It’s that time of the year when all of us are basking in the holiday mood, spending time with family and eating tons of goodies. Of course, when it comes to
Christmas, we all demand that long-awaited Christmas gift! So what do I want for a Christmas gift? Wait …… before I even start thinking about what gift I
want, that gift has to arrive on time before Christmas. Can you imagine the horror look on my face when I receive it right AFTER Christmas? No gift to
unwrap …… absolutely nothing! And I’m pretty sure there’s no Santa Claus coming down the chimney to deliver that wonderful gift for me. And I’m also not
expecting one of those futuristic Amazon Delivery Drones to come dropping gifts from the sky!
Before I introduce the topic of delivering the “Perfect Order”, let’s look at some interesting news headline here:
Cyber Monday setting shipping records this year: FedEx, spurred by online cash cows like Amazon.com, expected this Cyber Monday to hit 22 million shipments worldwide — double its busiest day six years ago and twice its off-season daily average.
Cyber Monday Expected to Break FedEx Shipping Records: FedEx reports that they are expecting Cyber Monday to be their busiest day in the history of their company as they ship more than 22 million boxes around the globe, an 11% increase from last year.
So now, you may ask, what exactly is the “Perfect Order” that you might have heard me saying that millions, if not, trillions of time when I deliver that TM
presentation? Alright, here’s a revision:
The “Perfect Order” is one such order which it is delivered to the right customer, at the right time and at the right place using the “best” route. If we were to
apply the same methodology to Mill Products companies, that mean that the Mill Products companies have to send their shipments to the right consignees at the right time (when their customers need it) and at the right delivery locations. That’s what we call good “customer service” with all these on-time deliveries
so that you won’t upset your customers.
You might think this sound easy, right? The answer is “No”. It’s not that easy. For any Mill Products company that have to make so many shipments daily, they have to ensure that the deliveries not only comply to the above rules (which is to be delivered to the right consignees at the right time when they need it), but also, they need to know how best to send their deliveries. They want to make sure that the shipments are sent using the most optimized route with the most efficient, economical and reliable carrier.
Still think that’s an easy task. Think further. Most of the Mill Products companies operate on a razor thin margin line. And, transportation and logistics cost
itself will account for almost 8-10% of their operating cost. So, imagine, if you were the CEO of a paper company and your profit margin is a mere few percent points, would you try to “squeeze” out of that 8-10% of your transportation cost to increase a few more percentage points in the bottom line of your
Plus, there are a host of constraints when it comes to deciding on the most optimized routes – Do you want to follow the company factory calendar when it comes to sending your deliveries? Is there a certain sequence for you to deliver your shipments to various customers in the same area without having to make unnecessary detours? Also, how do you best manage your carriers so that you get the best deal out of your carrier? And for Mill Products companies who are ISO14001 certified, you have to make sure that you have a low carbon footprint and have environmental procedures that are in place to ensure a sustainable end-to-end production – by having an optimized transportation process not only lowers your carbon footprint but also results in the conservation of precious resources.
As you can see, delivering the “Perfect Order” isn’t as easy as what you think. Thankfully, we have SAP TM to help solve some of these problems and to help the Mill Products companies to be a step closer to delivering that “Perfect Order”.
And I hope you will receive the right Christmas gifts on time before the 25th Dec.
Merry Christmas to you all!