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FDP (Fulfillment of Demand process)

The main challenge most organizations face today is how to make sure that all SKU, all the finished goods are available at the final consumption points be it dealer or retailer by 100% with no stock out, no over stock of inventory and it is not dependent on sales demand planning or any other unpredictable factor. Is it possible to let outbound logistics govern this entire process and manage in such a way that neither there is over stock or out of stock situation at any retail consumption point?

We took it as a challenge and developed a web based IT tool which is a very robust solution based on actual sales at the final consumption dealer/retail point rather than a best possible prediction/projection of future sales and associated replenishment requirement. This tool not only give us accurate replenishment shipment plan based on actual sales at end consumption point but also gives production requirement for the manufacturing to plan SKU wise production.

All our IT modules are supported by a robust monitoring and governance tool (Dash Boards) which serves as a kind of visual control to manage any deviations or outliers displayed in the form of various color codes. In our product configuration we have two such control towers, one for monitoring the outbound shipments and second for monitoring the overall inventory levels at all critical points in the outbound supply chain. This control tower helps Logistics process to take a leading role in making sure that the matrix of 100% fulfillment is met all the time optimizing cost and finish goods inventories across the complete outbound supply chain.

At the retails/dealers end which is the ‘last consumption point’, actual consumption is recorded through Dealer management system. Dealers may have their own ERP system or it can be as simple as a excel work sheet or any other digital tool where daily consumption is recorded on daily basis. FDP tool is integrated with the dealer management system and it automatically fetches daily consumption data as an input for overall replenishment at various points based on actual sales consumption.

At plant level the manufacturing requirement is calculated based on actual Consumption of the day at all retail points fed to their legacy system; be it SAP or oracle. All the processes of manufacturing, planning, scheduling is done by the legacy ERP system. The FG yard at plant level is the derivative of consumption pattern multiplied by manufacturing lead time comprising of complete resourcing, procurement and all the work center based lead times in the plant.

For one of our clients in a recent implementation we have achieved more than 99% availability with reduction of 30% in finished goods inventories in outbound supply-chain.

FDP Control Tower

FDP control tower visually displays actual fulfillment status real time across all dealers and SKUs region wise and deport wise. We have taken seven SKUs and 17 dealers across all regions of the country

Benefits

  1. Dealers need not do extensive planning; the entire replenishment is automatically done by the system for him as per his actual consumption pattern. They can be rest assured that inventory is kept for his consumption in his relevant depot or stocking points and this inventory will become available for replenishment automatically as soon as actual sales are realized at his end. Also all the problems due to carrying excess inventories because of improper sales projects, obsolete models and slow moving SKUs also get eliminated automatically freeing up the space and cash flow for the dealers.
  2. For sales team, there is no need to do monthly forecasts or sales demand planning and there is no need to know come out with 6 and 7 revisions for the month to adjust the forecast in accordance with fluctuating market conditions both at macro and micro levels. They can have clear visibility of shipment so he can be rest assured so whatever its consumed its already fed by supply chain outbound. And he can focus on his 100% on sales growth rather than inventory chases here and there.
  3. Finance- Looking at the current dynamic market conditions its more than very clear that no one can predict the future very accurately even for short-term or mid-term. The markets are growing really unpredictable, sometime it is pandemic, sometime it is recession, sometime wrong policy here and there, sometime in bumper sale due to a very good festive season etc…... So there is very remote possibility of getting any forecast or estimation which is accurate enough. A truly PULL system is the future and companies must produce and what is consumed by the market. Replenishment of FG inventories across the outbound supply chain also must be in line with the actual consumption from the market. FDP ensures that the PULL system if followed in its true sense where; if pull is lower inventory is lower sales/marketing will have to really do something to create a higher pull. The current system of PUSHING the excess FG inventories through the entire outbound supply chain will not work anymore.
  4. Outbound transportation function- ATL’s E-logistics tool gives a complete visibility through a control tower for better monitoring and control of movement of FG throughout the outbound supply chain.

FDP & Logistics execution put together has the capability to mitigate the risk due to current uncertain market dynamics and sales challenges of perpetual over stocking or under stocking leading to excess inventories or sales loss. It also mitigates challenges of transportation by giving a complete virtual environment to monitor and govern all shipments. It gives complete visibility to our end customers, dealers, all consumption point owners and transport service providers. All the required information for managing the entire end to end process is available via our platform to respective process owners virtually and visually through control towers. It is a total end-to-end integrated solution where complete visibility of how FG is getting consumed and how and when the consumption will get replenished is available to respective process owners real time. We have ensured that overall effort from sales side is heavily reduced and logistics become touchless. Across the entire outbound supply chain our clients have realized 40 to 50% reduction in efforts with the use of out platform.

Business result depending vary from industry to industry. On an average we have delivered 5 to 6 % reduction in the overall logistics cost and 30% reduction in FG inventory in entire supply chain. We insured that our IT platform is unified and all stake holders are very well connected. The deployment efforts for our platform are less than 2 to 3 months. We have the experience of working with all types of logistics service providers and industries for the last 15 years which helps reduce the overall deployment time significantly for any new implementation. Our whole process plus IT suits is a simple plug in. Using our managed services where we own the whole process at ATL and ensure a 4PL kind of ownership of complete outbound logistics and run it effectively meeting all the required client matrix either onsite or offsite.

Logistics Execution Model “e-Logistics”: A truly touch less process

‘e-Logistics’ is the second critical pillar of our IT platform. It takes feed from FDP or from the legacy system through the sales order module which has all sales orders fed into the system (through delivery order, stock transfer notes between one stock point to another stock point etc) and then subsequent logistics operations to fill all the inventory stock points throughout the supply chain.

‘Dock management’ is also there with all the capabilities of receiving window for the truck, inbound and outbound and then scheduling its delivery /picking from the dock. Depending upon applicability and visibility required by our clients, we deploy appropriate hardware based infrastructure with dock management system which is fully automatic. For a few high volume clients where TAT time is a critical requirement, we have achieved a TAT time of 20 mints from gate-in to gate-out.

This entire in-plant logistics we have is web based and mobile app based applications makes it completely touch less.

Benefits of e-Logistics

  • Touchless

    This is a virtual environment what we have created for the entire outbound supply chain. Our e-logistics solution absolves any need to have invoices, POD, Proof of compliances etc in hard copy. e-POD is generated by the mobile App provided to service providers and dealers after the FG reaches its destination. Our platform makes it possible to receive invoices digitally through e-logistics tool rather than hard copy bill. No need to send any hard copy docs to any logistics executive or anywhere. All the critical financial, compliance, inspection and e-PODs etc. are digitally available for any future reference all the time. We digitally store critical data for 3 to 10 years depending on client requirements and all this data are easily accessible, retrievable, recordable and verifiable all through the process including at accounts payable stage. All internal and external communication happened through mobile APP and control tower call center. From any remote location staff can operate the complete end to end process from virtual truck entry, docking and gate out and from procurement of logistics services to settlement of fright invoices. There is no need for large teams to be stationed at the base plant for managing the logistics and freight settlement invoice.

  • Cost and effort saving

    We have seen as is high 5 to 6% reduction in overall logistics cost by implementing our e-logistics for solution. There is significant savings in overall efforts required by logistics team, sales, service providers and accounts payable team. The entire effort of pushing inventory, follow-ups typically accounts for as high as 50% of logistics, sales, and accounts payable team’s time. The movement of inventory in our platform is done by the system rather than other manual follow-ups and processes; now no more manual communication. Traffic sequencing and E-bidding also reduces procurements efforts and costs significantly. Auto posting and approval of freight bills significantly reduces efforts and costs for the account payable team.

  • Customer connect/Alert to client

    When it come customer connect. Customer delight as I said we have given all the authority at the destination end to rate, track all the shipment they have ordered.

    They are the complete owners for deciding if they have received shipment what they asked for in terms of quality, quantity, photo imaging and feedback etc. They also rate the overall support given by the logistic helpdesk for whatever query they raised. It is no more a black box situation from them, every step in the process is clearly visible to all the stake holders. In fact they revived alerts at all critical steps in the process. For service providers even account payable also is far simpler and faster. They are able to provide feedback and also rate service providers on various parameters digitally, every time they receive shipments.

  • Transport service provider

    For transport services provider, doing business with the client company is much easier and transparent. They get daily region wise feedback on their performance along with areas of improvement.

    The feedback is provided to service providers on their drivers , truck condition, TAT etc. They are more because of timely payments are received because of e-POD, e-invoice digitally and automatically flow smoothly through the system without too much of paper work involved. Now they get invoices through electronic mode and time, date, shipment details and financials are quite easier to understand and legible with no fear of losing the paper invoices. They save on courier charges, and hard copy charges. They can now focus on their core activities rather than interactions and communications with logistics and sales teams.

Outbound Shipment Management Control tower

This is the exact image of one of the control towers operational at client site. As shown, trucks in transit are zero because of the pandemic situation currently. India wide, it gives visual representation of all shipments. You click on any icon of truck, to get the complete shipment level details. You can track and check the shipment for any SKU, any transport and any model of the product; if a particular model is going to be late or on time, this is a real time transport management system. On right hand side call center details like toll free number etc are available to all the stake holders; drivers, dealer, clients, to connect the help desk any time for any query. Although they have mobile application and there is no need to call but still if they have to, then all relevant information on how and who to call is available to them. They also can send e-mails or just use the mobile App. Logistics centralized help desk is for converting whole plant logistics and converting it as a helpdesk for all the plants. Help desk can manage all the shipments operating as one centralized function for all origins and depots using the platform and call center set-up. They take proactive approach for managing all outliers and deviation. If some trucks are going late, under break down, stoppage at a location more than the standard norm, accident etc…Rather than sales team or dealer or client’s logistics staff doing the response helpdesk manages the entire show. Help desk is well connected to all the stockholders also if response or query of the end customer is not getting resolved. They connect back to all the stake holder just to ensure that they are getting required services on time. Help desk also send regular updates and messages/ alerts to respective stakeholders.