Meet customer requirements and improve your bottom line

Best-in-class companies are using technology tools to meet customer requirements and turn them to their advantage.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 7/14/2008

For anyone doing business today, meeting customer requirements is, well, a requirement of doing business. That is especially true for manufacturers and distributors with customers in the retail supply chain. For them, compliance labeling, advance ship notifications (ASN), custom packaging and palletizing are par for the course.

No sooner do you adjust to those demands than new ones emerge. “The first wave happened about 10 years ago, when retailers started requiring compliance labeling and ASNs,” says Ian Hobkirk, director of supply chain consulting for Forte. “What’s happening now is that there are additional expectations around delivery times and delivery costs. If you’re a supplier, the focus is not just on being compliant, but being profitable at the same time.”

In other words, meeting customer requirements is also about maintaining the bottom line. “The laggards are typically throwing labor at the problem,” says Hobkirk. “They hire people to do things manually, which is neither efficient nor accurate.”

Best-in-class companies, on the other hand, are using technology tools to meet customer requirements and turn them to their advantage. Those tools include:

•         Distributed order management: For companies with multiple distribution centers and demand from two or three different channels, a distributed order management system determines the fastest and most economical way to fill an order across an entire network, using customer requirements, like service levels, as a constraint.

•          Integrated execution systems: Traditionally, transportation and warehouse management systems (WMS) have operated independently of one another. But to truly optimize the supply chain, transportation and warehouse management systems need to be integrated. “To make a complex decision about sourcing an order, your order management system needs to have data from a number of applications. If those systems are integrated, any time I make a change to an order, the changes flow through the entire system,” says Hobkirk.

•         Dynamic execution: “When it comes to compliance labeling, industry laggards often try to print labels before an order is picked and then apply them later,” says Hobkirk. “The problem is that orders often change. That means reprinting all of the labels.” Best-in-class companies, on the other hand, are moving to a more dynamic, automated environment that allows them to send ASNs and create and apply labels on the fly as orders are actually being picked and packed.

•        Next generation warehouse control: In highly automated facilities, the warehouse control system (WCS) that routes orders through the facility is evolving into a real-time tool with the ability to rapidly respond to changes in orders, provide real-time visibility into what’s happening now and support a WMS. “In the past, a WCS was a tool box that integrated material handling systems,” says Hobkirk. “Today, it’s a true supply chain execution application that improves visibility into your operations.”