Lead time

Why does Amazon go to Generac at all here?

Lead time by their own account.

Generac claims 50 to 60 weeks to deliver against an industry standard of roughly 70 to 90 weeks.

And in this particular market, that is the only currency that genuinely matters.

Because remember, the whole point of shifting your business model is to have more revenue that you are in control of.

And so when we want that money to actually pay out, which lever are we going to pull now to pay out when we actually need that money? Because every one of those four levers has a lead time, a gap between the day you pull it and the day a dollar starts to show up in your bank account.

And those lead times are wildly different from each other.

We're talking 30 days on one end and maybe four years on the other.

No one tells you that.

So people pick the lever that sounds best, you know, that they might bring up to their leadership team.

They pull on it and then wonder in March why the needle hasn't moved.

And I want to give you the lead time on all four of the levers.

Today we're tackling essential Kanban metrics for the CAPM exam, specifically focusing on lead time, cycle time, and throughput.

Getting these right is critical, as they are frequently tested in scenario-based questions.

Let's start with lead time.

On the exam, you must view lead time from the customer's perspective.

It is the total elapsed time from the moment a request is made until that request is fully delivered to the customer.

Imagine a stakeholder submits a request for a new report feature on June 1st.

The request sits in the product backlog for 10 days.

Your team then starts working on it on June 11 and delivers the completed feature on June 15.

So it could be purification aspects, chromatography, analytical testing, et cetera, where you cannot always add a capacity as quickly as the demand increase.

So we try to map these risks during the proposal state itself, which materials are critical, how long are the lead times, is there a qualified second source, um, you know, are the two suppliers procuring from the same upstream manufacturer? We then use our preferred partner network, risk-based supplier qualification, sourcing engagements, et cetera, along with the forward-looking capacity planning to address the highest risks items.

And that's-- Basically, the importance here is, is that buying the material is not same as securing supply.

The true resilience actually comes from your qualified materials, reliable suppliers, uh, available manufacturing capacity, and enough forward visibility to bring all these elements together to ensure uninterrupted peptide manufacturing and supply.

Okay.

That does make a lot of sense.

So when we're talking about sponsors, and they naturally focus on clinical trials and regulatory milestones, where do you most frequently see a disconnect between a sponsor's expectations and the cold, hard realities of supply chain lead times?

So the, uh, the most common disconnect is that su- sponsors understandably plan around their milestones, like the-

So there are these pockets of visibility and use cases of information that get used, but they don't get used in a holistic manner.

If my supply plan actually assumed my lead time to move from Shanghai to Long Beach is going to get doubled, I would actually create my lead times differently.

I would create my forecast horizon differently.

I'll plan my transportation differently.

But modern retail replenishment can be much more systematic.

The retailer may use sales data, inventory records, forecasts, replenishment rules, supplier lead times and other operational information.

The system can determine that inventory has fallen to a level where additional supply should be ordered.

That order then becomes another signal traveling backward through the supply chain.

So from the beginning, when you're designing the bag, you've already locked down the supply chain of it.

You know, if you choose what hardware to use, what brand of zipper to use, what color, especially if you're dyeing a fabric specifically for this design, then you already have the list of lead times for all of those.

And, you know, you have to consider the longest lead time every time.

So, for example, the longest lead time for this specific product is dyeing a fabric every Special dyeing for the fabric.

You're almost looking at optimizing it.

It's like, cool, as a bag brand owner, I have this product, right? And it's doing very, very well.

Let's break down materially, material by material, the lead times, and then say, all right, where are we most vulnerable? Where is this really taking the most time? And then can that be replaced? And the interesting thing about that is...

I can kind of see that as a double-edged sword though because if you replace it with something that's more accessible, then you risk perhaps your product not being as special.