Dr. Larry Lapide of MIT has written a piece here about the order promising process and some best practices for making it work better.  Larry talks about the fact that order promising is where demand and supply balancing really intersect.

This is a key challenge we talk to customers about all the time.  We’re increasingly hearing that customer expectations are on the rise while loyalty is on the decline.  The reality is that customers expect to make last minute changes now, and they expect you to commit to their changes - or they’ll go elsewhere.

Front-line decision makers throughout the supply chain need to be armed with tools to help them in these decisions.  Increasingly they are being asked to make promises to deal with the rising number of unexpected changes that are becoming the norm.  They need to be able to quickly determine if it’s possible to do what the customer is asking or not.  And, increasingly, if the immediate answer is no (after all, increasingly what the customer is asking for was not in the original plan), what is possible?  What tradeoffs could be made that would make it possible to satisfy the request of this important customer and what would be the implications of doing that?

If you can’t answer these questions quickly and accurately, then you aren’t in a position to satisfy your customers.  You risk not only losing your best customers, but you may be incurring significant costs trying to scramble to meet their needs.

If unexpected changes due to increasingly volatility are becoming the norm, the key is to acknowledge this and put processes and systems in place to arm your front-line decision makers to act quickly and decisively.

This entry was posted on Tuesday, April 8th, 2008 at 5:58 pm and is filed under Demand management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.