ANOVA: Comparing Lead Times Across Suppliers in a Distribution Network

The Scenario

NexaChain Manufacturing is a mid-sized electronics assembler headquartered in Phoenix, Arizona, that sources critical components from three suppliers: FastFreight Inc., GlobalParts Co., and RegionalSupply Ltd. The procurement team places approximately 90 orders per year — roughly 30 orders per supplier — and has recently observed that production scheduling has become increasingly difficult to manage. Some component shipments arrive in under six days while others drag past eleven days, creating costly inventory bottlenecks and idle production lines that the operations team estimates cost the company approximately $4,200 per day in lost output.

The Statistical Challenge

Priya Sharma, NexaChain's Head of Procurement, has extracted a sample of 90 completed orders from the past twelve months, recording the lead time in days (from order placement to confirmed delivery) for each order alongside the corresponding supplier name. The central question is whether the average lead times are statistically significantly different across the three suppliers — or whether the observed differences are simply the result of random variation in shipping cycles and production schedules. You have been brought in as the data analyst to apply a One-Way ANOVA test and determine whether supplier group membership explains a meaningful portion of the lead time variance in the dataset.

What's at Stake

If the analysis reveals statistically significant differences in mean lead times across suppliers, NexaChain's procurement team has a data-backed justification to act: renegotiate SLA terms with the slowest supplier, shift a portion of order volume to the most reliable one, or build differentiated buffer stock policies for each supplier. Without this analysis, procurement decisions remain reactive and anecdotal, leaving the company exposed to continued production disruptions worth hundreds of thousands of dollars annually. Your statistical conclusion will directly inform a contract review meeting scheduled in two weeks.