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Industry order fulfillment styles visited

April 26, 2010 1 comment

In my quest to find out more about order fulfillment styles I have arrived at few findings/analysis:

1. Order fulfillment is basically a supply-demand driven process.

2. Various types of order fulfillment styles include some of the following:

  • Configure-To-Order or Assemble-To-Order
  • Build-To-Order or Make-To-Order
  • Engineer-To-Order or Design-To-Order
  • Quote-To-Order or Inquiry-To-Order

Order Fullfillment Cycle

Order Fulfillment Cycle

Lets take up Configure-To-Order style:I go to a fast food nearby and glance at the food menu and place an order for a takeaway(time constraint). When I am very hungry and when its lunch time I decide to have a 3 course meal.I choose minestrone soup and green salads as an appetizer, some white rice and Dal(Indian gravy) as a main course and finally among the desserts I would chose my favorite chocolate mousse. The hotelier would have raw food stocked up in his kitchen beforehand.Immediately after I placed an order, the chef at the kitchen cooked the raw food got packaged them in some containers and I bought it home and fulfilled my hunger. This whole process followed by the hotelier to provide me with 3 course meal can be viewed as Configure-To-Order process. In the manufacturing world Configure-To-Order is a method of manufacturing which allows you, or your customer, to select a base product and configure all the variable parameters associated with that product. Based on the configurable items on each quote or order, Configure-To-Order (CTO) systems typically generate the manufacturing routing and/or bill of materials based on features and options such as color, size, etc.This process is also known as Assemble-To-Order.

Lets take up Build-To-Order style: Build-to-Order has been the capability to quickly build standard or mass-customized products upon receipt of spontaneous orders without forecasts, inventory, or purchasing delays. Laptop purchasing is one of the best Build-to-Order examples. Build-to-order laptops, or Custom Laptops, are systems that are designed and built specifically to suit customer needs and wants. As such, every system would be unique to the person who orders through build-to-order process and would usually take just a few business days to assemble, test and deliver it at the customer’s door-step.

Engineer-To-Order or Design-To-Order: Engineer-To-Order is a order fulfillment style whereby finished goods are built to unique customer specifications. Assemblies and raw materials may be stocked but are not assembled into the finished good until a customer order is received and the part is designed.Products are complex with long lead times, typically months or even years.Unlike standard products, the customer is heavily involved throughout the entire design and manufacturing process.Engineer-To-Order companies build unique products designed to customer specifications. Each product requires a unique set of item numbers, bills of material and routing.

Quote-To-Order style:In a typical Quote to order style OEMs contact Suppliers for components through Request for Quotations. Suppliers in turn would check Inventory and contact their Suppliers if required for stock replenishment / supply price negotiation. Suppliers would then get back to the OEM with a Quote (known as Bid in certain cases). After resale price negotiation with the OEM the Supplier ships the required quantity to the customer. Post which the Order is placed and the invoice is generated. Such a style is also known as Inquiry-To-Order process.

It would be a great help if you can provide me links/references to the above discussed order fulfillment styles.

Best Regards, Ajit

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Different tribes have different tastes

April 11, 2010 Leave a comment

Different people have different tastes for food. We often go to restaurants and the waiter provides us the menu card and that is exactly when the greatest of all problem arises – to make choices.We have to make our choices to satisfy the taste buds and same time tighten our pockets.Often we end up ordering the wrong dishes. I had been to McDonald’s yesterday to have some burgers. It took me several minutes before I could place an order.The reason being not able to decide on the burger. The same thing happens even at Domino’s Pizzas or a lot of other eateries. The confusion is less when we stick to one particular item and be satisfied whereas its almost a nightmare when we don’t understand which one to order.”What if” we find a solution to such a problem.

A Really Quick Restaurant

McDonald's - A Quick Restaurant

In the Configuration management world we can term all the food items to be “Products” belonging to a specific vendor like McDonald’s or Domino’s. We could have configuration systems in place at these vendor locations and provide consumers with  options to make their selection based on minimal inputs. For ex: Item – Burger, Cost – $10,Vegetarian/Non-Vegetarian,Taste -Hot/Sweet/Sour and then provide a  list of choices that satisfy all these inputs.The consumer happily makes the best and cost effective selection and the vendor becomes known as a quick service restaurant.

Best Regards, Ajit