The Value of a Good End-to-End Lead Time
About a month ago I ordered a bridesmaid dress online and 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: the time it takes from ordering materials from a supplier to the materials being received and ready for use.
Manufacturing lead time: the time it takes to send an order to production and for the materials to be manufactured and available for shipping.
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. In my case, as the customer for the online bridal dress shop, it would mean a happier customer which leads to gaining more business. At TransVoyant we help companies reduce their total lead times and network variability by continually learning the behavior 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 past, present and future performance for activities within a node (e.g. manufacturing, warehouse operations). Finally, we continually learn past, present and future variability for every lane, route and node in the customers entire network. This variability informs inventory and labor buffer requirements throughout the entire supply chain. In doing this, a business gains end to end lead time and variability visibility enabling measurement of quickest and alternatives routes in their network with the optimal amount of cost (inventory, transportation, logistics). When viewing your global end to end network it is important to pay attention to your lead times and variability because, as stated earlier, it effects how much inventory you need on hand and 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!
For more information on how TransVoyant can reduce your end to end lead time please email firstname.lastname@example.org