Page 106 - How To Implement Lean Manufacturing

The Significance of Lead T ime 85

while they allow continuous production, slow down the overall flow. Consequently, if
we reduce the time for the changeover, we can reduce the inventory both before and
after the machine. This lead time reduction and productivity technique, known as
SMED (single minute exchange of dies) will often have dramatic effects on inventory
reduction and consequently improve lead time and flow significantly.

Why Lead Time Is the Basic Measure of Being Lean
Short lead times and lead-time reduction is such a basic tool in Lean that you will find
it to be a strong measure of Leanness. In addition, if a company has short lead times,
several other inferences can be drawn about that company. Almost without exception,
you will find that they have:
• Good inventory management
• Good quality
• Good delivery performance
• Good machine availability
• Good problem solving
• Low levels of variation
• Stable processes

Chapter Summary
Lead time as a metric was not discussed much at all until the book Learning to See (Lean
Enterprise Institute, 1998) heightened people’s awareness of this powerful concept. The
business benefits of improved responsiveness and flexibility due to reduced lead times
are now well understood. The story of the Excalibur Machine Shop cited here showed
in detail how reducing lead time enhanced their production as well as improved their
ability to find and solve problems. In addition, this is a good example of how Lean tools
can be applied in the job shop environment. The seven techniques to reduce lead time
were explained, highlighting not only that lead time is the key metric to evaluating
whether a facility is Lean, but that those firms with short lead times have other natural
competitive benefits as well.