What Is Supply Chain Visibility and Why It Matters
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 tips on how to improve your lead time and reduce supply chain lead times.
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 management 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.
Automate Workflow
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.
Final Thoughts
In some cases, the best resource a company can lean on to improve its production capability is a 3PL company.
Redwood's Modern 4PL approach brings 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.
FAQs
What is lead time in manufacturing and order fulfillment?
Lead time is the amount of time it takes for a process to move from initiation to the next meaningful step. In manufacturing and order fulfillment, that often means the time from when an order is placed until the product is packaged and shipped. Shorter lead times help customers feel prioritized and reduce the chance of cancellations.
How can unreliable carriers hurt lead time?
Unreliable carriers can slow down the delivery of raw materials, which disrupts manufacturing schedules and creates downstream delays. If suppliers depend on carriers with weak service standards, production can stall before work even begins. Removing those carriers from the network is one of the fastest ways to improve lead time.
What are the best ways to improve lead time fast?
The fastest ways to improve lead time are to reduce carrier delays, source from local vendors when possible, limit dependence on outside manufacturing, and automate workflow steps. These changes shorten handoffs, reduce waiting time, and keep orders moving. In many cases, better internal coordination matters as much as transportation speed.
Why does using local suppliers help reduce supply chain lead times?
Local suppliers can reduce supply chain lead times because materials do not have to travel as far and are less exposed to international disruption. The article notes that global delays and trade tensions can make overseas sourcing less predictable. Even if local sourcing costs a bit more, it can prevent stockouts and missed orders.
Is bringing manufacturing in-house a good way to improve lead time?
Bringing manufacturing in-house can improve lead time because it reduces dependence on outside production, but it is not always practical. It works best when a company has the space, resources, and capacity to handle the work internally without creating new bottlenecks. A gradual expansion is usually safer than trying to internalize everything at once.
How does automation help reduce delays in production and order processing?
Automation helps reduce delays by speeding up purchase order processing, improving scheduling, and reducing communication gaps between teams. If an order sits waiting for manual handoffs, lead time grows quickly. Updating order processing systems and communications tools can make the workflow more consistent and responsive.
When should a company consider a 3PL or 4PL to improve lead time?
A company should consider a 3PL or 4PL when internal processes, freight management, or fulfillment coordination are creating delays that are hard to solve alone. The article notes that Redwood’s Modern 4PL approach can connect multiple supply chain processes to improve lead time across manufacturing, retail, distribution, and order fulfillment.
