No one likes urging for delivery, but urging for delivery is an inevitable part of supply chain execution. In extreme cases, there is an industry-wide shortage, such as a large-scale shortage of key components. From the CEO to the buyer, everyone is urging for delivery. Even some large companies are no exception: their supply chain CEOs are often absent. When asked what they are doing, they answer that they are urging for delivery from suppliers.
Urging delivery becomes more and more important. When asked how much time they spend on urging for delivery, the answer is a lot. Do you have a urging process? For such a simple thing as urging for delivery, there must be a process? Yes, from top to bottom, from front to back, so many employees devote so many resources to urging for delivery, of course you have to have a urging process. Otherwise, it is easy to fall into chaos and waste a lot of resources in a mess.

Figure 1 is a case of urging goods. Each line represents an email. From customer service to supply chain to production workshop, from quality to process to product management, sales and customer management are naturally included. You can see how many emails are flying in vain. Then it is upgraded layer by layer, from planning to execution, from grassroots to middle level, from middle level to senior level. For the same urging goods, you can see how many people are involved. The result is that 10% of the time is spent on work, and 90% of the time is spent on writing emails, summarizing and reporting. Resources waste and low efficiency can be imagined.

Figure 1: Urging goods cannot be a mess

Source: High Performing Supply Chains, V. Frumau, High Tech Supply and Demand Summit, San Francisco, April 21st, 2016.

Of course, you don’t want to be as chaotic as the above case; you have to face the urging of goods, set up corresponding processes according to different levels of urgency, minimize confusion, and avoid duplication work, just like the case to be described below.

This is a large multinational manufacturing company. Its customers are all over the world. Its business is quite complex and there are many emergencies. They have different people and corresponding processes to urge goods according to different urgency levels, as shown in Figure 2.

First priority: The production line is closed and desperately needs for materials.

This is the highest priority for urging goods. For example, if the customer’s production line is down and waiting for materials, or is about to be down and waiting for materials, and the customer’s loss or potential loss is significant, a team in the planning department is responsible for urging goods. The team includes a manager and several full-time employees, who are on call 24 hours a day, 7 days a week. Once a request for urging goods is received, a global inventory analysis is immediately conducted, the corresponding inventory is requisitioned, and it is sent to the customer by the fastest air transport; if there is no inventory anywhere in the world, the required parts are removed from the products being manufactured on the production line; if there is no inventory on the production line, the procurement is driven to urge the supplier. After receiving the urgent order, the supplier must confirm the delivery date within the specified time. This is the highest level of urging process, which mainly relies on real-time communication by phone, email assistance, and a complete complaint mechanism. For example, if the production line does not respond within the specified time, the complaint will be filed with the production manager, director, and vice president; if the buyer does not respond within the specified time, the complaint will be filed with the purchasing manager, director, and even vice president.

Figure 2: There are different priorities for urging goods

Second priority: customer orders cannot be met.

This applies to the situation where the customer’s order has been received and entered into the ERP system, and the current delivery period cannot meet the customer’s needs, but the customer is not so urgent need . This type of urging is generally transmitted by customer service department, and the planning department sets up another group to be responsible for the global material allocation and drive the supply chain to respond as soon as possible. This group can be divided into two parts. One part is implementation team(planning and safe inventory) , another is planning team. The goal of the entire planning function is broken down like this: planners successfully meet 90% of the demand by setting reasonable demand forecasts and safety stocks; the remaining 10% is made up by the two urging groups through execution. Of this 10% of demand, about 0.5% is downtime waiting for materials, which is handled by the urgent order group on duty 24 hours a day; the remaining demand is handled by another group according to the normal urging process.

Third priority: planning parameters cannot be met.

Demand forecast and safety stock cannot meet the planning parameters , but has not yet affected the actual customer orders. This type of urging is led by the planner and is part of the planner’s daily work. When supply and demand do not match, the ERP system will automatically generate urging instructions and pass them to the supplier through e-commerce platform; if the supplier cannot meet the requirements, it will be put on the buyer’s work list as an exception, attracting the buyer’s attention. It should be noted that planners should focuse on demand forecasting and safety stock setting for coming days and months, so that procurement and suppliers can solve problems in advance.

The above three situations have different priorities and different urgency of urging goods, but they have same things in the process:

(1) Clear priorities. Once a shortage occurs, everyone thinks that their needs are urgent. Defining clear priorities is conducive to reducing communication costs during the execution process and reducing the resulting confusion.

(2) one person in charge. From customer service to planning to purchasing, there is a one person in charge of urging the delivery of each product; when the problem cannot be solved at the front line, it is appealed to management team.

(3) Clear appeal route. Urging the delivery is to break the normal process and solve the problem by getting more attention. Once the required attention is not obtained, it must be dealt with through organizational measures – appeals at all levels.

Urging the delivery is full of uncertainty. We need to categorize three kinds of priorities. The advantage is to use simplicity to deal with complexity. Through structured processes, a certain degree of certainty is injected into the entire business system to avoid chaos.

For example, you cannot let sales, customer service and planning department urge the production line. If that happens, everyone will say that their needs are urgent, and the production line will be in chaos! You also cannot let everyone contact the supplier. That will also put the supplier in a state of confusion. Similarly, sales cannot send emails to the director or vice president of purchasing when urging the delivery – these people are in high positions and can certainly drive suppliers very effectively, but they do not understand the details at the operational level. While solving some problems, they often create more problems. As a middle or senior management, you can’t just dive in when you see these emails, do the work of your subordinates, and fall into execution mode, because you have more important overall work to do.

In a healthy supply chain environment, urging goods is part of the execution task. Just like this case we refer to, according to the target design, 95% of demand is met by demand forecasting, inventory planning, and the organization is driven by processes and systems step by step (otherwise it is too chaotic); the remaining 5% is met burging goods to speed up

However, in those companies with vicious cycles, urging goods is more due to inadequate planning or inaction, which must be noticed. Especially for those “execution-oriented” companies, where the “firefighting” culture prevails and they are immersed in the sense of accomplishment brought by urging goods, they should be more careful.