A Note on Why Lead Time Compression Is Becoming a Liability, Not an Asset
Plants chasing sub-30-day lead times are burning cash on expediting fees and eating margin on safety stock. The math does not work anymore. Here is what actually moves needle.
I spent last month talking to 14 plant managers across tier-1 automotive and heavy equipment. Every single one said the same thing: lead times are compressed but costs are exploding. One shop in Ohio is paying 18% expediting premiums on standard fasteners. Another in Indiana is holding $2.3 million in safety stock to cover a 12-day supplier variability window that did not exist three years ago. This is not operational excellence. This is a band-aid on a structural problem.
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