Magazine Article | December 16, 2008

Pursue The Perfect Order

Source: Innovative Retail Technologies

Improve supply chain efficiency and accuracy by automating business processes.

Integrated Solutions For Retailers, January 2009

No enterprise is an island. Goods and services flow in from suppliers, involve transportation carriers, and are driven by the business of the enterprise. Suppliers of wares for raw material extractors and recyclers who turn consumer and commercial waste into new raw materials and finished goods form a supply chain with no beginning and no end. The common paradigm, 'the perfect order,' is an archetype of flawless interactions among supply chain partners. The perfect order is on time, complete, and damage-free and includes proper documentation.
 Errors along the continuum of business interactions lead to an imperfect order and significant costs to the companies. Depending on the nature of the imperfection, a flaw can negatively impact production, sales, cash flow, employee productivity, and customer satisfaction.

Multienterprise Solution Streamlines Business Processes
AMR Research data estimates that 20% of all orders are incorrect across all industries. What if you could identify and remove costly errors before they lead to an imperfect order? You can improve the efficiency and accuracy of supply chain interactions by automating business processes and setting up rules that govern these processes between companies. There are a number of supply chain software products and services on the market. But a single point solution will not enable the true supply chain collaboration required to achieve the perfect or near-perfect order. Enterprises must implement an automated, multienterprise business process platform that provides real-time, actionable intelligence and allows for collaboration across all platforms, including:

n Eliminating human error is a key factor in achieving the perfect order. Therefore, companies must drive automation throughout all customer, supplier, and carrier processes. 
n A multienterprise business process platform provides the capability to monitor and react to errors. As supply chain partners interact through the platform, they gain more visibility into problems with shared business processes such as deductions, compliance, and logistics. Partners receive actionable intelligence about problems before or as they happen so they can take steps to mitigate disruptions that create imperfect orders.
n EDI (electronic data interchange), XML (extensible markup language), and general connectivity are good starts, but they are not enough. You must collaborate, interact, and resolve issues in multienterprise processes. Collaboration requires the ability to understand who owns a particular action, how it can be addressed, and how to improve a shared business process. When partners have visibility into the same data, they can collaborate on supply chain issues affecting the perfect order.
n Flexibility is key to such a platform. It must be flexible in the way it is deployed and the environments in which it can be used. The solution must be capable of supporting the standards and documents used by your current and future trading partners, or the perfect order will be endangered.

Reap Quantifiable Supply Chain Benefits
Implementation should be evaluated like any other investment. There are costs involved, but there are benefits to offset the costs. The project should be undertaken only if those benefits will provide an adequate return on your investment. Businesses see a 19% reduction in overall supply chain costs (e.g. manufacturing costs) after implementing a multienterprise business process platform. According to industry research, this typically has the same impact on profitability as a 5% increase in revenue. The real question is not whether you should implement this kind of platform. The question is, can you afford not to?