The need to maintain large inventories, on one hand, or the set aside significant productive capacity, on the other, will be reduced. The payment function is another area that deserves attention. In developing this closer working relationship, both you and your key customers will be able to utilize EDP for processing purchase orders and invoices. In addition to more predictable orders, more timely customer payments are likely to result. If you fail to develop these key customer relationships, your operating costs are sure to increase over time.
Contracts are for small order quantities.
The timing of orders is unpredictable. Freight and delivery requirements vary with each order. Purchase orders and invoices are processed manually. Significant inventories need to be maintained and monitored. Production capacity needs to be reserved.