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Lead Time Constraint Impacting Customer Order Promising in Outsourced Manufacturing

Continuing from my previous blog, upon delving deeper into the lead time constraint aspect, we come upon certain aspects of the high tech industry that prima face indicate to concerns regarding incorrect or conservative lead time on the product and it's transit time to the customer.





Delivery Lead Time:

Delivery lead time specifies the transportation time required to deliver the product to the customer. Delivery lead time depends on the type of request customer places which can either be a request date to ship or request date to delivery at customer dock. This can include single or multiple legs of transportation trips depending on the proximity of the customer from the manufacturing or consolidation warehouse location. Typically in High-Tech industry majority of the production or assembly takes place in South East Asia however the customers and distribution warehouse and 3PL locations can be spread across the globe. Delivery lead time is a critical factor for accurate customer promising as the material availability date is calculated by offsetting the lead time from the customer request date to ensure the product is neither shipped early or late. High Tech complex OEM organization with matured transportation planning process often determine the best suited route considering transportation attribute like load, region, mode, method etc. to optimize the shipments. This would also mean that the shipment can pass through different regions, 3PLs which might have different holiday calendar and the planning has to be so accurately done that the hand-off between two regions or warehouses is done on a working day to ensure the truck doesn't stop.




Since both manufacturing and transportation operations in High-Tech is outsourced, imagine the cost avoidance of accurate transportation planning and determining shipping/arrival date considering accurate delivery lead time across the regions. Join our session to understand how we manage to marry both supply chain planning and transportation planning applications to optimize assembly and transportation cost and also ensuring high OTS attainment rate.

Product Lead Time:

•    Mismatch or incorrect lead time set-up also impacts the scheduling results. One of the examples is a case when an Item is setup as lead time based and there is no actual lead time value setup. To avoid this situation the planning time fence adds 1 additional biz day
•    Due to the many challenges of High -Tech industries, there is a need to fix or redefine extra lead time padding for the items for a specified period of time. This lead time will be added to the original lead-times. The padded Lead Time may be due to geographical, trade compliance reasons. Ex: In the month of December, logistics across the globe hit a rush and the extra lead time may come into picture.
•    Often there arises a need to lock the Lead time for a fixed period. This is needed to avoid discrepancies in the supply chain.


 

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