For most manufacturers, on-time delivery is seen as a bonus, not a requirement. Even though this metric can be incredibly valuable to the company and its clients, too many businesses are unable to meet such strict demands, and thus tend to treat is a luxury, not a defining characteristic.
However, if you want to upgrade your company to world-class status, then we would argue that on time in-full delivery should be your primary focus. After all, this is what will keep your customers happy, and it will set you apart from the rest of the crowd.
Unfortunately, this is easier said than done. Nonetheless, it’s not impossible. Today, we’re going to outline the different steps that you can take to make sure that you can achieve near perfect delivery every time with a lean supply chain. It will take time and a lot of effort, but you should be able to rise to the challenge.
Make Perfect Delivery a Priority
This seems like a bit of a redundancy, but the fact is that too many companies are worried about costs to make anything else their top focus. However, there is a way that you can make your supply chain leaner to offset the costs associated with ensuring on-time delivery, so the first step you have to take is making it your priority.
But what difference will this make? Well, when you make something your primary objective, then it’s easier to adjust everything else to make it a reality. So, if cost-reduction is your current goal, then you will invariably sacrifice delivery to make that happen. However, if change gears, this metric will be the standard by which all of your operations are measured.
Overall, it becomes easier to achieve your goal because all of your systems are working towards it.
How to Create a Lean Supply Chain
Since cost will always be a mitigating factor, the best way to cut them is to streamline your operations. While it’s always nice to run a lean supply chain, the reality is never as easy as your plans and projections. Still, there are several things you can do to make this happen.
Be More Realistic with Projections
This is probably one of the hardest things for companies to do correctly because it’s almost impossible to know what the demand is going to be like for your products. However, one of the more common issues that comes out of inaccurate projection is that you wind up with a lot of inventory on hand.
So, the first thing that you can do is start revising your projections so that you can make them as accurate as possible. One way to do this is to plan out for both the next month and the next year at the same time. This will enable you to develop a more comprehensive strategy that can be adjusted on the fly.
How long does it take for your staff to pick and pack an order? What about your dock to stock ratio? If you are running behind on daily operations, then it can add up and affect your bottom line. One of the best ways to improve these metrics is to have technology on hand that will make things much more efficient for your staff.
RFID tags and scanners, digital data management, improved networking between workstations; all of these changes can add up to less time spent on each order, which can lead to huge gains. Also, restructuring your inventory can help alleviate redundancies and ensure that picks are more accurate and take less time.
Reduce Stock Variation
It should go without saying that having 100 products will be much easier to manage than having 1000. As such, you should take steps to consolidate and remove redundant items that could be creating issues for both your accuracy and efficiency.
- Analyze all your products and find out which ones are the most and least profitable. See if you can remove those that aren’t making money.
- When upgrading products, make sure that you have an aggressive plan in place to remove outdated stock before rolling out new items.
- Group like products together and have managers perform analysis on each group to make it easier.
- See if you can upgrade to a new product that can consolidate older versions so that you can reduce your overall inventory.
Overall, it’s much better to deliver fewer products on time than to carry a wider selection if it costs you time and money in the long run. If something isn’t necessary for your bottom line, then get rid of it.
Reduce Lead Times
Even if there are many elements to your supply chain, your goal should be to make each one as efficient as possible so that you can cut your lead times down substantially. This can include improving your order process, your packing times, and your relationships with your suppliers. If you can reduce your lead time by a day, that can have huge potential in ensuring that you are always on time with delivery.
When on-time near-perfect delivery is your primary goal is you must analyze every segment of your supply chain.
Every time you save a few minutes or a few dollars, it will add up to the point where you can not only cut down on costs but improve your company’s value to your clients by meeting or exceeding their expectations.