Your business needs
Many companies regard customer service levels as an inevitable compromise between their supply capacity, the allowable inventory carrying cost and the customer-requested lead times. This means in practice that the customer will receive the service level that you can afford. Customers may try to tip the balance by demanding even shorter lead times as well as requiring that you hold vendor-managed/-owned stocks in an effort to guarantee the supply speed & reliability they want.
The financial need to keep the working capital requirement as low as possible is not going to go away (with or without sales growth), and this creates a huge amount of pressure on service level and supply chain performance. One result of this is that most companies choose to measure (and act on) the service level relative to a commit date rather than relative to the customer-requested date – even though the latter is a much better gauge of customer satisfaction with respect to service.
If you feel that you are ‘behind the curve’ on supply chain performance (either as a customer or as a supplier) then you are likely suffering from this compromise paradigm of only being able to provide what your budget will allow or the customer will tolerate. The good news is that it is a paradigm, and changing the way the supply chain process works can reset the boundary conditions of how well you can serve the customer (better service and lower cost are actually not mutually exclusive). If this reflects one of your business needs then read on…