Background:
ABC Electronics is a mid-sized company that produces custom-made electronic components for industrial clients. They rely heavily on timely delivery of specific materials, such as specialized circuit boards, which are sourced from various suppliers. Recently, the company has been facing delays in receiving these critical components, leading to production slowdowns and increased pressure to meet client deadlines. To address this, ABC Electronics implemented an Expediting List to closely monitor their suppliers and ensure that deliveries stay on track.
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Identifying the Problem
The delays became particularly problematic with one of their main suppliers, “Speedy Circuits.” Despite the supplier’s name, recent shipments of key circuit boards were arriving weeks behind schedule, causing bottlenecks in ABC Electronics’ production line. This delay threatened their ability to deliver finished products to their customers on time.
In response, the Purchasing Manager at ABC Electronics, with the support of the expediting team, decided to implement an Expediting List. The goal was to monitor the production process more closely, identify delays early, and work directly with Speedy Circuits to address any issues that might be causing these delays.
Creating the Expediting List
The expediting team designed a detailed Expediting List using Excel, setting it up with 16 columns to track each step of the process. The structure included key information such as the Purchase Order ID, part number, quantity, various manufacturing process steps, delivery dates, and comments for updates. For the purpose of tracking Speedy Circuits’ performance, they focused specifically on the columns related to production steps (columns 4-10):
- PO ID: Each circuit board order from Speedy Circuits was assigned a unique identifier.
- Part Number: Specific part numbers were listed to avoid any confusion about which circuit boards were being tracked.
- Quantity: Each order’s expected quantity was specified.
- Process Step 1 – Raw Material Sourcing: This step tracked whether Speedy Circuits had acquired the necessary raw materials for production.
- Process Step 2 – Component Fabrication: Recorded the progress of the circuit board fabrication.
- Process Step 3 – Assembly: Monitored the assembly of various components onto the boards.
- Process Step 4 – Quality Control: Tracked the time taken for initial quality checks.
- Process Step 5 – Final Testing: Noted whether the boards had passed final testing before packaging.
- Process Step 6 – Packaging: Recorded when the boards were packed and ready for shipment.
- Process Step 7 – Ready for Shipment: Indicated when the boards were prepared for dispatch.
- Original Delivery Date: The date initially agreed upon for the delivery.
- Internal Demand Date: The date by which ABC Electronics needed the boards to keep production running smoothly.
- Latest Promised Date: The most recent date promised by Speedy Circuits.
- Planned Shipment Date: The expected date the boards would leave Speedy Circuits’ facility.
- Days Late: A calculation showing how many days the shipment was overdue.
- Comments: A place for updates on the order’s status, such as reasons for delays or actions being taken to expedite the process.
Weekly Meetings and Progress Tracking
ABC Electronics and Speedy Circuits began holding weekly meetings to review the Expediting List. During these meetings, they went through the columns step by step, focusing particularly on the process steps (columns 4-10). Here’s how these discussions unfolded:
- Raw Material Sourcing Delays: The Expediting List revealed that Speedy Circuits was experiencing delays in sourcing a particular type of silicon required for the circuit boards. This step was consistently taking 5-7 days longer than planned. With this insight, the expediting team worked with Speedy Circuits to identify alternative suppliers for the silicon, which reduced this delay by three days.
- Component Fabrication Bottlenecks: It was also discovered that there was a shortage of skilled technicians available for the fabrication process. By highlighting this in the Expediting List, ABC Electronics and Speedy Circuits discussed the possibility of hiring temporary staff or reassigning existing employees to critical stages of production to catch up.
- Quality Control Backlog: Quality control checks were flagged as a bottleneck during the meetings. The Expediting List showed that this stage was taking almost double the time initially estimated. The parties agreed to streamline the testing process by focusing on the most critical parameters and skipping redundant tests, reducing this time by two days.
- Ready for Shipment Discrepancies: The expediting team noticed that even when boards were marked as ready for shipment, they often sat at Speedy Circuits’ facility for a few days before actually being dispatched. Using the Expediting List, ABC Electronics pushed for faster turnaround in this stage, and Speedy Circuits agreed to prioritize shipments for ABC Electronics. This adjustment led to more timely departures from the supplier’s site.
Proactive Measures and Results
By using the Expediting List to dive into each step of the supplier’s manufacturing process, ABC Electronics was able to gain a detailed understanding of where delays were occurring and take proactive measures to address them. The list served as a shared, fact-based record that made it easier for both parties to align their actions and expectations.
After two months of using the Expediting List and holding regular meetings, ABC Electronics saw a significant improvement in delivery times from Speedy Circuits:
- The average delay was reduced from 12 days to just 3 days.
- The expediting team identified two alternative suppliers for key raw materials, reducing dependency on a single source.
- Weekly communication fostered a stronger relationship between ABC Electronics and Speedy Circuits, leading to better transparency and collaboration.
Key Takeaways from the Expediting List Case Study
This case study highlights the importance of having a structured approach like an Expediting List when managing suppliers and deliveries. Here are some of the main lessons learned:
- Transparency Through Detailed Tracking: The Expediting List provided a clear view of the production process, allowing the buyer and supplier to understand where delays were happening and why. This transparency is crucial in building trust and finding solutions.
- Proactive Problem Solving: By identifying issues early in the production process, the expediting team could address them before they snowballed into larger delays. The list made it easier to catch these issues, from raw material shortages to quality control backlogs.
- Enhanced Communication: Regular meetings based on the Expediting List helped maintain a consistent flow of information between the buyer and supplier. This improved communication led to faster responses to challenges and more efficient problem-solving.
- Fact-Based Decision Making: The data captured in the Expediting List enabled fact-based discussions, reducing misunderstandings and making it easier to align on the necessary steps for improvement.
Conclusion
In summary, the Expediting List proved to be an essential tool for ABC Electronics in managing supplier performance and improving delivery timelines. By focusing on each step of the production process, the expediting team could make targeted improvements, ultimately ensuring smoother operations and satisfied customers. This case illustrates how a well-managed Expediting List can transform supplier relationships, streamline processes, and achieve better delivery outcomes.
The Case “Case Study: Using the Expediting List to Resolve Delayed Deliveries in Manufacturing” is a part of the basic level What is Expediting course for operative buyer role.
Note: Illustration created by Chat-GPT on October 27, 2024.
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