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The white paper “Making the Case for Lean Process Lead-Times” does an excellent job of both describing the opportunity landscape and benefits of a serious effort to apply Lean principles to the administrative side of the Order Fulfillment process.

It is also important to differentiate between what might be strictly waste (anything that doesn’t add value from the customer’s perspective), and what might still be required (or in other words is still essential to ensure that value is delivered). A good example is the process around capturing and confirming the customer requirements. This sub-process is completely unnecessary in a retail store where the customer physically selects the product, but when that same product is going to be purchased on-line or over the phone, a communication occurs that is necessary to ensure that the customer acquires what he wants, but it really won’t increase the value of the product that gets delivered. In fact, any activity between the order and the delivery represents both opportunity and risk.

The opportunity is to reduce that activity to the bare minimum of what is essential and therefore improve the customer experience while minimizing the cost. The risk is that every step in a process typically introduces defect risks that threaten the customer experience and cost management. The challenge then is to engineer the essential elements of the process in a fashion that embraces “mistake proofing” and performs adequate validation on that objective before implementation. It’s never been easier to lose a customer and a single bad experience may mean they will never return.

The other key point of this article is that a Lean Order Fulfillment process must not be just “Change Tolerant”, but “Change Enabled”. The difference between these two conditions are really night and day. Have you ever wanted to change a hotel or car reservation on-line? How easy was it to do? With-out naming names, for years I used one primary car rental company but as the volatility of my travel increased I grew increasingly frustrated over the change process and very often just booked a new reservation rather than canceling the old one. The issue was that the change process required that you have the reservation confirmation ID at hand and there wasn’t any alternatives offered to find the reservation through other means. Think of all the waste that I introduced by not canceling the original reservation. Finally, my guilt and frustration resulted in a change to a different car rental company.

I’m sure that you’ve probably also noticed the increased trend towards encouraging people to order their product or service directly over the internet. This move isn’t just about reducing the amount of human touch time involved in the fulfillment process, there are other enormous advantages including the direct role of the customer in selecting and confirming their desires before the order is placed. On several occasions I’ve placed a phone order and only after receiving the email confirmation did I find that the address or product purchased has been entered incorrectly. The self service side of the internet eliminates many of these risks but it introduces new ones such as;

1. How easy is it for the customer to get information on the specific product or service of interest? I quickly abandon sites that are too complex or slow in this regard.
2. How easy is it to navigate through the ordering process? If I want to make changes, can I do it easily without losing other information I may have already provided?
3. How quickly can I get to the complete cost for the service or product including taxes and shipping?
   Is the product availability confirmed or a projected ship date provided?
4. Once ordered, is it easy to get status?

If you think about the questions above, a poor job in any one of these areas represents a serious risk of customer loss. If done well, it becomes a competitive advantage while simplifying the order and confirmation process.

As the article clearly articulates, efforts to reduce the Order Fulfillment cycle time offer significant benefits to both the customer and company provided they are implemented in fashion that also delivers a good user experience and minimizes any quality risks.

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Tags: Customer service, Demand management, Lean manufacturing, Order Fulfillment, Supply chain flexibility
Posted in Demand management, Lean manufacturing
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