Turnaround times are a major headache

21 February 2011

21 February 2011 | Lindsay Clark

The majority of industrial firms are striving to reduce lead times to meet customers’ needs following the recession, a report has found.

A survey of 162 manufacturing and distribution companies in Europe and North America said failing to meet delivery times affected companies’ ability to serve customers and resulted in lost sales opportunities and revenue as companies emerged from the downturn.

“This is particularly pernicious because losing one opportunity with a customer often means losing subsequent opportunities,” the report, commissioned by software firm Lawson, said. “The effects of inflexibility in your supply chain might appear to be small, but if looked at closely, they might be more damaging than is first apparent.”

When asked about specific supply chain headaches, 37 per cent said reducing lead times was their biggest hassle. Long lead times could be the result of buyer or supplier actions.

Other problems included suppliers raising prices, being inflexible, going out of business, changing ownership and being too slow to innovate. “A good supplier makes its customers stronger, which is why finding reliable suppliers and managing them effectively adds such value to a business,” the report said.

For the future, 44 per cent described themselves as optimistic, while 53 per cent said they were cautious. Only 3 per cent were pessimistic.

The research said companies should share data across the supply chain to improve efficiency and performance. “To stay competitive, companies need to collaborate more closely and be in a position to share information with their supply chain partners and customers.”

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