5 Tips for Controlling Lead Times

Few things are more awkward than explaining to a customer why a part is late. Even good excuses will only be tolerated a few times before a customer decides to find a more reliable manufacturer. Most of the time, however, manufacturers find themselves without any excuse at all except unpredictable lead times – which is no excuse when well-controlled workflow management is within every shop’s reach requiring nothing more than a change in perspective. Here are five simple solutions that can help any shop reduce its lead times and make promises to customers it can keep:



It may seem counterintuitive, but planning for 100% equipment utilization will result in longer lead times 100% of the time. Many shops operate under the assumption that maximizing productivity will maximize output, but in reality, waiting times increase exponentially with utilization. While this has been proven mathematically (as described in a previous blog post), it’s also something most manufacturing professionals have seen in action for themselves: At 100% utilization, there’s no room for error. When no machines are available to keep production going if another machine has to stop unexpectedly, even a few minutes of downtime can cause delays and bottlenecks up and downstream. Most of the time, 80-85% utilization will be optimal, especially if it gives operators time they can invest in continuous improvement and training instead.



When a customer places an order, what happens next? Most shops push it into production as soon as possible. But as demonstrated by Little’s Law, this has exactly the opposite of the intended result – if your shop can’t increase throughput, any additional work in progress (WIP) will cause lead times to go up. This also means that keeping WIP constant is a good way to achieve equally consistent lead times, and the best way to do that is to keep WIP out of the system until it’s ready to be produced. An orderly “first in, first out” approach makes lead times simple to predict based on the parts backlog at any given time.



The “first in, first out” mentality should cover more than the amount of WIP, however. It’s just as important to complete tasks in order, as individual operators usually lack the perspective to make decisions about workflow on the fly. A common example involves operators who believe they’re saving time by switching between quick-to-complete jobs that use the same setup. Those parts might get done more quickly (though usually not, in the long run), but few customers expect or even want early delivery. Meanwhile, the parts that got skipped over will take longer to complete, and those customers will definitely be disappointed, so encourage your operators to follow the schedule as closely as possible to avoid such issues.



In most shops, if you ask five operators how they set up for a commonly repeated job, you’ll receive five different answers and five different setup times, which makes predicting lead times tough. The solution to this challenge is obvious – fully standardized processes that reduce the impact of individual differences on lead times – but most shops struggle with the execution. One reliable way to accomplish this standardization process is the single-minute exchange of die (SMED) technique, which uses video recordings, interviews and discussions to discover exactly how best to perform a given task. For more information on how to put SMED to work in your shop, download our setup time reduction guide.



No matter how standardized a shop becomes, however, operators aren’t cogs in a machine, they’re human beings capable of improvement and improvisation when given actionable feedback. Ironically, lead time is a lagging key performance indicator (KPI) that is unhelpful at best and actively counterproductive at worst. When told to help address long lead times, most operators will try to increase their output, and one of the only ways to do that is to skip slow jobs in favor of quick jobs, something that usually just makes lead times even longer. Instead, offer feedback using leading KPIs operators can use for self-improvement, such as the number of days an order has been waiting at a machine or the time it takes to set up a job compared to other operators.



Of course, while these strategies have been shown to work anywhere from the smallest shops to the world’s biggest manufacturing facilities, knowing where to start can be difficult. Establishing the optimal level of WIP, performing a full SMED process or establishing a set of useful KPIs can be challenging. This is especially true for small and medium-sized shops that don’t have any resources to spare on organizational optimization efforts while handling an increasingly higher mix of low-volume jobs.


To overcome this hurdle, many of these shops have begun working with partners such as Seco. The holistic Seco Manufacturing Evaluation process, for example, examines everything from individual machining processes to the entire manufacturing environment to create a full report on the steps shops can take to improve their productivity. Learn more here.

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