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5 Common Challenges of B2B Order Management

January 28, 2017 by Nicola Kinsella, Director of Marketing

5 Common Challenges of B2B Order Management

Are you confident you can deliver orders on time, every time? No? You’re not alone. Manufacturers, distributors, and 3PLs from around the world share this challenge with you. In fact it’s just one of the 5 common challenges our B2B customers face every day. What are the others? Let’s look at the full list:

1. On-time Delivery
In the B2C world, late deliveries leave customers disgruntled. But often a simple coupon, worth only a few dollars, can save the relationship. When it comes to B2B the stakes are much higher.

Failure to meet your order promise dates can result in chargebacks or, worse, canceled contracts. And because a single customer can be worth a significant percentage of your business, this can be catastrophic.

But on-time delivery is a symptom. Let’s look at some of the causes…

2. Inventory Visibility

When it comes to fulfilling orders, the ability to see all your inventory, across all locations, is key. You also need to see which inventory can be delivered on time based on delivery times and the customer’s location.

Without this visibility, you’ll lose orders, or fail to meet your order promise dates, which leads to chargebacks and penalties. But that’s just part of the story.

The most efficient businesses can see ‘on-hand’ inventory across all locations and ‘inbound in-transit’ inventory as well. This gives you a larger pool of inventory to allocate to each order. Which brings us to the next challenge…

3. Inventory Allocation
Say Customer A places an order to be delivered next week. You allocate ‘on-hand’ inventory to that order. Great!

Now Customer B places an order that needs to be delivered the next day – just one problem – you don’t have enough ‘on-hand’ inventory to fulfill both orders. Now imagine if you could see ‘inbound in-transit’ inventory’…

You could allocate the ‘inbound in-transit’ inventory to Customer A, who doesn’t need delivery until next week, and the ‘on-hand’ inventory to Customer B, thereby fulfilling both orders… and saving the sale.

But if you’re really looking for fulfillment efficiency, you’d have a system that could allocate and reallocate inventory automatically. Not just based on customer orders, but supply chain delays that impact delivery. Why? Because it will help you more accurately address the next challenge…

4. Meet Order Response SLAs

While not every customer has order response SLAs, the big ones do. And just like failure to make on-time deliveries, penalties for violations can be severe.

Canceled orders, or canceled contracts all loom large when dealing with large customers. So how fast do they need responses to their orders?

We have B2B customers who need to respond to orders in 8 seconds or less. That’s fast. And the response needs to indicate whether they can fulfill an order, by when, and at what price. Which leads us to our 5th common challenge…

5. Complex order configuration and pricing
Order complexity takes many forms:

  • A product may be configurable, with only certain configurations being valid.
  • Customers may have special pricing
  • Customers may qualify for volume based pricing.

And here’s something you may not have considered…

  • Automatic price adjustments based on market demands.

We have one customer, a distributor, that varies prices based on the time of day an order is placed. This incentivizes customers to order at low volume times of the day, which helps them better manage their work flow. Could you benefit from more flexible pricing models?

Summary
B2B businesses face many order management challenges, but there are solutions that can help you increase your operational efficiency. So, if you can relate to any of the challenges above let’s talk!

Filed under: Order Management