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Order Fulfillment

The next area that will be impacted is order fulfillment. Within this process, selecting the best location for sourc­ing and carrier selection will be optimized with APS.

Demand Management

Demand management is a highly situational environ­ment. When capacity utilization is high, customer ser­vice translates into lead time management of backlog, When capacity utilization is low, customer service is managed in combination with inventory management, Product allocation, when it is needed, is a very compli­cated process and is a great opportunity for APS to make it a more dynamic process factoring in capacity, future periods, growth opportunities, and margins.

Consumption Logic

ERP vendors have learned that forecasts and customer orders can be blended to provide a better demand pat­tern than just one by itself. The consumption logic is time-phased to weigh customer orders higher in the short term and forecasts in the long term. This weight­ing can be dynamically related to capacity utilization and customer/product prioritization.

Order Lead Time

The timing and availability of product is a prime cus­tomer issue. Managing the lead-time to the customer is dependent on inventory management and finite capac­ity scheduling. The ability to control customer lead time will tax the capability of APS. This will require the cre­ative combination of logic, algorithms, and clear defi­nition of supply chain policies.

Order Configuration

In order to provide flexibility to customers in product configuration and maintain short delivery times, manu­facturers have to forecast assemblies and the final as­sembly has to be kept to a minimum lead time. This environment gets more dynamic as product life cycles shorten and new products need to be pushed into the pipeline as fast as possible. Despite a supply chain that spans the world, APS technologies will be deployed to plan just the right amount of materials to flow through the pipeline and minimize the cycle time of the entire supply chain.

Value-Added Services

Competitive factors change as companies reach a level of diminishing return. Products that once were specialty items are now commodities. The only product/brand differentiation for commodities is cost and availability.

Therefore, the business that does the best job of mini­mizing overall supply chain costs while maximizing availability will maximize market share.

Purchasing

We are already seeing the business model change as tech­nologies are introduced. The Internet has created many more exchanges for purchased raw materials. This tech­nology offers efficiencies in ordering, and matching price to availability. The exchanges will evolve eventually to the airline model where price is dynamically set based on glo­bal availability of material and capacity. Advanced algo­rithms will be developed to manage the risk associated to recovering fixed costs and the loading of capacity over rime.

Continued

Part 1  Part 2   Part 3  Part 4  Part 5  Part 6  Part 7  Part 8


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