Question

Four ways to reduce the lead time in the management of supply chain.

Answer 1

Ways to reduce the lead time in the management of supply chain:

1. Use a Domestic Supplier

Using a supplier based stateside can automatically reduce your lead time by two weeks or more — that’s about how long it takes for parts to ship from many foreign countries. Adding to potential delays is the language barrier that often can complicate communications.

2. Increase Order Frequency

Have you typically placed one large bulk order, thinking it saves you money? If it means longer lead times, you may discover that’s really not the case when you factor in potential lost sales or increased labor for inventory management. Do a total cost analysis to determine if there truly is a savings — you may discover it’s a wash. If that’s the case, consider ordering smaller quantities more frequently to help reduce lead times and carrying costs.

3. Provide Sales Forecasts

Letting your supplier know when to expect reorders based on actual sales data helps them anticipate your needs and speed up the fulfillment process. They can set your usual order aside and have it ready to ship when you say “go.”

4. Convert to Standard Components

If you truly require a customized solution, make sure you rely on a supplier that specializes in your industry and doesn’t have to spend time learning on-the-go. Sometimes, however, you can convert to a standard component. Not only will it save time in engineering and production, it will likely reduce your costs, too. Your supplier should be able to collaborate with your designers to determine if any tweaks can be made to the design to accommodate a standard component without compromising the performance or quality of your finished product.

5. Consolidate Suppliers

Managing lead times requires more than just managing suppliers. Have you considered the amount of time you spend coordinating multiple vendors? If trying to keep them all straight and having to handle multiple purchase orders and relationships means you aren’t able to get your orders placed in a timely manner, lead times will suffer. When possible, consider condensing your supply chain to reduce the time spent handling multiple accounts, and/or implement a management software that can help streamline your processes and create efficiencies. You’ll likely find that consolidating or changing suppliers can add value in many ways.

6. Consider Kitting Services

Another internal process that can improve lead times is reducing the time spent gathering parts in your inventory. Consider grouping various components that are frequently used together into batches so your workers can stay more organized and easily pick what they need from inventory for projects. This process is called “kitting” and increases efficiencies because workers don’t have to spend time counting individual parts.