IMPORTANCE OF LEAD TIME:
In many sectors, lead time is a crucial statistic. To prevent a supply delay, which could have a severe impact on customer satisfaction, contractor dependencies, and cost efficiency in general, it is essential to calculate lead times accurately and consistently.
Lead time is one of the key components of inventory management, and its significance to your company's overall profitability cannot be understated. It may make or break your Amazon business.
FACTORS THAT AFFECT LEAD TIME:
Even if shipping and freight services have improved recently, there are still other elements that influence lead times. Order processing and approval within your company could take some time. Your suppliers would then need to place their own orders for the components needed to make your items, which could cause delays owing to customs inspections performed at the ports. Your lead time is increased by all of these elements.
HOW CAN ONE EFFICIENTLY REDUCE LEAD TIMES AND IMPROVE INVENTORY CONTROL?
By increasing order frequency while reducing volume:
Consider ordering lesser quantities that will take less time to create and ship as opposed to placing huge orders for inventory. Then, your inventory gets refilled more regularly and reliably.
By rewarding suppliers
Include a lead time clause in the contracts you have with your suppliers. If they deliver far sooner than they anticipated, they may receive a bonus; if they are late, they may receive a penalty. This aids in encouraging your suppliers to follow the established lead times.
Automate the way one manages their inventory.
By automating your inventory management operations, you may reduce time to market. By using tools like QuickBooks Commerce, you can manage and create purchase orders more quickly, always stay in touch with your suppliers, and keep track of stock levels without having to worry about manual data entry or human mistakes.