The Importance of On-time Delivery, and How to Achieve it
The advancement of technology has connected the world in ways we could never have imagined several decades ago. It has also brought about new expectations among people for instant gratification. We see this trend in offerings such as Amazon Prime, which offers same day delivery. Innovations such as these have totally changed the playing field for an entire industry.
Similar expectations can also be seen in the manufacturing industry, with On-time Delivery, or OTD, being constantly linked to manufacturing performance. Speed and precision have become the new drivers in the supply-chain, and are interconnected to different industries such as eCommerce, which now require new levels of predictability and responsiveness.
But firstly, let's understand what On-time Delivery is. In simple terms, it is the ability to meet agreed shipping and delivery dates. More strictly, OTD is defined as the percentage of time goods are received by the customer by the promised date. Therefore, you do not achieve OTD if the goods are sent out from your manufacturing facility on the promised delivery date.
Now that we've established what OTD is, let's understand the significance of achieving it. According to the Fourth Annual IW Census survey:
These are the benefits of achieving OTD. However, the main motivation is to keep your customers happy. This should be the main goal, as happy customers will most likely result in more future business and collaboration. It also helps to enhance your reputation and business relationships. In addition, if your customer isn't happy, you may very well be dropped as their supplier in favor of another, who is able to provide the performance they require.
As we can see in today’s market trend, OTD has become a critical success factor for manufacturers. With this in mind, it is of the highest importance that you strive to achieve it. However, achieving OTD is not an easy feat, as it requires a holistic approach that involves all facets of a manufacturing business.
This includes, but is not limited to, your own supply chain management, documentation generation and management, production capacity, human resources, and sending and receiving of payments etc. That is a lot of data and data points to manage; and without an integrated system to assist you in gathering, storing, and processing it, the chances of missed deadlines are extremely high.
The key success factors for achieving on-time delivery are as follows:
Knowing the key success factors you need to focus on, you must now figure out a way to make all your different departments and systems talk to each other. Genuinely, this might be the biggest challenge you will face in your quest to achieve OTD – consistent and consolidated communication.
Communication may be a basic and simple task, but it becomes extremely complicated when multiple parties are involved. The room for error is extremely high if there is no integrated system to tie all these components together. There is a risk of miscommunication, as everyone interprets information differently, you may have misplaced documents, obtain data from the wrong sources and many more human errors that are too long to list here.
This is why a modern and integrated ERP system will be invaluable to you. Such a system can tie all data points together into an integrated database, ensuring everyone sees the same data. A modern system can also integrate with your machines, providing you with real-time data that enables you to monitor machine failure, capacity and output levels which you can respond to and correct on-the-fly.
An integrated system also ensures all documents have the correct data, no orders are missed, and all invoices are up to date. The margin for error can be significantly reduced with a proper system in place. Needless to say, with total control of your manufacturing process, achieving on-time deliveries consistently will become a much more attainable goal.
MONITOR G5 is a complete ERP system that fully integrates all your manufacturing processes. It is the culmination of decades of experience and collaboration with our customers. We continue the tradition of working closely with our customers to continuously improve our system even today. Our goal is to provide you with the best ERP system possible; your success is our success. If you would like to learn more about MONITOR G5 and find out how it can help you to achieve consistent On-time Deliveries for all your customers, then get in touch with us. We'd be happy to arrange a demo for you.
Monitor ERP System SEA