Thursday, January 9, 2014

Leveraging Complete Supply Chain Visibility for Happy Customers & Revenue

A major quick serve restaurant chain with over 10,000 store locations spread across more than fifty countries set itself a goal to improve visibility across its supply chain processes so as to prevent customer dissatisfaction and revenue loss as a result of stock-outs and missed shipments.

The Challenge:

This organization was not able to track purchase orders completely as they moved across an array of siloed ERP systems and other IT applications, from suppliers to distribution centers to store locations. When dealing with hundreds of fresh ingredients and thousands of order variations, delayed shipments, shortages and even overages can result in significant losses in revenue as well as unhappy customers.

The Solution:

The global restaurant chain leveraged visual process intelligence to help them continuously monitor the progress of fresh food and other order items through their end-to-end procurement process. The solution gives them real-time insight into bottlenecks and delays and immediately alerts their corporate procurement personnel to issues related to specific orders. In addition to monitoring orders related to replenishing supplies, the restaurant chain tracks and traces all the orders related to building out new stores – from fresh ingredients to light fixtures! The procurement team has been able to easily define and track service level agreements (SLAs) with each of their suppliers and get alerted when established thresholds are met or exceeded.

By establishing a monitoring layer that tracks the progress of every activity in the procurement process, stakeholders are immediately made aware of delays at any particular step in the process so that they can course correct. The new system tracks the time taken to approve an order, communicate the details with a supplier, get an expected receipt confirmation from a distribution center, receive a shipment notification, confirm receipt at a distribution center, update the corporate system, as well as close the PO.

Procurement planners can easily interact with the system and mark specific orders as high priority – for instance, for stock replenishment or promotional products for the holiday season and these orders are flagged as priority within the dashboards used by the distribution and transportation personnel as well.  Previously, shipment priorities were communicated using spreadsheets. Process intelligence gives the restaurant chain the ability to uncover actual supply chain patterns, analyze these processes and arrive at the optimal path. It helps them easily define and monitor service level targets for every step in the procurement process and immediately alert teams to delays and bottlenecks that can result in unsatisfied customers and potential revenue loss.

The Results:

Today, their procurement personnel benefit from the following:
·        The ability to easily track purchase orders across multiple siloed ERP and other IT systems – from suppliers to distribution centers to store locations
·        They can continuously monitor the progress of orders and reroute shipments to prevent stock-outs
·        They can easily track shortages and overages in received quantity
·        They can get immediately alerted to delays in high priority, seasonal products
·        They can get alerted if receipt of goods are scheduled on non-work days for a specific distribution center and immediately take action
·        Decrease costly emergency replenishment processes

Net; Net:

Catching emerging problems in a near real time fashion can add significant monetary results in time and customer sensitive supply chains.  By observing inflight results, immediate and significant benefits can occur, however this approach was also used to mine and visualize the paths of many orders for potential process improvements. The combination of real time monitoring and process mining for process improvement discovery is powerful and unique for supply chains.

This is a highly summarized and anonymous case study based on Vitria’s technology  

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