How to reduce lead-times

There are many reasons for wanting to cut lead-times, and many benefits when you do. Mostly it’s to do with competitive advantage. How long does it take your customer to obtain a similar product or service to yours, from a low-cost economy like China? If it’s 6-8 weeks you really don’t want to be taking longer than this! Help your customers to reduce their inventory costs and/or their own lead-times. Get really slick and transform your operations from Make to Stock to Make to Order!

 You’ll improve customer service, reduce working capital (cash tied up), free up lots of space and get rid of lots of wasteful activities. It’s an area where Lean tools and techniques can make a huge difference very quickly.

So – how to do it:

First: map your process and measure the time taken for each activity. At its simplest, observe the process and simply list each activity. For more detail, use Value Stream Mapping. Distinguish between value-added tasks (those things that the customer will pay for) and non-value-added tasks (waste). Remember always to look out for The Seven Wastes (muda).

Calculate the total lead-time and the percentage of lead-time that is spent on value-added activities. It’s likely to be less than 5% in most manufacturing businesses. Next, look at where the non-value-added time is.  Concentrate on the biggest time-wasters – often waiting time.

If you’re batching products, cut the batch sizes – just do it! Get back to the root causes for batching:

  • If it’s because of set-up and change-over times then use set-up reduction techniques (SMED) to cut these.
  • If it’s to make up for poor quality then get back to the root causes, inspect at source then apply mistake-proofing techniques and aim for zero inspection.
  • If it’s to make up for machine breakdowns then start measuring OEE (Overall Equipment Effectiveness), train operators in basic maintenance, annalyse the major causes of downtime and brainstorm improvements.

As with all improvement activities use the Improvement Cycle: Plan-Do-Check-Act. Work out what you want to improve, how and why. Make the improvements then review the effect. Work out how to do it better next time. Do it better and do it again. Keep going!

Most of all – train the people, work as a team, measure the results, recognise those who contribute, and sell the benefits to your customers and employees.

… and start now!

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