Why Manufacturers Should Focus on Improving Lead Time

A realistic discussion of lead time in supply chains and manufacturing may provide the industry with the right way to measure the success and innovation within our industries.

Lead time just may provide an all-inclusive measure that gives customers and managers a way to measure effectiveness and efficiency.

The problem with today’s discussion is that lead time is that is often expressed in ways that are unclear. Marketing and sales reps often adjust lead-time estimates to best fir the company’s goals instead of using a standard definition, such as the actual number of days from when a part or product is ordered until the first batch of the order is delivered.

Keeping the discussion of lead time in plain language would better serve our industry because it keeps expectations the same and allows us to compare products and services across multiple suppliers and sectors with a straightforward metric.

The Next-Gen Metric

Lead time presents as one of the best candidates for a next-generation metric because of how it fits into the overall discussion of lean supply chains. Lead time does this because, when averaged out across a company’s production, lead time takes into account both expected and unexpected orders.

This means that an average lead time closely represents a manufacturer’s ability to produce on demand. This on-demand production is an essential part of leaning the supply chain because it signifies that a company has the proper priorities and procedures to meet shifts in demand.

Lean operations are constantly working to reduce the amount of pre-positioned goods or excess parts sit around pre-assembled to an extent. When discussing these statistics within an organization, lead-time plus this inventory provides a good place to start working on efficiency improvements.

If a company finds a process adjustment that improves its lead time and reduces the amount of pre-assembly, it has stumbled upon a fix that should be implemented across its entire operation. A 3D Tale

The UK’s Whale, which makes heating and water systems for vehicles and mobile applications, makes a strong case for looking at lead time to measure innovation and predict where the market is going.

Whale says it has reduced its lead times by as much as 97% through the adoption of 3D printers for production of injection mold tools. Lead times dropped to a matter of days from a previous average of four to five weeks.

The adoption of the 3D printers has also significantly cut its costs, created more time for R&D and speed up testing. These printers are quick enough that a tool can be designed during the day, printed and then tested the very next day.

3D printing continues to show areas of innovation over many traditional manufacturing processes, but the savings and other reductions can be hard to compare across multiple sectors.

With a lead time reduction of 97%, we find a measure that’s immediately understandable.  It’s also something that customers can instantly recognize because parts and products they order arrive faster.