On-Time Delivery

Cost effective, on time delivery is a prerequisite for success in today's increasingly competitive manufacturing environment. Companies that prosper will be able to closely match production with customer requirements while retaining the ability to react rapidly to change. This paper discusses a method for getting closer to the customer, effectively reacting to change, improving on time delivery, and ultimately improving the company's competitive position. The method makes use of shop floor and systems simplification and builds on this simplification to evolve to a more make to order manufacturing environment. The method then uses computer modeling of customer orders and capacity to make and keep delivery promises.

It is no secret to manufacturing practitioners that the world in which they are operating is tougher and more competitive. Manufacturers are facing increased numbers of competitors not just from down the block, but from around the globe. The situation is compounded by customers who are more demanding. If a manufacturer can't deliver product at the right price when the customer wants it, the customer will quickly choose another firm vying for the business.

While price has always been a key determinate in the purchasing decision, the emphasis on timely delivery is relatively new. Our fast paced society has led individual consumers to increase the time demands placed on the manufacturers who provide them with products. While the pressure for timeliness brought to bear by the individual consumer is significant, it is relatively small when compared to the time demands placed on manufacturers of components and component assemblies by their customers.

The intense delivery pressure on component and component assembly suppliers, in the author's opinion, is due to the huge amount of publicity surrounding Just-in-Time (JIT) manufactur­ing techniques. This publicity has been fueled by the success of international manufacturers who are believed to make use of JIT. As U.S. manufacturers have attempted to quickly catch up to their off shore competition, they have scrambled to make use of JIT. Unfortunately for suppliers, very often vendor programs have been the initial segment of JIT implemented.

Too often these vendor programs have been nothing more than attempts to wring immediate cost, quality and delivery improve­ments from suppliers. In many cases, end product manufacturers are significantly larger than their suppliers. Smaller component and component assembly manufacturers have had little choice but to "play ball" or lose business.

Significantly and quickly bettering delivery can help suppliers if the steps they take result in fundamental improvements in their business. Unfortunately, often the only way to meet the custom­er's demands is to hold more inventory or to outsource. Holding more inventory or outsourcing can result in increased costs and a gradual weakening of the supplier's competitive position.

The solution to the problem of cost effective on time delivery is, first of all, to get closer to the customer. If suppliers can sufficiently understand the needs of the customer, they have taken a significant step toward meeting those needs. The problem is that customers are notoriously fickle. Just when you think you know what they want, they change their minds. Or worse yet, never make up their minds in the first place.

Not only is there change in what the customer wants, but there is inherent variability in the supplier's manufacturing processes. Machines break down, operators call off sick, vendors fail to deliver, and quality problems surface. While manufacturers can do much to cut down on this variability, problems will always surface, usually at the most inopportune times. Therefore, any plan to improve delivery has to be sufficiently flexible to account for change on the part of the customer, as well as to handle the variability inherent in manufacturing environments.

--- To be continued ---

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