If you’re a motor or gearmotor manufacturer and your motor lead time is significantly better than that of your competitors you can just skip this post. But if you think or know that a competitor offers a better motor lead time you need to start rectifying the situation immediately.
Want to see the oxygen get sucked out of the room in what had been a killer sales call? Just quote a 12 week lead time in response to the prospective customer’s question when you know that your prime competitor offers a 6 week motor lead time.
The fact is that customers today are using lead time as an important supplier qualifier. When manufacturers hold supplier conferences to discuss their latest supply chain initiatives in order to increase global competitiveness they strongly emphasize that the suppliers they will choose to stay with and give more business to in their supplier consolidation efforts will be those with short lead times.
To put it another way, today your lead time is an indicator of your manufacturing competency. Even in the industrial world we must recognize that a sea change in logistics expectations has been brought about by an organization like Amazon that is not only exploring drone delivery but also patenting “anticipatory shipping” that allows them to send you packages before you click “Buy.”
Sure, you can have production metrics that will support reduced inventory levels. But, unless put in the proper context they become an obstacle to achieving a globally competitive motor lead time.
Put another way, with today’s low interest rates how much inventory carrying cost savings can you justify versus the revenue lost for a single million dollar customer? It’s business you will never see.
But even if you capture new business despite having a 12 week lead time think of the revenue you’ve lost compared to that of having just a 4 or 6 week lead time. Think of it as lost revenue for each new customer captured during a given year.
If you are serious about seeing your sales and profits grow, as well as customer satisfaction, you should place new emphasis on reducing your lead time now.