Managing Supplier Lead-Time Variance

Supplier lead-time variance is the difference between expected and actual delivery timing across orders. An average alone can conceal occasional delays that cause serious service failures.

Managing Supplier Lead-Time Variance
Managing Supplier Lead-Time Variance

Supplier lead-time variance is the difference between expected and actual delivery timing across orders. An average alone can conceal occasional delays that cause serious service failures.

Define the start and end points being measured, including approval, production and transport where relevant. Segment results by product and supplier. Investigate whether delays arise from changing specifications, material shortages or shipping handoffs.

Use the findings to adjust planning assumptions and escalation rules. Discuss evidence with the supplier and agree on corrective actions. Check variability as well as the average before changing safety stock or customer delivery promises.

Open Sources Used

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