Tips About Reducing Lead Time in Supply Chain Management

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One of the popular concerns in Supply Chain management is the reduction of inventory levels. Having inventory in excess is an additional expense to the company. The following are some of the tips for reducing the surplus inventory for improving the efficiency of the system.

Low cost in Supply Chain Management reduces lead times because the reduction in transporting times from the supplier will be reduced. Processes like the creation of order, receipt of inbound order, and checking of reordering times can cause lead time variations. Making the process involved in the above process properly can also reduce the lead times. Reduction of lead time is one way of reducing the surplus inventory level. It is essential to establish clear goals of transportation from destination from the origin. Once an agreement is made it is vital to maintaining the process aligned with the supply chain management process. Managing each supplier individually will also help in managing excess inventory.

It is also helpful if the ordering of raw materials is carried out in small quantities frequently to cut down the inventory cost. When the ordering frequency is reduced the storage time for the inventory will be low. However, the time taken in transit is also critical if the order frequency is high.

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