Strategic Lead-Time Management

23 Questions

What is the main factor driving the growth of time-sensitive markets?

Shortening life cycles

In time-sensitive markets, what is the 'cost of time' for customers?

The additional costs incurred while waiting for delivery or seeking alternatives

What is reflected in customers' purchasing behavior in time-sensitive markets?

They value time

In industrial markets, what do buyers tend to prioritize when sourcing from suppliers?

Shortest lead times meeting quality specification

What happens if the preferred brand is out of stock in consumer markets?

A substitute brand will likely be purchased instead

What are some pressures leading to the growth of time-sensitive markets?

Shortening life cycles, customers’ drive for reduced inventories, volatile markets making reliance on forecasts dangerous

What is a major determinant of choice of supplier or brand in time-sensitive markets?

‘Cost of time’

What do customers value increasingly in all markets according to the text?

Time-sensitivity

What is the strategic leadtime management goal?

To compress the chain to reduce cost-added time

What does the pipeline management aim to achieve?

To remove blockages and fractures in the pipeline to reduce inventory build-ups and response times

What is the primary focus for improvement in logistics process?

Lead time as a whole, particularly examining interfaces between components

What does a supply chain map represent?

A time-based representation of processes and activities, highlighting time consumed as inventory

What does horizontal time determine?

Response time to demand changes

What can a rough-cut graph visually highlight?

Time consumed in non-value-adding and value-adding activities

What percentage of total process time is value-adding in the example of pharmaceutical product analysis?

6.2%

What can throughput efficiency indicate?

Most time in a supply chain is non-value-adding

What do companies not managing the supply chain as an integrated system often experience considerable time consumption at?

Interfaces

What is the primary factor determining an organization's ability to meet demand during the product life cycle?

Order-to-delivery cycle length

What is argued to be more important than the length of the order cycle from the customer's viewpoint?

Reliability of delivery

What can enable companies to offer both higher service levels and lower costs, breaking free of the classic trade-off between service and cost?

Agility

What measures the time it takes to convert an order into cash and considers the pipeline from raw material sourcing to the finished product?

$Cash-to-cash$ cycle

What is crucial for controlling lead times and meeting market needs in supply chain management?

$Strategic$ lead-time management

What is argued to be a continuing problem for organizations due to market volatility and lead time increases?

$Forecast$ accuracy

Study Notes

Lead Time Management in Supply Chain

The lead time to re-supply a market determines the organization's ability to meet demand during the product life cycle.
Companies achieving reductions in order-to-delivery cycle gain a competitive edge over slower competitors.
Many companies believe carrying inventory is the only way to service just-in-time deliveries, but this shifts the cost burden within the supply chain.
Agility can enable companies to break free of the classic trade-off between service and cost, offering both higher service levels and lower costs.
Forecast accuracy is a continuing problem for organizations due to market volatility and lead time increases.
From the customer's viewpoint, the order-to-delivery cycle is critical, especially in a just-in-time environment.
Reliability of delivery is argued to be more important than the length of the order cycle.
Inefficient processes, bottlenecks, and order volume fluctuations can lead to significant variations in lead times.
The cash-to-cash cycle measures the time it takes to convert an order into cash and considers the pipeline from raw material sourcing to the finished product.
Strategic lead-time management and logistics pipeline management are crucial for controlling lead times and meeting market needs.
The goals of logistics pipeline management include lower costs, higher quality, and more flexibility, achieved by managing the supply chain as an entity and seeking to reduce pipeline length and speed up flow.
Differentiating value-adding time from non-value-adding time is crucial for understanding how logistics processes can be improved.

Test your knowledge of time-based competition, lead-time concepts, and logistics pipeline management with this quiz. Learn about the importance of time sensitivity in customer behavior and the impact on purchasing decisions in both industrial and consumer markets.

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