http://www.esourcingforum.com/archives/2006/05/15/lead-time-optimization-lto/ The source of information and best practices in strategic sourcing. Tue, 10 Jan 2012 21:21:12 +0000 hourly 1 http://www.esourcingforum.com/archives/2006/05/15/lead-time-optimization-lto/comment-page-1/#comment-377 E-Sourcing Forum: the source of information and best practices in strategic sourcing Thu, 22 Jun 2006 12:48:38 +0000 http://www.esourcingforum.com/?p=114#comment-377 [...] One of the technologies Zara uses to accomplish this impressive feat, and stay profitable, is Lead-Time Optimization. Lead Time Optimization, succinctly defined as the optimized selection and management of inbound supply chains with respect to (highly) uncertain demand and long production lead times, attempts to optimize product line profits by attacking and minimizing the key drivers that lead to markdowns, stock outs, inventory turns, and reductions in working capital, all of which have a negative impact on profit. Recognizing that the industry is fraught with uncertain fluctuating demands that cannot be predicted with any significant degree of accuracy in advance, the lead time optimization products try to optimize around demand risk that results from the impact of variable demands on production schedules, capacity, shipping, and associated costs by assigning dollar values to risks, speed, and flexibility. [...] [...] One of the technologies Zara uses to accomplish this impressive feat, and stay profitable, is Lead-Time Optimization. Lead Time Optimization, succinctly defined as the optimized selection and management of inbound supply chains with respect to (highly) uncertain demand and long production lead times, attempts to optimize product line profits by attacking and minimizing the key drivers that lead to markdowns, stock outs, inventory turns, and reductions in working capital, all of which have a negative impact on profit. Recognizing that the industry is fraught with uncertain fluctuating demands that cannot be predicted with any significant degree of accuracy in advance, the lead time optimization products try to optimize around demand risk that results from the impact of variable demands on production schedules, capacity, shipping, and associated costs by assigning dollar values to risks, speed, and flexibility. [...]

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