5 WAYS TO REDUCE LEAD TIME IN THE SUPPLY CHAIN

For effective inventory management, it is crucial that the raw materials are available at the right time and in the right place. This is when lead time comes into the picture. Lead time refers to the time between initiation and receiving the order. It should be as minimal as possible to keep the operations running.

5 Ways To Reduce Lead Time In The Supply Chain

Here are 5 ways to reduce lead time in the supply chain. 

• Domesticate the supply chain.

  Building the supply chain with a supplier available in your country can reduce the lead time by 10 to 15 days. It also helps reduce the cost that you might have to bear, such as duty charges on imports of goods. To reduce the lead time, the supplier must be close to your warehouse, and if not, ensure that he can easily reach you in times of urgency. 

  
  

• Automate processing

  Thousands of pieces of software are built to perform the inventory management process. Automation brings transparency into the system. It reduces the human effort required to maintain records by hand and eliminates the scope of error. Automation makes the inventory management process faster and more accurate. 

  
  

• Forecasting

  Demand in the markets usually fluctuates from time to time. Based on this fluctuation, every business must forecast its supplies regarding how much to produce, what to make, etc. In such a scenario, it becomes essential that you also inform the supplier beforehand so that he can accommodate according to your predicted forecasts. Sharing the demand forecasts with the suppliers helps to make them aware of the orders you will place, thus reducing the lead time in the supply chain. 

  
  

• Build relationships

  To ensure the survival of your business, you must build relationships with your partners, suppliers, customers, and all the other stakeholders. A business's chances of success increase when it takes its key partners along with it. Building relationships with suppliers will not only help you financially but can also help you morally in times of crisis.

  
  

• Incentivize

  Offering a certain percentage of the profits to your suppliers, promising more product supplies, and helping them build their business by promoting their brand are a few incentives that can be offered to the suppliers. The incentive tends to create a willingness in the supplier to deliver good quality in less time, thus helping you generate more profits. 

  
  

The operations performed in a business are incomplete without the raw materials and stock of goods. Maintaining a balanced inventory is crucial for efficient operations. A business's suppliers determine the lead time in the supply chain. The lead time is a very important factor and must be as low as possible. To ensure this, the business must carefully assess the capabilities of the supplier. Based on the assessment, the business should take steps forward.