Multiple strategies exist for managing order fulfillment. At one extreme, customer orders will be filled from a finished goods inventory, while at the other, even the raw materials are procured to order. Building a stock of finished goods is both costly and risky, but sometime necessary to meet customer requirements. Selecting the right order fulfillment processes for different products and markets is therefore essential, from a cost and serviceability perspective.
Key Questions
- Which setup of order fulfillment processes meets customer requirements with minimum cost - for example Build to Stock, Build to Order, Configure to Order, Procure to Order?
- What is the additional cost and risk of offering shorter delivery times?
- How much extra does the customer need to pay for improved service levels?
- What is the minimum delivery time that can be sustained without incurring lost sales?
Order Fulfillment and SimFlex
SimFlex determines the optimal order fulfillment strategy for each product and market. This minimizes supply chain cost while fulfilling customer requirements. The solution is then revised based on a change in customer requirements, or for each new product or market introduction.