If on-time delivery is the measure, then it requires turning
away work with unreasonable due dates and possibly not
maximizing the throughput potential of the equipment. These
are not options where I work.
If you measure on-time delivery with respect to an available-to-
promise date, (not customer request date, rather a first-available
due date based upon your production constraints) it is definitely
an important measure of your customer service level, and probably
should be measured. It might also be an indirect measure of set-
up efficiencies, defective runs and restarts, as well... as long
as your production constraints are realistic/accurate.
You might want to look at either: a) value of raw material on hand
at any time or b) raw material inventory turns. They are balance
sheet issues, but they let you know if you're wasting too much
cash on raw material that you don't need (yet).
All production issues really are balance sheet issues at some
point. The objective should be to measure the "right things" that
have the most impact on total cost/income. Continuously improve
those metrics to an agreed upon acceptable level that demonstrates
success for your shop.
CFT Consulting, Inc.
Supply Chain Management Group
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