On the racetrack, as in all forms of business today, speedy delivery separates the winners and losers. Using the right tools can give an SME outsider the front running in business just as it can on the track.
Over the years Revolution Racegear has been revving up as [ita]the[end] supplier of the premier racewear and accessories for Australian motor sport competition, the company has treated its customers as highly mobile and motivated research laboratories. Feedback from drivers in events as diverse as V8 supercars and sprintcars have been used in the product development strategies at its purpose-built factory in Melbourne.
Unsurprisingly, accelerating delivery to speed-obsessed customers has proved essential to the company's success in keeping its RPM Racegear brand on the winner's podium. So managing director Dale Rodgers is glad to have the luxury of being able to control the entire manufacturing process, from design through manufacture to retail, in the face of the strong, unrelenting pressure on organizations to speed up order-to-delivery times. Since he took on his current position in 1997 Revolution Racegear has concentrated on "rejigging" its company-owned retail stores and processes, and on positioning its own brand to compete head on with the world's leading manufacturers.
"Timely delivery is critical," Rodgers says. "Motor sport at the professional end is a highly commercial business [and] the professional end absolutely demands that the window from agreed design and sign-off to delivery of the goods is short.
"So we've had to gear ourselves not just through technology but through better work practices internally to be able to deliver, particularly for the Grand Prix or Bathurst [races] where we have an enormous amount of pressure, with a lot of professional race teams showing off to new corporate sponsors and others."
Speed is not an issue for Revolution Racegear alone. A recent study from Aberdeen Group has found order lead time is the greatest challenge facing manufacturers, with the best companies tackling lead times and costs by reinventing their order-to-delivery process and IT solutions.
In fact, order lead time has now officially overtaken cost reduction as the top issue facing manufacturers. As customers trim inventory by insisting manufacturers become more reactive and reliable, those manufacturers are being forced to do much more than simply improve their complete and on-time order performance. Aberdeen says manufacturers are scrambling as they recognize that their current order-to-delivery processes are incapable of delivering in less time with the accuracy and cost profiles that customers and the CFO demand.
"Manufacturers now understand that their current order-to-delivery processes are nothing but a set of loosely coupled functions and not as integrated and streamlined as needed," says Aberdeen's senior vice president of value chain research, and report author, Chris Jones.
"Best-in-class mid-size manufacturers have adopted end-to-end integrated order-to-delivery processes and are using real-time information to accelerate the velocity of their business."
The research organization says far too many mid-size manufacturers mistakenly believe that an end-to-end integrated process does no more than efficiently pass information between the functional operations. The report shows only 20 percent of respondents had end-to-end processes in place and only 14 percent had integrated real-time IT solutions. Yet Aberdeen's Mid-size Manufacturing Order-to-Delivery Benchmark Report found manufacturers that move to a tightly synchronized order-to-delivery process are 2.5 times more likely to have the shortest lead times.
Traditional modes of interacting with customers are collapsing, with customers now much more likely to demand extremely rapid delivery, and just as likely to evaluate suppliers on their responsiveness and dependability alone. For instance, the number of manufacturers delivering products in five days or fewer had grown to 43 percent last year from 34 percent three years earlier, according to David Drickhamer, writing in Industry Week.
This new impatience puts great strain on manufacturers and their supply chain management capabilities. And as some firms respond, their competitors are being all but forced to follow.
"Buyers today have very high expectations," says Ian Hollingworth, CTO and regional vice-president of Quadrem Australasia, a procurement solutions provider with one of the largest supplier networks in Australia.