|
by Marty Weil, Contributing Editor Posted on Friday, March 07, 2008 12:10:40 PM   | Abstract: | Saddled with a mishmash of systems, many manufacturers see perfect order performance as an impossible dream. New order management and integration tools, however, can help bring improvements. |
The perfect order is more than a quixotic, impractical concept. The ability to deliver the right product, in the right quantity and configuration, and with the right documentation — all at the right cost — is becoming essential to survival as market forces make it increasingly important for manufacturers to retain customers and increase revenues. Despite these business imperatives, many manufacturers still often fail to execute orders perfectly. That's hardly surprising. According to Ray Wang, principal analyst at Forrester Research, there are 10 things manufacturers must get right in order to consistently deliver perfect orders. "For manufacturers to do all 10 things right, they must master order processing, be able to adapt in mid-flight, and have the flexibility to move or re-route a source based on conditions," Wang says. Many manufacturers struggle to achieve such adaptability and flexibility because they are saddled with system inflexibility and legacy systems integration challenges. Fortunately, however, a new wave of order management software is appearing that can help manufacturers overcome legacy system problems while improving order process visibility and enhancing supply chain agility. These tools can help manufacturers deal with increasingly complex order fulfillment processes while allowing them to effectively manage the bundling of post-sales services with manufactured products, experts say. One of the obstacles standing in the way of achieving the perfect order is the large number of legacy ERP systems that burden manufacturers. According to Rob Bois, research director at AMR Research, manufacturers today juggle an average of 5.2 legacy order management systems. "Multiple systems mean there is a limitation in terms of managing global order visibility and managing order servicing across companies and divisions," says Ken Ramoutar, global product line director at Sterling Commerce. "Today, companies are trying to move from having multiple, loosely integrated order management systems to a system that provides a more unified view of their global order management." Forrester's research supports Ramoutar's firsthand observations. According to a 2007 Forrester study, enterprises often cobble together fragmented ERP, CRM, and SCM systems without ever considering the end-to-end order flow. Yet, the business processes of a perfect order must seamlessly integrate across all stakeholders and transcend functional fiefdoms to address order management challenges. "For example, engineer-to-order products go through a number of changes as they pass through the development stage of their life cycle," Forrester's Wang says. The party that wants to see an engineering change implemented submits an engineering change order (ECO). Usually that document contains a statement of why the ECO is being requested or what design or manufacturing problem the ECO resolves. Historically, such ECOs have been paper documents that get filled out and then mailed or faxed, Wang says. Manufacturers in many industries have been looking for ways to effectively automate and streamline the processes. One industry-specific organization, RosettaNet in the semiconductor industry, has been developing a set of standard process steps that let manufacturers handle such ECO documentation efficiently and electronically, Wang says. But, without well-integrated internal order management systems and processes, manufacturers will run into difficulty implementing such standard order management processes. Multiple order management systems also often make it hard to manage increasingly complex supply networks, Sterling's Ramoutar says. "Large manufacturers are fractured internally because they are managing orders that are often sourced from multiple divisions of their own company. The order fulfillment process is a complex task. Manufacturers have to manage an ecosystem where order information is sent to suppliers — inside and outside the enterprise — which is later consolidated to appear to the customer as one order." Page : 1 2 3 ... NEXT |