Fill-Rate Management with OpsVeda
Most customer orders need to meet a minimum fill-rate at the order and line level for the same to be shippable. Fulfillment processes are geared to meet this requirement. The order gets confirmed if the fill-rate can be met by the requested delivery date (RDD) based on inventory on-hand and anticipated receipts. The current process helps streamline fulfillment, but also leaves money on the table. This is because it disregards possibilities of higher fill-rates through common sense interventions — Requesting additional time from the customer, Pulling-in purchases, Expediting inward shipments, or Shipping from alternate locations.
OpsVeda’s fill-rate management app intelligently prescribes these interventions and enables the fulfillment team to realize higher revenues, better SLA adherence and improved customer satisfaction levels.
Challenges
Fulfillment processes are geared to meet this requirement. The order gets confirmed if the fill-rate can be met by the requested delivery date (RDD) based on inventory on-hand and anticipated receipts. The process helps streamline fulfillment, but also leaves money on the table. This is because it disregards possibilities of higher fill-rates through common sense interventions:
- Shipping from Alternate location
- Requesting additional time from the customer
- Pulling-in purchases
- Expediting inward shipments
- Shipping from alternate locations.
Solution
The app examines all order lines that meet minimum shipment fill-rate threshold but have an allocation that is less than the order quantity. Next it executes a set of algorithms in a configured sequence to prescribe ways to bridge the gap:
Shipping from Alternate Location
This algorithm examines if all or part of the customer requested quantity is available at a shipping location different from the default one for the customer. Depending on the configuration and shipping costs, the algorithm will identify the quantities to be shipped from each location.
Request Additional Lead-time
The configured allocation sequence is considered by this algorithm to evaluate if additional stock that will arrive after the RDD can make up the shortfall. If the quantity gap can be bridged then the system will suggest that the customer be requested for more lead-time. The customers to whom such requests can be made and the maximum possible extension beyond RDD are configurable. The response of customers to such requests will be tracked and AI/ML algorithms will learn from the data to further refine the prescriptions.
Pull-in Purchases
This algorithm evaluates the possibility of requesting suppliers for an early delivery so that the quantity shortfall in the order line can be met without compromising the RDD. Configurations include suppliers to whom such requests can be made, the notice period for such requests, and the maximum days by which the purchases can be pulled in. The supplier responses to such requests are tracked to enable AI/ML algorithms to further fine-tune the prescriptions.
Expedite Inward Shipments
Sometimes it is worth expediting inward shipments to meet one or more customer orders. This algorithm compares the expedite costs to the incremental revenue or gross margin to decide if the cost of expediting can be justified. Factors like the customers whose orders merit this consideration, and the minimum incremental revenue/margin can be configured.
Adapting to Your Processes & Rules
The app is configurable and can be adapted to mirror your process nuances. The applicability and sequence of execution of algorithms can be configured at a very granular level to account for product, customer, and supplier considerations. The selection of order lines for fill-rate improvement can be filtered by configuring minimum thresholds for increase in fill-rate or allocated quantity or revenue. Individual algorithms also have configurable parameters, as explained above.
Benefits
The OpsVeda fill-rate management application combines OpsVeda’s platform capabilities with specifically crafted algorithms. Thus, it enables the user to boost revenues and customer satisfaction through proactive interventions in a productive manner boosting. The fill-rate management app impacts revenue positively in a direct as well as indirect manner as described below.
Higher Revenues
The app enables the organization to fulfill a higher portion of customer orders. Hence, revenues increase.
Improved Customer Satisfaction
Increased fill-rates not only improve SLA adherence but also improves the customer’s perception of your processes’ reliability. This results in higher satisfaction levels which generally results more orders and hence more revenue. It also has a behavioral impact and reduces the propensity to pad up orders in the hope of getting a higher allocation of scarce products.
OpsVeda is an enterprise software company on a mission to make customer operations immensely agile and profitable, through operational intelligence and AI-infused automation. Powered by patented technology and passion for business agility, OpsVeda solutions deliver predictive visibility and prescriptive automation towards opportunities, risks, and exceptions across the business functions of order fulfillment, supply, manufacturing, logistics, inventory, assets, and channel / retail. OpsVeda customers span consumer-packaged goods, food and beverage, fashion and retail, industrials, manufacturing, and high-tech industries.