Cost reduction has been replaced by order lead time as the top issue facing mid-size manufacturers, according to a new report. As customers eliminate inventory by asking manufacturers to be more reactive and reliable to their demands, customer service is no longer simply improving complete and on-time order performance. Mid-size manufacturers are scrambling as they recognize that their order-to-delivery processes are not capable of delivering in less time with the accuracy and cost profiles required to please customers and the CFO.
 
"Mid-size 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," said Chris Jones, Aberdeen Inc.'s senior VP of value chain research. "Best-in-class mid-size manufacturers have adopted end-to-end integrated order-to-delivery process and are using real-time information to accelerate the velocity of their business."
 
The report finds manufacturers that move from a loosely coupled set of department or functions to a tightly synchronized order-to-delivery process are 2.5 times more likely to have the shortest lead times. Far too many mid-size manufacturers mistakenly believe that an end-to-end integrated process does a better job at passing information between the functional operations. Only 20% of respondents had end-to-end processes in place and only 14% had integrated, real-time IT solutions.
 
To optimize order-to-delivery performance, Jones recommends:
 
-- Understand the difference between an integrated process and connected pieces.
 
-- Get started by picking the top three functions to integrate.
 
-- Automate and use workflow to drive velocity.
 
-- Extend order-to-delivery to the supply base.
 
-- Drive order-to-delivery performance with real-time information
 
Download a copy here: www.aberdeen.com/summary/report/benchmark/RA_MidSizeMfg_CJ.asp