Accelerating eCommerce growth is critical for B2B enterprises. This includes value-added services, new customer experiences, markets, and business models.
However, the B2B commerce landscape is very complex (e.g. multi-brand, multi-region, multi-enterprise supply chains), with specific needs around advanced inventory segmentation and intricate product and service configurations. Existing applications such as an enterprise resource planning (ERP) systems or commerce platforms were not designed to address B2B order management complexity. Enterprises require specialized software to deliver consistently excellent and profitable B2B commerce experiences at scale.
It’s a high-stakes pursuit because relationships are forged on your ability to reliably deliver performance-based products and services to customers that aren’t just critical to their business, but also to their customers and downstream supply chain participants.
What does it take to get this right?
- Visibility into inventory, wherever it resides within your organization – including the multiple companies and divisions you’ve acquired – and across your extended ecosystem of resellers, partners and suppliers.
- Perfect order orchestration, consistently deliver the perfect order while managing large order volumes, intricate product and service configurations, and a growing fulfillment network.
- Focus on the customer, whatever they need today or tomorrow, starting with setting the right expectations – with dynamically configurable products, accurate prices, professional quotations, and speedy allocation planning of products, production components, service parts and people – and following through with exceeding delivery and equipment uptime requirements.
Relying exclusively on your ERP system and customer service team to manage through this complexity and consistently deliver value to your customers – and your business – isn’t enough. You need industrial-strength order and inventory management applications integrated with a supply chain control tower that complement your ERP system so you can respond faster to an ever-changing world, predictably meet your customers’ expectations and strengthen business performance. Falter and you risk losing customers and damaging your reputation.
IBM Sterling Order
Large industrial companies, including wholesalers and distributors, often grow by acquisition, which creates a fragmented view of inventory.
Siloed repositories, disparate ERP systems and disjointed processes across business units and partners lead to redundancies in inventory (and associated capital costs), higher shipping costs and costly backorders because there’s less flexibility for product disbursement.
“The next big thing in the logistics market is to evolve from a service provider to an order orchestrator for our customers in order to provide efficient management of all orders in a global spare parts distribution network – connecting regional and local distribution networks and removing redundancies in inventory and transportation.”
— Markus Sontheimer, Chief Information and Chief Digitalization Officer of Schenker AG
Lack of visibility into vendor-managed inventory and inventory consigned at customer sites such as warehouses, creates more blind spots. Companies providing logistics services, and those companies who rely on those services, need added visibility into inventory at rest and in transit.
If you’re in the business of durable equipment, machinery or vehicles, and rely on an assured supply of parts and services to keep them running, you face additional challenges due to variable demand and supply of inventory over the life of such assets. It’s difficult to plan for what will be needed, where and when, as assets reach their age thresholds for repair, particularly given variability in operating environments – in a factory, a farm, a quarry or on the road.
With a fragmented view of inventory, management and fulfillment become chaotic and costly. What’s worse, your customers feel the pain if they have to search for what they need across each company division or business unit they work with, and place separate orders.
How can you bring clarity to chaos to reduce inventory levels and create a better financial picture?
Simplify complex B2B inventory actions through unified multi-enterprise inventory visibility, insights and alerts. Better visibility into inventory helps you optimize stock levels to reduce overall carrying costs and reduce shipping costs, while guaranteeing the fulfillment of orders and fewer backorders.
With more flexibility in planning and real-time available-to-promise data, you can map demand to supply across your ecosystem. Dynamically prioritize the allocation of products, parts and people to be responsive to critical customers while maintaining the lowest cost-to-serve. A consolidated view of inventory also makes it easier for customers to do business with you. They can find what they need in a single spot and place one order.
“Previously, if a customer was looking to buy valves, for instance, they might have had to interact with four separate divisions. Today, we can present that same customer with a single view of all the valving solutions they offer, so they can quickly find the product that are most relevant to their needs, all in one place.”
— Bob McAdoo, Vice President, Worldwide Business Systems, Parker Hannifin
Complex orders are a fact of life.
A single order can consist of 30-300 lines (or more) with parts and services, and often has complex configurations with multiple dependencies. Fulfillment of each line might require another purchase order, production order or work order, with extensive bill of materials and tasks to assemble a finished product and coordinate with a third party to manufacture the product or install the part at the customer’s site.
Complex business policies may further add rules and restrictions around fulfillment, allocation, backorder and substitution. Distributors and wholesalers – especially those managing after-market spare parts – can have a huge challenge managing post-sale service orders such as returns, exchanges and emergency purchases. To respond to their customers with agility, they need to work across multiple vendors, product lines and thousands of parts.
These business complexities in orders, fulfillment and pricing can make it nearly impossible to ensure your customers experience a smooth, predictable, error-free order experience every time. Moreover, complexity sometimes creates a culture of manual overrides, reprioritized rush orders, excessive backorders, cancellations and customer disappointment.
How can you provide customers a better journey?
The more complex your order management process, the more opportunities there are to automate it. You'll be empowered to deliver a better, frictionless customer experience that includes:
- Executing large volumes of complex orders flawlessly, including intricate product and service configurations and fulfillment types
- Providing accurate delivery estimates by unifying production schedules, sourcing options, and inventory availability across multiple entities
- Monitoring KPIs such as on-time and in-full (OTIF) to manage effectively against customer SLAs
Success hinges on your ability to respond to a request with a promise of an order and move from purchase to fulfillment quickly and accurately. Driven by full inventory and order visibility, order orchestration works with and extends your ERP system and can serve as the glue across multiple systems handling sub-processes. Intelligent workflows with collaboration and automation support dynamic pricing and allow you to quote and process orders faster. Embedded AI accelerates smarter sourcing and fulfillment decisions, and enables the agility to adapt to disruptions and get ahead of them. Partner-facing portals improve operations so that better customer service permeates your ecosystem.
Manufacturing giant, Parker Hannifin Corporation, rolled out a global order orchestration framework, enabling it to receive, ship and accept returned orders from anywhere. Tight integration with the company’s warehouse management environment ensures a seamless, end-to-end ordering process—from purchase to picking and fulfillment.
Now deliver on more customer promises.
Business risk sits across multiple sectors. The below industry examples highlight why servitization is so impactful:
- Harvest season arrived a week early and the parts required to service the combine on a farm still haven’t arrived, significantly impacting a farmer’s revenue potential.
- Every hour an MRI machine is down can cost a hospital thousands of dollars and jeopardize the health of patients.
- An airplane that reaches a mileage interval needs to undergo priority maintenance within a tight service window to avoid being grounded for air safety regulations.
Equipment uptime is a significant contributor to any customer’s reputation. To limit their exposure, customers want assurances you’ll deliver the right product, part and service at the right place and time for the right price. They use contracts based on Service Level Agreements (SLAs) to hold you to that promise and impose penalties if you don’t deliver.
Meeting SLAs presents its own set of challenges if you’re in the aftermarket arena, serving multiple customers each with different SLAs covering parts and engineers to get the work done at client sites. And B2B companies evolving into servitization, folding services into product offerings, face similar challenges. Whichever sector you operate in, your challenge is to keep customer promises – profitably.
“Historically our business has had to run B2B fulfillment processes manually because of our legacy systems. With IBM OMS, we have the capability in a consolidated platform to provide realtime inventory visibility and optimized order orchestration for our eCommerce channel which will result in a better customer experience.”
— Mohit Jain, CIO at Fleetpride
How can you live up to your customer promises?
Start by setting the right expectations with inventory and order management capabilities that work in concert with your ERP system. Gain the visibility and agility you need, for example with configure-price-quote accuracy, so you make commitments you can keep. Quotations that factor known availability of products have a higher chance of keeping their promise, especially when demand exceeds supply. Strong inventory allocation planning allows you to address the demand-supply imbalances based on real-time data, analytics and customer contracts.
Across the supply chain ecosystem, you need to track orders from request through fulfillment, and manage the people, processes and technology that touch the order as it moves through its lifecycle. This allows you to meet and exceed delivery deadlines and equipment uptime requirements, build and maintain brand loyalty, and avoid penalties.
With the ability to monitor KPIs such as on-time-in-full (OTIF), vehicle-on-road (VOR) or expedited freight, you can ensure you’re complying with customer SLAs. With real-time decision-making insights every step of the way, you can use these KPIs to be confident you’re delivering on more customer promises profitably.
Leading B2B organizations are leveraging purpose-built order management software to accelerate B2B commerce growth and profitability.
Let’s take a look at the value of augmenting your existing systems with IBM Sterling Order Management.
As part of a Total Economic Impact (TEI) study, Forrester conducted a series of interviews with Sterling Order Management B2B customers and determined that organizations achieved a 170% ROI*, on average.
The interviewed organizations cited the following key investment results:
- Improved visibility into inventory across all channels. Sterling Order Management delivers enhanced inventory views across different partners and channels.
- Reduced complexity. The consolidation of multiple systems and views promotes a single source of truth across complex B2B ecosystems.
- Improved speed to order fulfillment. Interviewees reported an improved ability to fulfill orders as a result of efficiencies throughout their complex operations across multiple partners, channels, and customers.
How can you extend your existing systems to master order complexity?
Every B2B company has an established technology footprint with an ERP system as a core system of record. ERP systems are the workhorse of your company’s operations and excel in inward-facing operations like finance, HR, master data, stock-keeping and long-term forecasting and planning. When the execution of every order line is contained within the four walls of the enterprise, ERP systems can sufficiently support traditional planning, procurement and replenishment processes. But they were never designed to handle complex orders that include lines that need to be executed outside of the enterprise, such as services, scheduling technicians, coordinating other external resources and reverse logistics.
ERP systems also aren’t built to be flexible and agile to scale-up to accommodate business changes. Because they are monolithic and batch-based, you can lose critical hours when you need to execute requests within a two-hour SLA window. If a business shift requires a change in configuration or extending the core business logic of the software, monolithic systems tend to be inflexible and require a huge spend on software customization and change requests.
How IBM can help
For enterprises looking to accelerate B2B commerce growth and profitability in a highly complex landscape, IBM Sterling Order Management is a multi-enterprise order management solution that helps enhance customer experience, increase revenue, and improve operational margin. With IBM’s order and inventory management solution, you can simplify complex B2B inventory actions through unified multi-enterprise inventory visibility, deliver the perfect order consistently while managing B2B complexities, and reduce manual effort and costly errors by digitizing processes and automating workflows.
IBM Sterling Order Management is an unmatched solution:
- Built for B2B: Purpose-built for complex, multi-enterprise B2B order management needs, allowing you to quickly fill critical gaps in ERP and commerce platforms.
- Adaptable: A modern architecture and platform agnostic deployment means your order management technology adapts to your business strategy, not the other way around.
- Lower TCO: Achieve lower total cost of ownership with accelerated development, resource-light transformation and always-on commerce.
The diagram below shows how ERP and IBM Order Management software (OMS) complement each other. We have broken down the core capabilities into three areas: capabilities that only an OMS can provide; those that ERP solutions could provide to a degree but are stronger in an OMS; and those that are core to ERP.
|ERP Only||OMS is strongest||OMS Only|
Take the next step
Be seen as a leader in satisfying high customer expectations and complex requirements. With our years of experience and extensive ecosystem of partners, IBM can help you become more customer-centric so you can keep the promises you make and build trusted relationships that deliver value to your customers and your business for decades.
Learn more about the potential impact IBM Sterling Order Management can have on your organization.
*Forrester, Total Economic Impact Study, “IBM Sterling Order Management Enables More Efficient Relationships Among B2B Businesses, Their Partners and Their Customers,” February 2020.