Lead Time Reduction In Five Easy Steps
Reviewing Lead Time Reduction
Excessive lead times are a huge problem for just about anyone running a production line. Misjudging lead times can be devastating to both your ability to keep up with customer demand and the faith those customers put in your ability to deliver on time. Reducing your lead times allows you to be more agile and responsive to customer demand, reduce or eliminate inventory, and trim unnecessary costs from your operations. In this blog post, we’re going to look at several steps you can take to understand your own lead times and then adapt them to consumer demand and reduce them as needed.
Jamie Flinchbaugh wrote a great article for IndustryWeek and said this great quote:
Delivering faster is a true competitive advantage. The pursuit of lead-time reduction also forces you to eliminate other wastes. If I had to pick a single metric to focus an improvement effort, I would choose lead time.
Get To Know Your Lead Time
It makes little sense to try and change something you don’t fully understand, so your first step should always be to have an intimate understanding of what your current situation/baseline is. To do this, you should look at every element of your lead time and figure out how it contributes.
Ultimately, your goal is to match demand perfectly and have products being created and shipped at that same rate. The next best thing is to have a pull system in which a product is created only as it is ordered. In this second scenario, think about every step that needs to be taken between a customer placing an order and the product being in their hands. In general, you’ll want to make sure you touch on these elements and any others that may be more specific or relevant to your own production:
Communication: How is an order communicated? Does it have to jump through multiple people to reach the person or team who will actually start production? Are there quicker ways to communicate between workers at any step in the process? Remember, we have a lot of options at out fingertips these days when it comes to communication!
Transportation: Transportation is unavoidable at one point or another, but reducing it or routing it in the most efficient way possible can definitely yield lead time improvements. Transportation doesn’t just mean delivery of products from a production facility to customers or to stores, it can also be the processes through which you acquire your raw materials, or through which partial products or materials move between various stages of production.
Training & Expertise: The training and expertise of your workers is going to have a huge impact on your lead time in many cases. A worker who is experienced in a certain task or at a certain station is going to have developed their own tricks for getting things done more efficiently – depending on mechanical limitations, this may have more or less of an overall impact on your lead times.
In addition to training and skill, safety will play a role. Safety is non-negotiable in its necessity, but new machinery and safety technology means that we’re constantly developing better ways to produce quicker without sacrificing worker safety (and vice versa).
Defect Rate: An important but easy to forget element, knowing your defect rate is important to accurately gauging your average lead time as you’ll have to deal with a setback at every X interval during production. Ideally, your defect rate is zero or as close to it as possible, but if that’s not the reality, you need to factor it in your decision making process.
Pick Out, Then Throw Out, The Waste
If you’re trying to facilitate lead time reduction in the first place, you’ll likely discover a disconnect in how long your lead time could or needs to be to stay even with demand and where it actually is currently. At this point, it’s time to look for areas in the areas outlined above where you can make improvements and cuts.
As you formulated your initial measurements and observations, you probably already thought of a few things that could go, or at least could change. Find needless transportation of goods between stations that could be reorganized to function more efficiently? Get on it! Or maybe you realized that you could do better with a certain aspect of your training which would thus enable your workers to be more effective in their given tasks. If so, go ahead and make those changes as well.
Your goal here should be eventual parity between lead time and demand, but the most realistic way for most people to realize is in small increments. Getting caught up in chasing large gap closers can sometimes do more harm than good – that said, if you see easy ways to cut out large swathes of wasted production time, go for it. Just make sure that you don’t lose sight of the smaller changes that can be made because every little bit adds up and is “worth it.”
Fine Tuning Your Lead Time Reduction
Finally, you’re going to be fine tuning the adjustments you’ve made. While it’s less than ideal, sometimes an initial decision you make with the intention of reducing lead time will have an unintended side-effect. While it’s important to think about the interconnectivity of various systems in production before making changes, sometimes these things just happen.
To employees, changing something twice is probably the only more annoying thing than changing it once in the first place, but you may have to do it anyways. In these cases, do your best to engage employees in a dialogue and explain any actions you’re making for corrective purposes. Your workers are your biggest assets in becoming more efficient, so try not to leave them guessing on anything.
Often, the changes you’ll be making at this stage are a result of overcorrection, and you may not have necessarily taken the wrong action, but just a bit too far. Rein things in as needed.
Ultimately, these three steps – when broken down into more specific elements, obviously – are all you need to reduce lead time. Better yet, the system is something you can run through for just about any step of production, so you can use the method for your production as a whole, or you can really zoom in on a specific process for ultra-fine tuning.
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