The order-to-delivery cycle is an important determinant of the level of customer satisfaction -- if the delivery process is poor in any way it will impact customer satisfaction negatively, according to a new study from Aberdeen Group. The report looks at how Best-in-Class companies are streamlining internal processes, providing cost and inventory data upfront and leveraging technology to optimize the order-to-delivery lifecycle.
The report benchmarks the following sub-processes within order-to-delivery: Request for Quote, Order Promising, Order Capture, Order Scheduling and Order Fulfillment. The cycle presents many opportunities for reducing error and waste,notes Aberdeen, and as a result almost 90% of Best-in-Class companies have an order-to-delivery initiative in place. Their commitment to the process is driving the performance improvement in inventory as a percentage of sales and customer service levels; for example, Best-in-Class achieved a 4% decrease in inventory as a percentage of sales over the last 2-year period .
"The order-to-delivery process is a somewhat neglected process compared to others. The predominant vehicle companies utilize to balance supply and demand is Sales and Operations Planning (S&OP), which leaves demand planning to a monthly or quarterly exercise. However the fact that the order capture process is actually the point of true matching of supply and demand is ignored. The problem with this is that there is no visibility connecting real-time demand with the supply capabilities of the organization," said Nari Viswanathan, Vice President / Principal Analyst, Aberdeen.
The top pressure forcing companies to invest resources to improving the order-to-delivery cycle is customer mandates for faster and more unique fulfillment. While this might suggest customer service reflects primarily fulfillment capabilities, Aberdeen's report shows the entire process, from beginning (quoting) to fulfillment brings performance improvement. For example, Best-in-Class companies have a strong ability to support a single quoting process to customers, irrespective of the sales channel, and they also have a strong ability to provide a single view of inventory across multiple facilities.