Order Management and Customer Service What matters to the buyer –Shorter order cycle = less inventory –Simplified order placement = lower headcount –Simplified order receiving = lower headcount What matters to the seller –Smooth workload and asset utilization –Repeat customers –Simplified order processing = lower headcount –...
Order Planning How to smooth workload and asset utilization –Salesforce –Discounts –Vendor Managed Inventory –Delivery Quotation –….
Order Transmittal How to simplify the buyers (and the sellers) process… –Automated systems –Point of Sale –Vendor managed Inventory –Broadcast –ILVS –Shared plans –...
Delivery How to simplify the buyers receiving process –ASN (Advance Shipping Notice) –Bar coding (with buyers numbers) –Order accuracy –Packaging –...
Customer Service Taking cost out of the relationship Building in reliance Competitive advantage
Increasingly Expensive “80% more inventory to fill 95% of orders from stock than to fill only 80%” Why?
Johnson Toy Case Pages Product Strategy –Basic low margin products –Unconventional high margin, high risk Jim the Jogger Doll –Based on TV show –Sold out previous Christmas –manufacture 10 million for this year
The Problem Orders placed quickly in January and February Jungle Jim the Jogger runs into trouble Sales vanish What to do
The Situation million dolls in retail stores 2.5 million in public warehouses Unknown quantities en route including unassembled parts
Returns Do we accept them? Who pays the freight?
The Process Returns negotiated with Sales reps Shipped back to Biloxi and “recycled” No inventory tracking –Can’t know whether it can be resold
Large Accounts 2% off invoice and no returns
What to do?