Lean Manufacturing Just In Time
PART II.
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Manufacturing lead time assumes components are available when needed in the manufacturing process. This includes any sub-assemblies, fabricated parts, purchased components and raw materials used directly in the item being manufactured. From this perspective, the time between the demand for material to be supplied by a vendor, and the availability of that material for use, is the purchase lead time. As in manufacturing lead time, there will be multiple elements of purchase lead time that will vary in each environment. These might include:
• Supplier's order processing time • Supplier's manufacturing lead time (or part of it) • Packaging time • Transit time • Import and export processing • Receiving and inspection • Quarantine From a manufacturing perspective, too often we view purchase lead times as a single entity, ignoring the individual elements. We need to focus on these specific areas in our efforts to compress lead times, both in our role as customer and as supplier in the logistics pipeline. Another perspective of lead time exists with respect to a product and how it is manufactured. This critical path through all levels of the product structure is generally defined as the cumulative lead time for a product. It represents the span of time required to produce an item if no subassemblies, parts, or raw materials are available. In other words, the time to order and receive material from suppliers and build the item from the bottom up. This is best illustrated by taking the multi-level bill of material shown in Figure 2 and laying it horizontally, with manufacturing and purchase lead times displayed graphically, as in Figure 3. The flip-flop bill of material in Figure 3 is critical to understanding how we operate as a manufacturing company, and where we should direct our lead time reduction efforts. Manufacturing the product is not the end of the task, however. We still have to get the product to where the customer wants it. Delivery Lead Time This is the manufacturer's view of how long it takes to satisfy a customer order after the order is received and the item is available to be shipped. This includes the customer order processing time, picking and packaging time, transit time to the customer, and the time required for all activities that take place prior to the order reaching the customer's destination. This can be different than the lead time quoted to customers, which may include a portion or all of the cumulative lead time. The time between our receipt of a customer order and the delivery of the product to the customer is the customer lead time. This lead time must be viewed from the customer's perspective'. If we control the market for a product, we can dictate this lead time to a customer. In engineer- or build-to-order environments, the Manufac
Let's face it—as manufacturers, we would really like to buy material and parts, and build individual units, only after a customer order is received. While we pursue this ideal environment, let's learn to manage the real world, a world of constraints and competition—a world characterized by dependent demands, finite capacity and finite resources. To be Continued STAY CONNECTED To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. We'll also send you our free Special Report, "Five Change Initiatives for Personal and Company Success." Your
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