With increased levels of supply chain integration and reduced inventory levels, reliable, on-time deliveries have become critical for success. Large inventories and production capacities were traditionally required to ensure on-time delivery. However, with advanced information systems, agile manufacturing organizations with flexible equipment and tooling, and sophisticated logistics systems, integrated supply chains no longer need large, costly inventory buffers to respond to unexpected events and variations in demand. These capabilities should be augmented by the effective use of advanced transportation capabilities, such as overnight delivery.

Recommendation. In response to increasing demands for rapid delivery and customized products, small and medium-sized manufacturing enterprises should consider using advanced supply chain communication systems, flexible manufacturing techniques, and modern transportation capabilities as alternatives to investing in large inventories and production capacities.


Customer expectations for timely service before, during, and after a sale continue to increase and, aided by the Internet and modern transportation methods, suppliers are responding to these demands. Web sites are being used to post maintenance manuals, service bulletins, and responses to frequently asked questions. e-Commerce enables customers to place orders around the clock from anywhere in the world without incurring the cost of long-distance calls. Replacement parts can be delivered overnight in the United States and within a few days in most of the rest of the world.

Recommendation. In response to increasing customer expectations for service and support, small and medium-sized manufacturing enterprises (SMEs) should reassess their service and support capabilities and revise them, as needed, to remain competitive and to seize new market opportunities. SMEs should develop an understanding of the opportunities provided by various Web technologies and, if appropriate, create a Web presence.

Building Partnerships

Partnerships are the backbone of integrated supply chains. In many

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