|
GEA and Business Competitiveness
Express Delivery Contributes to Faster Cycle Times
Express delivery contributes to faster cycle times by speeding the delivery of components and materials for production, and by getting products to customers more rapidly and reliably. A company with fast-cycle capability performs seamlessly without work blockages, schedule slippages, delays, errors, and excess inventories. The company is able to reduce production costs substantially owing to minimal overheads on production materials and work-in-progress inventory. It is able to serve customers faster, because of diminished lead-time from receipt of order to delivery.
Fast-cycle capability also enables companies to rethink periodically their product lines, and to cope with emerging changes in markets and technologies in a more timely and effective manner. Companies that increase inventory turns are quicker to market, more responsive to customer demand, and better positioned to take advantage of short product life cycles.
Express delivery and improved return on investment
Success in manufacturing requires increasing the ratio of sales (or cost of goods sold) to average inventory. Inventory turnover is an important index of competitiveness. Use of express delivery improves capital utilization by enabling a company to reduce its cash conversion cycle--the number of days it takes from the time an order is placed until the time cash is received for the finished goods.
Additionally, significant savings in cost of storage are made possible by using the services of the express industry. Almost half of the companies questioned in a recent survey indicate that they have used express delivery services to achieve cost savings in storage by reducing contingency reserves, increasing speed of access, and raising the rate of turnover.
Express delivery: facilitating the new economy
Express services can be important to the success of any firm, but they are most important for companies involved in the 'new economy'. In a recent survey of "new economy" firms in one major country almost all reported that there are aspects to their companies' delivery commitments to clients for which next-day delivery services are important, compared with 54 percent across the economy of the country as a whole. As an example, many internet fulfillment centers are located near express hub airports. This allows internet merchants to extend by several hours the deadline for accepting orders that can be delivered the next day, and in some cases the same day.
In the same survey, a large majority of new economy companies reported that next-day delivery of sub-components to their own businesses is important - principally because they operate JIT inventory systems - double the proportion across the whole economy of the country.
Express delivery can also improve the speed with which warranty repairs are made for customers. By situating repairs facilities near an express hub, or even contracting with express companies to perform repairs, companies are able to reduce the time required for repairs, thereby enhancing customer satisfaction.
|
