Strategic lead-time management M M 6 Time-based competition Lead-time concepts Logistics pipeline management M M M M `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. Time-based competition Customers in all markets, industrial or consumer, are increasingly time-sensitive. 1 In other words they value time and this is reflected in their purchasing behaviour. Thus, for example, in industrial markets buyers tend to source from suppliers with the shortest lead times who can meet their quality specification. In consumer mar- kets customers make their choice from amongst the brands available at the time; hence if the preferred brand is out of stock it is quite likely that a substitute brand will be purchased instead. Customers in all markets, industrial or consumer, are increasingly time-sensitive. 121