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In fact, a 2018 survey from AlixPartners shows that the maximum delivery time the average consumer is willing to accept for an online order is just 4.5 days, down from 5.5 in 2012. And a vast majority (75 percent) of respondents said free shipping had "great impact" on their purchase decision, with a mere 4 percent responding that free shipping was "not a consideration" in their purchase decision.
If customers can’t get the delivery they want when they want it, they will shop elsewhere. As many as 50 percent of shoppers have abandoned a basket because of unsatisfactory or unavailable delivery options, according to Shippit, and 29 percent changed the delivery address of their order while it was in transit.
Flexibility is highly desirable, but for companies to meet customer expectations they need end-to-end visibility into their supply chains and the control to make changes in real-time.
The problem with low visibility
Only 6 percent of companies feel they have end-to-end supply chain visibility, according to the GEODIS 2017 Worldwide Supply Chain Survey, and 70 percent describe their supply chain as very or extremely complex.
In the pursuit of agility and maximum geographical coverage, most organizations engage multiple external parties with a variety of different systems. Integration tends to be challenging, to put it mildly, all leading to disjointed visibility into different segments, rather than a holistic end-to-end view.
With unwieldly, siloed supply chains, it’s very difficult to react quickly to customer needs, or to evolve and scale when the business demands it. While there are some tools that enable companies to dig into individual elements of their workflow, complete oversight and the ability to act in real-time continue to remain elusive for many.
Collecting the right data and integrating
The first step is to evaluate precisely what data needs to be captured. Get granular, dig into the details, and go beyond transportation. What are the key measures that determine cycle times for orders? The more you know about manufacturing, warehousing, cross-docking, servicing, and repairs, the easier it is to assess your supply chain and make informed choices about what needs to change.
All the various services you employ to complete product journeys and satisfy customers must work together like a well-oiled machine. The customer only sees your brand, not the multi-party effort behind the scenes, and so their experiences, good or bad, are always associated with your company. It’s vital to connect all the pieces, not just so you can see what’s happening at any given moment, but also to alleviate problems as they arise and tweak for maximum efficiency.
Orchestration allows for order optimization
Establishing end-to-end visibility and the ability to take action in real-time is hugely beneficial, but there’s also scope to go further and leverage the data you’re collecting to become proactive.
By weighing available inventory across your network, lead times, SLAs (service level agreements), internal and external capacity, transportation costs, and all the other details that make up your supply chain, you can establish the ideal order flow for each customer.
When you have a full orchestra, all playing together in harmony, it’s possible to conceive of and execute the perfect order for every customer at the most profitable cost. Once you have tamed the complexity, bringing together your legacy systems, integrating new technologies, and external partners, you can drive better performance.
Business benefits follow
Supply chain orchestration allows you to make best use of your resources. Planning staff can focus on adding value and tailoring every order. By gaining better visibility into your inventory, factoring in all locations and external parties, you can reroute, manage stock levels, and fulfill sales in shorter turnaround times.
According to IDC, “By 2019, 80 percent of supply chain interactions will happen across cloud-based commerce networks, dramatically improving resiliency and reducing the impact of supply disruptions by up to one-third.”
The more detailed your picture of lead times, the better your team can manage customer expectations. Order exceptions can be caught earlier and dealt with quickly. Such a configurable and agile layer on top of your supply chain allows you to grow, adapt, and change as required without massive disruption or lengthy software implementations. Ultimately, orchestration enables you to ensure a consistently high-quality level of service.
Martin Verwijmeren is co-founder and chief executive officer of MP Objects (MPO), a provider of smart cloud software for supply chain orchestration with offices in Boston, Rotterdam, Tokyo and Hyderabad. He was previously vice president of IT for CEVA Logistics. He has a Ph.D. in distributed systems for integral inventory management from Eindhoven University of Technology. Contact him at firstname.lastname@example.org.
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