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CBD Ltd makes specialist machines for the recycling industry and has the following processes in place for building and delivering a machine within about a 5-month time period. Parts and components can literally be 1000s due to the technical and computerised safety features of each machine. A list of input components takes staff over 2 weeks to obtain manually. These lists are then forwarded to purchasing who key in this information into the current database to select current suppliers. A further week is taken to making this process with a further week to scan prices over the internet for any possible savings. Current suppliers are willing to match a cheaper price should one be found.
It is CBD policy to then send current information about ordering the parts to 3 suppliers in order for each supplier to send a quotation for the best possible price. All quotes are then to be authorised by the Production Director, before the goods are to be ordered. The goods are ordered then from the supplier with the lowest quote and this process takes up to one month. Production takes about a month and then specialist freight and shipping services are arranged for the delivery of the machine. Due to the complex nature and administration of doing this it can take up to 2 months if the machine is being exported (about a month if within the UK). The stock of parts due to the diversity and volume of them required to build the machine means that 40% of time is wasted either looking for parts that are not there, or they are there but have been moved to another store room to make space available. This is mainly because of the stock system being computerised but CBD sometimes overlooking and not recording parts received until sometimes a week to two weeks later (the Purchasing manager wants a batch control prepared first before entry to ensure a good control exists over the input of data).
Required: Explain how the potential five month period of receipt of order to delivery to the customer can be shortened or improved.
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