Process Approach to Improving Order Management and Fulfillment Efficiency
Let’s see how many of these challenges sound familiar:
- Our orders take too long to process
- Our orders are input inaccurately
- Our orders and inventory records don’t connect in real time
- Our orders are filled inaccurately
- Our orders take too many warehouse workers to fulfill
- Our orders take too much time to input
- Our orders come from our customers in too many different formats
- Our orders must be formatted in a way that makes it difficult to put new products into our system
And these are just the challenges many businesses face that directly flow from their order processes. Accounting reconciliation, item (new product) creation, marketplace (Channel) management issues, warehouse expense and shipping problems are also too familiar to many businesses.
Often, we try to solve these challenges one at a time.
- Let’s speed up our order process.
- Let’s improve the accuracy with which we input orders.
- Let’s connect our inventory records directly to our order processes.
And so on…
Typically, the results are disappointing, frustrating and ineffective.
It’s a mistake to try to fix your business using the same approach you would use to fix your car. Your car has been expertly designed so that all of the systems work efficiently and effectively together. When your water pump goes on the fritz, your transmission is still working perfectly and it’s working in perfect conjunction with your engine. Therefore, you can simply fix the water pump and be confident that the car will run smoothly.
Your business may not be so predictable.
Instead of having a team of experienced automotive designers incrementally refine proven historical designs and technologies to create a new model, your business has probably evolved over the years to get the job done, even though the systems are not perfectly integrated or aligned and optimal efficiencies are never achieved. We are so busy staying in business that we sometimes fail to take the steps necessary to allow us to be as efficient (and therefore profitable) as possible. When we encounter a problem, we fix the problem. The business continues along, but doesn’t make as much money as it could if we were able to step back and look at the interconnection between our various systems and procedures and conceive better, more efficient and effective processes.
So, we address the problems as though they were independent of other business activities to which they are connected.
- If our orders take too long to process, we add more order entry staff.
- If our orders are input inaccurately, we offer a bonus to the employee with the highest data input accuracy.
- If our orders and inventory records don’t connect in real time, we update an inventory spreadsheet every morning so the order entry staff can check inventory availability.
- If our orders are filled inaccurately we add a quality control checkpoint between picking and shipping.
- If our orders take too many warehouse workers to fulfill we set higher picking targets to encourage faster picking.
- If our orders take too much time to input we create dropdown menus for easier data input.
- If our orders come from our customers in too many different formats we create financial incentives for our customers to use our preferred order receipt format.
- If our orders must be formatted in a way that makes it difficult to put new products into our system we try to modify the item descriptions to make it easier to add new items.
With predictably unsatisfactory results.
- Our additional order entry staff still struggle to be efficient and instead of improving our order entry system, we achieve daily increased order entry at the cost of reduced individual efficiency.
- Our data entry accuracy is improved, but with increased employee cost and we find that the best employees compete for the accuracy bonus, but the worst employees don’t improve performance.
- Our inventory confirmations didn’t seem to get much better, because the spreadsheet we use to make sure we have items in stock becomes out of date within a few hours every morning.
- Our order fulfillment got more accurate, but now we have a bottleneck at the pre-shipping quality control station.
- Our higher picking targets caused frustration and resentment.
- The dropdown menus helped sometimes, but limited our order input flexibility.
- Some of our customers opted to use a different format to send us orders, but others wouldn’t switch and our order entry staff is still struggling to respond to a wide variety of order transmission protocols.
- We can input new products into our system faster, but we have lost flexibility in the ability to describe the products in ways uniquely appropriate to particular products, resulting in a less persuasive presentation to our customers.
Why didn’t our solutions solve our problems?
Because you can’t fix a leaky boat by bailing out the water. The root causes of the problems must be addressed.
A comprehensive, system-oriented solution is required. There is a complex matrix of connections between every aspect of order receipt, entry and fulfillment activities. Only by embracing a solution that addresses the complexity of these interactions can you hope to permanently improve the deficiencies in your systems and put yourself on the road to sustainable increased sales and profit.
Avectous has over twenty years of sophisticated experience in analyzing complex business systems and architecting simple, elegant and comprehensive solutions. Our solutions are adapted to the effective and efficient parts of your business model and improve the less effective aspects, resulting in an easy-to-use soup to nuts system that gives you optimal efficiency and control. You will be able to reduce employee population and inventory levels while selling more and filling more orders faster and more accurately leading to a dramatically improved user experience for your customers.
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