Being on time begins with setting the expectation with the customer, promising delivery when it can actually be completed. Order delivery promising must reflect available capacity. Just as you manage cash, you must carefully manage the capacity of your business. There should be a process to commit the capacity, just as there is a process to write checks. Incoming orders are demands on your capacity account. Who is accountable for ensuring that the account doesn’t become overdrawn?
Sometimes, there will be demands that exceed your capacity. A rush order. An important deadline. An escalation and reconciliation process makes certain that both the customer and the business are satisfied. The order promising process is a negotiation to find the real needs of the customer and determine how to meet them profitably.
Quick Response
A necessary part of the promising process is the requirement for a quick response process. This process ensures that emergency orders are handled properly, and if possible accommodated. Customers have emergencies. They sometimes want a product faster than you normally produce it. How do you handle this/ You want to find as many ways as possible to say “yes,” but not every emergency is one to which you should necessarily respond. Is the rush order for someone who has never ordered from you before? Will this order be the beginning of a relationship or is it merely a one time request? Or, is the order needed by a regular customer who buys a significant amount? Should there be a difference in how you respond? does the customer service representative decide or is it up to the account manager? What if overtime is required? Who can authorize the expenditure? The scheduler? The plant manager? The responsibilities for answering these questions and the process for making the decisions must be spelled out and agreed on before you get the call. Otherwise, you may have one person making promises, but another is accountable for the results.
An escalation process keeps everyone honest; preventing you from saying “no” when you should say “yes.” Sometimes, the customer wants to have the product but plant capacity is already booked. What then? How is the customer’s voice going to be heard? The reconciliation process escalates the request to the next level of management.
Buffer Diagnostics Reveal Your Opportunities for Improvement
Buffer diagnosis is the process of reviewing your “almost late” order events and finding the resources that are causing these events.
Regularly gather snapshots of the state of your plant; your buffer status. Which parts are almost late? What resource is causing it? Compile these snapshots into your database. They become a documentary of your plant’s performance.
At least once a month, formally look at your film. Which resources are causing the most disruption? These are the ones that will become your next bottleneck – the one that affects your customer.
These resources are the ones eligible for improvement efforts. Without a targeting mechanism like buffer diagnostics, you are shooting in the dark.
My next blog post will finish up discussing the last key parts in building a reliable delivery system. Check out the full white paper titled “How to Build a Reliable Delivery Process” here.