According to the Federal Reserve Bank of New York, supply chain pressures are easing. These pressures have been a key factor in driving inflation and also impacting companies’ ability to sell through to customers. Still, global uncertainty, challenges with capacity, and potential work stoppages continue to impact supply chains.
From start to finish, every step of the supply chain influences the lead time for getting goods into your customer’s hands and getting paid for your work. An efficient supply chain optimizes inventory levels, reduces holding costs, and improves the customer experience.
What Are Lead Times in Supply Chain?
Supply chain lead times include everything it takes for materials or products to move through the various stages of the supply chain from order placement to delivery. Shorter lead times improve efficiency and reduce the need to tie up capital in excess materials or products.
There are different kinds of lead times in the supply chain and these differences impact the supply chain in a variety of ways.
Material Lead Time
Efficient supply chains have to account for the time it takes your suppliers to process, prepare, and ship materials to you. Supplier lead times are influenced by location, inventory, capacity, and logistics.
Transit Lead Time
Delivery lead times include moving goods from one location to another. Transit times are influenced by transportation mode, infrastructure, and availability of resources. Natural disasters and global unrest can also impact transit times and lead to time delays.
Manufacturing Lead Times
Once raw materials or goods are received, there is the lead time it takes to manufacture finished products. Availability of raw materials, production efficiency, inventory management, and market demand can make a difference.
Customer Lead Times
Also called order lead time, customer lead time is how long it takes to fulfill a customer’s order from start to finish. Processing efficiency, available inventory, customer demand, manufacturing of finished products, pre-processing time, post-processing time, and shipping times all influence customer lead times.
Replenishment Lead Times
Replenishing inventory and making sure there are enough raw materials on hand is crucial for maintaining optimal inventory levels and avoiding stockouts for products or downtime in manufacturing. Managing reorder points, ordering, suppliers, and material flow is crucial.
5 Expert Tips to Achieve Shorter Lead Times In Supply Chain
Reducing lead time in supply chains makes your entire operation more efficient. The shorter your cycle times, the more goods you can sell. Here are five tips from industry experts on how to reduce lead times in the supply chain and produce better outcomes.
1. Have a Clear Level of Communication with Your Team and Suppliers
An efficient supply chain requires clear and consistent communication. When team members and suppliers all know the current and future status of goods, everyone is on the same page.
With a comprehensive view of your raw materials, products, shipping times, and the right project management tools, you can improve cycle times and keep your team, suppliers, and customers up-to-date. Supplier lead times impact supply chain flow and can delay manufacturing.
2. Identify Processing Time and Time Delays in the Production Process
Improving lead times and avoiding production delays requires monitoring each step in the manufacturing and production cycle. Small bottlenecks can have a ripple effect throughout the entire supply chain. When you can proactively monitor and identify inefficiencies, delays, or workflows, you can improve processes.
With automated notifications, you can more easily monitor the key points in your production process where bottlenecks occur so you can adjust as needed. For example, monitoring inbound shipments for delivery time ensures you have the staffing and capacity to accept shipments and avoid backups at the docks or paying for idle time.
3. Consolidate Your Domestic and International Suppliers Based on Customer Demand
Today’s global supply chains are complex. Juggling multiple domestic and international suppliers introduces multiple variables into the procurement process. One way to improve lead times is to consolidate your suppliers based on customer demand.
This requires analyzing customer orders and finding supply partners that can meet your delivery expectations. By working with a smaller group of trusted suppliers, you can develop long-term relationships to achieve faster response times.
4. Ensure Accuracy in Shipping Times and Delivery Times
Customers now expect you to provide accurate shipping and delivery times when they buy your products. You should demand the same from your suppliers.
At each stage of the supply chain, you need real-time data, including tracking of shipments. This data can help you monitor delivery times, adjust lead times based on potential delays, and evaluate supplier performance.
5. Automate Your Order and Fulfillment Process
The more processes you can automate, the more efficiently you can run your operation. By automating the order and fulfillment process, you can streamline a host of tasks to keep your supply chain running and minimize lead times.
For example, asset tags and IoT devices can read and track inbound and outbound products automatically. You can also automate bill of lading (BOL) creation and shipping documents to save time.
End-to-end automation software to manage your entire supply chain helps control inventory flow and anticipate potential problems before they become critical issues. Optimizing each step of your order and fulfillment process streamlines your operation, improving lead times, cycle times, and order fulfillment.
The Right Software Solution for Your Business Supply Chain Management
By incorporating these five tactics into your supply chain management strategy, you can improve lead times and delivery times. The right software solution can help you manage your supply chain more efficiently and provide greater transparency.
Surgere’s cloud-based Production Control tool gives you complete visibility into production and operations. Real-time reporting with custom alerts and notifications can help you identify bottlenecks and potential problems in your supply chain. You can instantly check the status and location of your tagged assets and gain valuable insight into your entire supply chain.
Surgere’s solutions reduce loss, save time, increase speed to market, improve inventory management, and create transparency in the supply. Predictive analytics help you more quickly identify potential problems in the supply chain so you can adjust lead times as necessary.
Contact Surgere today to learn more about how to reduce lead times in supply chains.