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LEAD TIME - Coggle Diagram
LEAD TIME
WHAT IS LEAD TIME?
Definition: The time of a requisition process + an order process + receiving the delivery of the product at the precise location
Major benefits of reducing lead times:
- reduced carrying cost & inventory cost
- streamlined operations & improved productivity
- competitive advantage with faster deliveries and more efficient output
- avoiding stockouts by quicker replenishment
- improve cash flow and 'cash-to-cash cycle'
JUST IN TIME (JIT)
Definition: A management strategy that aligns raw-material
orders from suppliers directly with production schedules
In short: Only purchase what we need when we need it
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JUST IN CASE
(JIC)
Definition: An inventory strategy where companies keep large inventories on hand, to minimize the probability that a product will sell out of stock
In short: Purchase all we can, just in case
Prerequisites
Simplicity: Lowering production volumes in reaction to reduced demand >> sharpen company's focus on the most matter products
Collaboration: Chosing partners who have skills, tools, knowledge
Resilience: Choosing suppliers closer to the selling market, holding a larger inventory of sensitive items locally, & multisource key products
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