We’ve written about predictive lead time before. It’s a powerful new capability for supply chain planners and it’s available only from Demand Solutions. It can help you hit customer service targets more consistently without holding excessive safety stock. You may have spoken with colleagues who are dipping their toes into the predictive lead time pond and have been encouraged by the early results.
But at some point, you may have decided you don’t need predictive lead time (PLT) technology. After all, maybe your suppliers are delivering pretty consistent performance. Perhaps your customer base is highly loyal and you don’t believe a slight hike or dip in customer service levels will change that. Or maybe you’ve simply accepted holding safety stock as part of the price of doing business.
Well, then you should definitely look into PLT technology.
An Overlooked Benefit of Predictive Lead Time Solutions
I’ll concede that not every supply chain professional stays up at night worrying about lead time. But if you’re one of the lucky ones, it behooves you not to miss out on an unheralded benefit of PLT technology.
Much of the value of predictive lead time solutions lies not just in the ability to confidently promise delivery dates to customers, but rather, in the breadth and depth of data these solutions generate. Using this data, you can begin to squeeze every dollar of profit from your supply chain.
Think about it: PLT solutions collect receipt information for every single purchase your business makes, in every location. With that information, you can begin to understand the actual lead time your suppliers are giving you, for better or for worse. Are there seasonal variances? Frequent stock-outs? Any supplies actually showing up earlier than expected?
You can use this rich information to measure the performance of each supplier against stated targets. And this, I believe, is the true value of predictive lead time technology.
Get Your Suppliers Right Where You Want Them
Armed with complete information on supplier performance, you can begin to determine whether you’re actually seeing the lead times you’ve been promised. You can evaluate and rank vendors based on hard data—not gut feelings or your most recent memory of their performance. You can highlight significant issues to them and begin to discuss potential solutions.
You’ll have all the evidence you need to demand better service from poor-performing vendors—or to explain to them why you’re switching to their top competitor.
In short, predictive lead time technology is extremely valuable for companies that think they don’t need predictive lead time technology. In my next article, I’ll begin to explore how getting good information from your PLT system can help you optimize your safety stock levels.