For businesses that sell and distribute products, you’ll likely have already run into issues surrounding lead time in your supply chain. Lead time is essentially how long it takes for a customer to receive their item after placing the order. With so many things being outsourced these days for convenience, it’s easy to run into delays with your production line if you rely heavily on third-party vendors to participate in the production process. The more aspects of your production line you can control, the more autonomy you will have over your supply chain and lead time as a whole. There are many strategies to organize your means of production and improve your lead time from using domestic suppliers, analyzing your sales trends, and streamline communication with your business’ third party suppliers. We spoke to a handful of business leaders on the topic of improving supply chain lead time, and here’s what they had to say!
If you are using an international supplier for any of your production supplies, you are likely causing issues in your lead time. Jean Gregoire, Founder & CEO of LoveBox said, “Use a domestic supplier. If you can have your product manufactured in the country in which you’re based, you can reduce your lead times by at least two weeks. This also eliminates any language barrier that can sometimes lead to delays.” This advice is seconded by Bill Glaser, CEO of Outstanding Foods emphasizing that this can also cause communication issues. “Using a domestic supplier for your inventory instead of one overseas can definitely help improve your supply chain’s lead times. Shipping from a foreign country not only takes more time, but there may also be language barriers involved which can sometimes lead to incorrect products being sent inadvertently. In addition, it might cut down on lead times if you order several smaller shipments over time instead of waiting to receive one bulk order.”
Domestic vendors are a good starting point, but you can cut your time down even further by using local vendors. This is also a great way to support the community and local business. “Use local vendors whenever possible,” said Lindsey McCormick, Founder and CEO of Bite. “This will increase your ability to quickly stock essential items for production and allow a greater amount of customer support from your vendors due to their proximity.”
Involve your team as soon as you become aware of the problem. Keeping your team and employees in the loop can help you solve the issue faster and with a unified force behind you. “Working together as a team can greatly improve your supply chain’s lead times. If you see it all as a type of domino effect, a delay in production can also create a delay in shipping, and so on,” said Marc Atiyeh, CEO of Pawp. “So, it’s important that each department completely realizes how meeting their deadlines will affect the entire process.” As Lauren Singer of Package Free Shop tells us, different team members might have different insights into the problem at hand. “Make sure your team is well informed about any supply chain or production issues that you might be facing. If you’re all on the same page, you can tackle the issue head on. Chances are that your team has eyes and experience unique from management.”
Outsourcing production can sometimes save on time and money, but it can also put supply stock out of your control. Consider whether you can bring some simpler production operations to your own warehouse. “Do you outsource any of your production processes? If so, re-evaluate this choice and see if you can host these outsourced operations to happen in house. The more control you have over production, the more control you have over your lead time,” said Michael Jankie, Founder of The Natural Patch Co.
When it isn’t possible to host your means of production in house and you need to outsource, make sure that your internal communication is top notch to avoid any confusion about orders or deliveries. “Sometimes, it will be necessary to outsource production and deal with outside vendors and suppliers. When this is the case, make sure your internal communication with all third parties is detailed and often. The more outside influence that enters your production line, the more likely you’ll have supply chain interruptions and miscommunications,” said Heidi Streeter, Founder of Holiday St.
You may find that you need to scale back or increase the amount on supply orders. Make sure you reflect accurate sales forecasts for your suppliers so they know what to expect ahead of schedule. Nancy L Belcher, Ph.D., MPA and Co-founder of Winona said “Take accurate stock of what you will need the following quarter so your suppliers can be prepared. It’s great to start selling more, but it can cause frustrating hiccups both for you and your suppliers. Give an accurate forecast that reflects what you’ll need when you order again.”
If you are finding that your supply orders are not matching your product demand, try ordering supplies more often but in smaller quantities. Yuvi Alpert, Founder and CEO of Noémie said “Try splitting your supply orders into smaller batches, rather than large bulk orders. Those take a little bit longer, and it may end up being that case you save money by ordering more often in smaller batches.”
Whenever possible, automate your orders, sales and inventory system. This can save you tons of headaches searching through records of sales and stock. “Automate your inventory management system as well as your online sales. It’s important to rely on manual entries as little as possible to reduce human error and missing orders,” said Jeremy Gardner, CEO of MadeMan. This will help improve your lead time by assuring that orders get from the customer to your warehouse as soon as possible. Jeff Goodwin, Sr. Director, Performance Marketing and E-Commerce at Orgain said “Automate sales and purchasing whenever possible. The longer it takes for a sale to register for your warehouse, the longer it will take for your customer to receive their goods. If you can automate these processes you will be able to keep better track of the orders coming in and going out. This will also help you understand your lead time results further.”
This also makes the consumer experience better. Businesses should also consider offering online customer service like live chatting to assure that any order issues can be easily solved. “Consider having customer service chat lines to deal with order issues that may arise,” said Dan Lewis of Convoy. “The quicker you can get on top of an order issue, the quicker you can maintain the lead time you are aiming for and give your customers a positive experience using your service.”
Improving lead times comes down to understanding every layer of your business and production operations. First, consider consolidating your production and doing whatever you can in-house. You can also improve lead times by making sure you always work with local or domestic suppliers to cut down on delivery times for your customers and your supplies. These initial steps will put your business in the right direction to change your lead times from good to great!