Out-of-date delivery dates have a massive impact on production flow
It’s Monday morning, the fresh start to a new week. You open up your inventory tracker or your clear-to-build report and realize that your critical parts either didn’t show up on time or are not arriving when you thought they would. In other words, you have a major problem—you don’t have the necessary inventory to hit your build plan.
In a perfect world, these issues wouldn't arise because suppliers would always deliver the right goods on time and in full. Or, if the ETA of the parts were to change, the supplier would promptly notify you of the change so you can adjust and plan accordingly.
The unfortunate reality is that for many reasons, purchase orders (POs) and parts orders change, get delayed, or are simply not delivered at all. A supplier might forget to enter the PO into their planning system, accidentally ship the parts to an incorrect delivery address, or not follow up promptly with their sub-suppliers to mitigate further upstream delays. For a manufacturer, the impact of these delays can be severe.
The main causes of out-of-date delivery times
Delays in POs and part deliveries mean more than just an out-of-stock item—they can have dramatic impacts on downstream orders, customer relationships, and potentially shut down your entire operation. Such delays can be caused by:
- A supplier said that they would deliver a part by the due date, but their production was delayed and they didn’t remember to update you
- Your point of contact at the supplier works in sales and was not aware of the late shipment, so they didn’t update you
- Your supplier missed your original PO and never acknowledged it in the first place
- Your supplier did alert you to the delay, but that alert was sent to the wrong email or you simply missed the update
- Your supplier’s upstream supplier had a sub-component delay, and they didn’t communicate that to your supplier
- The shipping carrier had a delay in pickup at the supplier or delivery to you
These delays influence the visibility, predictability, and efficiency of your production flow
Any of the above reasons for out-of-date delivery times impact the visibility, predictability, and efficiency of your production flow. When you lack a holistic view of material availability, you fail to maximize your build capacity. The result? Factory downtime, bloated operations, and ultimately missed delivery dates to customers, which can negatively impact revenue.
Visibility
Visibility into accurate order status updates and delivery changes impacts build capacity. Why? Current timelines for orders are necessary for determining capacity. This makes it even more difficult as you scale and grow your production efforts because you are managing more suppliers and items. A lack of visibility into delivery times makes it nearly impossible to make decisions that will prevent factory downtime.
Predictability
Predictability is also hindered by out-of-date delivery times and shortages. Tracking incoming, and current, inventory highlights gaps between future build plans and capacity. Without accurate data and timelines, you are missing key insights to proactively adjust and prevent production shutdowns. Lack of predictability also causes teams to thrash and make misguided decisions when ordering inventory.
Efficiency
Lastly, efficiency requires precisely matching supply to demand, which is impossible to do without visibility and predictability. You are unable to prevent bloated operations and inventory, even when facing delivery changes, increases in order volume, or new production lines. Having excess inventory impacts margins and working capital. Plus, more resources are an additional cost, and they do not always lead to better outcomes.
Improving the visibility and predictability of delivery times and shortages
If you’re manually tracking just a few purchase orders, that is doable. However, the problem is that many businesses continue to use manual processes to manage and track purchase orders on a much larger scale, which is wildly complex and physically impossible. Manual PO tracking systems are prone to human error—it’s not unusual for teams to accidentally mistype a part number or PO. And with literally tens of thousands of emails and communications about parts and delivery times, it’s easy to miss one or leave essential questions unanswered.
Use automation to manage your complex inventory planning and PO tracking
To guarantee the arrival of parts on time and to meet your build plans, POs need to be tracked. ETAs need to be updated regularly through proactive follow-up with suppliers. Managing and ramping production efficiency requires expanding capacity as quickly and efficiently as you can to match demand. Supplier diversification and supply-chain resilience require 2-3x more suppliers (and therefore, purchase orders) without doubling or tripling the staff budget to manage them all. All of this is impossible to do without automation and the power of Generative AI.
With an automated tool like Factor, you can solve supply chain disruptions before they become problems. The software integrates into your existing tools via API, including your ERP or MRP, to close critical communication gaps between your resource planning and your suppliers.
Factor proactively does outreach to suppliers for you so they can confirm POs and update the estimated time of arrivals. The data shows suppliers are updating this information 5-10x more frequently and therefore, the details they provide are more accurate. Factor also alerts you to changing arrival dates earlier. By feeding this data back into the MRP, manufacturing teams can increase the accuracy of their planning, and companies get more out of their resource planning systems and processes.
Click here to learn more or request a demo today to see how Factor can transform your operations and help you get better data from your suppliers to save money and time. Our supply chain experts are ready to provide a tailored walkthrough focused on your specific challenges and goals.