Do You Make These Lead Time Mistakes
Shoppers use technology today at a dizzying level to gain leverage over retail. Mobile phones offer limitless shopping options for products at the right price and place. Key to the shopper process is deciding where to purchase the product. This changing speed of retail decisions shortens the retail response times in a manner legacy technology cannot manage due to their base code designs in a time where mobile shopping and omni channel were not even words to consider 10 or more years ago.
One core component of inventory replenishment is lead time, how long from when the purchase order is placed until the goods are available to ship/sell to a customer. If you plan a lead time of 10 days and it takes 17 days you will have 7 days of lost sales. If you plan a lead time of 20 days and goods are available in 12 days, you will be forced to hold 8 days of safety stock. While everyone will admit lead time is a critical part of replenishment, most retailers are not using their lead time data in an effective manner, the costs are astronomical.
Attached is a link to my slide share on the 7 most common Lead Time mistakes you make when managing or ignoring our lead time. I am often asked to speak about lead time and the problems created in replenishment. These 7 are the most common problems of managing lead time for inventory replenishment. I can even share a startling fact: every one of our customers made their investment in our software back from corrected lead time mistakes alone, everything else was additional return on investment. To help you we provide a link in the slide share to a lead time forecasting kit with more education materials. Think of the dollars you can recover with just one or two corrections in lead time. Enjoy the slide share and read more at Data Profits blog.
Watch the Slideshare here and use the link for free download:
I look forward to your comments and idea on the lead time Component of replenishment