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
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.”