Module: Automatic computation of lead time

Executive summary

Supplier’s lead time is the key element of supply management. It is thus rather sad that (and it happens relatively often) the information is either completely missing from the primary ERP systems, or it is outdated.

This module is able to calculate lead times automatically from past deliveries. Thanks to that, the lead time is accurate (and updated).

We also calculate deviation between the different lead times; this is then an input to the module Safety stock.

Functional description

Computation of supplier’s lead times using data from SIDI

Lead time is calculated automatically from past deliveries. For the computation, we must be able to establish order date and the date of receipt of the suggested order.

Not all orders are suitable for such automated computation. For example, references (an order at a beginning of the year with sequential receipts during the year) are not suitable. Furthermore, it is not useful to take too distant deliveries into an account, as the that might have lost their relevance.

The module allows to tag and import into the SIDI only those suggested orders that are indeed suitable for this type of computation. Which of the orders meet such criteria is determined in the course of implementation.

Orders are automatically adjusted (cleaned) for extremes. The user can do it manually (see the following section: Cleaning extremes in lead time).

From the final deliveries, we compute an average lead time (used as a final lead time), and standard deviation, used to compute safety stock (see the module: Safety stock).

Lead time can be computed through aggregation of the following:

• Combination of product, supplier and warehouse.
• Combination of product and supplier.
• A supplier.

It is also possible to compute a lead time for some products automatically, for certain products and suppliers it can be imported directly from the customer’s ERP and yet for other products and suppliers it can be entered directly through the GUI (see the module: Administration of suppliers).

Cleaning extremes in lead time

Lead times are cleaned automatically for extremely long or extremely short deliveries. To get a proper statistical sample, cleaning is automatically started for more than 8 deliveries.

Adjustments (results of cleaning) can be seen in the section Detail in the tab Cleaning lead times. There is a list of all supplies (of the given supplier) linked to the selected item.

You can see which items are adjusted automatically. The automatic adjustment can be disabled for a whole month; alternatively, a specific delivery can be cleaned manually – this means that it won’t be considered for an automatic computation of lead times.

Displaying the results

The results can be seen in the module Detail.