Top Ten Problems Solved by SAP Business One in Manufacturing.
Problem #8: Late Deliveries
This is the eighth in our series of blogs exploring ten of the most common challenges facing manufacturers, and how SAP Business One helps address them. In the previous post, we examined ways to maximise machinery and equipment efficiency. In this blog, we turn to problems due to late deliveries.
The Problem
Late deliveries are a major problem in manufacturing because they create a ripple effect throughout the entire business. They can stop production, increase costs, reduce profitability, and weaken customer relationships, making on-time delivery one of the most important KPIs in manufacturing.
Customer dissatisfaction and lost business
Manufacturers often operate within tightly planned supply chains. When a delivery is late, the entire supply chain may be disrupted. This damages trust and increases the likelihood of customers switching to competitors. In industries such as engineering, automotive, aerospace, and electronics, delivery performance is often a key supplier selection criterion.
Production disruption
Many manufacturers use lean or just-in-time inventory approaches, meaning materials arrive when needed rather than being stored in large quantities. A late delivery can cause:
- Production line stoppages
- Idle labour and machinery
- Missed production schedules
- Reduced overall equipment effectiveness
Increased operational costs and lower margins
Delays may lead to unplanned costs that reduce margins. For example, late delivery into your warehouse can result in rushed replenishment of inventory at higher rates than you would normally expect. It can also hold up production, leading to overtime payments to meet customer deadlines.
Late deliveries also have an impact on your cash position, as customer payments may be delayed until orders have been satisfied in full.
How SAP Business One can help
SAP Business One helps tackle late delivery issues by giving manufacturers greater visibility, control, and planning capabilities across their operations. SAP Business One doesn’t just help manufacturers react to late deliveries. It helps them predict, prevent, and manage the underlying causes by bringing inventory, purchasing, production, and sales data together in a single integrated system.
Improve visibility
Role-based dashboards provide real-time visibility across your business to inform decision making. This allows managers to spot trends and address issues before they become customer problems.
An example: On Time In Full (OTIF)
OTIF reports for Purchasing and Sales help you optimise operations by monitoring delivery and fulfilment KPIs. The Purchase OTIF Report, as an example, includes details of purchase orders by date range along with filters for supplier, product, and manufacturer. Pie charts show the proportion of orders delivered on-time, in-full, and overall OTIF score.
Improve production planning
Late deliveries are often caused by poor scheduling or unexpected capacity constraints. Production planning in SAP Business One provides a comprehensive set of tools to help you manage and optimise your manufacturing operations. It allows you to plan, schedule, and monitor all your production activities, ensuring that you meet customer demands efficiently and on time.
Optimise Inventory
SAP Business One helps prevent materials shortages that lead to late deliveries.
An example: Material Requirements Planning (MRP)
More accurate forecasting of stock requirements and automation of manual tasks result in the following key benefits:
- The right level of stock is available when you or your customers need it
- Cash Flow is improved by purchasing just-in-time
- Purchasing from preferred suppliers ensures quality standards are maintained
- Accurate and real-time visibility of stock improves Customer Experience
Integrated solution for your entire business
With SAP Business One, sales, purchasing, inventory, and production all operate from a single system. The result is fewer surprises and more reliable delivery commitments.
- Sales teams know what can realistically be delivered
- Production has accurate demand data
- Purchasing can order materials at the right time
- Management has a single version of the truth
Take the next step
These are just some of the ways that SAP Business One can help your business. To find out more, download a copy of our SAP Business One Beginners Guide – Manufacturing or take a virtual tour.
In the next blog in this series, we focus on problems arising from inaccurate costings.
By Edward Bentley