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Re-Stapling Yourself to a (Multi-Channel) Order
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Supply Chain Graphic of the Week: Savings Impact of Dynamic Routing


This Week’s Supply Chain by the Numbers for May 28, 2010: Machine Tools Investments looking Good; Perrier Sales going Flat, as Green Bottle doesn't mean Green Image; No Slow Steaming for Ocean Cargo Rates; Your Supply Chain Managers may be Looking for New Jobs


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What was the median performance (half above, half below) for on-time shipments to customers, based on the just released DC Metrics report from WERC?

Click to find the answer below
Re-Stapling Yourself to a (Multi-Channel) Order

As we cruise into a Holiday weekend here in the US, some thoughts on a subject I covered many years ago, and that’s the idea of “Stapling Yourself to an Order.”


The notion was first popularized in a classic Harvard Business Review article dating all the way back to 1992 by Benson Shapiro, Kasturi Rangan, and John Svioloka (Shapiro the most well known of the trio.) The piece has been republished as a “classic” by HBR a couple of times since then.


“The truth is that every customer’s experience is determined by a company’s “order management cycle” - the ten steps, from planning to post sales service, that define a company’s business system,” the article says early on.


For awhile, there were some order management vendors in the market which used to talk about the concept that “the order is king.”  You don’t hear that much anymore, and I am not sure why  – except I did hear it last year from Rick Odorico of building products supplier Dal-Tile, who unprompted used that exact phrase in a Videocast we broadcast last year.


In general, we have certainly become better and much more highly automated in the traditional order management process since 1992, when Shapiro, Kasturi, and Rangan wrote that “Each step in the OMC requires a bewildering mix of overlapping functional responsibilities…Each step is considered the primary responsibility of a given specific department, and no step is the sole responsibility of any department.”

Gilmore Says:

"For many companies, there is a lot of good that could be done from re-stapling yourself to an order, maybe not in the physical sense of the paper orders we had back then, but with the same conceptual foundation of following your version of the OMC from start to end."

What do you say?

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your Feedback here

By the way, here are the 10 steps of the Order Management Cycle that the article defined:


Order Planning: Design of the order management process

Order Generation: How and where orders will be solicited and acquired

Cost Estimation & Pricing: Providing quote or price to customers

Order Receipt & Entry: Capturing a new order and starting the workflow (manual or automated)

Order Selection & Prioritization: What orders are most important, and how will they be handled sequentially?

Scheduling: Moving the order into a production or fulfillment plan

Fulfillment: Delivery to the customer

Billing: Customer invoice process

Returns & Claims: Handling any returns or complaints about damage or other product issues

Post Sales Service: Service and support activities (warranties, replacement parts, etc.)


There is a certain “timelessness” to these 10 steps, and certainly they can be used as a starting point to document a company’s own order management process. The article makes the axiomatic point that “every time the order is being handled, the customer is being handled at the same time.” (As an aside, I have a copy of the original HBR article, and just might be able to send you a copy upon request at the Feedback button below, assuming the numbers aren’t so large as to have Harvard Business Press attorneys sending letters to us.)


But even today, does any one person in a company have a full grasp of the full order management cycle? Probably somewhat more today than in 1992, for at least major parts of the OMC. Many companies have well defined and executed streamlined “order to cash” processes, as the most obvious example. Technology today can drive more integrated process than software was close to delivering almost 20 years ago, when our latest generation of supply chain managers was still in grade school.


But I am not sure how many companies have a single manager that owns the OMC. And in many, I still think customer service reps probably understand the OMC and its challenges better than anyone else in the company.


As the title the article suggests, I think there still may be lots of opportunity to “staple yourself to an order,” and literally walk through that order management cycle, especially from a customer’s perspective, while also for looking for internal inefficiencies and other areas of improvement.


But there is another important difference between 1992 and today. Back then, we had much higher levels of vertical integration, and sales channels were relatively simple. Today, we have increasing outsourcing, virtualization, and a dizzying array of channels (note: the vending machine channel is coming, as it already has for Apple and others, and is widely used in Japan).


So I posit that today, we have to staple ourselves to a “multi-channel” order as well, which is a bit different that how we might have thought about it in 1992. Stapling yourself to these orders will often involve a more virtual, information-based journey than the almost pure physical one Shapiro and gain were envisioning (though there is much value in that too).


Just think of and now WalMart, Home Depot, and I am sure many others which are vastly expanding the drop ship model, taking e-commerce orders and firing them off to tens of thousands of suppliers. Just imagine the potential for fulfillment variability there.


We in fact wrote a report about this earlier this year, which you may or may not have seen. It is available of course for download: Re-Staple Yourself to an Order Report.


This whole scenario has led a growing number of companies to look to create “order hubs” – central repositories of customer orders that in turn manage the supply and fulfillment sides of the OMC across distributed channels. I don’t have room right now to go into much detail, but here is a very summary illustration from the report:



Larger/Downloadable Image


So I suggest that for many companies, there is a lot of good that could be done from re-stapling yourself to an order, maybe not in the physical sense of the paper orders we had back then, but with the same conceptual foundation of following your version of the OMC from start to end, with a special attention to the complexities of virtualization and multi-channel fulfillment.


If you haven’t done it lately, it may be time to do it right now. Process naturally deteriorate, as most know, and I suspect for many they will find the customer is being “handled” in some ways that could be improved.

Have a good Memorial Day weekend for those in the US.


Though we may have gone electronic, is there still value in “stapling yourself to an order?” Does anyone at your company really own the full OMC process? How is the virtual, multi-channel world impacting this? Let us know your thoughts at the Feedback button below.

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We received a few nice letters on our piece on Supply Chain Core versus Context, that used author Geoffrey Moore's framework for thinking about Outsourcing. That includes our Feedback of the Week from

Christine Topoulos of Finance Specialists Group, who says there are other ways to think about "Insourcing."

Another writer says Moore may have borrowed a bit too liberally from others for his book.

On other topics, one writer says former CVS SVP of Supply Chain Kevin Smith was right-on in saying SCM execs need to very upfront with all employees about what is happening internally, and another says our blogger David Schneider didn't give enough credit to the growth of hydrogen powered fork trucks.


See these and more below.

Feedback of the Week - On Core versus Context:


It is fun to see that the traditional square box model still in use but this time for outsourcing and insourcing decisions. On the financial side of this equation antidotal evidence appears to indicate that companies have started looking at fixed asset mobility as a way to optimize their production/supply chain capabilities. Equipment purchased for overseas manufacturing in the last 3-10 years is being imported and installed into North American operations (not just the US) for a variety of reasons. Some of this equipment is already fully depreciated even though its value in the production cycle is still good to excellent.

One indication of this trend is on the logistics side of companies that are looking for appraisal valuation specialists to determine customs duty costs at import entry filing.

It may be a trickle right now but as the cost of global manufacturing starts to change again, re-importing and insourcing may start taking

Insourcing can have a financial value that some companies have forgot.  When cash was flush and banks would lend to anyone for anything, where you produced product was not import for accounts receivable financing and longer-term equipment financing. 

Today, banks are cutting back lending for international transactions and the trick is to manufacture in a country that will provide financing based on a government export program.  In the U.S., if your manufacturing is greater than 50% US content (before profit margin) commercial bankers can tap into one of two U.S. government financing programs without using their own capital or at reduced rates.  That can mean the difference between getting funding or not for many businesses - large and small. 

This is one more reason to think strategically about the tradeoffs of insourcing and outsourcing.  If you are a logistics manager, make sure you talk to your finance team when contemplating supply chain moves.  Remember even the manufacturing side of Free Trade Agreements can have a financial impact on supply chain optimization.

Christine Topoulos

Finance Specialists Group

More on Core versus Context:



My first thought is that this is a brilliant way of defining “core"

Not just the typical “things that we do better than anyone else can”, but evolving to a focus on what draws the customer to our products and services. 

One additional thought – core or not, innovation needs to encompass the supply chain.  It is not enough to simply push “context” activities to third parties, you must leverage the innovation of those parties to facilitate market dominance(or at least a respectable market share).  Apple, long known for innovative products (we will have to wait for iPad’s future bombshell idea), does not invent everything itself.  Many of the major features of its products are being brought to it by innovative suppliers.  Apple leverages those innovations to create a win for themselves, and a win for the supplier who benefits from Apple’s hugh market potential. 

This is, in part, the rationale behind the Vested Outsourcing movement.

Steve Murray

Principal Consultant and Chief Researcher

I’ve read all of Moore’s books and in my opinion he has made many solid contributions to the world of business.  However, that said, I think he is trying to take advantage of Hamel and Prahalad’s “core competence, core platforms, core…………” with his definition of “core”.


Al Cole

Partners network international, LLC

On Kevin Smith Interview:


I strongly agree with what Sir Kevin Smith says that Honesty is the best policy & Tell people what you know when you know: I believe that for subordinates to perform well there must be a personal touch maybe emotional support from your manager.

Sometimes we tend to be superior in all aspect but we forgotten the feelings of our subordinates which somehow affect their productivity and effectiveness in performing their job. As a manager we act like the head of he family which oversight all their children merits and demerits.

Leonor P. Cruz/Vendor Development Specialist-SCM


On Alternative Forklift Power Sources:


I enjoyed the read but I was surprised to see such a lopsided attention to fuel cells given the lead in about covering all negative and positive points. What about the drawbacks with battery-operated forklifts? I saw no attention to the time it takes for batteries to charge, the associated capital expense of needing to own many batteries per vehicle and the manpower needed, among other points.   

Also, I was surprised to read that there's not a large interest in hydrogen fueled forklifts.  We're seeing something different: By the end of 2008, there were 200 hydrogen fuel cell-powered forklifts in operation in the United States. These forklifts consumed at least 20,000 kg of hydrogen and were in operation at 16 sites in 9 states.

In October 2009, there were 450.

The population of hydrogen lift trucks has doubled in size each of the past two years and is projected to double again by the end of 2010.

Patrick Serfass
Vice President, Technology and Communications
National Hydrogen Association


What was the median performance (half above, half below) for on-time shipments to customers, based on the just released DC Metrics report from WERC?