Follow These Secrets to Improve Your Lead Time
Nowadays, customers expect quicker deliveries and real-time tracking to complement it. They simply don’t accept “we’re out of stock” as a suitable answer anymore.
And thanks to the internet age, they can take their business to the competitor in a matter of minutes. Customers have so many alternative shopping options they no longer wait around for just one company to stock up on a specific type of product.
So, in order to survive in just about any consumer-driven industry these days, you must be quick.
One area that many businesses don’t take into account often enough is lead time. Everything from production to order fulfillment has a lead time associated with it.
Essentially, a lead time is the amount of time it takes to begin a specific part of the process after it has been initiated.
For instance, when a customer places an order, they have initiated a process. The amount of time it takes the company to ship that product to the customer from the time they placed the order is known as the lead time. Decreasing this amount of time gives the customer a sense of priority and it also means they will likely get their products quicker.
On the other hand, if the lead time leaves them waiting for days until it actually gets packaged and put on a truck, the chances of a cancellation increases.
So, in this article, we will take a deeper look at this small yet critical window of time and give you a few tips on how to improve it…
Step Away from Unreliable Carriers
One of the biggest contributing factors to an inefficient manufacturing schedule is the carrier who is slow on delivering raw materials.
Suppliers are the lifeblood that drives manufacturing. At least, they are when they are on time!
However, in all honesty, it’s usually the carrier they use that tends to drop the ball.
Ultimately, when the issue is finally narrowed down to this point, you really only have 3 options…
- Speak with your suppliers and ask them to use carriers that have better service standards
- Ask the supplier to use your carrier (since you’re likely paying for shipping as a manufacturer anyway)
- Find a different supplier
Most successful manufacturing companies opt to work with the same suppliers but have a more active role in the movement of their freight. Regardless of which method you choose, the bottom line is to remove unreliable carriers from your network, regardless of how that takes shape.
Locate Local Vendors
The lead time for manufacturing is also dependent upon the lead time of both suppliers and vendors.
If you depend on international suppliers of raw materials, this can significantly impact your ability to stay ahead of the curve. This issue is extrapolated via active, volatile trade wars that are actively being lodged by multiple government entities.
To improve your own lead time and stay ahead of manufacturing issues caused by international delays, just locate local vendors and suppliers instead. Of course, this is not always a possibility, but it should be a priority when available.
While you might pay a premium, those extra pennies are nothing compared to running out of supplies and not being able to fulfill customer orders.
Reduce Your Dependence on Outside Manufacturing
Those who can handle all their manufacturing processes in-house typically have fewer lead time issues.
This may seem like a logical way of improving lead time, at first. And for a lot of businesses, it is the right choice. However, it can quite easily become overwhelming, which may result in even longer lead times anyway. Likewise, it is not feasible for those who don’t have space, resources, or the ability to keep everything in-house.
However, there are more benefits than drawbacks to being able to internalize your manufacturing.
If need be, gradually increase your manufacturing capacity as resources become available. Remember, increasing lead time is a marathon process, not a sprint. So, any improvements you make benefit you in the long run.
Having efficient internal processes is another way to reduce delays in manufacturing and production.
In order to improve in this area, you’ll need to automate some workflow processes.
For starters, consider a few important factors that can impact order processing such as:
- How long does it take to process a customer’s purchase order?
- Once processed, how quickly can you get manufacturing on schedule to accommodate?
- Is a lapse in communication delaying production?
If the answer is yes to any of these questions, it’s time to update your order processing system.
Technology can significantly improve lead time, especially for manufacturing companies with multiple touchpoints within the process.
In some cases, the best resource a company can lean on to improve its production capability is a 3PL company.
A leading 3PL like Redwood Logistics has experience working with multiple supply chain processes. Processes that work together to improve lead time in manufacturing, retail, distribution, and order fulfillment!
If you’re looking to improve your lead time, and considering updating your order entry system or communications software, or have any other questions about this daunting task, contact the experts at Redwood Logistics.