Supply chain managers and Researchers continue to pursue to integrated supply chain management across the business and companies. Some of the general processes in organizations show that both the sales and financial managers are happy to endure integrated supply chain management for limited targets of greater importance to them.
Sales and Customer Service practices that sacrifice supply chain performance
Practice 1: Pulling forward sales to hit a revenue target
The frequent practice in sales that deceive the supply chain is the establishment of artificial end of sales period peaks in demand by moving forth demand in order to hit a revenue number or sales objective. This means that orders are pulled ahead from the first week to the next financial period and deductions are provided to the consumers to encourage them pull their order forward.
Practice 2: Reporting “On Time in Full” measures against promised not customer requested date
A common practice of many institutions is to address their “On Time In Full” (OTIF) dispatch performance. Leading practice in the trade sector would appeal an OTIF in addition of 97 percent measured at a Stock Keeping Unit (SKU) level. The way to discard this practice is by realigning the consumer service metrics around actual consumer use.
Practice 3: Stockpiling product as an insurance policy
The outlining method for the Christmas range is often identified by mid-February and the orders are placed with the providers. The financial and the category managers are not satisfied with these limits but these limits are impelled by logistics and the supply chain, because if we don’t get commodity in by an assured time then we have this crest and we end up with a back log of stock in storehouses that doesn’t reach the store on time. The best way to survive is to do the trustworthy assessment of ordering practices and the necessity to start stockpiling month’s priory.
Practice 4: Manipulate orders in favor of financial reporting principles
This practice is guided by financial recording needs and comes with different structures and forms. New purchases are periodically held not wanting to out-perform until usage has been reported to the stock market. Shipments start again once this process has been completed. In universal organizations the charge of the obscured sales on other markets would also need to be taken into account.
Practice 5: manipulation of sales forecasts to match financial forecasts to the financial market
Excellent practice within many organizations is the monthly usage of Sales and Operations (S&OP) methods to regulate demand and supply beyond the drenching and frozen period, mostly three to 24 months out.
Source: http://www.emeraldinsight.com/doi/abs/10.1108/13598540910954511
