Good is not good enough!
Often companies think that focus on produce, marketing/selling, and deliver to customers a product that solves a problem is good enough to compete with other manufacturers in the industry.
However, markets are quickly changing since customers demand faster responses due to increasingly developed technologies that make tasks easier and accessible for people that use it.
There are three possible approaches to solve this issue.
Meaning having a lot of inventory, which is the most expensive option with many risks due to demands continually changing.
The good thing is that the company will be able to perform quick response to purchase orders that allow companies to offer the highest service level possible.
Still, doing the mentioned above doesn’t warranty that you’ll keep your market shares since competitors can offer more flexible options in terms of customization and some cases, lowest prices due to lower cost.
2nd Semi pure Pull systems:
Which wait for a customer demand (order) to place production orders and, when ready, send the product to the demanded location. This path is one of the cheapest ways to put products into the market because it allows companies to have the lowest inventory levels.
Also, this makes it possible for clients to have the highest level of customization, which is another driver of customer satisfaction. Nevertheless, this will be the option with the most extensive lead time possible, driving losses in market shares due to the mentioned at the beginning of the post (increasing demand for faster responses).
3rd The idea of Postponement:
The last one, but in many cases, the most cost-effective choice. It is a mix of both previous approaches. The key here is to find the right push/pull point, continuously tracking inventory levels and demand to maintain just as needed stock quantities.
In a continually changing world, the goal should be to have a continuous improvement process to review existing processes and prioritize and attack problems. You can start with your daily work.
To do so, we provide you with the CTGroup SIPOC tool to scope and breakdown your current processes and have a better look at your issues. If you need further assistance, feel free to Contact Us, we are more than willing to support your improvement projects.