Delivery performance issue

Depending on the product you produce, the sector you are in, and the customer base you are addressing, the length and shortness of the delivery time are important.

Especially those who manufacture for sectors such as automotive know well that the punctual delivery rate followed as KPI (Key process indicator) is recalculated and monitored in each shipment. It is a parameter that is calculated and sent to you by the main customer every 3 months at worst, and is queried if you fail to meet the targets (95% and above).

On-time delivery is important, but not so easy.

I have tried to briefly discuss some issues that prevent you from delivering on time with a fishbone below.

lack of delivery performance
lack of delivery performance

1- Late entry of the order: Late entry of the order received by the sales staff from the customer for various reasons, including negligence, in order to start the process. Login can be in the form of sending an email or logging into the ERP system to start the process. Regardless of what form, late entry of the order will cause a delay in the delivery date from the beginning of the work.

2- Raw material shortage: The order has been entered, you will start production, but there are no raw materials or auxiliary materials to be used for production. The reason for this may be financial reasons, inconvenience of the cash flow budget, as well as the inventory and production planning or purchasing processes not working properly.

3- Faulty production: Faulty production is wasteful in any case, but we can give an example because it prevents timely delivery. You received an order of 100 units and placed 100 work orders for production. When you make 10 faulty production in the later stages of production, you will wait for 10 to be produced again, starting from the beginning of production to complete the order.

4- Unexpected machine downtime: It is one of the 3 basic parameters that reduce productivity. When one or more of the machines that will make production after the order has entered production with a work order, the production machine will wait, delay and timely delivery will be in danger.

5- Lack of Follow-up: Since the production process is a process from entering the order to the delivery of the product to the customer; Waiting for material in front of another process step due to lack of follow-up when one of the process steps is finished will lead to a delay in the complete production process and on-time delivery.

6- Customer payment delay: In some cases, the product is finished before the date of shipment to the customer, but according to the agreement made with the customer, if the payment is received before the product is shipped, the shipment is delayed until the customer receives the payment. In practical application, keeping the product in stock for days or even weeks for customer payment after motivating the employees to keep the product on time, stressing it and producing the product on time causes the trust of the employees. “My manager, we worked overtime to grow the product, we produced it on time, but the products have been waiting in the warehouse for a week” my system may come 🙂

7- Giving an early deadline: It is best to give the customer a deadline for the order by looking directly at the ERP or by asking the production planning. In small businesses, on the other hand, since the salesperson follows the production and knows the situation instantly, it is given directly by the salesman. Even if the seller knows the exact date when they can deliver the product, they can sometimes set an earlier deadline due to customer pressure or the threat of shifting the product to another supplier. In this case, the product delivery date will probably exceed the deadline.

8- Delay caused by subcontractor: In cases where the subcontractor makes part of the production of the product as a subcontractor, no tolerance can be imposed for the delay of the subcontractor, especially when the narrow deadline is given, and the delays caused by the subcontractor will directly lead to a delay in the product delivery date.

9- Lack of personnel: Lack of personnel, which is one of the production resources, will result in the completion of production and therefore a delay in the shipment, whether due to permits or insufficient employment.

10- Change of customer demand: The customer makes changes on the agreed product after the order deadline has been given and sometimes even after the production has started, and the time taken for the implementation of these changes may make it impossible to deliver the product within the given deadline.

11- Change of priorities: Change of priorities due to purely internal reasons such as raw material delay, machine failure or the insistence of the “dear customer” causes a working product to be stopped and another product to be taken to the line and therefore to late delivery for the stopped product.

12- Incorrect deadline: Although the early deadline mentioned in Article 7 is a conscious choice, in some cases the incorrect deadline given to the customer due to the wrong information received from ERP due to the incorrect data entered in the production planning causes late delivery of the product and low delivery performance.

All of the reasons listed above may be in your company or may not be any of them, or due to other reasons not listed above, there may be late delivery and subsequent poor delivery performance.

Low delivery performance will cause you to be positioned at lower levels and less preferred, not where you want to shake your trust and image in the eyes of customers.

However, this is a problem that can be solved in a short term by establishing a system suitable for your company with a systematic work.

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