How can you reduce lead times in a supply chain?

From choosing local suppliers to utilising inventory management software, there are many ways to keep lead time to a minimum. Read our list to learn more.
February 1, 2023
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5-min read

It should be no secret to wholesalers that customers hate to wait. Long waiting times lead to frustration. Frustration turns into complaints and negative reviews. Unfortunately, that often has a long-term negative impact on your company's reputation.

So, how can you reduce long lead times in your supply chain? From choosing local suppliers to utilising inventory management software, there are many ways to keep lead times to a minimum. Take a look through our list to learn more...

What are lead times?

First, we need a clear definition of what lead times are. The lead time is the length of time it takes from the start to the end of a process. Within a supply chain, this specifically begins with a customer order and ends with the delivery of the products. The longer the lead time, the longer your customers will be waiting for their order.

Reducing lead times in a supply chain

So, what can your business do to reduce lead times? There are some key points to consider...

Accurate reporting

An important strategy for reducing lead times is to let your suppliers know in advance what products you'll need to restock through the upcoming quarter. This allows them to plan ahead and complete the order fulfilment process quickly. But how can you find accurate information on what you'll need? The answer is real-time data. With real-time stock and order data, you'll be able to see exactly which stock items you're low on - and what you'll likely need in the future.

Streamline through automation

Lead times can be extended by small, manual processes. These processes are also easy to forget or mishandle, which can cause further issues down the line. Automation reduces the chances of human error and ensures that processes run smoothly and quickly.

Plus, with inventory management software, it's quick and easy for warehouse staff to find the right bin location for an order. Similarly, carrier integration can also save precious time, as the software automatically calculates shipping, prints a delivery note, and sends a dispatch email to your customer. This way, once the orders arrive in your warehouse, manual processes won't hold up delivery.

Order frequently

Although ordering in bulk can bring savings, it can also mean longer lead times. The longer wait can unfortunately contribute to lost custom, which ultimately cancels out any savings gained. If this is the case for your business, it could be more beneficial to place smaller orders with your supplier more frequently. This can potentially bring financial savings as it also means less cash is tied up in stock, as well as better overall efficiency.

Inventory management

Lead times are worsened by stockouts, so it's important for your company to be aware of what is low in stock. Inventory management software can make a big difference. Because your entire stock will be visible, your purchasing team will be able to pinpoint bestsellers that quickly go out of stock and add them to shortage lists that all departments can access. This means that no matter who takes the order (such as customer service representatives or your sales team), everyone can add products to the list. This reduces the chances for products to be missed - and lowers lead times.

Warehouse staff should also create a personalised dashboard to highlight outstanding orders. In OGL's Profit4 software, this can be done by filtering all orders by status. You can then create a dashboard that exclusively displays orders awaiting dispatch. With this, you'll have an at-a-glance view of remaining orders, which helps to speed up the delivery process.

Keep communication open

Whilst this might sound obvious, it's important to keep the lines of communication open with your suppliers. They can keep you updated about any delays, and you can provide them with deadlines. Meanwhile, as mentioned above, it's also important for different departments to communicate and integrate their processes, such as through shortage lists.

Prioritise orders

When a customer has requested an expedited delivery, it's even more vital to reduce lead times. These customers will be expecting their delivery fast, and this potentially means a higher risk of a negative review if things go wrong. In these cases, you'll obviously want to prioritise these orders for picking and dispatch. With Profit4, you can choose which orders are prioritised within your warehouses.

Domestic suppliers

Another way to cut down lead times is to use a domestic supplier. This obviously reduces shipping times and eliminates customs delays. However, this can raise overall order costs, so you should weigh up what will provide the best savings for your company.

Automated delivery methods

Rather than always manually ordering stock, it can help to automate this process along with customer delivery. There are some automated delivery methods that are suitable for items that aren't currently in stock. This way, you can accept the order and reduce the impact on lead times.

With Profit4, you can choose between direct delivery and back-to-back delivery. Direct delivery allows you to place an order with a supplier to be shipped directly to the customer. If you wish to replenish stock automatically, you can do this with back-to-back orders”. Every time you receive an order from a customer, the items purchased will automatically be reordered from the supplier. These automated delivery methods reduce lead times by preventing human error, like a customer service representative forgetting to raise an order for a low-stock item.

Reduce lead times with inventory management software

Minimising your lead time maximises customer satisfaction. One of the best ways to do this is through streamlining your inventory management. When you know exactly where your stock is, what's awaiting shipment, and what needs restocking, you can ensure no step holds up the process.

With personalised dashboards and automated delivery methods, Profit4 offers a variety of tools to cut down lengthy lead times. That means your deliveries run smoothly and, ultimately, your customers are happy. Shorter lead times help you to develop a positive reputation for your business and build repeat custom.

To learn more about our inventory management software, you can book a live demo. Or why not take a look at our case studies to see how our software has helped businesses like yours?

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