Improve delivery reliability

Delivery reliability is not just a KPI – it is a key to customer satisfaction and long-term market success!

Johannes Rauh, Senior Consultant

Challenge #1: Lack of transparency in production control

Many manufacturing companies still either do not record their extensive company data at all or use it inadequately. In the production environment, this can be seen, for example, in paper-based processing, booking points that cannot be used specifically for optimization or irregular bookings and system breaks. In addition, companies sometimes miss out on optimization potential due to a lack of real-time data. This is not only a major risk of error, but also a waste of resources. As a result, a clear picture of your production processes cannot be generated, problems and weak points cannot be identified and the effects of improvement measures cannot be monitored.

Another aspect related to transparency in companies is key figure management. Incorrectly or insufficiently defined key figures often do not have the desired effect. Weaknesses can often be found with regard to lead times and delivery reliability: Lead times are often not recorded at all or not stringently defined. For this reason, they can be understood differently from department to department or only evaluated inadequately – for example, only from the warehouse to production to dispatch.

In order to reliably determine the effects of changes and to improve and measure your delivery reliability, it is important to correctly define the area to be considered: Do you deliver directly from production to the customer or is there a finished goods warehouse from which you draw at short notice, thereby keeping the delivery time perceived by the customer to a minimum? Depending on the initial situation, it may be sufficient to only look at certain sections of your supply chain. Even if data is available and key figures are clearly defined, the challenge is to use this data continuously through regular evaluation, interpretation and implementation of improvement measures.

Challenge #2: Fluctuating demand and unreliable supply chains

Across the entire supply chain, there are various fluctuation effects that pose significant challenges in the manufacturing industry. Thinking down the value stream, this starts directly with the first link in any supply chain: the customer. Fluctuating ordering behavior caused by seasonality, upward or downward trends and inconsistent customer requirements have a major impact on the entire upstream processes. Strong volume fluctuations therefore require short-term capacity adjustments – both upwards and downwards. Changing product requirements on the part of customers, in turn, require a production network that is as flexible as possible and capable of mapping the required variance. In general, very few customers are prepared to accept long delivery times or inaccurate delivery forecasts. In order to be able to respond to these customer needs in the best possible way in competitive market environments and improve delivery reliability, responsive, flexible production with defined and ideally short lead times is required. The entire supply chain should therefore be viewed holistically.

Suppliers can also represent a further uncertainty factor. Delays in the delivery of raw materials or components, low availability of critical components or even the complete failure of individual suppliers can have a significant impact on the supply chain. Such failures are usually difficult to predict and can result in customer orders not being fulfilled on time. The possible consequences range from increased procurement costs and production stoppages to a loss of customer confidence.

Further challenges arise across the entire supply chain. Fluctuating inventories and a lack of transparency regarding material flows as well as a lack of coordination between sales, production and SCM make smooth sales & operations planning (S&OP) difficult. The difficulty here lies in reconciling external factors such as volatile markets with internal factors such as available capacity. In these situations, good companies stand out from the best, as they are able to react quickly to new requirements through a flexible production system, smooth S&OP and short lead times, without customers suffering as a result.

Flexibility in the supply chain is the key to not being unprepared for market changes.

Johannes Rauh, Senior Consultant

Challenge #3: Bottlenecks in production

Difficulties in the supply chain are not only caused by external factors. Especially in your own production, you are usually aware of the causes of delivery delays, for example due to disruptions in your own factory. Nevertheless, many companies lack the necessary transparency to clearly identify bottlenecks. A frequent trigger for delays in the supply chain is the breakdown of machines and systems, including machining centers or test benches. The causes range from outdated technology and insufficient materials to incorrect operation. Troubleshooting can take a long time, especially with complex machines or entire production cells. This has a direct impact on the ability to deliver.

The short-term absence of personnel, especially in key positions, can also lead to serious disruptions. Sickness-related absences of employees with central core competencies can cause serious disruptions to production.

But even if production runs smoothly, bottlenecks can occur. Inefficient processes or a lack of capacity, especially when workloads are high, mean that short-term customer requests cannot be fulfilled or can only be fulfilled with a delay. This is where you have the greatest leverage. In the following, we will show you how you can shorten your throughput times in a targeted manner and thus sustainably improve your responsiveness and delivery reliability.

Through efficient processes and targeted measures against bottlenecks, you can turn your production into a real competitive advantage!

Philipp Kappus, Senior Manager

Strategy #1: Effective PPS through digitalization and automation

Excellent production systems are characterized by effective production planning and
production control (PPS). Their tasks usually include the planning of production and assembly orders based on current forecasts and sales figures, the derivation of necessary capacities and operational material planning in day-to-day business. If these processes are coordinated with production and logistics, many disruptions can be avoided in advance or, in case of doubt, quickly rectified.

Modern IT systems, especially ERP and MES, form the basis of effective PPS. Companies create a digital image of all ongoing processes by continuously maintaining their master data and processes. The progress of customer orders and stock levels can be monitored in real time. This allows you to identify disruptions at an early stage and implement solutions accordingly before the customer notices any impact. If orders change or key resources are unavailable at short notice, the production plan can be automatically adjusted, materials reordered or additional resources created. In this way, you remain flexible and optimally equipped for every challenge within your supply chain.

As soon as your data is collected, the system creates a comprehensive data basis for in-depth analyses of your processes. The targeted use of artificial intelligence is already opening up completely new ways of using data for companies. The use of historical data in combination with machine learning is also known as predictive analytics and enables you to make more precise sales and production forecasts. Intelligent simulation models also show where disruptions are most likely to occur in your supply chain. Whether for sales forecasts, production optimization or more precise delivery promises – well-used IT systems and the data they collect take your PPS to the next level and improve delivery reliability!

Operationally, an effective PPS uses various methods from lean management. Kanban control is used to trigger replenishments in line with demand, automate logistics processes and optimize inventories. This reduces replenishment times and tied-up capital. Kanban control is particularly suitable in production environments with stable material requirements. On the basis of a stable supply chain and clearly defined processes, you can further enhance these benefits with just-in-time control. Optimally coordinated supply processes ensure that materials do not linger unnecessarily in the warehouse, but arrive directly where they are needed. By consistently implementing this system, you shorten the throughput times of assemblies and remain flexible and able to act even in the event of short-term changes to customer requirements.

Strategy #2: Congestion management and capacity increase

In addition to PPS, most of the potential for improving lead times and delivery reliability lies in the production processes themselves. As already mentioned, bottlenecks and disruptions can arise for a variety of reasons that need to be avoided. The first step is always comprehensive process analysis together with the technical experts on site. Using methods such as value stream mapping, precise information on process sequences, inventories, working hours and employee requirements is collected in a joint diagram. Process mining can also be used for even more data-based evaluations. Create a common chart to identify potential weaknesses and problems in a structured manner. Prioritize the bottlenecks that have the greatest impact on your throughput times and delivery reliability. Then derive targeted measures for improvement. A practical example: at a manufacturer of punching tools, we were able to identify potential in this way that reduced the throughput time of an entire product family by around 20 %.

Machines are also among the possible causes of delays. With the help of analyzed machine data and the planned production mix, you can set up a model for predictive maintenance . This is a tool for predicting downtimes and proactively scheduling maintenance. This allows you to effectively reduce downtime and avoid delays in the process flow. Predictive maintenance is particularly suitable if machine data is already available or if the machine is particularly important. In addition to classic malfunctions, inefficient set-up processes, especially for large machines and systems, are often a reason for high throughput times.

Using the SMED (Single Minute Exchange of Die) method, set-up processes and therefore throughput times can be significantly reduced. Use SMED specifically where you have high setup times in the value stream (e.g. 20% of the duration of the process step). There are also strategies for short-term increases in capacity requirements in the event of unexpected customer orders: modern, flexible shift models and adaptive overtime management enable you to react to capacity bottlenecks on the same day and increase employee satisfaction at the same time. If this has already been exhausted, capacity can also be built up for a short time by using external partners. For this purpose, your production processes are examined and, in particular, the process steps that do not make use of key know-how are temporarily outsourced. Therefore, create a partner network as a preventative measure that you can fall back on in the event of unexpected orders. In this way, you can remain able to deliver at short notice without burdening your balance sheet in the long term.

Summary

Especially in times of high cost focus, throughput times and delivery reliability must not be neglected as important key figures. They make a significant contribution to customer satisfaction and therefore to your long-term success. In summary, there are four central building blocks on the way to optimized throughput times and increased delivery reliability:

• Increased transparency through the use of modern IT systems
• Data-based optimization of your PPS to reduce disruptions in operations
• Identification and elimination of bottlenecks based on data and process analyses
• Selection of the optimal bottleneck for better control of your processes

If you need support in consistently reducing your throughput times and sustainably improving your delivery reliability, please contact us!