Company A is a manufacturer of wooden products with 30 employees and a turnover of
5MEuro. Few suppliers deliver the main raw material (wood) once or maybe twice a year.
This is the logic in the industry which forces Company A to carry large raw material
inventories. It implies that measuring on-time delivery from suppliers makes no sense.
Company A has a couple of hundreds of domestic and international customers, mainly
retailers. Their customers have demands on short lead times and have in many cases a
98 per cent contracted on-time delivery performance. As the wholesalers have disappeared
from the supply chain, Company A also has to carry finished goods inventories. This has
implied very high on-time delivery performance levels to customers. No customer has ever
complained about the on-time delivery of Company A, therefore, they do not report it
currently other than as averages per year. Due to company growth and lack of resources,
they have not prioritized supply chain PM such as more frequent measurement of on-time
delivery. The focus has rather moved to PM concerning inventory levels and tied-up
capital in raw material, work-in-process and finished goods inventories. When the
new ERP system was acquired, an important aspect was that Company A would be able
to develop and grow within the selected system, also when it comes to supply chain PM.
The configuration possibilities were especially important. The case description of
Company A is shown in Table IV.