On-Time Delivery: How it Impacts Your Bottom Line

By George Alvarado
Vice President / General Manager
Fit-Line Global

In today’s world, the pace of business is fast and customer expectations for continual improvement and seamless transactions are at an all-time high. Making sure your supply-chain allows you to meet your delivery commitments is crucial to separating successful businesses from those who can’t keep up. Optimal product development and quality, competitive pricing and on-time delivery are no longer discretionary; they have become market expectations that every customer demands.

While on-time delivery will always be at the heart of any successful product-driven business and customer relationship, your ability to get your manufactured goods where they need to be, can impact arguably every other part of your business – from inventory, product and shipping costs to staffing, employee morale and your bottom-line.  Here are a few things to consider:

Yes, your performance is being judged.  It’s no surprise that companies are tracking metrics and how their suppliers are succeeding (or failing) when it comes to the KPIs on-time delivery. Few companies have the luxury of shipping products late while also maintaining a good, working relationship with their customers. Don’t sleep on your competition and think you’re doing enough. Always strive to better your processes as it will ensure a positive, long-term relationship.

Beware of the Bullwhip Effect.  Defined as a distribution channel phenomenon in which forecasts yield supply chain inefficiencies, the “snap” of the whip can affect all sides of the supply chain. It’s important to communicate clearly with your customers on production and timing operations as that establishes a strong foundation of trust.

Delivery delays soak up leadership attention. Senior management should expect to put out fires and respond to crises related to customer deliveries – occasionally. Even companies with the best on-time performance records miss deadlines some of the time. But when an inadequate customer fulfillment system starts to consume the bulk of your C-suite’s attention, other larger issues, such as product R&D, marketing and long-term strategy, invariably start to suffer. Investment in supply-chain relationships that minimize firefighting is a high-leverage use of time.

Leverage the latest technology.  Information technology is a key enabler to helping companies operate effectively in highly competitive environments – even those in seemly low-tech industries. Implementing an effective enterprise resource planning system, for example, helps manage customer relationships, manufacturing and distribution to ensure on-time delivery.

Invest in your people.  Operating an efficient, streamlined supply chain is like sprinting the 200-meter dash while navigating a series of randomly placed hurdles along the way. Each day brings its own set of unique problems to be solved. And at the heart of those solutions, even in the most technically advanced company, is an employee specially equipped to perform his or her job like no one else. Investing in your people through formal development curriculum, on-the-job training, coaching and mentoring, plus rotation through multiple assignments helps create a well-rounded staff committed to on-time delivery and your company’s success.

It comes down to dollars and (common) sense.  Henry Ford realized it first and the Japanese perfected it.  Being able to predict exactly when you are able to deliver your products to your customers saves you time and money – in stocking and inventory fees, shipping costs, staff overtime and dozens of other operational expenditures.  More than anything else, an airtight, on-time delivery system allows you to maintain control over at least some of the third-party variables that dictate your bottom line.

While these are a few considerations, it’s important to note that establishing a strong foundation of operational excellence and customer service with your executive leadership and employees is what ultimately differentiates your business from others. At Fit-Line Global, we’ve made a name for ourselves not just for producing the highest quality products, but for ensuring their delivery on-time, within budget and with our customers’ ultimate business goals in mind.