Do not always focus on Lead Time when you source in China

I visited a small company yesterday and the president of the company asked me at one point how to shorten lead times from China. It was a good question though I am not sure lead time should be of the utmost concern to him since his company sells high end audio equipment probably ordered in low QTYs. I told him I thought the best way to cut lead times was to make sure you were organized, to keep mistakes in design to a minimum and to make sure you maintained good communication with your vendor so that delivery dates were adhered to or the customer was notified immediately when they changed. In other words, the goal should not be to cut lead time but to get the product delivered when you need it. The more I thought about this answer the more I liked it, for over the years I have seen more mistakes happen when people tried to rush orders, thinking about reducing lead time, the end result being that product shipped late and the lead time was in fact lengthened, not shortened.

This is not to say that lead time should never be a concern for importers. For some high-volume, short life-cycle consumer goods, or seasonal goods, lead time is very important because if you don’t ship product ASAP you risk losing market share to your competitor. With orders of this nature the discussions with the vendor are always centered on cutting production time and getting product out of China as quickly as possible. But once again there has to be a point where you need to accept the fact that vendors have limitations as well in terms of what they can do and how fast they can do it. If you fail to recognize a vendors limitations then you risk having them make mistakes in production that will result in a slower delivery time as they have to repair or redo defective units.

In the end if you are focused on cutting lead times it is probably better to look at the shipping end than the production end. There are “fast boats” and “slow boats” and you can cut your shipping time by as much as 2 weeks if you pick the right carrier. If you have a good shipping agent you still should be able to cut significant lead time off your delivery. But then again you will pay more for this service and that adds more unit cost to your product. You simply have to ask yourself if it is worth it.

In the end, I always tell people to live by these rules if they want to get their product out of China quickly.

1.) Know when you need your order and communicate this clearly to the vendor,
2.) Give your vendor the order early and work with their production schedule, not yours.
3.) Make sure your design is finished. Nothing slows down orders more than changes in design.
4.) Follow up 2-3 times a week when an order is in production.
5.) Do not assume anything.

DSC00769

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s