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How does fulfillment in Supply Chain Work?

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Cristyn Narciso
Cristyn Narciso
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I found this course very informative and easy to understand. I am just getting started in working with supply chains/manufacturing and enjoyed this free course.
Ankit Kumar
Ankit Kumar
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Very basic but yet an effective course. An easy explanation of different processes of a Supply Chain. The mentor has explained everything through pictures and flow charts which made it easy to understand. He has also provided the slides used in the course for later reference. Good for anyone who is new to the Supply Cain. I really wish him to create a more detailed and advanced course.
Laverne Angela Gadiah
Laverne Angela Gadiah
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Thank you for a very clear, easy to follow and concise course. It was informative and definitely on point.
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Gearing up the businesses with improved product fulfillment operations enhances the reliability of your supply chain operations. It paves the way for an increase in the profitability as it brings about streamlining of processes at reduced costs. It is then natural that we need to have an understanding of how fulfillment works in the supply chain, and our objective is to discuss this in this article.

  1. Focus on the Customer

It starts by focusing on the customer because no one size fits their requirements. A case in example is expecting those customers who do not want a ‘next day delivery,’ yet forcing them to pay extra for it. It would result in contentious issues that would drain your time, resources, and in a worst-case scenario, could result in your losing them. It not only makes sense but is imperative for you, while considering the supply chain fulfillment process, to set your processes based on what the customers need. Some businesses might have to deal with complex supply chain due to their customers’ profile being diverse. In such cases, the best way is to group them based on common characteristics and serve them as a group rather than individual customers.

  1. Chalk out a supply chain strategy

Once there’s clarity on the requirements of customers, the next step is to frame the goals and determine the flow of supply fulfillment. Such an approach should meet the following salient criteria:

  • The plan should well document and made sure that the employees understood it.
  • Since supply chain embraces all the functional business vertices, for instance, research and development, purchasing, manufacturing, sales, logistics, etc., it cannot manage in a ‘silo.’ It means everyone in your business would have to be made aware of the essential characteristics of fulfillment.
  • The strategies should be flexible in that they are amenable to adaptation to meet the needs of the customers. It means, they should be chalked out in a framework that allows for quick decisions and adjustments on them depending upon the way they pan out in fulfilling the needs of the customers.
  1. Putting in place sales and Operations Planning

Sales and operations management played a functional role (S&OP) because the responsibility vests with them to eliminate wastes and redundancies. It is not advisable to rush into the software before undertaking an analysis of processes. Some of the processes problems could relate to (a) slow-moving or obsolete inventory, (b) unrestrained stock-outs, and (c) uncontrolled generation of the stock-keeping unit (SKU). These can result in defragmented processes, which can escalate the costs leading to the reduction in viability and profitability. Once this is done, then you can go in for customized software that would get rid of individual and manual processes and create a centralized way of sharing the data across the departments.

  1. Design the supply chain network

The ultimate goal of the supply chain is to minimize multiple handling of the product for a simple reason. If done so, it adds to the possibilities of committing errors and causing damages, which in effect results in the bloating of costs. It can be avoided by visualizing the supply chain as a link between two essential “bookends.” It comprises your ‘suppliers, the customers’ and implementing the processes by setting the service expectations of the customers on the top of the pyramid. Move downwards by establishing the lead times with your suppliers while analyzing both the fixed and variable costs would have to undertake. Alternatives that would optimize the costs would have to consider, wherein monitoring and evaluation go hand in hand to assess the outcome and corrective measures taken as and when warranted.

With e-commerce taking a central role in the way modern businesses conducted and online sales becoming a rule rather than an exception. Companies have to be aware of the role fulfillment plays in accelerating decision making. Not only just understanding its role is enough and the businesses have to invest in fulfillment operations to reap the fruits. Timely fulfillment is not just an empty term but one that has lots of practical meaning. It is wise for businesses to recognize this, and this article would help in doing so from an operational perspective.

Keywords:

SUPPLY, Supply Chain, CUSTOMER, FULFILLMENT, PROCESS, BUSINESS, OPERATION, COST, ROLE, SALE

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