The time between placing an order and when it is delivered is known as the “delivery lead time” in the supply chain. It is crucial for supply chain management and can be a useful metric for handling logistics and inventories.
There are three supply chain scenarios where accurate delivery times are important. They first give an idea of the timing of incoming orders, or how long it will take for supplier purchases to arrive. Planning your inventory and managing your supply chain effectively requires an understanding of the delivery lead times from upstream suppliers.
Outbound or downstream deliveries, or how long it takes to deliver an order to a client, are the second crucial sort of delivery lead time. Although not every firm has clients who will be influenced by delivery lead times, for those that do, this kind of delivery lead time is crucial.
The third factor is the lead times for internal deliveries. Not all supply chain transactions include an outside entity. For companies that own and run various supply chain components, such as plants and warehouses, delivery lead times are just as crucial.
Do You Need Lead Time in Supply Chain?
Delivery lead time is a crucial supply chain management parameter. It’s critical for businesses to understand how long it takes a product to go through the pipeline from the original order to delivery, whether they are purchasing, selling, or moving goods and materials internally. Effective software can track outcomes, ensure consistency, and even spot chances for development.
- Since there are costs and dangers involved with having too little or too much stock on hand, understanding the delivery lead time is an essential component of inventory management.
- With perishable commodities, delivery lead times are even more crucial, in part due to the possibility that raw materials will spoil and render inventory useless.
- Customers could become impatient, complain, or decide to do business elsewhere if the order fails to reach them at the given time.
- An accurate response may be given and more satisfied clients can result from having a clear awareness of shipment lead times and transparent communication lines.
- AdHoc costs that may occur like demurrage and detention charges can be avoided if the vendors already have a pre-planned schedule with all possible delays.
- It helps the carriers meet their service delivery agreements better and build a strong market presence with reliable delivery schedules.
Access your free trade route report now
Get your free comprehensive copy of the sailing report now for custom port pairs
How to Get an Accurate Lead Time in Supply Chain?
Consider a software solution to reduce the delivery lead time. For a person, it would be impossible to track inventories at various points in the supply chain, calculate critical metrics in real-time for each product, input, and business line, or integrate supply chain data with financial data and invoicing and payment processes. These duties, however, are only a part of the everyday routine for a solid software-based inventory management system like GoComet.
With its SaaS offerings, GoComet, a pioneer of a multi-modal logistics platform, aims to disrupt the supply chain sector. In addition to Forbes, Gartner, The Economic Times, and many other respected publications, they have been featured. They established themselves as the forerunners of change in the supply chain sector by releasing a fantastic new product and two game-changing features- GoPlan, Predictive ETA, and Proactive Upload.
GoPlan is an end-to-end dispatch planning solution that can help you avoid relying on inaccurate carrier timetables. It is your first move when planning to move a container with an accurate delivery timeline. GoPlan is a business intelligence tool, that can help you make smarter dispatch planning decisions based on current industry data. It is a revolutionary new lead time calculator for all delivery lanes in the supply chain.
Get a 7-day free trial to our lead time planning solution
Access to the most reliable sailing schedules for more than 200,000 port pairs on a real-time basis now!