In the seventh of our ‘Lean manufacturing in the digital age’ series, we explore how improving visibility and moving away from manual processes can transform your on-time delivery performance.
What is the number one objective assigned to supply chain managers? Optimising inventory costs? Greater end-to-end visibility? Improving product availability? Reducing transport costs?
Not according to research by global transport and logistics provider, Geodis (a division of the SNCF Group).
The number one target for supply chain and logistics professionals is ensuring that on-time deliveries are met.
On-time delivery (OTD) measures the ability of supply chain to distribute the right product in the right quantity and timeframe to the right location. As such, it is one of the most important methods of assessing the efficiency of your supply chain operations and has a direct impact on customer experience.
Achieving a favourable OTD score (typically expressed as a percentage) comes down to the seamless interplay of six factors:
- Inventory management
The coordination between these areas is where many organisations fall down. Each of the functions may be performing well in isolated siloes, but a lack of wider connectivity and joined-up thinking (not to mention systems and information) is preventing greater operational efficiencies from being unlocked.
Breaking down these siloes and establishing, or enhancing, communication channels had been an area of strategic focus for manufacturers; but relatively few were treating it as a business-critical priority. The Covid-19 pandemic has changed that.
Log jams and pain points
Covid-19 has struck at the core of global supply chains, disrupting large swathes of Asia, Europe and North America. Manufacturing has been one of the sectors most affected, largely because the majority of production operations still have to be carried out physically rather than remotely.
Many manufacturers have struggled to maintain their material and distribution supply routes as various countries around the world enter into or come out of quarantine. Those lucky enough to have an adequate stockpile of raw materials may not have had access to adequate labour to process it due to ongoing lockdown measures.
At the other end of the process, the tremendous volume of freight being shipped is placing record demand on logistics providers and their distribution centres – especially regarding fast-moving consumables like food and drink, healthcare and hygiene goods.
Issues such as these can all negatively impact a manufacturer’s on-time delivery performance.
However, there are some positives to be taken from the current situation; namely it has galvanised senior decision makers towards becoming more digitally enabled – something which has proven to positively affect OTD scores.
Technology is playing a crucial role in making this happen, and it’s anticipated that these shifts in technology and new ways of working may have a long-lasting impact well beyond the current situation.
Businesses who have previously been shackled by a heavy reliance on manual, paper-based processes, siloed information systems and a lack of operational and supply chain visibility are discovering a more resilient, flexible future for themselves. One which is built on real-time information, data sharing, transparency and diversified means of supply.
One such business is a Dundee-based manufacturer of bespoke, high integrity valves for the oil and gas industry.
Established almost 30 years ago, the business has grown to now supply customers working on time and mission-critical projects around the world.
As the company grew, and operations become more complex, managers recognised the need for streamlined production planning and scheduling processes. The senior team made improving OTD performance a strategic business goal – something that could only be realised with the right digital platform in place.
The team sought to invest in systems, technology and equipment in order to upgrade its operations, and improve reliability and efficiency, while also reducing costs.
Embarking on a strategy to boost OTD performance, the team was determined to improve visibility and move away from manual processes – which included a physical planning board in the machine shop and manual planning of test and assembly operations.
Any digital replacement would also need to integrate with its existing ERP system to improve information flow through the business, laying the foundations for future improvements.
The decision was made to invest in Access Orchestrate Planning and Scheduling software from award-winning provider Access Group.
Reliability you can trust
Following implementation, Access Orchestrate has enabled day-to-day scheduling, capacity, what-if analysis and scenario planning. The outdated planning board was replaced with an online drag-and-drop Gantt Chart which, due to its intuitive design, was quickly adopted by the team.
With this software in place and a concerted effort from the whole workforce, OTD performance has been transformed from an unpredictable 50%, to a reliable 90%.
More than 95% of orders are now delivered within one week, and with a continuous and detailed review of any missed deadlines, performance continues to improve.
“Orchestrate has enhanced our ability to anticipate and adapt and as a result we’ve seen a marked improvement in our delivery performance,” the firm’s commercial director explains. “Operating in the oil and gas sector, reliability and trust in our systems is essential – Orchestrate delivers the confidence our customers need.”
Improved production scheduling means it is possible for manufacturers to improve forecasting and identify potential roadblocks and bottlenecks. As a result, firms can plan how to deploy resources more effectively, to ensure greater efficiency and productivity gains.
Following the success of the project, Access Orchestrate has since been deployed across other areas of the business including engineering, quality and inspection, testing and assembly.
On-Time Delivery is business critical, but it shouldn’t be a headache to achieve it. By using technology to remove the manual admin, you can ensure your business is running Lean – and excelling.
The Access Group and The Manufacturer have a resource hub dedicated to helping manufacturers profit from Lean in the digital age.
Every Monday, we will be publishing a new article in the Lean manufacturing in the digital age series:
- The key to Lean Manufacturing in the digital age
- Is Frankenstein’s monster disrupting your Production Planning?
- Don’t let Legacy Software be the albatross around your neck
- Does your supply chain contain more holes than Swiss cheese?
- Greater productivity isn’t delivered by hand
- Could the loss of one person sink your business?
- Supply chain transparency – helping manufacturers to deliver the goods
*Header image courtesy of Shutterstock, all images courtesy of Depositphotos