As manufacturers embrace digital technology and control, consumers are doing the same. Whether that consumer is the product user or the wholesaler, digital technology and IoT have changed the expectations they put on the manufacturer.
Customers expect products to be simple and easy to order, as well as fast to deliver. Expectations are higher than ever, and if manufacturers want to compete, they'll need to continue meeting customer demand and exceeding what their customers are asking for.
Let's take a closer look at lead time and discuss how managers can focus on getting finished products into customers' hands faster than ever before.
Lead time is the total time from when a customer places an order until it’s delivered.
Don't get confused with cycle time and takt time! What’s the difference between Takt Time, Cycle Time, and Lead Time?
Many types of lead time can be measured in manufacturing. By separating them into categories, managers and technicians can drive process improvements to reduce lead time for each type.
Cumulative lead time is the total time of all other lead time categories. It allows managers to look at the macro and micro KPIs for lead time and identify areas for improvement in the sales and production processes.
The calculation for lead time is simple: the date of delivery minus the date when the order was placed.
LT = OD – OR
Lead time is usually expressed in days, providing a rational format for the manufacturer and customer to understand during communication. On the other hand, cycle time is generally expressed in seconds, minutes, or hours.
Lead time impacts the entire manufacturing process, and there are many benefits to reducing it. These reasons include the following:
In fast-paced industries where demand changes quickly or seasonally, reduced lead times help planners manage demand more accurately. Planners can forecast in the near and long term to ensure capacity is available to meet demand while also having time to react to disruption.
Manufacturing is a complex system of inputs. A change in any one of these inputs can disrupt the entire manufacturing process and increase lead time. Factors that can impact manufacturing lead time include:
Any manual part of the production process — inventory management, planning, procurement, quality, or shipping — has the potential for human error. Errors can create machinery downtime, increase process time, trigger unnecessary processes, and increase lead time cumulatively. Some errors are so great they can increase manufacturing lead time independently.
Lead times are quoted by the vendors producing materials for manufacturers. Manufacturers, in turn, quote lead times to their customers for finished goods or parts.
While reducing lead times in the above examples can be accomplished through automating tasks and processes, there is no better way to reduce manufacturing lead time than by eliminating unnecessary processes that are slowing down the time it takes to produce and supply finished products to customers.
With a production monitoring platform like MachineMetrics, companies can connect factory assets and monitor production down to the machine and spindle level. Many manual tasks and processes can be automated or semi-automated to drive greater operator performance and machine utilization.
Redundant operator tasks
Manual data tracking
Manual analysis using spreadsheets
Archaic preventive maintenance strategies driving
MachineMetrics offers a best-in-breed machine data platform that leverages your equipment’s real-time data to improve existing processes, eliminate unnecessary ones, and significantly reduce lead time to meet today’s demanding customer expectations.
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