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...A third metric involves adding up all the lead times for all the steps in a supply chain; this is called the Supply Chain Lead Time, or Supply Chain Cycle Time. This is much more difficult to do than it sounds, since in many cases the supply chain is actually a network containing different parts or SKUs; you have to cover all possible branches to see which has the longest supply chain lead time. Consider the simplified example of an automobile manufacturer below. What is the sum of the lead times along the longest branch?
...If no one held any inventory in the supply chain, then it would literally take that long to build the components shown, ship them, and assemble the car. Most supply chains do hold inventory, so the actual response time to a customer order for the finished product is much less than the Supply Chain Cycle Time...
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SCM105 Specifications
Rating:
(874 ratings)Total Reading Time: Approx. 1 - 2 hours (for average readers)
Word Count: Approx. 11,000 words
Author: Dr. Warren H. Hausman
Professor of Management Science & Engineering, Stanford University
Certificate: Counts toward Fundamentals of Supply Chain Management
Datasheet: 
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Contents
- Introduction
- Alignment of Metrics with Business Strategy
- Service Metrics - Build-to-Stock
- Service Metrics - Build-to-Stock (continued)
- Service Metrics - Build-to-Order
- Inventory Metrics
- Speed Metrics
- Financial Metrics
- Bullwhip Metric
- "Bad" Metrics
- Applying Metrics Across the Entire Supply Chain
- Conclusions
- Test Your Knowledge
- Feedback