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sinha.rk.dr@gmail.com
When was the last time you offered faster delivery to your customers?
B2B businesses compete on delivery lead time and reliability, assuming that quality and price are at par. Promising faster delivery gives a competitive edge and leads to higher share of business. Why is it that companies who can consistently offer faster delivery still fail to capitalize on it?
I was intrigued by this observation and decided to discuss it with the leading B2B companies across various industries. The findings were quite revealing.
Let’s take an example. The customer asks its vendors to supply in 10 days’ time. Our company can meet it comfortably and consistently. We then work on improving our system responsiveness and now we can consistently meet their needs in 7 days. Shouldn’t we offer 7 day delivery and capture more business? Supply Chain teams are often reluctant to do it.
While shorter lead time is clearly better for the customer and the overall flow, the additional cushion of 3 days is loved and protected by the supply team. They feel ‘longer is better’ as their primary measurement is on OTIF and the cushion of 3 days helps them show better performance, just in case…
The root cause of voluntarily giving up this significant competitive advantage lies in the way teams are measured. There are several other cases where measurements take us away from being more competitive.
I would urge you to take a hard look at the current measurements and change them if they interfere with the business goal. Would love to discuss your specific cases…