Availability time

Key takeaways

Definition: Availability time is the entire cycle from order to delivery, covering manufacturing to shipping.
How it works: Starts with a customer order and ends with product delivery, involving multiple supply chain stages.
Types: Includes Production, Order Processing, Stock, Transit, Supplier Lead Time, and more.
Pros and cons: Advantages are better customer satisfaction and efficient inventory. Risks include quality and cost issues.
Explore your options: Companies like SAP and Oracle offer tech solutions to improve availability time.

How it works

In the realm of supply chain management, understanding availability time is critical for operational efficiency and customer satisfaction. Availability time serves as a multi-stage process that starts the moment a customer places an order and ends when the product is successfully delivered. This cycle incorporates several key components, including order processing, stock checks, production phases, and supplier lead times.

Order processing is the immediate step after an order is placed and involves tasks such as picking, packing, and labeling the product. Then comes the stock check, where inventory levels are verified to confirm immediate availability or the need for restocking. If the product is not readily available, the production phase kicks in, especially in a made-to-order setup. This may also involve supplier lead times if additional materials need to be sourced. Finally, the product goes into transit, being shipped and ultimately delivered to the customer.

Reducing the duration of each of these stages without compromising on quality is the ultimate goal for most businesses. They continuously monitor and analyze each segment of the availability time to identify bottlenecks and optimization opportunities. By understanding and improving upon this multi-faceted concept, companies can strike a perfect balance between operational costs and customer expectations, thereby achieving a competitive edge in the market.

Availability time types

Availability time can be categorized based on different phases or types, each important for supply chain management:

Production availability

This is the duration needed to convert raw materials into a finished product. For companies employing a made-to-order strategy, optimizing this component is critical to meeting customer expectations without inflating costs.

Order processing time

Once an order is received, various steps like confirmation, picking, packing, and labeling are involved. Reducing this time can lead to quicker shipments and higher customer satisfaction, but rushed processes risk errors.

Stock availability

This deals with how quickly an in-stock item can be prepared for shipping. High stock availability generally results in quick delivery but may also lead to higher carrying costs if not managed well.

Transit availability

This is the shipping or transportation time from the warehouse to the end-user. While this is often out of direct control, choices like shipping carriers and routes can impact it. Quicker transit can delight customers but might be costlier.

Supplier lead time

This is the time taken by suppliers to deliver raw materials or components. A shorter supplier lead time enhances flexibility but may come with a premium price or less stringent quality checks.

Service availability

For digital goods or services, this is often measured as "uptime." High availability is crucial for maintaining trust but can require significant infrastructure and maintenance costs.

Seasonal availability

Products like holiday decorations or seasonal fruits have specific availability windows. While high demand can drive sales, there's a risk of unsold inventory if not managed well.

Restock availability

This is the time needed to replenish sold-out items. It's critical for avoiding stockouts, but poor forecasts can lead to overstocking, which incurs extra costs.

Customization availability

For products requiring personalization, this is the time needed for customization tasks. While it adds value and uniqueness, it also extends the delivery timeframe, which may not suit all customers.

Understanding and optimizing these types of availability time can help businesses make informed decisions, striking a balance between cost, quality, and speed.

Pros and cons

Pros

Customer satisfaction: When products are available quicker, it directly impacts customer satisfaction. Happy customers are more likely to become repeat buyers and recommend your service.
Inventory management: A shorter availability time can help companies maintain lower levels of inventory, which in turn reduces storage costs and the risk of obsolescence.
Competitive advantage: In markets where customers expect fast deliveries, reduced availability time can serve as a unique selling proposition that differentiates a company from its competitors.
Cash flow: Faster turnover of products can lead to quicker payments, thereby positively impacting a company's cash flow, which is crucial for ongoing operations and investment.
Scalability: If you've optimized your availability time, scaling up operations becomes easier because your supply chain processes are already efficient.

Cons

Quality risk: The focus on reducing availability time could lead to corners being cut in quality control, which can damage brand reputation in the long term.
Cost: Investments in technology, manpower, or expedited shipping to decrease availability time can drive up operational costs, which might not always be offset by increased sales or customer retention.
Increased complexity: Availability time involves various stages and components. The task of closely monitoring and optimizing each can introduce complexity and require specialized skill sets.
Supplier dependence: If a supply chain is optimized for minimal availability time, any delay from suppliers can have a cascading effect, leading to longer delays and potential stockouts.
Environmental impact: Faster processes might require expedited shipping or production methods that are less environmentally friendly, which could be a concern for sustainably-minded customers and regulators.

Balancing these pros and cons requires strategic planning, ongoing monitoring, and adjustments to ensure an optimized and resilient supply chain.

Explore your options

Now that you've deepened your understanding of availability time and its significance in supply chain management, you may be contemplating strategies to optimize this critical metric. Companies like SAP, Oracle, and JDA Software offer advanced supply chain solutions that can help you monitor and improve availability time across various stages.

By leveraging such technologies and expertise, you can fine-tune your operations for shorter availability times without sacrificing quality. This will not only satisfy your customers but also give you a competitive edge, enabling you to manage costs effectively and scale your business with greater ease.