After understanding the concept of Lead Time in purchasing, it is essential to identify the factors that contribute to providing the best UX within this concept
In a loose translation, "lead time" means "waiting time." Increasingly, time has become people's most precious asset—whether for your client, supplier, or end consumer.
Within the corporate concept, lead time is the path traversed from a customer's request—whether for a product or service—to its delivery or fulfillment. In other words, it is everything that happens during the purchasing process.
Developing a schedule with time predictability and contingencies is one of the actions of the procurement professional. Lead time must be part of this schedule.
Having access to technologies that track cargo exclusively, for example, is one of the ways to anticipate contingencies and keep the lead time schedule on track.
Lead Time Schedule
Within this concept, all production stages, from order to delivery, must have their operations monitored. This is certainly a basic premise for maintaining lead time. With an increasingly competitive market, timing is not a mere detail. To keep clients satisfied, meeting schedules is the bare minimum expected.
To gain credibility and balance expenses, it is necessary to find strategies to manage inventory and thereby maintain the production flow. However, it is important to emphasize that excess inventory is an indicator that this flow is out of balance.
In addition to all the specifics involved in procurement management, the lead time schedule must take into account:
- Planning material purchase procedures;
- Process mapping to ensure operational flow;
- Estimating lead time based on order mapping;
- Developing a strategically calculated inventory spreadsheet;
Process Management
Checking lead time is part of the procurement management process. The responsible professional must meticulously verify factors such as:
- Supplier Profile and Supply Chain – choosing the right, influential contacts and maintaining good relationships with them. Always have a plan B. In other words, a backup supplier that can deliver in an unforeseen or emergency situation.
- Transit and Geographic Location – planning the route the product will take is directly linked to timing; therefore, the supplier's location will affect the entire process.
- Dates – the variables surrounding this issue are so numerous that they extend beyond the calendar. External factors, such as holidays or public demonstrations, can severely disrupt lead time if not anticipated in the planning. Other points include product nature, cargo volume, destination, etc.
- Federal Revenue Inspection Requirements – as the agency responsible for cargo inspection, and given the unpredictability of how thorough the inspection will be, it is ideal that everything complies with regulations to prevent delivery delays.
How to Calculate Deadlines
For an accurate calculation, certain aspects must be observed following the definition of the strategic planning developed by the procurement department.
- Make a list of requested products – noting all requirements for the raw materials needed for product manufacturing, if applicable to your business.
- Create a spreadsheet – listing all the services and installations that will need to be carried out.
- Understand raw material seasonality – if applicable, and organize a table covering the logistics of this material.
- Always include a safety margin in your calculation – factor in weekends and know your supplier's profile well. Additionally, account for unforeseen events related to the transit of the material until it reaches the company.
- Highlight and prioritize items that have longer lead times!
- Determine a deadline (with date and time) for each product or service. To achieve this, you need a history or record of it.
- Estimate variables – set deadlines with a safety margin, as previously noted, and maintain communication with the customer regarding the current stage of delivery.
- Monitor the entire process!
Checking machine maintenance among other operational issues well in advance is part of the management work that precedes lead time planning.
By utilizing technology that promotes process automation, the lead time phase in the procurement department certainly becomes more agile and accurate.
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