Due Date Performance and Value shipped:

Dealing with the conflict

This conflict exists in an environment that typically has the following characteristics:

• There is little correlation between effort and sales value
  • High value/low work effort and low value/high work effort products in the product mix
• Operations compensates for low sales by:
  • pulling orders forward
  • concentrating on high value goods
• Operations are measured on both sales value and due date performance

Some of the typical problems this conflict presents:

• Late or partial shipments
• High levels of overtime
• Confusion - fire fighting - low morale
• Difficulties having the right raw materials/components at the right time
• Poor cash flow – too much cash tied up in inventory and debtors.
• Early shipments – often annoying customers through
  • receiving goods early when other orders are outstanding
  • using up space,
  • early invoicing
  • unpredictable lead times.

If you are in operations you are probably living with some or all of these problems. Sometimes the major difficulty is engaging the rest of your organisation to take the appropriate synchronised actions.  

How can Goldratt UK help you with the problems and the buy-in?
Our clients have experienced exceptional results, amongst them:

1. Reduced work in progress
2. Identified and capitalised on hidden capacity - preventing high effort jobs getting stuck in system
3. Increased due date performance
4. Invoiced sales target linked to orders-in target for the month, therefore driving in the right place
5. operations are no longer compensating by cherry picking high value orders from the start of the next month
6. Reduction in unnecessary overtime budget
7. Reduction in unnecessary stress and fire fighting.

If you would like to explore how you can achieve these benefits amongst others for your operations function, contact us to arrange a free consultation with one of our operations experts.