Becoming the Supplier of Choice
You can’t improve what you can’t measure. Manufacturers are looking for any competitive advantage they can get. So, what metrics are manufacturers monitoring and which ones are part of their continuous improvement processes?
LNS research published a group of metrics (“28 Manufacturing Metrics that Actually Matter”) that world-class manufacturers are using each day to improve their operations. These are the metrics that are getting attention.
Today, I wanted to focus on one of the metrics related to Improving Customer Experience and Responsiveness: “On-Time Delivery to Commit.” This metric is defined as the percentage of times that manufacturing delivers a completed product on schedule that was committed to customers.
In a recent survey, IndustryWeek “Best Plants” Award finalists reported an on-time delivery rate of 98.7%. Approximately 40% of survey participants had on time delivery at 60 to 90%—leaving room for improvements. Manufacturers that focus on this metric will reduce their lead times to deliver to customers as well as to always hold the delivery date—thus becoming the supplier of choice. This in turn leads to increased revenue.
Many of the customers I speak to are using very manual ways to schedule their production. Whether it is paper-based, spreadsheets, whiteboards, sticky notes, etc., these methods do not take into account the changing dynamics of the plant floor. For example, machines go down, key personnel is missing, a new rush order is entered. All of these examples have an impact on what I like to call the reality of the plant floor—which is always changing.
As a planner, you want to know what is possible as well as whether your orders will be on time. With the manual systems I mentioned above, this is not possible. I want to know well in advance if my orders will be late or whether I will run out of inventory. Those that can see in advance will be able to take action early enough to ensure production is on time and orders get to customers when promised. And this is all possible through automation.
We’ve all been on the end of disappointment on the consumer side—whether it is our favorite product missing from the shelf or a delivery date way in the future. These delays disappoint us as customers and make us start thinking about alternative suppliers.
The best-in-class manufacturers from the IndustryWeek survey that are getting 98%+ on-time delivery are the ones that will reap the rewards by taking business away from their less punctual competitors. Scheduling can boost ROI and is key in becoming the supplier of choice.
How are you scheduling your production?