It is not just anymore just-in-time that is important, customer wants it now! Putting a major focus on substantially shorter delivery times gets some SMEs really up to speed.
While supporting European SMEs in change management, Bellevue SME Advisors take it, that SMEs can increase their sales if lead times are reduced substantially.
Most SMEs feel complacent with their current lead-time performance and do not necessarily see the potential up side to get them substantially shorter.
An SME active in building complex made-to-order electronic systems with several distributors around the world did not have longer lead times than the competition, i.e. around 8 weeks from order to delivery.
The company did set a very bold goal; let’s get these lead times down to 1 day!
Why did this SME set this goal:
- The distributors wanted sell more actively while seeing the results of their efforts faster
- Get a higher share -of -mind from distributors for SMEs systems
- While taking out all the slack from the value chain, the overall efficiency of the company would increase
- The positive can-do attitude across the value chain creates a “doped value chain”
- Complacency with the current situation was not bringing the company forward
A whole lot was involved to achieve this, among other:
- SME CEO was on the drivers seat
- All, everybody in the company got engaged to achieve the common goal
- Re-thinking the systems offered
- Integrating all suppliers into the project and challenging them actively
- Tough discussions with suppliers
- Re-thinking production and assembly cell
- Re-thinking sales documentation
- Re-thinking supplier base
- Re-thinking parts ordered
- Re- assessing distributor base
- Less than 1 day was achieved
- As a side phenomenon the assembly cell productivity was not anymore depended on one particular skilled employee
- The company sales grew almost 50% in 24 months
- Export increased substantially through distributors
- Positive feeling among employees that change is great and slack is not accepted in the value chain
This project was a great success.
SME, make yourself feel uncomfortable by setting really bold goals. That pays off!