About a tenth of what our branches sell is ordered in for a particular customer: made to measure windows, doors, staircases and kitchen units that we do not keep in stock. For these special orders our monthly report shows one headline figure, the average number of days from order to delivery. It goes to the board, and our trade customers ask about it when they plan a job.
Through last year the figure improved, from eleven days in the spring to nine in the autumn. Over the same months complaints about special orders rose by half, and two of our account managers said their customers were giving up on us for doors and windows. The two did not fit, and for a while each side assumed the other had the wrong numbers.
Both were right. The report averaged the orders delivered that month, because an order only has a lead time once it has been delivered. In the spring one of our window suppliers began to fall behind. Customers who had waited three or four weeks cancelled and bought elsewhere, and a cancelled order has no delivery date, so it never entered the average at all. Cancellations of special orders went from about four percent to fifteen. The longest waits were leaving the figure before they could be counted, so the worse the supplier became, the better our average looked.
We rebuilt the report around the month in which orders were placed. For each month it now shows how many were delivered, how quickly, how many were cancelled, and how many are still open. When we ran it back over the year, the typical customer who placed a special order in September waited sixteen days for an outcome, and one in seven never received the goods. The supplier at the centre of it was on a quarterly review. It is now on a weekly one, and two products have moved to another supplier.
The board now sees the share of orders cancelled next to the lead time, and the lead time is never shown without it.
An average of the things that finished leaves out the ones that did not. When the slowest are the ones that drop out, the figure improves as the service gets worse. Count every order you took, and say what happened to each of them.
– Serguey Shinder
