It is now March, and those earnest New Year’s resolutions may have fallen by the wayside. Whether the goal was to lose weight or work out more, few of us set our sights on perfection. However, today’s supply chain managers must deliver perfection every day, with very real consequences for anything less.
What Is a Perfect Order?
How do you define a perfect order? One of the fundamental requirements is an on-time delivery. Late shipments mean lost sales– according to the Food Marketing Institute, grocers lose $75 billion a year in sales, or 10% of the industry total – due to out of stock and unsaleable goods.
Early deliveries can also cause challenges, especially for a busy distribution center with hundreds of dock doors. If the carrier arrives too early, the shipper’s dock area becomes congested and the driver may have to wait for a dock door to become available, wasting precious moments of their Hours of Service (HOS).
Delivery Windows and Ship-By Dates Enforced
Many companies have tackled the quest for the perfect order by requiring that suppliers arrive within specific delivery windows. Failure to do so can result in fines of as much as 3 to 5% of the value of the shipment. Even Amazon is taking steps to ensure delivery windows are met. In the past, sellers could notify Amazon three days after the expected ship date to confirm shipping had occurred. Now, sellers must confirm the shipment BY the expected ship date. A seller who does not comply with this requirement for at least 96% of their orders is at risk of losing their privileges to sell via Amazon.
Damages, Invoices Are Also Aspects of the Perfect Order
And, timeliness is only part of the equation. A perfect order should also arrive damage-free and be invoiced at the agreed upon rate. Damaged products cannot be sold, and the process of auditing invoices to ensure all contractual agreements, including accessorial charges are correct, can be time-consuming and costly for all parties.
Top Four Tips for the Quest to Achieve the Perfect Order
So, how do shippers, 3PLs, and carriers achieve the quest for the perfect order?
- Establish parameters early in the relationship. How does a specific carrier or shipper define on-time? Does everyone have the same understanding about contracts, when or why exceptions may be allowed?
- Ensure connectivity. Make sure that all links in the supply chain are connected with technology and there is communication throughout the shipping process. One solution is to combine the use of a transportation management system (TMS) with other systems, such as ERP or WMS.
- Maintain visibility. By using a TMS that serves all transportation modes –including parcel — with a single platform, you can follow your order from beginning to end, even if it is routed as part of a multi-mode or multi-stop move. This visibility allows supply chain managers to take action to prevent an issue before it occurs.
- Manage by exception. With very large volumes of orders, monitoring each one manually can be daunting, if not impossible. However, if you let your TMS do part of the work, only notifying you of exceptions – like an invoice that does not match a bill of lading – your workflow can be more efficient and the outcomes more consistent.
While many of us have heard the quote, “to err is human, to forgive divine,” the reality of today’s business environment is that there are few second chances. And, it is not ok to meet some of the requirements some of the time – the expectation is to meet all requirements with every order. Technology cannot guarantee 100% compliance, but it gives you a definite advantage in your daily quest for the perfect order.
To learn more about how a TMS can help you reduce costs and improve customer service, check out this research brief by the ARC analyst firm.
