The Real Impact of Expediting Orders in Manufacturing – and How to Break the Cycle

You can read Part 1 here

Part 2:The Expediting Trap – Causes and Consequences

Why do so many companies fall into a cycle of frequent expediting? The root causes are usually planning and process failures that make the supply chain reactive. A major culprit is demand forecast error. If you consistently can’t predict what customers will buy (or when), you will constantly be caught off guard. Industry data shows that inaccurate demand forecasts account for nearly half (49%) of all expedited orders (Metric of the Month: Mitigating Expedited Costs in Logistics | Supply & Demand Chain Executive) – by far the single biggest trigger. When forecasts are off, manufacturers either don’t have enough of the right materials on hand or aren’t prepared for a spike in orders, forcing them to rush in supplies or expedite production to catch up.

Other common causes include material shortages and planning breakdowns. In a benchmarking study, after poor forecasting (49% of expediting cases), the next largest causes were raw material shortages (20%), followed by issues like poor transportation planning (15%), last-minute production schedule changes (15%), and lack of transport capacity (15%) . In essence, weaknesses anywhere in supply chain planning – from supplier management to scheduling and logistics – can spawn urgent orders.

Top five causes of expedited orders, according to APQC benchmarking data. Inaccurate demand forecasting is by far the leading cause (49% of expediting incidents), outweighing other factors like raw material shortages and planning issues in transportation or production

The impact on lead times and supply chain stability is profound. Expediting is not a harmless workaround – it makes your supply chain less stable over time. When a factory constantly juggles rush requests, the normal production sequence is frequently derailed. This tends to push out lead times for all orders, because resources are often pulled from one job to finish another. One expert describes a vicious circle: an initial delay threatens a late delivery, so the team expedites the order; but expediting disrupts the production flow and causes congestion in materials, which extends lead times for other items (How Expediting Destroys Factory Performance (& how to avoid it)). Those longer lead times then create more risk of future late orders, prompting yet more expediting  Over time, the organization may even artificially inflate planned lead times and safety stocks to compensate, masking the underlying problem of poor planning  In short, expediting begets more expediting. This trap leaves companies with higher inventory and buffer stocks, longer cycle times, and still the occasional backorder – essentially a higher-cost operation with shaky reliability

Breaking out of this cycle requires addressing those root causes head-on. The good news is that organizations who escape the expediting trap see dramatic improvements in performance.

Real-World Benefits of Reducing Expedited Orders

Manufacturers that manage to reduce their dependence on expediting almost always reap significant rewards in service, cost, and efficiency. By investing in better planning and resisting the urge to constantly fight fires, they achieve a more stable, predictable supply chain. Here are a few examples and results reported in industry:

• Inventory Drops and Service Rises: A pharmaceutical manufacturer undertook an end-to-end planning overhaul to get ahead of demand and avoid reactive expediting. The result was over a 40% reduction in inventory (including raw materials, WIP, and finished goods), while simultaneously improving service levels by 18 percentage points  By holding the right items at the right time (instead of hoarding everything “just in case” or scrambling to buy last-minute), they cut carrying costs and still delivered to customers more reliably. This came with a 75% reduction in obsolescent stock – showing that smarter planning reduced both shortages and excess.

• Huge Savings on Freight Costs: A janitorial products manufacturer discovered that many of its outbound shipments were going rush due to poor load planning and an overstuffed warehouse. By implementing a custom transportation management system (TMS) and optimizing how orders were consolidated and scheduled, they dropped expedited shipping costs by over 90% per month (Custom load plan and outbound shipment solution | Schneider). Essentially, nearly all the costly last-minute trucks and air shipments went away. This not only saved tens of thousands of dollars monthly, but also improved operational calm – orders shipped out in an organized manner rather than via frantic, expensive moves.

• Higher Efficiency and Shorter Lead Times: Companies that adopt demand-driven planning (more on this below) often report substantial gains. One approach, known as demand-driven MRP (DDMRP) or pull-based replenishment, helps eliminate the constant expediting by building buffers and scheduling to actual consumption. Manufacturers moving to these techniques have seen service levels reach targets, inventory reduced by around 40%, and lead times cut significantly (How Expediting Destroys Factory Performance (& how to avoid it)). With fewer emergencies, capacity is used more productively – one study notes higher equipment utilization and OEE thanks to a steadier schedule and less downtime from changeovers Planners and procurement teams also get back a lot of time; instead of chasing shortages daily, they can focus on continuous improvement and strategic tasks (leading to “significantly less fire-fighting and stress” for the team)

These examples show that attacking the root causes of expediting isn’t just a nice operational goal – it has measurable financial payoffs. The key is to shift from a reactive approach to a proactive, demand-driven planning process. How can manufacturers make this shift? Below are several strategies to minimize the need for expediting in the first place.

Part 3 follows shortly. Stay tuned