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How to Reduce Your Shipping Lead Time

Time to read: 5 minutes

When it comes to shipping for eCommerce, shipping lead time and speedy delivery is vital. The faster you can get your orders out the door and on their way to your customers, the better. The stakes for online businesses are higher than ever, as 42% of shoppers expect orders delivered within two days.

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Fast shipping is important. Consumer expectations are evolving as more individuals shop online rather than  in-store.. While offering excellent  products is important,  fast delivery is a major factor in a buyer’s decision-making process. Eighty percent (80%) of consumers are likely to buy if there’s expedited fulfillment and are likely to pay more. 

Despite that, it is easier said than done for many retailers and manufacturers. Supply chains still face cargo delays and product shortages in 2022. These issues can make it challenging for businesses to consistently keep their inventory in stock and turn a profit out of it. 

The good news is that you can achieve reduced lead times and an optimized supply chain with some strategic changes in your logistics strategy.  You get increased customer satisfaction and a stronger competitive edge in a fast-paced online market.

To deliver items faster, we must first understand the concept of shipping lead times. Shipping lead times, also known as customer lead times, are the periods between the confirmation of an order and its fulfillment or delivery. For smaller eCommerce firms, this may also include the time it takes to prepare an order for shipment and ship it.

The Importance of Reducing Shipping Lead Time

Shipping lead time reduction aims to streamline your supply chain processes so that it takes fewer days, weeks, or months to accomplish fulfillment.

In general, the supply chain for your organization will be more effective with shorter lead times.

You can significantly improve forecasting and warehousing capabilities can be greatly improved. Also, you can better deal with negative feedback about late shipments if you provide customers with a clear timeframe for actual delivery.

Growing your business means shortening lead times. There are several benefits to reduced lead times, all of which contribute to healthier and more agile business processes. 

1. Improved Cash Flow

The less time products spend in your warehouse and get moved out for delivery means a bigger bottom line. You avoid paying larger carrying costs for your inventory if you can get them out for shipment faster.

2. Delivery Accuracy

The consistency between a customer’s order and what is delivered is a key factor in business success. However, maintaining this precision and adhering to delivery dates can be challenging when dealing with lengthy lead periods.

Fortunately, cutting down on lead times improves delivery accuracy significantly. You can maintain regular shipments for your clients by reducing the time you have to wait for inventory replenishment to arrive.

3. Optimized Use of Resources

Reduced shipping lead times can help you identify where waste builds up in your supply chain. For instance, you can see a lack of organization in transferring finished goods. You should then reconsider your distribution routes or cooperate with fulfillment facilities closer to your location.

You can reduce lead times by eliminating redundant stages (or pauses) in the supply chain. Doing this prevents you from wasting time, money, and other essential business resources.

4. Greater Customer Satisfaction

Shorter shipping lead times will always be advantageous for your brand because prompt delivery enhances the consumer experience. And as a result, it boosts consumer happiness and brand loyalty. Remember, 81% of consumers say a positive customer service experience increases the chances of making another purchase.

5 Strategies for Improving Shipping Lead Time

eCommerce business owners are constantly seeking methods to speed up the process of packing and shipping orders. Additionally, given the intense competition, some suppliers even promise next-day or even same-hour delivery. If online retailers want to keep consumers satisfied, they must strive for lead times that move quickly. This logistical necessity is vital for business owners planning to market their goods internationally.

You may shorten the time the supply chain process takes in multiple ways. Here are a few popular techniques for reducing supply chain lag times.

1. Bring Your Suppliers Closer

Since it often takes two weeks or more for parts to arrive from many foreign nations, using a domestic supplier can cut your lead time in half or more. The language barrier, which frequently makes communication more difficult, increases the chance of delays.

If your company’s imported raw materials are readily available locally, then consider switching to domestic suppliers, provided the goods’ quality is not compromised.

2. Lead Time Contracts with Suppliers

A lead time contract is an excellent approach to ensure that your vendors deliver as promised. Under the terms of this agreement, both parties can agree on the same lead time and delivery date.

Your suppliers will be more realistic about delivering if you have lead time constraints written into your contracts. You’ll also have a fallback for handling any customer complaints due to delays.

Highlighting areas that require development can strengthen the connections between your lead time contracts and your suppliers.

3. Streamline and Strengthen Your Supply Chain

Automation and inventory management systems may do a significant chunk of labor-intensive work across your supply chain, reducing lead times.

‍An inventory management system can assist you in reducing human error from sales data and forecasting. Orders can be automated and track important metrics to measure supplier performance and lead times accurately.

You can reduce lead times by using software to manage your ordering process. It’ll also eliminate order mistakes and maintain departmental alignment. It can also result  in satisfied, delighted consumers that are more likely to support your brand in the future. Order information will be sent automatically from one department to the next, keeping everyone in your organization in the loop.

4. Consolidate Your Suppliers

Another excellent strategy to improve shipping lead time is to consolidate suppliers. You’re probably wasting time and extending lead times if your goods must travel from one supplier to another before getting to your warehouse. 

It’s wise to have at least one backup supplier so that you aren’t dependent on one source (you probably won’t need more than two). When feasible, think about streamlining your supply chain to save time managing various accounts. Consider putting vendor management software in place to improve efficiency. Consolidating or switching providers can offer value in a variety of ways.

Consolidating your suppliers into one or a small number should be a  supply chain priority. When items can be processed and fulfilled in one location, there is less chance for error and less time lost.

5. Improve Communication Internally and Externally

Ineffective communication is another frequent cause of lengthy wait times. Successful lead time forecasting depends on both internal and external communication. When misunderstandings happen regularly, your production plans get slowed down. As a result, better communication will result in faster lead times.

Your orders may vary from month to month if you work in a sector where fluctuations happen regularly. Immediately inform your suppliers if you expect demand to rise to keep them ready for larger-than-normal purchases. This makes it more feasible to ensure that they are ready to manage very large orders at once. Being informed ahead of schedule also means that suppliers are capable of sending your items out as soon as possible. 

While it doesn’t necessarily help with improving lead times, keeping your customers informed of their product delivery status helps build trust and manages expectations which is a good indicator of superior customer service.

Optimizing Shipping Lead Time for Business Growth

Lead time reduction doesn’t necessarily mean working harder and faster; it means producing better results by operating efficiently. A real competitive advantage, lowering shipping lead time should be a key objective for every firm.

Identifying opportunities for improving lead times allow for upgrades throughout your supply chain. From integrating software and automation to strengthening supplier relationships, you stand to make your business more resilient.

You will better understand your logistics operations and expertly manage any risks. It’ll also improve your financial performance after you have put a lead time reduction strategy in place. Risk won’t be as much of a problem due to the shorter lead time. Your customers receive better service thanks to a more efficient supply chain. Additionally, you’ll be able to satisfy their needs faster, boosting your profit margin. Furthermore, it  will support the expansion and growth of your company.

ZhenHub offers advanced eCommerce fulfillment solutions to help accelerate your business growth. You can drastically improve your shipping lead time with a wide range of cost-efficient shipping services and access to a distribution network of global warehousing partners.

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