Soon On-Time & In-Full will matter more than ever
By Victor Engesser, RVCF
Once this global crisis is behind us retailers and their suppliers will work quickly to get back to normal (or as close to it as possible) and that will start with communication, collaboration and new commitments to each other. What we learned from the OTIF Impact Survey earlier this year is that many of the business processes retailers rely on to support purchase order management can be improved to support better OTIF supplier delivery performance. Starting with forecasting, and ending with the final revision to the order (via PO changes) retailers should be working to constantly improve accuracy, reduce volatility, and better align business processes between each of their supplier partners to optimize performance.
Likewise suppliers, both big and small, must invest in the people and systems required to support not just demanding retailers requirements but also to be able to take sales and forecasting data they receive to develop manufacturing plans that allow them to meet or exceed market expectations. Their ability to communicate accurately what they can, and cannot, supply and to relay this information early in the ordering process is critical to improving OTIF performance.
As if all of this was not challenging enough the return to "normal" will be especially complicated as attempts are made to restock and re-balance inventories. With capacities strained allocation decisions will be necessary, causing forecasts to be inflated and orders to become more (not less) volatile. As costs and terms are revisited relationships will be tested. Now more than ever relationship management moves to the front of the line in importance. How well trading partners work with each other will determine the slope of their recovery.
At RVCF we continue to focus on best practices, industry initiatives and collaborative solutions that make it possible for retailers and suppliers to optimize supply chain operations. Towards this effort we invite you to join our Webinar on May 7th and we will take you through all the survey details regarding how OTIF performance is impacted by the most common order management business processes and provide you with our best thinking around how relationship management in this area can be improved.