Lead Time And The Success Of Logistics Networks

656 words - 3 pages

INTRODUCTION
The business environment has become more fast paced. Automation in factories , development and use of JIT practices ,the use of ERPs in every day work have changed the speed of work. Frequent new innovations resulting to even shorter life cycles have made customers to be more interested in speed and convenience of delivery so much that price is no longer the determining factor of purchase. Christopher (2011) explains that the lead time are both customer and supplier based concepts and that for the supplier, the lead time is the time it takes to be paid while the customer lead time is the time it takes from placing the order to the delivery. Both concepts are extremely important to logistics management in that speed of delivery to customers and of payment to suppliers is an element that can place an organization in a competitive stance as order winners. Jones and Towill (1998) stress that organizations today share similar technology and similar work practices ...view middle of the document...

Kazaz et al (2012). The different stages that begin with the request of material and lead to the final order receipt is the order cycle. As stated by Christopher (2011) Bottlenecks , inefficient processes and fluctuations in order volume often lead to variations in the time used to complete orders.
In typical construction order cycles, the lead time consists of the time spent on all the processes till materials are received. It is how long it takes to get the correct request with all data needed, the time spent on the stage of bidding (Inviting at least three suppliers) ,evaluation of offers received and negotiation, purchase order placement and approval, purchase order acknowledgment and then delivery by supplier .Ideally this should follow a synchronous flow so that lead time is reduced but the process often can be affected by several factors that tend to extend one stage or the other thereby also extending the lead time. Such factors include Supervisor or team head input, miscommunication or the lack of it, supplier delays, and transportation schedules.
WAYS TO ACHIEVE TIME COMPRESSION.
According to Kazaz et al (2012), balancing the time frame to complete processes in the chain can help compress the lead time. In saipem, as stated by Towill (1997), Developing a seamless supply chain is important. There should be elimination of unnecessary procedures that only further delay delivery. A more streamlined procedure that does not involve approval of a section head at every stage is a step, Adopting business practices as JIT, benchmarking approaches so as to compare and improve on which stage in the chain has the longest time, and strengthening information networks will help further compress time.
Reference:
Christopher, M. (2011) Logistics and Supply Chain Management. 4th ed. Harlow: FT Prentice-Hall.
Mason-Jones, R. and Towill, D.R(1998) Time compression in the supply chain: information management is the vital ingredient .Logistics Information Management
11/ 2 pp. 93-104.
Rushton , A., Croucher, P. Baker, P. (2010) The Handbook of Logistics and Distribution Management . 4th ed. London - Kogan Page
Wu, Z, Kazaz, B, Webster, S, & Yang, K (2012) 'Ordering, Pricing, and Lead-Time Quotation Under Lead-Time and Demand Uncertainty', Production & Operations Management, 21, 3, pp. 576-589,

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