Have you ever got the situation that you asked the same product from several different kinds of factories, one offer you lead time in 35 days, but the other can deliver it in 20 days, why?
There are many reasons that could tell the differences, here is an overview of the important ones.
1. The lack of materials
There is an old saying in China: If you have no hand you can’t make a fist. Similarly, if a factory does not have kept stock for the needed materials, then they’re unable to produce your order in time, they need to arrange the procurement for materials first. It will be weeks later until they receive those materials from suppliers to arrange the production. There is no double that lead time is longer with the addition of materials lead time.
2. Lead time of raw materials is different
As we know lead time of raw materials is also vary from each other. For example, if you buy led lighting products, of all the materials like electronic components, structural parts, etc, electronic components take more time to prepare, at least 20 days, structural parts can be faster, takes 10-15 days. Lead time is longer if there is a lack of electronic materials.
3. Not standard products
If the product you ordered is a new product for a factory, not only they need to make preparation for these materials but also need to build up the working procedures, QC evaluation standard, etc, and need to arrange pre-production to check further for product quality.
4. Too many procedures
Different factories have different processes to run the order production, for a big factory, when they receive your PO, they need to input the order information to their system first to have it approved by each principle of division. Procurement team will start to prepare materials after approval. To a small and medium-size factory, there have fewer procedures and as soon as they received your PO, they can start preparing the materials, save a couple of days and lead time is faster. To see further differences, you can refer to this post “Big factories or small and medium size factories?”
5. Production schedule is too late
For many reasons, although the factories have kept stock for all needed materials, they probably will not produce your order on time. Because the production capacity is changeless, each order is produced according to production schedule. If there are many other orders waiting in line already, then your order will be postponed until the earlier orders are finished. Another situation is they have bigger orders, considering the production cost and efficiency, they are very likely to produce big orders first, as a result, your order need to wait for another few days before in production, makes your order production lead time longer.
6. Deposit payment not received in time
Usually, the lead time is calculated from the date that they received the advance payment, the factory starts to run the order against advance payment, not PO. Thus if you have not arranged the advance payment in time or it gets delay, lead time can be longer. Unless you have cooperated with the factory for a long time and have built up a good relationship with them, they are willing to run the process for your order as soon as PO received.
7. Production efficiency is different
Factories are varied from labor force, manufacturing scale, production facilities, production capacity, all of it could make a difference in lead time. For those factories who have more production facilities or advanced machines, will be with higher efficiency and faster lead time than those factories who merely depend on the labor force.
8. Quantity not enough, far from MOQ
To a factory, if you are ordering less than their MOQ, you might need to negotiate with them to accept the small quantity order. Same to the factories, they also need to negotiate with the raw material suppliers and coordinate with them to get the materials prepared, spend more time and energy negotiating with related parties and following up the order.
9. The 3rd Quality inspection
When the order is finished and get ready to be delivered, if you required an additional quality inspection from 3rd party, it will affect the lead time too, with additional 1-2 days or more.