The value of lead time reduction and stabilization: A comparison between traditional and collaborative supply chains

This work quantifies the financial impact of the mean and the variability of production and shipping lead times on multi-echelon supply chains. We combine agent-based modelling and Taguchi methods, through which we develop a framework for supporting entrepreneurial investment decisions. A throughput-based analysis reveals that decreasing mean lead times improves the internal operation of production and distribution systems, while reducing lead time variability enhances the satisfaction of consumers. In this regard, we contrast traditional and collaborative supply chains. We find that the latter are not only more profitable than the former, but also more robust to variations in lead times.