Fit to Be Tired
Do I look exhausted? Don't feel sorry for me. That hunted look just shows I'm staying ahead of the competition.
By Kevin Kelly

(FORTUNE Small Business) – Relentless. That is what business has become. These days it seems that customers need to keep their suppliers in a permanent state of crisis. Recently one of our bigger customers awarded us a large order—and then demanded delivery within a week, four times faster than usual. And that is just one example of our plight. If our family-owned plastic-bag-making company is not scrambling to meet the demands of customers who claim they can get it cheaper and faster elsewhere, then we are ripping up the schedule at day's end to bail out a buyer who has managed to run out of product. In fact, constantly shifting customer timetables have forced our company to hold scheduling meetings twice daily.

It is exhausting. Customer demands keep me and other managers logging ten-hour days and inhibit our ability to plan. But as much as I want to complain, I'm beginning to see relentlessness as my ally. Short lead times give us a huge advantage over our less agile rivals, especially larger manufacturers or distributors importing from overseas. While the bureaucracy of a large company might get in the way of making last-minute schedule changes, our customers know that they can issue a distress call to me and my family and get help.

So we are gearing up to handle the madness. For us, being able to respond quickly means taking actions that not so long ago would have seemed counter to running a successful business in a low-margin commodity sector. Namely, we are boosting our cost structure. During the past few months we have added an extra customer service person and doubled the size of our art department, which processes package designs. Neither position directly generates new sales. But to chop lead times we have to get orders into our system and through production. The only way I know to do that is by adding salaries, in this case more than $110,000 a year.

We are also dumping money into computer systems to speed us up. Over the next year we plan to invest at least $60,000 in software to help get information to our customers more quickly. And we are finally doing what our larger brethren did years ago, leaving behind the world of manual inventory counts to embrace bar-code technology that will help us track raw materials and finished-goods inventory. That will allow us to tell customers much more quickly what we have available without requiring the customer service agent to run into the factory and perform a physical count. We're also adding a nifty feature to our order-entry software that will allow agents to simply copy an old order, update the price, quantity, and due date, and spit out a new order in seconds.

For a manufacturer, adding more equipment or getting more out of existing equipment remains one of the best ways to get products to customers faster. We recently spent $1.5 million on a new printing press that increased our capacity 20%, thanks to the machine's ability to run difficult jobs twice as speedily as any of our existing equipment. On those older machines we are studying ways to reduce setup times, and managers are teaching employees how to run machines more quickly. The result? We are producing faster than we expected.

Throwing more money into machinery strains our cash flow, which already was tight. But I don't think we have a choice. Our customer service manager figures that she wastes eight hours a week doing physical inventories. Meanwhile, customers wait for answers. And I spend my days answering calls from stressed-out buyers begging for delivery on orders so new they haven't hit our schedule yet. The peace of mind that comes with better systems and more people makes the moves no-brainers. Not to mention the customers who will stay because they know we'll take care of them. Especially if they need the bags in a week.