Let’s continue the saga of order management, in part I we tried to put into clearer perspective the way order information flew. In part II, we discussed the generator of the order, the point in the chain that was the point of contact where consumer met the brand.
An order is generated through a thorough understanding of local demand. A retailer serving his geography knows this. He is also the change agent – a point we forgot to mention earlier. When it comes to changing a customer preference, the retailer holds a lot of sway. He is the man guaranteeing the product. Not some copy with phone number and email on it.
The order from various retailers passes onto the distribution chain that is served by the brand. The distribution chain comprises of vendors, suppliers, stocking or a C&F agent. The order is segmented, consolidated and processed at that stage before moving to the brand.
Here is a quick view of a single distributor processing orders –
The flow of information here is inconsistent, incoherent and irreconcilable. Let’s follow through on all the claims –
- Inconsistent – the order details are taken from the retailer not when the products start to deplete or when he wishes to order, but when the sales rep is available.
There are other inherent inconsistencies with respect to the sales representative. Those also get resolved by automating the order taking process.
- Incoherent – the orders are mostly handwritten and unclearly defined, that is also the reason one needs extra manpower to comprehend and sieve it.
A convenience store, a small convenience store that is, carries about 3000 SKUs and it only goes up. That amount of options would invariably create incoherence and we solve it for all the stake holders.
- Irreconcilable – This is a big claim to make but the way orders data from one point to next, the whole process is akin to a game of Chinese Whispers. The whole process is as far from Data-Driven as it could be.
There is always excessive ordering, wastage, and delay, and there are stock-outs, shortage and more than necessary capital utilization, which is always bad for business.
Even though the point of sale is where the consumer preferences change or can be altered. Distributor can drive that wedge deeper and cement it there, if he is unable to process the orders effectively and efficiently. But that is the problem for brands to solve.
Let’s revisit the process once again. This is how a single order is processed –
The order is broken down into various SKUs, segregated according to the brands and then the wish list is passed on to the brand to process. A point to remember is that at no point the fulfilment is ensured. Even though the retailer, the distributor and the brand would want to ensure fulfilment for higher turnover.
This is a real scenario – where a distributor is processing multitude of purchasing orders being released at their own pace.
This is an important image if one has to understand the dynamics of the information flow.
There is an unusual lag/ delay before the brand is made aware of the order generation or demand, the sooner the brand knows of the demand, the faster the process, the higher the fulfillment. It simply does not happen.
The distributor would forward the order if he could process it sooner, the distributor would forward the order if he could segregate it faster, and this is where Hashbrown Systems jumps in with their engineering prowess and analytical ability.
An Autonomous Ecosystem for Distribution
- The product information is structured by employing
a. NLP – Natural Language Processing, and
b. Manually – by distributor and brands
The orders are processed and relayed in real time over cloud to the distributor.
The purchase orders are automatically generated in the ERP / Accounting software of their choice.
The orders can be forwarded to the Brand in real time or can wait consolidation till the next delivery cycle.
This is the simplified version of the process -
Even though it is essentially the same process – it has been automated and optimized. The solution when implemented show clear wins in the following areas.
- Reduced Lead Time
- Higher Inventory Turnover Ratio
- Lower Wastage
- Predictive analysis of the distribution network and Additional benefits,
- Faster, optimized and configurable delivery schedule.
- Lower Capital Allocation
To learn more about our solution follow this link or simply contact the fine people of Hashbrown Systems.