Challenge
In 2006, the company faced a significant challenge with a high failure rate of 11.6% in its Built To Order (BTO) shipments across Europe. This high rate of failed deliveries was detrimental to customer satisfaction, brand reputation, and operational efficiency. The issue was compounded by the complexity of managing BTO processes, which require precise coordination of production, inventory, and logistics to meet specific customer orders. The failure rate was indicative of underlying issues in the supply chain, including inefficiencies in production scheduling, inventory management, and logistic operations.
Actions
To address the high failure rate in BTO shipments and improve the overall efficiency of the BTO process, the company implemented a comprehensive strategy involving several key actions:Process Optimization: The company conducted a thorough review of the BTO process, identifying bottlenecks and inefficiencies. Process improvements were implemented to streamline production scheduling, inventory management, and logistics coordination.Advanced Forecasting and Planning: The company adopted advanced forecasting and planning tools to better predict customer demand and align production schedules accordingly. This helped in reducing lead times and improving the accuracy of BTO shipments.Enhanced Quality Control: Stringent quality control measures were introduced at various stages of the BTO process to ensure that each order met the required specifications and quality standards, reducing the likelihood of shipment failures.Improved Supplier Collaboration: The company worked closely with its suppliers to ensure timely availability of necessary components, adopting a collaborative approach to manage supply chain risks more effectively.Customer Communication: The company improved its communication channels with customers, providing regular updates on order status and addressing any concerns promptly to enhance customer satisfaction.
Results
The strategic initiatives undertaken by the company yielded significant improvements within a year:Decreased Failure Rate: The failure rate of BTO shipments decreased from 11.6% in 2006 to 4.7% in 2007, marking a substantial improvement in the reliability and efficiency of the BTO process.Growth in BTO Shipments: Despite the rigorous focus on reducing the failure rate, the company also managed to grow its BTO shipments by 3% in Europe, indicating not only improved operational efficiency but also increased market demand and customer trust.Enhanced Customer Satisfaction: The reduction in failure rates, coupled with improved communication and service levels, led to higher customer satisfaction and loyalty.Operational Efficiency: The process optimizations and advanced planning capabilities resulted in more efficient operations, reduced waste, and lower costs.Stronger Supply Chain Collaboration: The improved collaboration with suppliers contributed to a more resilient and responsive supply chain, capable of supporting the company’s BTO strategy effectively.This success story highlights the importance of a holistic approach to addressing supply chain challenges, demonstrating how targeted process improvements, advanced planning, and enhanced collaboration can lead to significant enhancements in service quality and operational performance.
Short summary
In response to a high failure rate of 11.6% in Built To Order (BTO) shipments, a company implemented a series of strategic actions that led to a significant reduction in the failure rate to 4.7% by next year, while simultaneously achieving a 3% growth in BTO shipments across Europe. The strategy included process optimization, advanced forecasting and planning, enhanced quality control, improved supplier collaboration, and better customer communication. These efforts not only improved the efficiency and reliability of the BTO process but also resulted in higher customer satisfaction and operational efficiency, demonstrating the impact of comprehensive supply chain management and collaborative practices on overcoming complex logistical challenges.