If you’re like most manufacturers, your on-time delivery rate could use some improvement. While it’s most critical in a “Just in Time” environment, it’s an issue for every manufacturer in terms of building customer satisfaction and maintaining a competitive edge.
A number of factors influence the ability to deliver on time. Here are a few to consider:
Improvement begins with measurement. On-time delivery is measured as the percentage of time that goods reach customers’ loading docks by the due date. That number in and of itself is important, but you can add power by routinely analyzing the figure to see what contributed to both meeting and missing due dates.
Quote realistic due dates. Unrealistic due dates have consequences — and none of them are good. You may have to go into overtime, disappoint the customer or bump another customer’s order. Take into consideration historical output data, as well as current and expected plant capacity. Don’t quote on a best-case scenario. Factor in some wiggle room for an equipment breakdown or another big customer wanting a rush order. Of course, if the customer needs the order sooner than your realistic due date, you have to be willing to add capacity.
Adopt or upgrade finite capacity and scheduling software. Managing the many variables affecting production is almost impossible to do manually. Computer programs can help enable your company to create realistic plans and schedules displayed on monitors throughout the plant. More importantly, it helps you react to changes and communicate them quickly. Software also enables you to generate “what if” scenarios so you can be prepared for unexpected events, such as an employee’s absence or a delay in getting materials.
Simplify your shop floor configuration. Do you have a traditional functional layout in which, for example, all welding work goes to a welding department? Consider converting to customer-focused cells arranged so that work flows logically from raw material to finished goods. This model is better at adapting to change than the functional model and flexibility is a key benefit of cells in terms of achieving on-time delivery.
Shorten customer lead times. The shorter the time between order entry and delivery, the fewer uncertainties you have to deal with. Manufacturers with short customer lead times tend to have the highest on-time delivery rates.