Multiple strategies exist for managing the order fulfillment process. At one end of the spectrum, customer orders might be filled from a finished goods inventory (BTS), while at the other extreme, even the raw materials might be procured to order (PTO). Building a stock of finished goods can be both costly and risky, yet sometimes it is necessary to meet customer requirements. Balancing the right order fulfillment modes for different products and markets is therefore of crucial importance, both from cost and serviceability point of view.
Key Questions
- Which setup of order fulfillment processes (PTO, BTO, CTO, BTS) meets customer requirements with minimum cost?
- What is the additional cost and risk of offering shorter delivery times?
- How much extra does the customer have 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 can propose the optimal order fulfillment process for each product and market. This process minimizes supply chain cost while fulfilling customer requirements. The solution can be reviewed with every new product introduction, new market introduction or change in customer requirements.