How delivery costs impact your factory’s ability to be competitive

Delivery processes in factories don’t always get the recognition they deserve, and the reality is that they can make or break your business.

Just as much as quality control processes, your delivery processes directly affect your ability to stay competitive, profitable, and scalable.

Seeing that delivery management platforms can reduce costs by up to 20%, let’s look at how you can make your delivery process as efficient and smooth as possible.

In today’s blog, we’ll cover:

Let’s dig in!

What is delivery in an industrial context?

The production of goods is only one part of manufacturing. The delivery of these goods is just as important.

So in the context of a factory, how do we define delivery?

Put simply, it’s anything that helps take your product to market.

Think warehousing, logistical planning, vehicles and trucking, storage materials, labelling and sorting, and shipping.

Delivery occurs at different stages of the production chain depending on its purpose. 

For instance, you’d probably need to build a warehouse and access facilities for your factory before manufacturing any product.

And if you rely on external partners to fulfil deliveries, you’ll want to contract these partners before committing to orders.

This is all basic stuff, but by thinking about delivery in simple terms, we can understand a little more clearly how many factories slip up.

How do delivery processes work in a factory? 

Ideally, your product would be on the road as soon as it’s produced. However, this is far from reality for most factories.

A more typical process would look something like this:

  1. Product is produced, passing quality controls and other safeguards
  2. Product is packaged and grouped as standard
  3. Product is temporarily housed on-site, awaiting distribution (In cases of overproduction or preemptive production, product is secured and catalogued accordingly)
  4. Product is collected in batches by delivery agents
  5. Product is sent to distribution hubs or to end-buyer

Of course, this sketch might not apply to your business model or industry. This is just a simple example.

But as with anything in manufacturing, surface simplicity hides complexity.

Each step of our delivery process contains pitfalls that can have serious implications for any factory.

What can go wrong with delivery processes? 

Like any other part of manufacturing, delivery is also subject to accidents, breakages, and wear and tear.

Vehicle breakdowns, employee absences, industrial action, and global events outside your control; all these variables could slow or stop your delivery process from working on time. 

However, at the best of times, an ineffective delivery process can compound problems across the whole chain of production.

Imagine you have the perfect system for producing your product at speed. You have high consumer demand for your goods and a list of orders longer than your arm.

None of this matters without an equally effective delivery system. Costs mount up as you continue to produce beyond your capacity to deliver.

A very common problem is, therefore, overproduction. Warehoused goods that don’t move are a problem, not least because the longer they stay there, the more they represent lost revenue.

If you handle all delivery operations in-house, you’ll need a logical way to maintain and audit these materials.

On a factory-floor level, a bad system for moving products off the lines can have ramifications, too. 

What are the consequences of bad delivery processes? 

Efficiency and quality in the production phase are easily wiped out by a flawed delivery process.

Put simply, a bad delivery process is fatal for your bottom line. 

You need to be confident that your finished product moves on time and at the right volume to keep a smooth, uninterrupted production line.

Fail to do so, and you could be looking at a warehouse full of products, unmotivated staff, a backlog of unfulfilled orders, and a disgruntled customer base.

This will also affect your projections, making inventory management more difficult. How can you order supplies accurately if you don’t know when and in what state your existing materials will be converted to product?

The importance of delivery is clear to see. So how can you use smart technology to ensure that it’s working the way it should?

What software do I need to ensure my delivery processes are up-to-speed? 

If you really want to bring your A-game to your delivery processes, you have two options.

You can either get different tools to help you with specific areas of your delivery process or one tool that unifies and integrates everything you need to run a smooth operation.

For the latter approach, our mlean Production System (mPS) has all the tools you need to ensure your delivery processes are effective, efficient, and follow a continuous improvement cycle.

Let’s take a look at the different areas your software would need to touch on to optimise your delivery processes:

Standardisation

Standardisation practices are a great way to ensure your delivery efficiency is on point, avoiding any extra costs derived from premium freight situations.

Having a clear set of standardised practises also helps you avoid having to incur additional costs for urgent delivery when already delivering late to your customer.

The best way to standardise your delivery processes is to get a software that has, at least, the following tools:

5S — Your standardisation processes need to be in strict alignment with lean methodologies, and there are few things leaner than the 5S. This method is great to ensure your workspace is safe, tidy, organised, and optimised, so make sure to include this tool in your standardisation essentials

Visual standard — A great way to help you standardise your processes is visual standards. You probably have plenty of these by workstations already, but they really come into their own once you digitalise them and make them available across devices. This way, all your employees can access them whenever they need to check what the accepted standard looks like

Skills matrix — Knowing your workers’ skill levels at different tasks will help you enormously when optimising your standardisation procedures. A ‘skills matrix’ tool will let you know who needs more training on what and in what areas of the factory your employees are more effective. This helps you standardise your processes quickly and maintain the progress you make

Standardisation work audits — Implementing standardisation practices is great, but if you don’t audit them, they’re not likely to be long-lasting. Make sure you always run audits to see what needs correcting and what can be improved

Our standardisation solutions have all these tools, so you can rest assured that we’ll have exactly what you need. And if you don’t need everything at once, that’s fine too —our software is modular, so you can pick and choose exactly what you need.

Maintenance

If you implement standardisation measures without planning to properly maintain them, you’re in for a really bad time.

Bad maintenance renders your standardisation processes useless, bringing in the extra costs of premium freight and urgent transport with the added expense of a software that doesn’t work for you.

Just as crucial as implementing lean manufacturing practices is making sure they stick, and the best way to do that is by choosing a software that can help you with maintenance.

We have a maintenance solution to make sure your standardisation practices are working as they should. Our module is called TPM, and it follows the principles of total preventive maintenance to ensure maximum efficiency in your already standardised processes.

Shop floor management

Now, delivery processes need a bit more attention from the shop floor.

Apart from the aforementioned consequences of premium freight and urgent transport, your shop floor needs to have an internal logistic plan in place to be followed through to ensure a cost-effective delivery.

The shop floor also needs to know their number of logistic incidents and take measures to decrease them.

To do this, an effective software can, at least, bring you the following:

Routines  — Setting routines will help you deal with predictable actions and predictable results, so you won’t get any last-minute surprises regarding excess inventory, late deliveries, or bad processes throughout your factory

Gemba walk — Gemba walks are at the heart of successful shop floor management. If you don’t have this type of tool, you risk not knowing what the main problems in your shop floor are or how to fix them, which translates into chaotic, delayed processes, downtime, and probably more logistic incidents that you’d want to admit

SFM board — A visual management panel is fundamental to get a quick glance over what works and what doesn’t, and it’s even better if you can share it in real time with everybody involved in the process. Not having all your KPIs and relevant key indicators displayed regularly means you’ll be working blindly, and a lot of issues will escape your control

Our shop floor management solutions cover all the bases for this, so you can rest assured that whatever module(s) you choose will integrate with any pre-existing modules from our standardisation and maintenance solutions, giving you a cohesive suite of modules to improve your delivery processes, cost-effectiveness, and customer satisfaction.

Start of production

Starting your manufacturing process without checking first that your quality standards will be upheld is a dangerous game that can lead to scrap, rework, downtime, and effective money loss.

Our start of production solution has an Okay1stPart module that helps you ensure you have a flawless start of production for mass manufacturing, which will in turn make your delivery process more efficient and cost-efficient.

Audits

If you don’t check how your processes are doing, you run the risk of seeing all your hard work disappear in the blink of an eye.

As important as standardising, maintaining, implementing shop floor management, and start of production techniques are, audits are at the core of implementing a lean manufacturing system that passes the test of time.

Our audit solutions have everything you need to schedule, check, approve, and review audits in real-time from a single dashboard.

They integrate with all of our modules, so you only need to input the data once and then schedule the audits to see if everything’s working as it should, or if it needs any sort of intervention.

mlean & delivery processes 

Delivery processes can really affect your bottom line, customer satisfaction, and credibility.

These processes don’t exist in a vacuum either, and they need everything around them to work perfectly to really be effective.

That’s why you need a software that will bring you the solutions you need, unifying your tech stack and growing with you.

Our mlean Production System (mPS) is a modular suite of tools for lean manufacturing and continuous improvement aimed at reducing wasteful practices, optimising industrial processes, and increasing profitability.

And because this software has been developed by experts in the field who’ve experienced the realities of factories first-hand, the mPS comes with a set of connective tools to maximise the impact this software has for you and your factory.

These connective tools are called improvement drivers, and they can help with a wide range of things:

  • Action plans (included with all mPS subscriptions) All the actions you create will be available in your dashboard thanks to this tool, so you can streamline and prioritise your actions with real-time data
  • Production alerts — You can create alerts based on your organisation’s protocols and escalation procedures. You can also configure the parameters for each alert and how they’re organised
  • Improvement ideas — Create improvement ideas for specific issues in your shop floor and collaborate internally until the idea is successfully carried out. The data for these improvement ideas is kept in the system, so next time you have a similar issue, those successful improvement ideas will pop up ready to be implemented
  • Problem-solving — All the tools you’ll ever need for problem-solving, from 8D, A3, RCA, Short Loop and more all ready to fix your issues and make sure they never come back
  • HSE risks — Health and safety policies at everybody’s fingertips to make sure all protocols are followed at all times. You can also configure risk categories and set priorities, which help you reduce health and safety issues.

The road to operational efficiency in factories is long and rocky, and in the current climate, business can’t afford to keep working with outdated systems that lead to wasteful practices.

Our mPS is the tool you need to turn all that into a walk in the park, increasing revenue, efficiency, and customer satisfaction.

Book your free demo today and see for yourself!

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