‘Time is money’ is perhaps an over-worked cliché in common parlance, but in
logistics management it goes to the heart of the matter. Not only does time repre-
sent cost to the logistics manager but extended lead times also imply a customer
service penalty. As far as cost is concerned there is a direct relationship between
the length of the logistics pipeline and the inventory that is locked up in it; every
day that the product is in the pipeline it incurs an inventory holding cost. Secondly,
long lead times mean a slower response to customer requirements, and, given
the increased importance of delivery speed in today’s internationally competitive
environment, this combination of high costs and lack of responsiveness provides a
recipe for decline and decay.