In a survey of small U.S. small manufacturers conducted by business software provider Exact, half of the respondents said they failed to deliver some percentage of customer orders on time last year. The top five reasons for not meeting delivery expectations were:
“Many of these issues are all too familiar to small manufacturers, but they don’t need to impact on-time delivery”
- Receipt of raw materials past due (39 percent)
- Inaccurate estimation of time to complete order (25 percent)
- Dependency on subcontractors, e.g. let down by supplier (23 percent)
- Unexpected or seasonal influx of incoming orders (21 percent)
- Insufficient capacity (19 percent)
Small Manufacturers & On-Time Delivery
“Many of these issues are all too familiar to small manufacturers, but they don’t need to impact on-time delivery,” said Steve Leavitt, GM of U.S. Cloud Solutions for Exact. “We recently surveyed a similar group of small businesses, which also includes wholesale distributors, and in that research it was clear that there’s a reluctance to address these challenges with technology.”
Recent research done jointly with SMB Group showed that seven out of 10 small manufacturers and wholesalers think that enterprise resource planning (ERP) software (or ERP-like business software) is too costly and they don’t see how it would benefit their businesses.
A look at the top five reasons for on-time delivery failure of the small manufacturer shows a pattern that could be addressed using widely available and affordable technology. By quoting planned delivery dates to customers with 100 percent visibility into the materials (e.g., current and planned stock), schedules (what’s already promised and when) and processes involved (e.g., machine capacity, labor), it’s much more likely that promised delivery times would be accurate and achievable.
Considering that 22 percent of the businesses surveyed said they lost customers last year due to issues other than price increases (and 13 percent don’t know), it’s clear that greater insight into production planning, capacity, order progress, etc. is critical for businesses of this size.
Exact polled more than 250 U.S. small business manufacturers in March 2014. The survey included 30 questions related to operational efficiency on the small manufacturer.
Exact Online is a product of Exact, a global company with 30 years of experience in manufacturing and wholesale software. Exact supports 10,000 customers in the U.S.
Since 1984, Exact has been serving SMBs with information technology to launch and grow their businesses. As a global solution provider with more than 1,800 employees worldwide, Exact helps 100,000 local and international companies run their business every day. Exact is headquartered in Delft, the Netherlands and has been listed on the NYSE Euronext Amsterdam since June 1999. The company’s revenues in 2013 amounted to €213 million. In the U.S., Exact’s business unit, Cloud Solutions, is headquartered in Newton, MA. Visit www.exact.com for more info.