The “Amazon Effect” has spilled out of the retail segment and is changing the demands of our customers and, given a little more time, will become the standard expectation. Warehouse managers are in a tough spot, stuck in between their own organizational expectations for near real-time notifications and manufacturing and industrial customers who are saying, “If Amazon can send me notifications of my new book, then why can’t my distribution partner send me alerts about my mission-critical inventory?”. In this article we will touch on the pressures from both sides, and present critical elements for a low-cost achievable solution.
The organizational expectations of customer expectations and competitive fears are tangible and real to our senior management, marketing and sales, and customer service departments. We can’t ignore their feedback since they are in touch with our clients. The issue as supply chain professionals is: can we find one solution that meets all of our clients needs? What are the pressures our customers are putting on us as an organization? Here are a few that you can expect:
- Imagine a large customer telling your senior executives that, “On average, it takes 4 days once goods arrive at your location, to be received on our dock. Here is the report showing your shipping performance in the past 6 months, we want to edit our contract to lower that to 2 days”.
- Customers may be receiving notifications from couriers when goods have entered the country, or have arrived at the receiving docks – imagine being the customer service person receiving the call saying, “You received my goods yesterday and I haven’t received a notification of a pickup by the courier to me. When is it being shipped?”
- Customers ordering the same product from multiple organizations, and cancel orders based on who sends notifications the quickest?
- A fully-integrated Enterprise Resource Planning (ERP) system where marketing, sales, inventory, purchasing and warehouse at an execution level (WMS) are all in one system.
- Decide the notification thresholds you as an organization want to commit to. Customer commitments need to be consistently achievable from the contract, to the marketing and sales messaging to the warehouse execution. Examples could be:
- If your backordered product arrives at our location by 2 pm – we will ship it out the door that same day. You will receive a notification of your order being filled and the shipping notification.
- If you place an order with us by 4 pm then you will receive an order acknowledgement and a shipping notification before our doors close that same day.
- Tighten up receiving timelines and automate backorder fulfillment processes to be real time. A backordered product arrives at 3 pm and is being shipped out the door by 4:30 pm.
- Speed up product receiving and shipping processes, eliminating time-wasting steps by updating the system using hand-held scanning systems that tie directly into our WMS/ERP system — minutes matter.
- Automate the notification system through your ERP system so that no human intervention is needed BUT warehouse teams need to understand the effect of ‘pulling the trigger’ on that scan.
- The warehouse team needs to be trained and understand the greater vision that we are all working to keep our company commitments and we are “all pulling on the same rope, the same way”. Commitment keeping should be celebrated across the organization.
So, what can we do with this new client reality driven by the “Amazon Effect”? We can resist or we can put the pieces into place to find an automated, low-cost solution to meet this near real-time demand. What are the pieces?
The ideas listed above do not have to be expensive and as supply chain professionals we can get ahead of the curve of this expectation, woe to those who don’t plan for difficult days are ahead. Every operation is different, but customer expectations often drive the ship so getting ahead is our best strategy to help shape the direction. A technology partner like Mibusoft can help you plot out a plan to “get ahead”.