Dynamic Distribution Networks Drive Better Customer Service, Says New Aberdeen Report

A new study by AberdeenGroup (Boston), “The Supply Chain Integration Benchmark Report: Warehouse Without Walls,” reports that top-performing distribution operations follow a “dynamic” philosophy to reduce cycle time and inventory within their supply chains and still provide high levels of customer service. The research organization likens the dynamic distribution network to lean initiatives in manufacturing designed to root out waste and time and improve responsiveness to customer demands.

Key findings in the report include:

  1. Top performing companies have cash-to-cycle times that are 25% shorter than their peers and
  2. On-time delivery performance and order fill rates for best-in-class operations far exceed others responding to the survey.

“Departmental rivalries, misaligned goals and performance metrics, and poor partner management policies all contribute to a company’s inability to create more fluid and flexible fulfillment operations,” said John Fontanella, the report author and sr. v.p. of research for Aberdeen.

The full report can be downloaded for free, after entering personal contact information. It includes specific recommendations to move toward and improve a best-in-class supply chain. These recommendations include:

  1. Show one face of the company to suppliers and service providers
  2. Establish standard processes across partners
  3. Measure partner performance frequently and consistently
  4. Improve knowledge gathering through increased visibility of supply chain events and activities
  5. Resist the tendency to take back control of an operation of an underperforming partner
  6. Adopt supply chain analytical tools to monitor network performance and identify opportunities for improvement
  7. Evaluate how well your technology stack supports managing a partner network
  8. Push for wider adoption of standard communications standards such as EDI and XML

Source: AberdeenGroup.

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