|Description|| Perfect-Order-Fulfillment The percentage of orders meeting delivery performance requirements (à see Delivery-Performance-KPIs in 2 separate KPI-description documents) è see REMARK section of this document on judgement regarding tolerances (e.g. on DATE and QUANTITY) with complete and accurate documentation and no delivery damage. Components include all items and quantities on-time using customer's definition of on-time, and documentation - packing slips, bills of lading, invoices, etc. - A product is considered perfect if the product ordered
is the product provided. - A quantity is considered perfect if the product ordered is provided
in the ordered quantity. - A delivery is considered perfect if the location and delivery time ordered
is met upon receipt. - A customer is considered perfect if the product is delivered
to the specified entity.
è The product has to be delivered exactly to the specified ship-to-party and
its given address, which could be different from the party´s own location ("delivery of construction material to a construction site for housebuilding") - the business partner customer consists typically at least of 4 distinct roles, which are sell-to-party, ship-to-party, bill-to-party, and paying party. - Documentation supporting the order line is considered perfect
if it is all accurate, complete, and on time. - The product-condition is considered perfect if the product is delivered /
faultlessly installed (as applicable) according to specifications with no
damage, customer ready, and is accepted by the customer. Faultlessly
installed (as applicable), correct configuration, customer-ready, no damage,
è On one hand proof-of-delivery / installation note signed-off by the customer would be a typical example for customer feedback collection. The customer explicitely agrees, that installing and finalizing was done appropriately.
è On the other hand a customer complaint (e.g. with the customer service dept. at the call-center of the own organization, giving reference to a specific sales order) would be a clear indicator, that something was definitely not perfect. Please keep in mind, that a perfect order could still turn into an imperfect one, since complaints could be risen even after the first sight quality- inspection, so after the receipt of a proof-of-delivery at the own organization... The concept used, is applied in an generic way, so to be applicable across the different levels of perfect xyz fulfillment, regardless whether schedule-lines, order line-items, or an order on header-level is in focus.
|Interpretation|| Discussion: The performance of the supply chain is considered "perfect" if a commitment made to a customer is met through the supply chain.
*Level 1 is at the order level, Level 2 is the order line (i.e. SAP R/3 SD "line-item level"), and Level 3 is the components (i.e. SAP R/3 SD "schedule line level").*
An order is defined as a collection of one or more order lines representing a request to deliver specified quantities of goods or to render specific services. The order can further be defined as a request (with a specific identifier as a reference) to deliver specified items or to render specific services with specific prices, dates, and quantities. Commitments are made to a customer at the order line level, where an order line is defined as a line representing a commitment on a sales order. An order line always references a product or service.
For an order to be considered perfect the following standards must be met: - Delivered complete; all items on the order line are delivered
in the quantities specified - Delivered on time to customer's specified date, using the customer's
definition of on-time delivery - Documentation supporting the order including packing slips, bills of lading, invoices, quality certifications, etc., is complete and accurate
è As long as we do not face issues with the documenting papers by
# the customer
# the 3 rd party carrier / 4 th party logistics provider
# at the customs authorities
# by other authorities (like the police etc.)
we assume them to be perfect - all these parties will definitely let you know, it there are issues, they will simply reject the delivery or block the transport (so in a learning organisation this will only happen once - Faultlessly installed (as applicable), correct configuration, customer-ready and
accepted, no damage, on specification
Often for date and quantity issues (and occasionally product) a range rather than a strict value is used. This is acknowledged as a standard practice; in those situations the standard measured is considered to be met perfectly if the range specified is satisfied.
The term "customer-ready" for the perfect condition standard may imply a subjective component based on the customer's satisfaction. Although condition may not be as rigorously measured as time or quantity it should be considered as a component if available, especially since this attribute measures performance of the supply chain which is, of course, ultimately measured by its customers.
It should also be noted that a corresponding evaluation of suppliers' performances could be determined by extending these standards to each supplier's ability to source products. Data Collection (does not apply to POF_overall, stated here for reference, only): Data for the components that are used to drive the calculation of supply chain performance are primarily taken from Deliver and impact Deliver Enable process elements. These are primarily associated with the original commitment (Customer Order Processing) and the satisfaction of that commitment (Receipt and Installation (as appropriate)). In addition, the documents necessary for support of the supply chain process should be scored across the set of Deliver process elements. The Enable Deliver Process Element - Assess Delivery Performance should be updated from metrics derived. Metrics: The Perfect Order Fulfillment calculation is based on the performance of each Level 3 component of the order line to be calculated (product, quantity, date, time, docu-mentation, condition, and customer). For an order line to be perfect, all of the individual components must be perfect.
The calculation of line item perfect order line fulfillment is based on the Level 3 components: - Each component receives a score of 1 if it is judged to be perfect. - It receives a score of 0 if not perfect.
è see REMARK section of this document on judgement regarding tolerances
If the sum of the scores equal the number of components (in this case, 6 - see Figure 1 the 6 boxes at the bottom in the middle) the order line is perfectly fulfilled. The com-ponents required to calculate schedule-line / line-item perfect order fulfillment are:
|Calculation Formula|| Generic calculation scheme:
Perfect Order Fulfillment-Outbound = (Total No. of Perfect Orders-Outbound / Total No. of Orders-Outbound)
|Unit of Measure||%|
|Direction||Meet target value|
|Industry Relevance||ALL industries that incorporate physical goods (different variants of use).|