Understanding lead-time implications for financial performance: a qualitative study

What is it about?

The purpose of the study is to describe the implications of strategic lead times (SLTs) for return on investment (ROI). The study was part of an interactive research project and is based on the logic of theory application leading to theory building. It uses a multiple case study with five holistic single cases. Empirical data (ED) have mainly been collected from interviews and focus groups. Using a combination of a relative financial performance measure (ROI) and a set of SLTs (systems perspective), this study focuses on SLTs’ actual implications for ROI. The findings provide evidence that different sections of a supply chain can have different implications for revenue, cost and investment (i.e. the three absolute measures related to ROI).

Featured Image

Why is it important?

The study shows that the length of and uncertainty in SLTs have implications for companies’ financial performance, and that these implications vary in strength and can be either direct or indirect. These findings are incorporated into a framework on SLTs’ implications for ROI. The findings offer practitioners a rich description and understanding of SLTs’ actual implications for financial performance in terms of ROI. This knowledge can support practitioners in analysing supply chain designs based on financial performance.