of soda and energy drinks, the receiving retailer or end customer probably won’t suffer greatly, especially if the mistake is quickly rectified.
But consider the cost of a mistake in commercial aviation — where the key metric for business performance is to have the aircraft in use as much as possible. When aircraft sit on a runway or in a hangar waiting for a part, the loss of use costs thousands, negatively affects on-time performance, and inconveniences customers — which can tarnish the brand’s reputation. Likewise, a mining company may lose millions of dollars if it halts work after receiving the wrong excavator wheel-track replacement.
A company’s mission and industry should dictate whether (or in which cases) it will strive for perfect orders. For example, parts ordered by an airline or mining company are more mission-critical than an order of balloons headed to a party store. And every supply chain has its own complex systems and interlocking components that impact the costs of achieving perfection.
Assessing the financial feasibility of the perfect order
With many new solutions available to help improve accuracy and reduce variability, companies must assess expected gains against projected costs. By automating manual and analog order management tasks, organizations are increasing accuracy, reducing the use and waste of items such as paper and printing supplies, and improving customer service by providing greater transparency into order status.
Before deploying new systems and automation, companies should understand their order accuracy requirements and the potential returns on their investments.