The Value of a Good End-to-End Lead Time
About a month ago I ordered a bridesmaid dress online. Unfortunately, when I received the estimated arrival date it was 5 weeks from my purchase date! I understand that things take time to ship, but in the day in age of same day delivery 5 weeks just seemed way too long. Working in the supply chain industry one of my first thoughts was well, where in their supply chain network is something going wrong? This led me to think about their lead time and how it could be better.
When looking at a business’s total lead time you have to keep in mind that it is the amount of all processing time, transit time and time spent as inventory. It is the true time it takes for materials to travel from the beginning network at the supplier to the distribution centers and finally to the customer.
There are several factors to tracking lead time;
Supplier (inbound) lead time
Manufacturing lead time
Customer (outbound) lead time
The time it takes for a customer’s order to be received, processed, and shipped to them.
Reduced lead times mean less inventory, faster delivery and more cash on hand for the business.
At TransVoyant we help customers reduce their total lead times and network variability. This is achieved through continual behavior learning of their lead time between nodes for multi-mode shipping lanes, lead/cycle time for in-node operations and the dwell time within each node.
Taking this information, we evaluate past, present and future supply chain performance between nodes. We also evaluate performance for activities within a node (e.g. manufacturing, warehouse operations). Finally, we continually learn variability for every lane, route and node in the customers network. This variability informs inventory and labor buffer requirements throughout the supply chain. In doing this, a business gains end-to-end lead time and variability visibility enabling measurement of quickest and alternative routes in their network with the optimal amount of cost.
When viewing your global end-to-end network it is important to pay attention to your lead times and variability as it effects how much inventory you need on hand. This directly leads to customer satisfaction as customers expect their items as fast as possible with little to no effort.
Let’s be honest, no business wants someone to write a blog post about their slow lead times due to receiving an order in a slow manner!
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