Supply Chain Lead Time Reduction
Supply chain managers know that one of the biggest impacts on inventory level is lead time. Developing strategies for lead time reduction should be one of your highest priorities. That said, some manufacturers struggle with maintaining visibility over their inventory, making it hard to control levels and manage lead time.
Extended lead times don’t just create inefficiencies when it comes to inventory levels. They also tie up your cash and storage space. Let’s say your lead time is 30 weeks, or about seven months. This means that in order to fulfill your own orders, you must carry over half a year’s inventory. You also need to ensure you have safety stock on hand, which increases costs all around.
You often see this with disorganized companies. Not only does it take weeks for them to process an order, but if they’re buying from an inefficient supplier, that increases lead time further—especially if they’re overseas. Now you aren't only looking at high prices; you're also looking at long waits.
Supply Chain Lead Time Reduction Strategies
Is your lead time larger than you’d like? You’re not alone. Many companies lack the resources to analyze inventory levels and create efficiencies that save time and money.
An experienced supply chain partner, like Birmingham Fastener Managed Inventory, can diagnose issues in your supply chain and develop strategies to improve processes and maximize profits. You can process orders quicker, optimize inventory levels and ensure you can get shipments out quickly. With an inventory management partner, can avoid overspending and stocking spare parts to free up storage space and your budget.
When it comes to reducing your supply chain lead time, consider these questions:
How long does it take to send an order to the supplier?
- Is it taking days or weeks for your team to review orders? Why? Finding ways to reduce review time is essential to lead reduction.
How long does it take your supplier to ship your products?
- In addition to your own review time, your supplier has a review time, too. They also have to manufacture and package your orders. This isn’t in your control, but that makes it even more critical that you have suppliers that you trust. Find a supplier that is committed to being your partner, not just another provider.
How long is delivery time?
- Understanding how shipping costs relate to your bottom line is essential. While you want to save as much money as possible, you should also consider your return on investment and total cost of ownership. Sometimes the high price for expedited shipping is worth it.
When it comes to answering these questions, you need maximum data visibility. While some companies struggle with this, others enter into valuable partnerships with experts they can trust. If you’re looking to reduce lead time, consider a team of experts who can create efficiencies in your supply chain and save you money.