Once your preschooler has mastered his letter sounds it might be time to consider teaching word families.
Word families are groupings of 2-3 letters that are commonly found in many words throughout the English language, such as:
There are too many to list, but try these great lists on Enchanted Learning.
Once your child has learned his word families well he will begin to recognize them as one set of sounds and will not have to sound out every letter individually. Even some of my older students who read letter-by-letter benefit from re-learning their word families to aid in better fluency (rate and accuracy of reading.