Measuring The Reduction Of Lead Times

The traditional belief is that plant-wide efficiencies must be improved to reduce lead times. This idea goes hand in hand with the desire for maximizing resource utilization. The problem is not the concept of efficiency, but that most measures of efficiency work counter to lead time reduction.

QRM Principle #3

Measure the reduction of lead times and make this the main performance measure.

The concept of reducing lead times usually corresponds with the goal to maximize resource utilization. The problem is that most efficiency measures work against lead time reduction; in fact, 70% of policies used by managers today contradict lead time reduction. This QRM principle may seem like a bold step. It is important for all employees in a manufacturing facility, especially upper management, to understand the dynamics of factory operations. The interactions between capacity utilization, efficiency measure, lot sizing policies and their effects on lead time, need to be analyzed. Lead time includes external, internal, quoted, planning and supplier time.

Lead time minimization increases performance

The foundation of the entire QRM philosophy is based on this principle although it can't be just a tactic. Companies must change their traditional ways of operating and redesign their organizational structures to significantly affect lead times. QRM is an organizational strategy led by top management. Lead time reduction becomes the main measure and all other measures are deemphasized or eliminated.

QRM - Not Just Another Buzzword, But A Way of Life!

Examples of Lead Time Measurements At AEC

Quick Response Office Cells: Involves estimating, design engineering, customer service, and production planning.

1. The measurement of time from when the Q-ROC receives a customer's purchase order, to the promised ship date.
2. The measurement of time from when the Q-ROC receives a customer's purchase order, to the date the manufacturing order is complete.
3. The measurement of time from manufacturing order schedule start date to the manufacturing order close date.
4. RFQ to completed quote lead time.