Having grown up in a family involved in manufacturing, school holidays were invariably spent working around the foundry, machine shop, polishing shop and pick & pack - where you quickly got to understand process and work centre constraints.
If something went wrong as an order was processed on the shop floor, fulfilment was compromised unless priorities were quickly changed and valuable time and resources diverted to solve the problem.
Over the last 30 years, much has been done to improve manufacturing and distribution processes. Supply chain specialists, associations like APICS, and works like the 1984 management novel ‘The Goal’ by Eliyahu Goldratt, have all served to make our operations and logistics practices more sophisticated.
For those who haven’t read ‘The Goal’, I urge you to do so. Whilst now over 30 years old, The Goal’s premise, centred around the Theory of Constraints, is still highly relevant. If our main character Alex Rogo was around today, I’m sure he would still be challenged with business problems involving order fulfilment and reducing cost to serve.
For those who read The Goal and undertook your Product & Inventory Management certification through APICS, you’ll remember the 90’s as the time we focused on the ‘four walls of the business’. But with the commercialisation of the internet over the past 20 years, today the ‘four walls’ have been blown away. To thrive and survive we view our supply chain as encompassing our suppliers and customers as well as our own business.
Last month our sister company’s Director of Consulting Services called out that something was missing in B2B eCommerce https://www.commercevision.com.au/blog/b2b-ecommerce...-is-there-something-missing. Andrew’s article looked at why some customers won’t place orders online and identified that for customers whose ERPs are capable of emailing the purchase order directly to the supplier’s inbox, entering that PO into the supplier’s online eCommerce system doesn’t add any obvious value to the buyer. In fact it adds another step (read cost) to their purchasing process.
So back to The Goal - having to manually enter orders into your ERP system is a big constraint in reducing cost to serve and fulfilment time. No matter how efficient your current processes are, your fulfilment time is dependent on order entry.
Our hero Alex Rogo, taking a cue from his guru Jonah, would look for a way to free up the order entry bottleneck. Removing this constraint would allow orders to flow freely from the buyer and be processed 24/7 by the business.
Fortunately for Alex (and for manufacturers and distributors today), the advent of AI technology has enabled automated order processing solutions. These applications can take customers’ PDF purchase orders and turn them into ERP sales orders in seconds. Intelligent solutions can now learn a customer’s ordering behaviour and can correct errors and spot potential issues, thus ensuring near 100% accuracy. How better to free up constraints in the order-to-cash process?
So what does the future hold for Manufacturers and Distributors? We believe businesses are at the dawn of a new age where AI will solve a host of constraints that impact cost-to-serve and fulfilment. Automated order processing and AI will enable companies to finally find their ordering Zen.