The Role of Materials Management in Developing Time‐Based Competition

Abstract

Many firms increasingly have to produce products tailored to customers'specific requirements. At the same time, many consumers require shorter and shorter lead times for such orders. In such industries, time‐based advantages can often be the single most effective competitive edge. With respect to delivery performance, time‐based competition refers to the ability to deliver a customized product within a shorter elapsed time than can competitors in the same market, and is usually measured in terms of delivery lead time. Among the many methods suggested for reducing lead time, the roles of product design and materials management are often cited as critical. However, there exist few benchmarks by which to judge this performance.A cross‐industry field study carried out by the author provided insights into this problem. Data for the study were gathered through interviews with managers in 35 firms across the United States and Canada. The results suggest that purchasing managers can contribute significantly to lead time reduction efforts within their organization. In particular, reducing late supplier deliveries and material defects requires that firms work closely with a few certified suppliers in solving these problems. In a similar manner, simple and manufacturable products developed through increased input of manufacturing and materials managers in the early stages of the design process can have a great effect on lead time reduction later on. Such efforts in the design and materials areas may often require that the traditional boundaries existing between functional areas in a firm be broken down.