ERP and Outbound Logistics: A Jelly Jar Case Study
Logistics is about the physical flow of materials. ERP is about optimizing the resources of a business and materials are key resources of most businesses. Let’s look at outbound ERP logistics today.
Our business exists to support our customers. Those customers might be other producers, wholesalers, or retail but we must find optimal ways to provide their needs. Imagine yourself at the grocery store. You just picked up a jar of jelly and put it into your cart. Perfect logistics might have the jelly supplier at the store adding a new jar on the shelf for the next customer. We are the jelly supplier; how close to perfect can we aim for?
Someone has to make the glass jar, the metal cap, and the paper label. Someone also has to grow the grapes. After all the ingredients are together, someone has to transport it to the store. The auto industry has gotten pretty good at this. Tires are delivered right to a production line a few minutes after the brakes are delivered with only enough time to install the brakes and move the car in process a few feet down the assembly line. That is an example of an industry that has worked hard to use just-in-time methods through ERP logistics management, EDI and other communication tools.
Your Customer’s Supply Chain
What might we do in our business to better support our customers through better outbound logistics? When we accept an order, do we tell them we will deliver in our usual four week lead time or do we ask when they want a delivery? They have always given us the same ship-to address, but have we ever asked if there was a better delivery point? Are we selling through distributors or wholesalers and possibly could provide better service with direct store deliveries? Are we providing a finished product ready to sell? Or, is some additional conversion required?
Our business exists to support our customers. Those customers might be other producers, wholesalers, or retail but we must find optimal ways to provide their needs.
We are our customer’s supply chain. Our customer wants to work with a supplier that is easy to do business with. If we handed him that jelly jar at exactly the time he needs another, how much easier to do business with could he expect us to be? Maybe if we told them we did not need a payment but that might be going too far.
Our ERP is a major logistics tool with a bevy of useful data. Use it to find ways to hand your customer that jar when he needs it and he won’t even wonder who else could provide his needs.
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