Integrating scheduling, capacity and prioritization

Transcription

1 White paper Integrating scheduling, capacity and prioritization Integrating Scheduling, Capacity, and Prioritization One Network Enterprises

2 White paper Integrating scheduling, capacity and prioritization Orders that have no impact on critical out-of-stock situations are received on their due date, while critical orders are delayed and causing unnecessary out-of-stock situations and lost sales. The Due Date Dilemma Imagine scheduling a dentist s appointment, juggling your schedule to meet the appointment, only to be told the night before the appointment that the Doctor does not have the time to meet you and you must come in a day later. Now compound the delay with the fact that you have an abscessed tooth that will not allow you to chew food without severe pain and you must deal with the pain another day, while your friend, who has an appointment on the same day as you, has no pain, is not re-scheduled and able to have their appointment. The truth is this same scenario occurs every day in the supply chain. Orders are placed, due dates are committed and later changed because capacity is not available in the supply chain. On top of it, the orders that have no impact on critical out-ofstock situations are received on their due date, while critical orders are delayed thus causing unnecessary out-of-stock situations and lost sales. Based on a review of One Network customers, it is not unheard of that during peak seasons, facilities can have 20-25% of their order due dates being re-scheduled because of capacity problems and an additional 10% of orders requiring costly third party outsourced space. These re-schedules result in an unprecedented number of out-of-stock situations that negatively affect same stores sales and a company s top line. Next-generation supply chain procurement processes must address the challenge of accurately predicting, refining, and scheduling due dates based on the actual capacity and inventory priority. According to studies One Network has conducted, accurate due dates can deliver a 5-10% increase in same store sales without adding additional shelf space or additional overhead costs to the procurement process. Challenges with the Current Procurement Process The major challenge with current procurement process is that they are not integrated with their logistics processes. Yes, these systems claim they take distribution capacity into consideration, but the truth is this capacity is based on a historical capacity and is often not reviewed for years becoming stale and out-dated. Even as historical capacity is exceeded, the systems allow buyers to write purchase orders without consequence, leaving their logistics group to clean up the mess downstream. An additional challenge is that once capacity is exceeded, buyers and the logistics groups are either not provided with a portrayal of the current order priority or if they are provided with an order priority it is an inaccurate portrayal. The priority is often subjective based on an individual buyer s perspective often leading to excess inventory on slow moving items and out-of-stock situations on promotional and fast moving products. Ultimately current disconnected procurement and logistics systems result in: Increased inventory levels Costly out-of-stock situations Lower Same Store Sales Subjective, instead of quantitative, prioritization

3 white Paper Integrating scheduling, capacity and prioritization Until recently companies have not had much option but to accept the archaic delivery due date process. The reason is the delivery due date dilemma is really a multi-echelon supply chain process that must be carefully coordinated between procurement, logistics, vendors, and carriers. Current procurement systems were not architected to deal with the multi-echelon challenge; they were designed to solve procurements business challenges not those upstream and downstream. With the advent of Network SaaS (Software-as-a-Service) vendors, like One Network, procurement systems can now be extended to solve complex multi-party challenges like the due date dilemma. Integrating Scheduling, Capacity, and Prioritization What is the secret sauce these Network SaaS solutions provide? It s quite ingenious they integrate true capacity, actual scheduling constraints, and inventory supply and demand priority when determining the due date. The great thing is they allow existing procurement systems to be embraced versus requiring a costly procurement replacement strategy. Additionally, they truly integrate the procurement, vendor, carrier, logistics, and store operation processes. The Network SaaS solutions, like One Network, start at the time a procurement system creates an order, manages the pickup and delivery date commitment process, and determines dates based on actual capacity and required supply and demand. the delivery due date dilemma is really a multi-echelon supply chain process that must be carefully coordinated between procurement, logistics, vendors, and carriers. Current procurement systems were not architected to deal with the multi-echelon challenge.

4 White paper Integrating scheduling, capacity and prioritization These solutions will consider: 1. Actual capacity and item prioritization considered during order creation 2. Automated appointment scheduling pickup and delivery prior to orders being transmitted to a vendor, customer, or carrier. 3. Tendering with a confirmed appointment and/or sent to partner with confirmed appointment 4. Continually updated capacity view throughout the supply chain 5. Milestone driven execution highlighting key activities e.g. pickup requirements - what time does the order have to be staged to meet the required due date 6. Visibility of item and order prioritization throughout an order s lifecycle so all parties can understand criticality of orders and determine due date shifts during capacity constraints. This process should: 1. Put quantitative numbers behind the priority of orders eliminating Buyers subjective view of their individual item or order prioritization. 2. Reduce inventory levels because higher safety stock requirements will not be required. 3. Reduce outside warehousing costs because capacity is understood and orders are executed based on inventory needs and actual capacity. 4. Improve same store sales because critical out-of-stocks are resolved. Example Illustration Here is an example process flow of the Integrated Capacity, Scheduling and Prioritization solution delivered by One Network s Logistics Network solution integrated with a customer s legacy procurement system. 1. Utilizing the logic in existing procurement system an order s initial delivery date is created. The Delivery Date is a requested commitment and not confirmed until actual capacity is confirmed and an appointment is successfully scheduled. The status of the order is Pending. 2. The order is sent to One Network s Logistics Network 3. One Network determines the priority, verifies capacity, and reserves a delivery appointment on the required delivery date. 4. A Reserved appointment is created. This is a soft appointment that reserves the time; however a party partner, Hub, or carrier - will confirm the appointment. Until the appointment is confirmed Appointment Scheduling can change the appointment based on the corresponding order s priority and available capacity. 5. One Network Logistics Network sends Delivery Date confirmation and provides reserved appointment date/ time to the existing procurement system. The status of order is changed to Reserved 6. A partner, carrier, or hub will log in and confirm the schedule date/time. Additionally, the partner, carrier, or hub will be able to request new times if they cannot make the reserved date/time. For the existing procurement process the only major change is the initial delivery due date calculation is a tentative or requested due date; until it can be confirmed against actual capacity and scheduling constraints.

5 white Paper Integrating scheduling, capacity and prioritization A new architecture is required for more complex and interactive multienterprise business processes. The data model and process model are very different from enterprise-centric architectures. Gartner The Future of Integrating Scheduling, Capacity, and Prioritization As companies embrace Integrated Capacity Management, Scheduling, and Prioritization they will begin to allow the systems to re-calculate delivery due dates based on supply and demand. This will allow companies to reduce the overhead associated with managing and determining which orders should be received and when. Additionally, companies will begin to transmit orders with appointments when they are communicated to their partners. This will alleviate the partner s challenge that an appointment was not available. Finally, the pickup appointment calculation will be integrated into the overall process. The theory is that the appointment scheduling solution will have network visibility from the vendor to their customer and even from the customer to the end consumer. The Integrated Capacity Management, Scheduling, and Prioritization is already determining the delivery appointment, so it is a natural transition to calculate the lead time between the customer and vendor, and secure the pickup appointment at the vendor based on inventory availability, and determine the pickup staging times to assist operations and labor scheduling. This truly offers an end-to-end integrated capacity management, scheduling, and prioritization process where appointments are secured based on supply and demand and carriers are left to execute the moves without having to worry about fighting for appointment times. Realizing the Advantages As companies institute Integrated Scheduling, Capacity, Prioritization solutions the disconnection between Buyer s, Customer Service Representatives, and Logistics will erode. The Integrated Scheduling, Capacity, and Prioritization integrates Vendor, Logistics, and Customer processes in a seamless manner to identify the true capacity as orders are placed and due dates determined based on capacity and item criticality. Additionally, the solution delivers users proactive tools to respond to the unforeseeable disruptions in supply chain e.g. promotions, late trucks, and out-ofstocks determining the impact of an order not arriving on the specified date and efficiently rescheduling based on the effect on the business. Most importantly the Integrated Scheduling, Capacity, and Prioritization will deliver five key advantages: 1. Put quantitative numbers behind the priority of orders eliminating Buyers, Customer Service Representatives, and Logistics subjective view of their individual item or order prioritization; 2. Create executable due dates because actual capacity and prioritization; 3. Reduce inventory levels because higher safety stock requirements will not be required; 4. Reduce outside warehousing costs because capacity is understood and orders are executed based on inventory needs and actual capacity; 5. Improve sales because critical out-of-stocks are resolved

6 White paper Integrating scheduling, capacity and prioritization To understand the One Network Platform and obtain detailed information on each of the network services and our retail supply network solution, please contact us at: Tel: (US) (international) Corporate Headquarters US One Network Enterprises 4055 Valley View Ln Dallas, TX Tel: Web: International Headquarters One Network Enterprises (Europe) Mayfair House Heddon Street Mayfair London, W1B 4DA United Kingdom Tel: +44 (0) Web: