Lead time improvement by supplier relationship management with a case study in Pompaj company

Abstract

In today market, transferring product to customers at the shortest possible time is an advantage. In contrast, delay provides undesirable results for a company. There might be many reasons in the supply chain for this delay, but focus can be placed on the first stage of a supply chain, which is related to suppliers and supplier relationship management (SRM). The concentration of this paper is on long lead time (LT) as a critical problem and also as an indicator of suppliers' relationship performance as well as an indicator of the whole supply chain. In fact, the aim is to propose an SRM approach for reduction of LT. Casual Loop Diagram (CLD) has been used to find two main reasons for the long LD, i.e. poor communication between the procurement department and suppliers and problems in procurement management. A manufacturing supplier company has been selected for empirical study and the results imply that after implementing SRM approach, products are delivered five days earlier. This approximately shows 33% time reduction, from period of 10 to 15 days to the period of 5 to 10 days. Therefore, the LT indicator has been cut by one third, which indicates the effectiveness of SRM in supply chain. © IDOSI Publications, 2012.