In any purchasing/materials management system, the materials, delivery, supplier lead time plays a critical role for the timing and sizing of purchase order decisions. Many purchasing professionals have recognized this importance, and major efforts have been made to accurately predict lead times and to develop strategies for coping with problems created by lead time variations.
The length and reliability of lead time has a significant impact on the total cost of services, because it is important to make tools and spare parts available at right time for prompt response to breakdown, planned maintenance. The recent emergence of time-based management concept attests to this effect.
For example, the lead time length and reliability influence the capacity and manpower requirements, work load, safety stock level, and productivity.
Different BI reports helps to analyze time gap between PO release date, delivery lead time, supplier’s lead time and design supply chain strategy.
The main purposes of this report are:
1) To identify and analyze the major characteristics of Supplier and Delivery lead time.
2) To review the potential impacts of supplier and delivery lead time on the system’s performance
3) To suggest several positive strategies for managing supplier and delivery lead time and to make tools and equipment’s available at right time to avoid breakdown of running assets.