About LeadTime Technology™ (LTT)

Founded in 1998, LeadTime Technology, Inc. is a market leading provider of technology-enabled process optimization to reduce and right-size inventory, improve forecast accuracy and service, optimize production resources, and reduce cycle time across the supply chain including manufacturing, distribution and retail. Its applications are developed by practitioners for practitioners to achieve world class operations improvement leveraging Lean, Six Sigma, and SCOR principles supported by patented algorithms and technology. LeadTime Technology’s™ unique combination of consulting and software enables operational decisions to be clearly correlated to financial measurements to ensure rapid ROI and increased contribution to shareholder value on a daily basis. Based on Microsoft platform technology and independent of enterprise applications, the intuitive user interface distills all supply chain complexities into a simple list of recommendations for continuous flow management and synchronization in virtually any size or type of operating environment.

The propagation of forecast error throughout a supply chain results in increased variability and costs based on time delay in the communication and response of the network to daily variance of actual to forecast exacerbated by amplification due to aggregated volume from points of consumption backward to the material sources locations: i.e. the bull whip effect. Rather than making major investments in futile forecast improvement efforts, we have built our processes based on the most economic utilization of manufacturing and distribution resources while managing variability and increasing operational response time the inevitable error in the forecast through a bottoms up approach and patented daily re-forecasting algorithms based on new information and existing plans.

Taking a bottom up approach to optimization, we look first at the production resources and optimizes them based on most profitable economic value add, not simply cost. LTT, the software technology enabling effective supply chain process optimization, searches for the balance among supply and demand and resource utilization that provides the highest shareholder return. In most cases this is a highly non-linear problem; the more you make the less it costs, but the longer it lasts. LTT addresses all the variability germane to the problem to effectively “right size” inventory for improved customer service while eliminating slow moving and obsolete inventory (SLOB) and reduced safety stock.

Since the inventory module is custom configured to each facility’s unique footprint, the business process is modeled as it is (or should be) and not shoehorned into an existing model. The module will recognize the specific constraints and choices for each manufacturing process; batch size, process time, yield, package splitting, etc. By taking a daily forward looking approach, always planning at and beyond the supply lead time, it identifies problems before they occur.

LTT correctly calculates the recommended optimum lot size and the optimum safety stock level simultaneously for each item at each location. For multi-level production or distribution, it will also optimize where in the supply chain product should be held and in what quantity. For constrained systems, LTT uses a sophisticated “product wheel” model to calculate the interdependencies of products on a resource and correctly size the production runs for optimum value. LTT will recommend which products should be in production (on the wheel) at what time and in what sequence and quantity they should be produced. It will also calculate when and in what sequence products are to be scheduled “on the wheel” throughout the course of different planning horizons and adjusted based on actual demand.

Using a proprietary, patented forecast algorithm, LTT calculates a “blended” forecast correctly accounting for both orders already on the books and the demand/orders not yet seen as provided by the enterprise forecasting system/method. Recalculating this forecast daily the LTT forecast accuracy is well beyond any other method commercially available. And because this forecast is optimized at the supply lead time, it is the only one to use for production planning. Order quantities and safety stocks are also recalculated daily so that seasonal effects are anticipated. In systems that that require these to be input, they never seem to change.

Offering a full suite of longer term forecasting tools as well as models for slow moving skus (i.e. parts), LTT supports an optimal basis for managing the Sales & Operations Planning (S&OP/SIOPS) process for most companies. By incorporating sales and marketing plans, historical data analysis, daily order updates with the operating, production, and material plans while considering the financial impact, S&OP process decisions are more factual and reflect the most economic value add for the organization.

LTT will also automatically identify whether a product should be make-to-order or make-to-stock based on the economics and demand for the product over time. Implementing LTT recommendations, it is no longer necessary to designate the product as one or the other. LTT’s output also identifies the overall contribution of the product to economic value; a key determinant in the product rationalization process.

By capturing and utilizing actual data for calculation of supply and customer lead times, LTT is one of the only models that correctly acknowledges the impact of customer lead times. Since this data is updated daily, LTT senses and adapts to the demand signals for optimal operating response.

Based on forward-looking projections, LTT anticipates and recommends the need for component inventory build, identifying when materials should be made or purchased, in what quantity, and in which products to optimize total value. For products that are being phased out, LTT employs a “soft landing” tool that tunes down inventory as the drop date approaches. We have also successfully calculated the optimum “lay-in” quantities for new products based on historical statistics, S&OP/SIOP plans, and knowledge of the business process.

As the individual production resources are optimized, each are then combined and optimized globally. This ensures both local and global optima are identified. LTT consulting and software technology are a full suite of tools supporting global multi-stage, multi-source manufacturing, distribution and transport loading. Long term planning and simulation modeling ensure that the facilities are not capacity constrained over time and that operations are contributing to measurable shareholder value on a daily basis.

General Functions and Features

• Production + distribution simultaneous optimization

• Multi-site production split
• Bottom-up process from the plants/warehouses to the network
• Runs on a typical PC (Windows/SQL platform)
• Easy import/export capabilities with existing enterprise applications
• Simplified decision support recommendations for the Production Planner
• Emphasis on preventing “fires” before they happen; decision support to extinguish fires before they burn down the forest
• Can be implemented in “months” for small fraction of the cost and resources to maximize ROI usually in less than 90 days

Optimization

• Uses non-linear calculations for optimizations

• Economic value is the key driver
• Order quantities are an output based on economic value
• Accounts for the time value of money
• Uses a cost and time changeover matrix for optimization
• Uses real history and probability distributions for key variables

Inventory Modeling

• All optimizations updated daily

• Model determines whether SKU should be push or pull depending on value
• Custom configured based on the business processes used or desired
• Handles layered BOMs
• Correctly calculates the service driven safety stock at each level and identifies where— and in what quantities— each should be stored
• All relevant variability modeled
• Employs “product wheel” (production sequencing techniques) models for constrained systems

Forecast

• Optional sophisticated long term forecasting algorithms

• Import/Export capability with existing forecasting/demand planning systems
• Uses sophisticated, patented algorithms to blend the forecast considering both in production, in house, and forecasted orders
• Re-forecasting daily and optimizing the forecast at the supply lead time results in higher accuracy
• Statistically optimized start up quantities
• Automatically trimmed quantities for products about to be dropped

Production/Network

• Capacity loading

• Multi-level, multi-sourced Distribution Resource Planning (DRP)

Output

• What if analysis for the resource and the network

• Reports – Excel®, hardcopy, graphics
• Supports Microsoft SQL Analytics & Reporting Services, Business Intelligence
• Simple graphical interface with access to all relevant data
• Little to no user training required

Additional Features/Functions

• Transport load leveling

• Data warehouse
• Supports vendor managed inventory
• Provides Product rationalization tools
• Long term planning and simulation tools for S&OP/SIOP processes
• Multi-level available to promise