Deliver faster and reduce costs at the same time
Measures to shorten delivery times are a key success factor in modern supply chain management. Due to the continuous increase in customer expectations and the dynamics of global markets, it is becoming increasingly necessary for companies to optimize their supply chain processes. This enables them to guarantee a strong competitive edge on the market.
Short delivery times mean smaller inventories for customers and therefore lower costs. Newly acquired storage capacities and financial resources can then be used elsewhere. Furthermore, short delivery times promote the flexibility of companies to react to (unexpected) market changes, which can significantly improve their position on the market.
As you restructure your supply chain, you may be asking yourself the following questions:
- How can you optimize your supply processes?
- Which measures are best suited to your company?
- How can your stock levels be optimally managed so that costs can be reduced?
- What opportunities does digitalization open up for you to automate your processes and improve response times?
Due to highly complex products, fast delivery tailored to customer requirements is a challenge, especially for order-related manufacturing companies. valantic supports you in developing a comprehensive understanding of your requirements and challenges. In this way, suitable measures can be identified to optimize processes and significantly reduce delivery times.
Identify causes: Obstacles in the delivery processes
Delays in delivery affect customer satisfaction, lead to financial losses and a significant loss of trust, which could seriously damage your company’s brand. The complexity of supply chains, which involve numerous players and processes, continues to increase, with many factors intertwining.
The most common causes of delivery delays are
- Incorrect planning of production and sales quantities
Inadequate planning usually results in a shortage of raw materials. This can lead to production delays as relevant components are missing or are not available on time or in sufficient quantities.
As a result, the specified time frame for the completion of a product cannot be met. This significantly impairs customer satisfaction. Furthermore, additional costs can arise as emergency purchases have to be made or replacement materials have to be used in the event of bottlenecks.
- Supply chain problems with own suppliers
Bottlenecks in raw materials or other relevant components on the part of suppliers block production. This is because difficulties in delivery, logistical disruptions or even delayed transportation affect the entire supply chain.
However, as your company is dependent on timely delivery, such delays have a significant impact on the production schedule. They throw it off balance and, in the worst case, can lead to a standstill.
Technical faults, defects or errors in the machines are frequent reasons for production stoppages. But force majeure, such as natural disasters or other unexpected events, can also cause delays. Such problem situations usually require extensive repairs or the use of spare parts. This not only slows down production processes, but can also put a financial strain on your company.
An unexpected increase in demand has the consequence that production processes are overloaded if they do not havesufficiently flexible structures.
Processes in the handling of orders and in logisticsthat are in need of improvement impair the smooth flow of deliveries. This is because delays in warehousing as well as in shipping and transportation lead to products being delivered outside of the time frame. In addition, poor coordination and communication between the individual work levels can impair the effectiveness of the supply chain.
- Faulty performance promises or service level agreements (SLAs) that cannot be implemented
Failure to meet agreed service levels, particularly with regard to delivery times, reduces customer satisfaction. The reason for this is a lack of compliance with the procedural and technical possibilities, which can also have legal consequences.
Long-term benefits for all parties: You benefit from short delivery times
Short delivery times offer your company both operational benefits and a clear advantage over your competitors.
Successful supply chain management: measures to shorten delivery times
If you want to shorten your delivery time efficiently without having to fear a loss of quality, you should consider the following points:
1. Introduction of supplier management
Comprehensive supplier management enables your company to identify bottlenecks and delays at an early stage and react flexibly to them. In addition, continuous measurement of your partners’performancehelps you to identify potential risks and strengthen your own security of supply. This reduces dependency on individual suppliers and promotes the stability of the entire supply chain.
2. Development of a company-specific measurement methodology for delivery performance
The implementation of suitable company-specific KPIs helps you to keep an eye on and measure your delivery performance at all times. One example of this is the On-Time-In-Full (OTIF) KPI, which focuses on reliability and efficiency. It provides a valuable basis for analyzing and specifically improvingdelivery processes.
Such performance indicators are a relevant tool for continuously monitoring internal aspects such as on-time delivery or delivery quality. They make it possible to precisely assess the efficiency of the entire supply chain. Risks and bottlenecks are identified at an early stage so that you can take effective measures to shorten delivery times.
3. Integration of dynamic inventory management
Dynamic inventory management helps you to keep high delivery promises. Flexible warehouse management makes it possible to manage materials efficiently and respond quickly to orders. This means that customer requirements can be fulfilled without having to maintain high stock levels. Continuous adjustment to current order quantities and market trends will reduce your storage costs and delivery times.
4. Sustainable and resilient planning processes
Develop resilient planning processes on the basis of which you canreact flexibly to fluctuations in demand and plan the optimal use of resources. Precise resource planning that focuses on the optimal use of raw materials, production capacities and machines significantly reduces the risk of bottlenecks. It also ensures that customer ordersareprocessed on time.
5. Optimization and digitalization of production and outgoing goods processes
Digitized production and outgoing goods processes shorten internal throughput times. Automated processes and the use of digitally networked systems lead to a seamless and speedy process flow. With the help of digital control, deliveries can also be optimally plannedand coordinated.
6. Suitable choice of location
When choosing a locationand planning the warehouse structure, always focus on the customer in orderto ensure proximity to them. Strategically positioned warehousing ensures that the required products are available quickly. At the same time, a well thought-out warehouse network ensures that delivery routes remain as short as possible. This reduces delivery times and promotes customer satisfaction.
Optimal implementation of strategies in your delivery structures - an application example
Initial situation:
A global manufacturing company that primarily operates in make-to-order mode was faced with considerable challenges:
- Declining competitiveness due to long delivery times
- Increasing inventories of raw materials, which led to higher costs
- Inconsistent planning at departmental level without a cross-departmental and synchronized overall process.
Procedure:
A comprehensive approach was chosen to address the existing problems:
- Conducting a holistic analysis of the supply chain and sales structure to identify weaknesses and optimization potential.
- Design and implementation of a global Sales & Operations Planning (S&OP) process
- Development of a standardized process that is accepted company-wide.
- Step-by-step implementation to ensure smooth integration into existing processes.
- Implementation of training measures to train employees and ensure process acceptance.
- Handover of analysis templates to enable independent use and continuous improvement.
Results:
The implementation of the S&OP process led to significant improvements:
- Reduction in delivery time by approx. 18
- Optimization of working capital by around 12
- Increase in efficiency in the order-to-delivery process by around 17
These successes strengthened the company’s competitiveness and sustainably improved its position on the global market.
Turn your vision into reality: Female Digital Impact
