I’ve been working on my book The Amazon Effect lately, and it brings to mind the critical importance of responsiveness. There is no doubt that a large part of Amazon’s success is due to responsiveness – quick deliveries, Amazon Prime within 1-2 days with no freight, Sunday deliveries, same day deliveries and now they are even looking at options to deliver in hours or minutes.
I work with a cross-section of manufacturing and distribution clients. Aerospace and building products industries have been a focus area of late as both are growing. I work with the best and help make them even better. What I’ve seen is that these clients prioritize responsiveness. Speed matters!
For example, one client in the building products industry turns around a vertically-integrated manufactured product within 24 hours as a worse case scenario. The vast majority leave their facility on the same day they are ordered. This is one of the reasons they are #1 in their particular industry. Another client in the building products industry delivers within 2 days, and 80% are actually shipped within one day. It is obvious that one of the reasons their customers continue to order from them is their rapid delivery. Everyone is geared to this end. In a third example, another building products industry client also ships within 24 hours. In their case, they are upgrading their system to better support this continued focus as they continue to double their business every few years.
My aerospace clients sing the same song yet lead times are longer with these more complex products. For example, in one aerospace manufacturer of items in the cockpit, customers are demanding quicker deliveries. Although their lead times can range from 13 weeks to 9 months, demands for radically reduced time frames continue to occur. In another aerospace client that produces door frames and larger parts of the plane, they won new business partially because customers knew they could support increased volumes on quick lead times for their industry. The aerospace industry is quite collaborative; thus, supply chain partners work together to reduce the overall supply chain lead time.
What metrics can we use to measure responsiveness? Typically cycle time metrics rule the day in this area. I find that order fulfillment cycle time is the best measure of success.