Lead Time Management

For everything you wanted to know on building leadership and management, refer Shyam Bhatawdekar’s website: http://shyam.bhatawdekar.com

(Refer our High Quality Management Encyclopedia “Management Universe” at: http://management-universe.blogspot.com/)

Need for Lead Time Reduction

• Value for money (VFM) to customers is inversely proportional to lead time.
• Less the lead time, more is value for money to customers.
• Customer satisfaction/delight is the result of increased VFM and reduced lead time.
• More customer satisfaction means more new customers, more retained customers, more orders and more profit.

Lead Time Defined

• In terms of a supply chain, the total time needed for an order to be processed.
• Lead time starts when the order is received by the sales department and ends when the client pays the invoice.
• Lead Time = Process cycle time (throughput time) + Waiting time + Transportation time + Storage time + Inspection time.
• Lead Time = Time taken by value adding activities + Time taken by non value adding activities.

Ideally, lead time should be zero. It means that product should be available to the customer off the shelf. Though it may seem theoretical, customer has a reason to ask for it.

Lead time reduction is one of the major techniques to create a lean enterprise. Also refer: http://lean-organization.blogspot.com/ (Lean Enterprise).

Every Business Process Has Lead Time

• Time to market (from conceptualization to delivering to the customer).
• Product development lead time.
• Material procurement lead time.
• Recruitment lead time.
• Sales order processing lead time.
• Decision making lead time.
• Project approval lead time.

etc.

Lead Time Reduction Involves

• Decreasing the time it takes a company to perform key activities throughout its value chain.
• Use of analytic techniques.
  · to minimize waiting time.
  · to eliminate activities that do not add value.
  · to increase parallel processes.
  · to speed up decision processes within an organization.
  · for concurrent execution of not only engineering but also all development activities. A truly cross-functional team provides the core means for achieving the concurrency required for cycle time reduction.
• decreasing the time it takes for processes to run.

Methodology

Lead time and cycle time reduction tries to decrease the overall time taken from conception to delivery of products and services. The methodology focuses on three primary areas within a business:

New product development

• Lead Time Reduction makes use of cross-functional teams to shrink the time required to take a product from conception to market. The tool involves key decision-makers from each functional area at the beginning of the development process.

Operations

• Lead Time Reduction minimizes complexity, streamlines processes, and decreases run lengths. This allows the organization to eliminate bottlenecks, decrease unproductive waiting time, and reduce the carrying cost of inventory. In service operations, this tool speeds up workflows and decision-making throughout the organization.

Delivery and logistics

• Eliminating unnecessary work and speeding up decision-making can decrease the time required to fill orders and can increase the predictability of response.

Systems Used For Lead Time Reduction

• Just in time (JIT). Also refer: http://just-in-time-management.blogspot.com/ (JIT).
• Methods study.
• Value adding management/Activity based management (ABM). Also refer: http://activitybased-costing.blogspot.com/ (Activity Based Costing- ABC).
• Business process reengineering (BPR). Also refer: http://business-process-reengineering-bpr.blogspot.com/ (Business Process Reengineering- BPR).
• Benchmarking. Also refer http://benchmarking-system.blogspot.com/ (Benchmarking).
• Total quality management (TQM). Also refer: http://total-quality-concept.blogspot.com/ (TQM).
• Total productive maintenance (TPM). Also refer: http://total-productive-maintenance.blogspot.com/ (TPM).

Common Uses of Lead Time Reduction

• Increased productivity and employee effectiveness.
• Increased profit margins of products or services through lowering costs of production and inventory.
• Better meet changing customer needs through shortened product development cycles.
• Support more product changes over a shorter period of time.

For More Guidance, Assistance, Training and Consultation

Contact: prodcons@prodcons.com

Also refer: http://prodcons-group.blogspot.com/, http://training-development-function.blogspot.com/ and http://productivity-consultants.blogspot.com/

Other Topics of Interest

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(Home Page for Writings of Shyam Bhatawdekar) http://writings-of-shyam.blogspot.com/
(5S Housekeeping) http://5s-housekeeping.blogspot.com/
(Activity Based Costing- ABC) http://activitybased-costing.blogspot.com/
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(Basic Statistics) http://statistics-basic.blogspot.com/
(Behavioral Safety) http://behavioral-safety.blogspot.com/
(Benchmarking) http://benchmarking-system.blogspot.com/
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(Books- Best Management Books) http://best-management-books.blogspot.com/
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(Business Ethics and Ethics in Management) http://business-management-ethics.blogspot.com/ (Business Plan) http://business-plan-document.blogspot.com/
(Business Process Reengineering- BPR) http://business-process-reengineering-bpr.blogspot.com/
(Career Planning within Organizations) http://organizational-career-planning.blogspot.com/
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(Corporate Governance) http://corporate-governance-policy.blogspot.com/
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(Counseling at Workplace) http://counseling-skill.blogspot.com/
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(Daily Management) http://daily-management.blogspot.com/
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(Efficiency Techniques: Work study: Motion and Time Study) http://work-study-measurement.blogspot.com/
(Efficient Work Methods or Practices) http://efficient-work-methods.blogspot.com/
(Email Etiquette) http://email-etiquette-manners.blogspot.com/
(Emotional Intelligence) http://emotional-quotient-intelligence.blogspot.com/
(Empowerment) http://employee-empowerment.blogspot.com/
(Enterprise Resource Planning- ERP) http://erp-management.blogspot.com/
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(Executive Etiquette and Manners) http://executive-manners.blogspot.com/
(Exit Interview) http://exit-interview.blogspot.com/
(Financial Ratios and Financial Ratio Analysis) http://financial-ratios.blogspot.com/
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(Functions of Management) http://functions-of-management.blogspot.com/
(Gemba Kaizen) http://gemba-kaizen-improvement.blogspot.com/
(Genuine Professional) http://knol.google.com/k/shyam-bhatawdekar/the-genuine-professional/6txz9nck6g3/10#
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(Internal Motivation or Self Motivation) http://internal-motivation.blogspot.com/
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(Just in Time Management- JIT) http://just-in-time-management.blogspot.com/
(Kaizen) http://kaizen-improvement.blogspot.com/
(Knowledge Management) http://knowledge-management-initiative.blogspot.com/
(Lead Time Management) http://lead-time-management.blogspot.com/
(Leadership) http://lead-max.blogspot.com/
(Lean Enterprise) http://lean-organization.blogspot.com/
(Learning Organization) http://learning-organization-profile.blogspot.com/
(Life Management: Competencies) http://knol.google.com/k/shyam-bhatawdekar/competency-matrix/6txz9nck6g3/4#
(Life Management: Effectiveness Management: HSoftware) http://knol.google.com/k/shyam-bhatawdekar/management-in-life-profession-family/6txz9nck6g3/3#
(Life Management: I Am Liberated) http://knol.google.com/k/shyam-bhatawdekar/i-am-liberated/6txz9nck6g3/6#
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(Problem Solving) http://problem-solving-skill.blogspot.com/
(Profit Improvement) http://profit-improvement.blogspot.com/
(Project Management) http://management-of-project.blogspot.com/
(Public Speaking) http://public-speak-skill.blogspot.com/
(Quality Circles History) http://quality-circles-history.blogspot.com/
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(Quality Function Deployment- QFD and House of Quality) http://quality-function-deployment.blogspot.com/
(Quality Gurus) http://quality-gurus.blogspot.com/
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(Recession and Opportunities) http://knol.google.com/k/kalpana-bhatawdekar/recession-and-opportunities/1268ytxl8r5dc/1
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(Research Methodology) http://research-work-methodology.blogspot.com/
(Safety and Health Management) http://safety-health-management.blogspot.com/
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(Self-concept) http://knol.google.com/k/shyam-bhatawdekar/self-concept/6txz9nck6g3/12#
(Self Motivation or Internal Motivation) http://internal-motivation.blogspot.com/
(Self-confidence) http://self-confidence-improvement.blogspot.com/
(Self Development) http://managing-self.blogspot.com/
(Shyam Bhatawdekar’s Articles on Management) http://writings-of-shyam.blogspot.com/
(Six Sigma) http://six-sigma-system.blogspot.com/
(Six Thinking Hats) http://six-thinking-hats.blogspot.com/
(Soft Skills) http://soft-skills-competencies.blogspot.com/
(Spiritual Quotient/Intelligence) http://spiritual-quotient.blogspot.com/
(Statistics- Basic) http://statistics-basic.blogspot.com/
(Strategic Management) http://strategic-managing.blogspot.com/
(Stress Management) http://management-of-stress.blogspot.com/
(Stress Management) http://managing-stress-strain.blogspot.com/
(Success in Life or Success) http://success-achievement.blogspot.com/
(Success in Life or Success) http://knol.google.com/k/shyam-bhatawdekar/success-in-life/6txz9nck6g3/14#view
(Supply Chain Management) http://manage-supply-chain.blogspot.com/
(Supply and Demand) http://supply-demand-laws.blogspot.com/
(Talent Management) http://managing-talent.blogspot.com/
(Team Building) http://team-building-working.blogspot.com/
(Telephone Etiquette) http://telephone-etiquette.blogspot.com/
(Three Sixty Degrees Appraisal System) http://three-sixty-degrees-feedback.blogspot.com/
(Time Management) http://time-life-management.blogspot.com/
(Total Productive Maintenance- TPM) http://total-productive-maintenance.blogspot.com/
(Total Quality Management- TQM) http://total-quality-concept.blogspot.com/
(Training and Development) http://training-function.blogspot.com/
(Trainers’ Qualities) http://trainers-qualities.blogspot.com/
(Transaction Analysis- TA) http://transaction-analysis.blogspot.com/
(TRIZ- Inventive Problem Solving) http://triz-problem-solving.blogspot.com/
(Value Engineering/Analysis) http://value-engineering-analysis.blogspot.com/
(Winners and Losers) http://winners-losers.blogspot.com/
(Work Study: Method Study and Work Measurement) http://work-study-measurement.blogspot.com/
(Work Methods or Practices: Efficient) http://efficient-work-methods.blogspot.com/
(World Class Manufacturing) http://world-class-manufacturing.blogspot.com/
(Writings of Shyam Bhatawdekar on Management) http://writings-of-shyam.blogspot.com/
(Written Communication) http://written-communication.blogspot.com/
(Zero Based Budgeting) http://zero-based-budgeting.blogspot.com/

Counseling: General and Psychological
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(Children’s Behavior Problems) http://child-behavior-problems.blogspot.com/
(Cholesterol Control) http://controlling-cholesterol.blogspot.com/
(Counseling: Psychological) http://counselingfamily.blogspot.com/
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(Cross Cultural Etiquette) http://cross-cultural-etiquette.blogspot.com/
(Emotions) http://emotion-feeling.blogspot.com/
(Executive Etiquette and Manners) http://executive-manners.blogspot.com/
(Exercises) http://exercises-plan.blogspot.com/
(Family Counseling) http://family-harmony.blogspot.com/
(Health: Homeopathy) http://homeopathy-medicines.blogspot.com/
(LifeManagement: Competencies) http://knol.google.com/k/shyam-bhatawdekar/competency-matrix/6txz9nck6g3/4#
(Life Management: Effectiveness Management: HSoftware) http://knol.google.com/k/shyam-bhatawdekar/management-in-life-profession-family/6txz9nck6g3/3#
(Life management: I Am Liberated) http://knol.google.com/k/shyam-bhatawdekar/i-am-liberated/6txz9nck6g3/6#view
(Marriage Counseling) http://marriage-counsel.blogspot.com/
(Ownership on Job) http://job-ownership.blogspot.com/
(Parental Responsibilities) http://parental-responsibilities.blogspot.com/
(Personality) http://human-personality.blogspot.com/
(Qualities of Spouse) http://spouse-qualities.blogspot.com/
(Quit Smoking) http://quit-smoking-plan.blogspot.com/
(Self Development) http://managing-self.blogspot.com/
(Self-confidence) http://self-confidence-improvement.blogspot.com/
(Stress Management) http://managing-stress-strain.blogspot.com/
(Stress Management) http://management-of-stress.blogspot.com/
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