Lead time, what is it?
Shortly, this is lead time: how many days do you need to wait from the day you place an order until the moment your products arrive at your warehouse?
This is a tricky question, I know. And, of course, it all depends on the distance and the type of transport of the goods!
In fact, I deliberately posed the question in the wrong way. The right wording for the questions would be
- What’s your supplier lead time?
- How many days go from the day you place an order till the moment your products leave your supplier’s warehouse?
These are the key questions! From these parameters, you can evaluate your supplier’s reactiveness. In many Nations where Saporalia operates, I hear many different answers. They may vary from 3-5 days for more structured Companies up until even 10-15 days for smaller Enterprises. Plus, of course, the time that it will take for the goods to be transported to you.
The importance of lead time
I think this is an important aspect. In fact, the faster your supplier is in refurbishing your warehouse, the better the situation you will have in terms of avoiding problems with your stock. It also allows you to have sustainable management of products’ quantities in your warehouse. In this way, you will not increase your stock too much.
Fact: you might know that in Italy stock is taxed by authorities and the government. (I am not aware if this is the case in any other country as well. So, please do let me know if you have the same problem as I am curious!) so all the producers and exporters tend to have stock at a real minimum and manage the production and the acquisition of the products only once they receive the new order from the Customers.
This kind of regulation doesn’t help your stock management and makes the product receiving timing a bit too long…it is not good!
At Saporalia, when we start co-operation with new Customers, we try to identify the recurrence of ordered products’ quantities. Not only the ordering frequency, which is not always in our or your control but defining a sort of standard ordered quantity. When this is defined, we will make sure our warehouse will always have that quantity of the products you may/will order plus 30% of them in case you need more. Obviously, we are taking some risks here. Customers may not order the products but I feel this has made a difference with a lot of our Customers in terms of timeliness of sending the goods when receiving the new order.
In fact, I can easily tell you that in those cases when we have a sort of standardized order taking path for the products you are trading from us, we can let the goods leave our warehouse the same day when receiving the order in the morning till 12 (CET – Central Europe Time zone), or the day after if the order arrives when it is already afternoon for us.
It has to be emphasized that another important value to take into consideration is the shelf-life, of course for short shelf-life products keeping stock is not possible without a strict plan, but in most of our products shelf life is 36 months so we make this possible nearly always
So, what about you? Are you happy with your supplier’s lead time? Let me know!