Reduce Lead Time is something that will benefit manufacturers and customers. For manufacturers, greater lead times have the risk of stockout or to hold excessive materials. And customers don’t like to wait too much, because it’s frustrating.
Also, taking too long to deliver products can result in market changes, making products obsolete or out of the quality standard. Besides that, your competitors can deliver faster, which will be disadvantageous for your company.
We already established in another article what is lead time. Now let’s discuss how to reduce lead time and what are the benefits of it.
Reduce lead time of your Supply Chain
Two things must be done to increase efficiency in manufacturing operations: reduce lead time and forecast it rightly. You need to know the timing and assure clients and other partners that it will be followed. There is some ways to reduce lead time, among them:
Using closer suppliers:
That’s the most basic way of reducing the time of delivery. Since the supplier is closer to you, it doesn’t take long to get the products to your warehouse. That means reducing traffic, cutting different means of transportation, such as airplanes or ships and dealing with less uncertainties on the delivery path.
Making orders more often:
Usually when you order greater quantities it takes longer to deliver. You may discover by doing a cost analysis that it’s better to order frequently because it can reduce lead time and costs, since it’s easier to deliver less products.
That will also allow the supplier to reduce his carrying costs and avoid problems in shipment and transportation.
Share sales forecasts with suppliers
If you share your sales forecast with your suppliers you allow them to preemptively fulfill your orders and speed up the process. If they know your sales moments and usual size of orders they can have your shipment ready to go at the precise moment.
Make partnerships with suppliers
When you have trustworthy suppliers that you already know, it’s important to consolidate a contract and make that supplier a partner. Managing a lot of suppliers takes a lot of time and can result in losses.
You don’t need to depend on only one supplier, but it’s a good way to reduce lead time to establish connections with the best ones. That’s because they already know your process and can anticipate problems and necessities. Besides that, it reduces the time you need to review your contract and relations.
Use kitting services
Basically, kitting services are a way to gather parts in your inventory, which increases efficiency of workers that don’t need to spend their time counting parts and joining them. So, it makes your inventory more organized and easier to find items.
Make promotions and incentives
You can create bonuses for suppliers that can deliver in faster times and consolidate that relation. Of course, it’s important that even by reducing the time of delivery, the quality of the product remains.
Communication can Reduce Lead Time
Finally, you need to stay in touch with your supplier for the whole process, telling you your expectations and frustrations. You need to know how their process works and how they can work with you. Also, how well you two can contemplate each other’s needs.
Reduce Lead Time for more profit
As stated, if you can reduce lead time of your supply chain, you’ll end up being more profitable and efficient, while consolidating a better relationship with customers and partners. But you need to maintain your expected deadlines and quality of products.