Delivery times are the phases in the critical path of production or execution of a service, evaluated from order placement to delivery. Calculations vary based on the type of organization and product/service, and reducing delivery times can improve efficiency and reduce costs. Organizations analyze their processes to reduce lead times and focus on adding value to customers.
Delivery times consist of all phases or operations contained in the critical path of production of a product or execution of a service. Steps can be evaluated at any point in the process, from the moment an order is placed to its delivery. Different types of organizations may use different elements in their calculations. Many organizations seek to reduce delivery times to improve efficiency and reduce costs.
In the context of determining lead times, the critical path refers to consecutive operations with no downtime. These steps can’t take longer than expected without impacting a schedule. Delivery times for various products or services are often calculated by software programs, such as Enterprise Resource Planning (ERP) applications, and are based on information provided by the organization. Delivery time calculations often include the use of safety stock and the time required for operations.
The specific elements used to determine delivery times may vary depending on the type of product or service provided. For example, a supply chain company may store and ship products and supplies. In this case, the delivery time may consist of the time required to place product orders, ship from the supplier, receive and store the products, process customer orders, choose the products, and pack and ship to the customer.
For manufacturing companies, lead times can be substantially more complex. Production lead time can include orders, production times, and quality assurance. You can also add handling and shipping time to your customer.
Service companies often send representatives to a customer site to perform a service, such as equipment repair. For this type of business, turnaround times may include the time it takes to enter a sales order, schedule a support rep, and perform the service. Calculations can take into account previously scheduled jobs and travel time to the customer site.
Reducing delivery times offers many advantages. For businesses that stock inventory, it can reduce costs because the organization can commit less capital to inventory financing. Lower inventory also helps protect your organization from risks of loss, damage or obsolescence. Service companies can use service people more efficiently and by doing so, can increase their profit margin. An organization that has reduced delivery times is also better able to adapt to changing customer demands and meet emergency requests.
Organizations try to achieve these benefits by analyzing their processes for opportunities to reduce cycle times. They may also discover unnecessary operations that can be eliminated. By reducing lead times, organizations can focus on maintaining operations that add value to their customers.
Protect your devices with Threat Protection by NordVPN
