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On-Time Delivery: The Measurement that Matters
By: Simon Kaye
Posted: November 2, 2011, from the November 2011 issue of GCI Magazine.
Beauty brand owners function in a high-pressure environment that emphasizes the here-and-now. Systems and structures are seen as important in some contexts— for example to identify and resolve quality control problems. But the industry’s logistics parameters in today’s global sourcing supply chain often are not viewed with the same structured perspective. Getting the latest urgent shipment in on time is what matters.
This fits today’s emerging supply chain paradigm for all industries, which has changed from emphasizing cost alone to emphasizing service and reliability as cost drivers. Complete and timely delivery is a critical measurement of service and reliability, and this is synonymous with the integrated transportation management systems used to coordinate every phase of the process—from contractual activity, to delivery and cost finalizations. The goal is to eliminate the guesswork, backtracking and delays that waste time. With a focus on measuring and achieving on-time delivery, all other key performance indicator (KPI) measurements fall into place.
There are numerous KPIs to measure logistics performance. However, just-in-time shipping requirements and expense from wasted fuel and delayed customs or security clearance make on-time delivery KPI number one. Complete and timely delivery is synonymous with planning and preparation. When planning is incomplete, the resulting inadequate information flow and poor organization will create preventable and costly problems when it comes to measurable efficiency in global sourcing.
Establishing measurable standards and aligning them to the cosmetics shipper’s requirements is a step-by-step process that should mean supply chain management with capabilities to:
- Provides upstream control of ASNs (advance shipment notifications);
- Receive, verify and transfer product;
- Manage inventory and import/export requirements;
- Process customer inquiries, select carriers and route shipments;
- Identify all customs and security regimes that apply to the shipment;
- Undertake warehouse and inventory management;
- Schedule deliveries.
Putting such a detailed process in place is the foundation for efficient supply-chain. The use of such best practices in supply, scheduling, transportation, stocking and quality enables brand owners and shippers to build a common framework for understanding what is expected of them, and makes such issues as cross-border tariffs, taxes, regulatory and licensing requirements easier to deal with. When combined with effective use of International Commercial Terms (Incoterms) and modern electronic tracking systems, the entire process creates predictability and consistency.