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Lead-Time Accuracy Lessons from the Supply Chain Bootcamp

by Laura Casasanto

November 3, 2011

The Supply Chain Bootcamp is well under way here at Planet Hollywood in Las Vegas, providing attendees with instruction on how to get more out of their new or existing SAP system. Yesterday’s sessions covered diagnosing and implementing cost cutting measures, while today’s have focused on improving inventory turns and lead-time accuracy as well as a great review SAP’s logistics information system.

In one of today’s sessions led by veteran Supply Chain Bootcamp speaker Joseph Grobler titled “Improve your lead-time accuracy 15%-20% as you optimize processes and realize incalculable benefits across your supply chain,” Joseph detailed the many impact improvements in lead-time accuracy will have on your supply chain:

  • Revenue
    • If we miss the sale due to unavailability, we lose the revenue for that sale and potentially lose the customer to a competitor
  • Service levels
    • Although the supply chain must ultimately provide a service to the customer, it is the service levels between internal departments and functions that ensure predictability and overall performance
  • Inventory values
    • All process inefficiencies, including lead-time inefficiencies, can be camouflaged with enough inventory — often referred to as strategic and/or safety st ock
  • Turn-around times
    • Dependent on the ability to meet customer demands in time and on time, every time
    • Unreliable supplier deliveries and unnecessary inventory handling impacts the necessary actions
  • Operational costs
    • The inability to do something the first time around results in unnecessary compounded costs and efforts while expediting and validating
  • Information accuracy
    • Incorrect information creates frustrations, delays, inaccuracies and unnecessary costs
  • Process flexibility
    • Flexibility does not mean the ability for every person and function to “do it my way,” but rather for the company to move as one or change direction at the drop of a hat

Joseph really stressed that last point: "You cannot have people living in the village without any rules. There has to be rules and you've got to have law enforcement … You can’t have Sales or Production not doing what they need to do or doing it their own way," he said.

Of course this advice is often easier said than done. Implementing a new initiative to reduce lead-time accuracy in your own organization may require a great amount of effort, but the pay off will be more than worth it. Improving lead time throughout the supply chain will make your life much easier by keeping down costs, increasing efficiency, and positively affecting other areas of the supply chain such as MRP and ATP.

-Laura, SCM Expert

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