Why order automation is key to flexible logistics

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Disruptions force flexibility in logistics

When asked about today’s logistics challenges, Koen De Waele points straight to the disruptions of recent years. We have had the COVID-19 epidemic, but also, for example, the container ship that turned entire logistics structures around the world upside down due to its blockage in the Suez Canal. Closer to home, he also sees challenges in traffic congestion, but equally practical in finding drivers for long-haul transport. Not to mention geopolitics in a broad sense. Logistics will have to be especially flexible in the future. Classic issues such as, for example, where are we going to keep stock - close to the market or centralised - will have to be rethought.

Cooperation in the logistics chain is the new standard

Basic automation within the logistics sector is, according to Koen, more than natural. But these ERPs are focused internally and not on collaboration in the chain. You are never alone in a logistics chain, there is sourcing, there is warehousing, in short, a whole chain of stakeholders who influence assignments that succeed each other.

Outsourcing transport used to be obvious, but now slowly but surely all parts of the chain follow, such as warehousing, operational processes in general, to even sourcing. Moreover, batch sizes are getting smaller and smaller, so the complexity in the logistics chain is growing.

Moreover, that logistics chain is also moving further and further towards the end customer. The logistics job used to consist of one-to-one transport from the supplier to the factory. In the next step, the distribution centre was added. But today, it goes all the way to the shop and even to the end customer if we think consumer. But in B2B too, this trend is starting to take hold.

So there is a need for transparency. Not only what is the status of my parcel, but also is the item available for an order round? So the solution in B2B shifts from holding stock to linking the information of those stocks. Which, of course, benefits cash flow. Working capital at 0 interest is completely a thing of the past.

Technology and tooling uplift the operational process

In classical order management thinking, we think mainly in terms of personnel. You need many hands to do manual order entry. And scaling up is only possible by recruiting extra people. Only, they are becoming scarce here too, and nobody today is eager to do boring, repetitive work.

An added disadvantage, all the information is in those people's heads and not in systems, which, when they leave the company, creates a gap in that information flow. Moreover, order entry has to master all contracts, because every customer has its specificities, its price agreements, its delivery terms....

If you want to be a game changer in technology, good, correct and coherent information is a mandatory starting point from the start. Because information arrives today via different channels, structured like EDI, but also unstructured via e-mail. This is where we can already intervene technologically via AI and its language model. That way, we can put orders in the chain as structured data and benefit from that qualitative data further on throughout the collaboration.

The role of humans is changing from intake to control, which is a lot more efficient. Time is no longer used for input, but for refining the order in terms of information. That may not benefit sales, but it provides a solid basis of information for subsequent systems such as WMS, TMS, etc.

Automating partial processes pays off, but start with order automation first and foremost

How do you start with such automation? Large all-encompassing projects that take years and not only require major change management, but also usually cripple ongoing processes for a long time, are out of date. This monolithic solution used to be there out of necessity because getting applications to communicate was a big challenge. Today, with the world of APIs and UXs that can be aligned, this hurdle has been removed.

Do take sub-processes in hand, though, thinking strategically about the sequences in which you elaborate. What for the WMS, TMS, customer portal, and order management? Can you perfectly hang a solution on top of an existing unwieldy structure today and work step by step? It's more efficient and faster.

The strategy whereby Hyperfox hangs the order management part in front of the existing classic ERPs is therefore the right starting point, according to Koen. If you look at that sub-process, you see that companies take on more than one role. They are often simultaneously manufacturer, distributor and player in e-commerce. So you get this complexity of back offices, each of which has to handle specific sub-processes. A classic ERP is not built for that.

A correct order automation tool has to support all those different channels to transform everything that comes in to that structured data. And also pass it on to the follow-up process, such as fulfilment. But in between, there is another big issue, the complexity of business models. Every customer has their own trajectory. It requires solid domain knowledge. And that is precisely where that back-office has to start showing its added value....

The result is higher performance and value creation per employee.

Customer portal as the final piece

From the questions asked by listeners during the talk, we learn that a good customer portal can be the final piece of a solid logistics and operational automation in the philosophy of best part solutions.
It can provide answers to queries from customers looking for status information of their order, but you can also force customers through the portal to provide not only correct but also complete data with an order, which can also be the source for work contract compliance. And of course, it is the unique source for the ‘single source of truth’.

Everything starts with a good order automation platform, but it also forms the final piece every time!

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