customer lead time

6 Reasons Why It Is Important to Understand Expected Customer Lead Time

Customer Lead Time is unquestionably a buzz word in today’s fast paced business environment, and everyone involved needs an in-depth understanding as to why it is important. Customer Lead Time can be defined as the time it takes from the instant an order is made by a customer, till the moment it reaches the hand of the customer. The term ‘Expected Customer Lead time’ is commonly used in many fields like Manufacturing, Material Requirement Planning & Enterprise Requirement Planning (MRP & ERP), Project Management, Supply chain Management, Supplier Management, and so on. Ideally, every business has a Customer Lead Time. […]

Components of Material Management

11 Vital Components of Material Management Technical Competencies to Master

When I started my blogging I wrote a blog on 8 Technical Supply Chain Competencies in Nov 2015. It was pretty basic and was more based on experience than research work. However, I did receive some good feedback on this article. On the back of that I have had opportunity to sponsor a Master’s research work to explore Components of Material Management Technical Competencies at Lancaster University. Nurul Amira, who is also the co-author of this article, has identified 11 Components of Material Management Technical Competencies for supply chain professionals as part of her research work. The purpose of this […]

Inventory Reduction Strategies

18 Targeted Inventory Reduction Strategies for Supply Chain Professionals

Inventory comprises an important part of current assets, particularly in manufacturing industry. A lot of cash flow is committed to inventories so as to ensure a smooth flow of production to meet a demanding customer service level. However, maintaining inventory also involves holding or carrying costs along with opportunity cost. Therefore, identifying inventory reduction strategies becomes critical for supply chain and operations professionals.   Inventory management therefore plays a crucial role in balancing the benefits and disadvantages associated with holding inventory. Efficient and effective inventory reduction strategies go a long way in the successful running and survival of a business firm. As Apple CEO Tim Cook says:   Here is […]

Vendor Managed Inventory (VMI)

Vendor Managed Inventory : A Step-by-Step Guide, Benefits and Risks

Given the disruptive nature of the supply chain dynamics, an important aspect of supply chain planning and control is the attempt by supply chain managers to improve supply chain performance. One way of avoiding this is to allow an upstream supplier to manage the inventories of its downstream customer. This is commonly known as vendor managed inventory (VMI). Vendor managed inventory (VMI) is a supply chain initiative where the supplier is authorized to manage inventories of agreed-upon stock-keeping units at customer locations. The benefits of Vendor managed inventory (VMI) are well recognised by successful retail businesses such as Wal-Mart. In […]

inventory management and control

How to Develop Traffic Light Inventory Management and Control Report in Excel to Reduce Stock Outs

Please raise your hand if you’ve ever panicked when your boss asked the question how many items are Out of Stock from Made to Stock list? Or How many items we are carrying too much excess stock? And it is not unusual that your boss wants this information in next 5 minutes! This is where inventory management and control report comes into play. Just to clear one point from start, I am not talking about inventory management and control reporting system from warehouse physical inventory control perspective but I am talking about inventory management and control report from a  planning/management […]

Safety Stock Formula

6 Safety Stock Formulas You Can Consider in Your Next Calculation Cycle

Safety stock is a term used to describe the additional quantities of stock held by a company to mitigate the risk of running out of stock. This therefore acts as a buffer in case the supply and demand are different to what was planned or forecasted. There are many ways in which to calculate safety stock and there are plenty of Safety Stock Formulas available which you could use. Below we will go through 6 different Safety Stock formula definitions to get a comprehensive figure for safety stock. At the end we’ve given you a ‘bonus track’ of EOQ calculation! […]

Importance of Demand Forecasting

Importance of Demand Forecasting in Supply Chain- 9 Authentic Reasons

The importance of demand forecasting has been topic of discussion in economics and valuable books have been written on it over the years. However, within the supply chain context there are three types of forecasting, which are: Demand Forecasting: This is the investigation of the companies demand for an item or SKU, to include current and projected demand by industry and product end use. Supply Forecasting: Is a collection of data about the current producers and suppliers & technological and political trends that might affect supply. Price Forecast: This is based on information gathered and analyzed about demand and supply. […]