Order Lead Time – More Vital Now Than Ever!

Lead Time

Order Lead Time – Place December Orders NOW!

Let’s start with the Bottom Line…

Order lead time for December orders is NOW!  You don’t want to wait any longer to get caught up in the holiday supply chain melee, and risk getting an order after the first of the year when price increases can come into play.  Give yourself the necessary lead time by ordering now.

What Exactly Is Lead Time?

Calendar

The amount of time that passes from the beginning to the end of any given process is defined as lead time. This is the amount of time that elapses between a customer placing and receiving a product order.

 

 

 

 

Lead Time Management

Lead Time PO

To fulfill orders on time, you need a well-managed supply chain with an inventory control manager who monitors and acts on lead time. As a result, lead time is an important metric for any business.

Do you keep track of your order lead times on a regular basis?  You should because it’s a critical metric for any successful order management specialist and an important part of inventory control. Continue reading to learn what lead time is, how to calculate it, and how to keep it low while increasing sales.

One of the most important inventory control metrics is lead time. It has an impact on all businesses in a supply chain and can cause major problems if it spirals out of control. Calculating, comprehending, and responding to changes in lead time enables a company to avoid losses and fulfill orders quickly, efficiently and effectively.

 

Lead Time In Manufacturing

Attached Lid Containers

Manufacturing lead time, also known as production lead time, is the time it takes between when a customer places an order and when the manufacturer completes it. This includes the time it takes to obtain supplies, manufacture the goods, and ship them.

Supply Chain Lead Time

Every step in a supply chain has an impact on total lead time. Production takes time. So does shipping and any other intermediate steps. As a result, inventory management lead time must be organized and monitored.

After Receipt of Order Lead Time

After receipt of an order, is the point at which the order is received by the supplier. Any actions taken between receipt of order and the delivery of goods are included in the order’s lead time. This starts the production clock and is the first significant number when measuring lead time.

Different Types of Lead TimePlastic or Wood Pallets – Which Is The Right Choice?

Lead time is classified into four types:

  • Customer lead time is the amount of time that elapses between placing an order and receiving the product. Several factors can influence this, including the manufacturing process, shipping method and any customer delays.
  • Material lead time is the time it takes to obtain the materials and supplies required to manufacture a product. This can be influenced by supplier lead times, shipping times and any material delays.
  • Production lead time is the time it takes to complete a product after all materials are received and on hand. The manufacturing schedule, workforce availability and any offline machinery can all have an impact on this.
  • Overall lead time is the total amount of time an order spends in production from beginning to end. It includes both active production time and any time spent waiting for materials or other resources. This metric is frequently used to assess a manufacturing process’s efficiency and to identify potential bottlenecks.

Lead times are an important part of the manufacturing process and can have a huge impact on how quickly products are brought to market. When planning production, businesses should account for all types of lead time to ensure that they can meet customer demand on time.

Lead Time Is Important In Inventory Management

Lead Time Calculator

In inventory management, understanding and controlling lead time is critical. Each step in the supply chain is affected by lead time, which can cause a process to lag behind. This can lead to additional delays with subsequent orders, resulting in ever-increasing lead times and dissatisfied customers.

Poorly managed lead time in inventory management can result in a lack of stock, canceled orders, delays at the online shopping process and ultimately, revenue loss.

Calculate Lead Time

Calculating total lead time is not as difficult as it may appear. All you need to know is the order of the supply chain and how long each step is expected to take. It’s a simple formula…

Formula For Lead Time

This formula will help to determine your lead time. Depending on whether you are a manufacturer or a retailer, you have two options…

  • The lead time formula for manufacturers is as follows:
    • Manufacturing Time + Procurement Time + Shipping Time = Total Lead Time
  • The lead time formula for retailers is as follows:
    • Total Lead Time is the sum of the procurement time and the shipping time.

Order Lead Time

How To Determine Lead Time

Let’s look at an example of calculating lead time now that we have the above lead time formulas. We’ll play the role of an industrial supply producer attempting to calculate the lead time for an order of 1,000 plastic shipping pallets.

To begin, we can examine the company’s previous data on pallets to determine manufacturing time. Assume that the average time for producing 1000 pallets is two weeks.

Now, we consider procurement time. This is the amount of time it takes for all components and raw materials inventory used in production to arrive onsite for a manufacturer. In this case, we’ll assume that getting the necessary materials takes five days.

Finally, we must determine how long it will take to ship the pallets to their destination. We’ll say it will take one week to ship to its final stop. This can be estimated based on previous shipments, or it can be provided by an external shipping company.

We can now apply the aforementioned manufacturing formula.

Manufacturing Time + Procurement Time + Shipping Time = Total Lead Time

Total lead time = two weeks (14 days) plus five days plus one week (7 days)

The total lead time is 26 days. With this information, you can keep the customer informed and look for areas to improve the ultimate delivery date.

Custom Equipment Company will work closely with you to ensure as effective and prompt delivery on your orders as possible. Even after placing an order, we will help to meet your budgetary requirements by invoicing in a mutually acceptable timeframe.

We are in business together and we want to
work together for all our best interests.

Visit www.cec.mhs.com To Select From
Custom Equipment Company’s Storage Tote or Plastic Pallets Shown Below…

Attached Lid Totes

Tote

The Attached Lid Tote is great for storage of parts and facility items. They have a solid wall inside for easy cleaning and the interlacing-lid allows for stacking and security. These can ward off weathering and other outside contaminants to a degree. Household uses also apply.

Inside dimensions for HDC-2115-12 top 19.7″ x 14 x 11″ bottom
18″ x 12.2″ for HDC-2717-12 top 25.2″ x 15.5 x 11″ bottom 23.7″ x 13.9″

The Attached Lid totes have reinforced ribs and close with a padlockable hinged lid that interlocks for extra strength. Totes nest when open to save space. Molded hand grips allow easy lifting. Sold in carton quantities. These Items typically ship in first business day after order*

Click Here To Order Attached Lid Totes

 

48″ x 48″ Solid Deck, Nestable
One Way Plastic Pallet

Plastic Pallet

Our Solid Deck One-Way Pallet – 48″ x 48″, also known as an Export Pallet, is strong, durable and great for one time use or inner facility multi-use.

They offer durable and reliable solutions for your export and logistics needs. The unique, nestable design allows you to stack more pallets at a safe height while maintaining structural integrity. Light weight, one-way plastic pallet with great space saving ratio. Easy and safe to handle and cost effective.

Common Uses: (1) To ship items when you do not expect to receive the Pallet back. These Pallets are more expensive than some wood pallets, but they offer protection to your products and your employees because they do not splinter. There are no exposed nails and they are made of a durable plastic that doesn’t break easily.

Click Here To Order Solid Deck Nestable One Way Plastic Pallets

 

48″ x 40″ Nestable
One Way Plastic Pallet

Plastic PalletOur 48″ x 40″ One-Way Pallet, also known as an export pallet, is strong, durable and great for one time use or inner facility multi-use.

They are nestable (Stacking 79 high) and offer space-savings for your facility. The unique design allows you to stack more pallets at a safe height while maintaining structural integrity.

Light weight, one-way nestable plastic pallet with great space saving ratio. Easy and safe to handle and cost effective.

Common Uses: (1) To ship items when you do not expect to receive the Pallet back. These Pallets are more expensive than some wood pallets, but they offer protection to your products and your employees because they do not splinter. There are no exposed nails and they are made of a durable plastic that doesn’t break easily.

Click Here To Order 48″ x 40″ Nestable One Way Plastic Pallets

 

CEC Logo