The lead time within the supply chain management process is a critical factor. When it’s too long, potential orders are lost through customers being unwilling to wait. Other issues such as an extended delay to the usual lead times can further compound the issue of lost or canceled customer orders.
Therefore, handling long lead times within the supply chain is necessary to mitigate, reduce, or work around them where needed. Here are some suggestions on how to do that.
Assess the Current Supply Chain Management
It’s necessary to proceed through a full supply chain assessment to see where the company is today and what is contributing to longer lead times than expected.
Such an assessment should include having a detailed discussion with the sales, finance, operations, purchasing, supply chain, logistic and inventory management, and other relevant departments. This will help highlight the concerns and stress points for each that are possibly contributing to the extended delays.
While much finger-pointing is likely to occur, what an assessment is intended to do is figure out how the entire management of the supply chain is at fault. For instance, poor communication can lead to late ordering of supplies, contributing to not having available products when sales are recorded. Ineffective management of supplier relationships can also create knock-on delays too.
Working with a team like Supply Velocity to complete a supply chain assessment is a necessary step to figure out what is going wrong. Only then can improvements be recommended and implemented.
Review Supplier Relationships
Suppliers that specifically have longer delays and extended lead times for products should be looked at more closely. Discussing the causes of the delays and exploring all ways to work around them is worthwhile.
Also, explore alternatives to this supplier to access the component or finished goods normally received from them. Is the company already working with other suppliers fulfilling the same requirement and how do their lead times compare? Consider switching more orders to the speedier supplier if the matter doesn’t resolve itself.
Are Transportation Distances Adding on Time?
Are the longer lead times originating from suppliers that are the furthest away from the warehouse? Is this just a coincidence or is the additional time created by transportation delays?
Other than creating a new warehouse closer to the supplier, there’s not much that can be done to cover a greater distance any faster other than flying goods in. However, that will increase costs substantially.
Speed Up Order Processing
Are customer orders late getting into the system and leading to unfortunate knock-on delays to the ordering team? If there’s a bottleneck here, what can be done to remove it?
Are production and quality control slowing down the release of products for shipping to end customers? How can these be streamlined to maintain the same quality but require less time?
Are there problems with miscommunication between departments or within the same department? Can systematizing certain aspects of communication for repeated requests avoid this issue?
Also, are orders sometimes completely lost within the system? How often does this occur and where are they getting lost along the way? How can this be prevented in the future?
Addressing these concerns can do much to speed up order processing.
Long lead times are the bane of the sales team. Fortunately, there’s much that can be done to address them. So, companies that are keen to resolve the issue have many options to begin doing so.