Lead time optimisation by means of multivariate analysis

As proved by existing scientific literature, lead time plays a fundamental role in companies’ logistics performance with a direct impact on inventories. The globalization trend that has been spreading over the last years has led to more geographically dispersed and complex Supply Chains. Direct implications are reduced costs on materials and production on one side, longer lead times and higher inventory costs on the other one. The aim of the thesis is exploring the applicability of Performance Pricing, a top-down approach to benchmark the price of a material group, to supplier lead times optimization. A real case application was developed at Hilti Corporation covering different products families and procured items. The proposed model enables Hilti and other companies to identify critical drivers of supplier lead time and optimize it to minimize inventory costs.