Supply Chain Visibility 23
The logistics department in this example
— like those in many other companies
— faces two crucial challenges:
1. How to gain visibility of customer
orders, so that it can take into account
any factors that might affect on-time
delivery or customer service.
2. How to consolidate items into complete
orders and organize loads to optimize
efficiency.
Companies must address these challenges
if they are to deliver a high level of customer
service and maximize profit margins from
mass customization. Yet, there are many
obstacles to overcome.
Challenge 1: Gaining
Visibility of Orders
Customized orders are complex. They can
have multiple components with different
lead times, all residing in different divisions
and warehouses. Traditional ‘push’ methods
of shipment, where items received by the
logistics department are simply shipped
via the next available and most cost-effec-
tive transportation method are no longer
adequate to cope with these layers of com-
plexity. To ensure that all components of a
customer order are delivered at the same
time and to maintain high customer service,
companies need to provide logistics func-
tions with visibility of the full customer order.
This is, however, not always as straightfor-
ward as it sounds.
Many of the companies that are cham-
pioning mass customization are national
and multinational corporations with many
separate divisions, product lines and loca-
tions. Each division or location might have
its own database and technology systems location may be referenced by five different no understanding of the customer, but also
and receive orders from multiple sources names in five different systems. no (or limited) understanding of the product
— including fax, e-mail, telephone and post. The challenge of providing order visibil- being supplied as well.
Data flows into the business and typically ity is also especially difficult for companies The answer lies with supply chain vis-
resides in different IT systems in the different that have outsourced their logistics func- ibility solutions that provide logistics profes-
departments of the responsible divisions. tions. For these organizations, the discon- sionals with a complete and accurate view
Crucial information may also be stored in nect between order management and of orders, inventory and shipments, based
different data formats and nomenclature, transportation management spans not only around key business processes. These
making it even harder for companies to divisions, but entire companies — or mul- sophisticated software products consolidate
consolidate information about orders and tiple companies — perhaps many hundreds information from multiple sources — includ-
make it more widely available across de- of miles apart. In this case, the third party ing legacy, ERP and bespoke packages
partments. For example, the same physical carriers in charge of shipment not only have — and enable orders to be tracked through
June 2007 Supply Chain Europe
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