In previous articles we have pointed out that reducing the total replenishment lead time is a key factor in fixing many troubles that afflict supply chains.
By “total replenishment lead time” we mean what is sometimes referred to as the ToC Replenishment Time or Theory of Constraints Replenishment Time. It is the sum of the following factors:
- Order Lead Time (OLT) – the time that elapses between the first consumption of a unit from a SKUL (SKU-Location) and when the order for replenishment of that unit of consumption occurs
- Transportation (or Shipping) Lead Time (TLT) – the time spent in movement of an item during replenishment
- Production Lead Time (PLT) – the time between the release of an order for replenishment and the release of the shipment of replenishment goods
Dealing with Transportation Lead Times
Typically, reducing transportation lead times means an increase in the cost of transportation. In a firm where cost-world thinking abounds (read: the vast majority of companies in existence today), anything that “increases costs” is nearly always rejected off-hand.
Article Source: : SC Transportation