Lead time - A time to refocus

Notes for meetings with the CEO, COO and Operations leadership



Lead time is one of those elusive "things" seldom discussed in meetings with the CEO and senior leaders - until its sharp edge starts to cause pain. Ask the CEO of Hachette, a little known, but quite large book publisher on Amazon. In 2014, as commercial negotiations were stalling with Amazon, the lead times of Hachette's products suddenly started stretching out big time (from days to weeks). The result - it blew a gaping hole in Hachette's quarterly revenue when they reported. Amazon, on that occasion, had suddenly started extending their lead times on Hachette books as a negotiating instrument, among other tactics. Just one of the many ways in which extending lead-times and its after-shocks can impact companies.


Lead-Times demand CEO/COO attention, especially in the current (2020-early 2021) pandemic-induced disruptions in the manufacturing and logistics segments of supply chains across industries.


In highly uncertain demand-supply environments, as in the current "fog" of covid19, where supply lines continue to face uncertainty and disruption at various points - such as, inadequate logistics or factory (fab) capacity, or labor shortages - lead time for a product enterprise becomes the most critical metric, right alongside adequate capital and product quality


Fail to act on Lead-time issues and it can kick off a vicious, downward spiral every Operations team dreads -

Cancelled customer order, leading to -> missed Revenue targets, and/or
Last minute large, air-freighted orders shipped to meet quarterly cut-offs -> blunted margins


This article outlines why is lead time important, what mid-size and smaller companies can do in such uncertain (covid19) times against seemingly unsurmountable competitive odds to get a grip on their product's lead times. The article offers new ideas and approach in two of the key areas - Process and System - which can no longer wait.


Demand Responsiveness, Demand Responsive Operations Demand Responsive Supply Chain, Demand Responsive Global Supply Chain, Operations Support System for Supply Chain Planning & Execution, Operations Support System for Real-time, Collaborative Planning & Execution

Demand Responsiveness, Demand Responsive Operations Demand Responsive Supply Chain, Demand Responsive Global Supply Chain, Operations Support System for Supply Chain Planning & Execution, Operations Support System for Real-time, Collaborative Planning & Execution