Resilient supply chains
_{Order management}

This is the first in a short three part blog series that explores supply chain resilience – why it matters and how it can be achieved.

In this blog, you will learn about the importance of order management to supply chains, and how the order management process can be improved.

Taking ‘just in time’ for granted

Just in time supply chains appear to be very straightforward. You simply order a product from anywhere in the world and it arrives in a few days (or hours, in some cases).

This incredible convenience (and the customer expectations around it) did not exist just a few decades ago – and is something that many of us take for granted today. But such speed and convenience take a lot of planning and continual work behind the scenes – this is called ‘order management’.

Meet the supply officer (SO)

Indeed, to achieve this efficiency, the role of the SO – who handles much of the administration around the movement of goods (ie. order management) – is critical. For example, an SO will properly configure all parameters in the company’s logistic system. This includes master data management – which is related to any information required to pass an order. eg. the supplier’s name, price, logistic conditions, etc. They will also manage the nominal flow of parts and information which represent up to 90% of the transaction, but only one third of the workload.

In fact, SOs spend about two thirds of their time managing non nominal activities, like collaborating with suppliers to confirm quantities and delivery dates, or reconsolidating documents (eg. purchase orders against delivery notes) – thus minimizing impacts on deliveries. This may not seem particularly important, but these small tasks must be done (and done properly) in order for supply chains to properly operate – regardless of their size, and if they operate on the just in time model.

Of course, much of this concerns the movement of goods from warehouses to the end customer. However, another increasingly important aspect of order management is an understanding of ‘reverse logistics’ – namely the work required to bring back products to suppliers and organize repairs. This often requires a different order management process – for example, a much less automated workflow – because it can be difficult to forecast where parts will fail, or be broken. Reverse logistics can also entail additional negotiation with suppliers – but is critical to extend the lifetime of products and maintain customer satisfaction.

What we learned about better order management

From our experiences delivering supply chain services for multiple clients in multiple sectors over the years, we have learned a lot and created some unique capabilities:

• Managing the complete portfolio of suppliers with an end to end vision. This allows us not only to manage day to day activities, but to set commitments that your suppliers will keep to, and minimize missing parts
• A Supply Officer framework that describes a global order management task in 30 individual activities. We can either manage one supply chain task (for example, good receipt disputes), or your entire supply chain
• Up to 30% demonstrated cost savings by using our service when compared to the more common ‘Time and Material’ approach
• A range of dashboards and tools to enhance your ways of working, and offer you a complete view of the performance of your supply chain and order management process

In conclusion

Supply officers could be thought of as unsung heroes of the supply chain. Improved technology and procedures for order management can help them to be more effective, consequentially increasing the resilience of your supply chains – for example, by better utilizing available resources and streamlining operations. 

In the second of this three-part blog series, you’ll learn about Supply Chain Quality Management – what it is, how it works and why it matters.

Struggling with on time delivery or supplier visibility? We can help. Capgemini has helped a range of companies across industries and countries to improve their order management processes and strengthen their supply chains. Choose a world leader – find out how we can help you – contact our expert.