Lesson 13. Removing Waste Means Turning Wasteful Motions into Productive Work
Approach to Inventory and Lead Time:
Inventory and Lead-Time
Everyone-the manufacturers and their clients-face a highly competitive business environment In the economic jungle-as in the real jungle-you either eat or are eaten. This harsh business environment has led to rising client demands for lower costs and shorter delivery deadlines. For their part, factories seek "compressed delivery deadlines."
Imagine some company managers who, faced with tough market competition, come to you for advice on how to shorten delivery deadline periods by as much as 50 percent. Let us also assume that the factory managers have already tried installing new equipment and implementing a TQC program, but without the expected results. They are getting desperate for answers.
Now imagine how surprised they would be if you were to simply suggest, "That's easy enough, just reduce your current inventory 50 percent." No doubt, they would probably appear mystified and wonder how the subject of conversation got switched from delivery deadlines to inventory. Again, you need only explain, "What's the mystery? It's really very simple. Just cut the current production lot sizes in half."
Now watch what happens. Their minds, already bewildered by your connection of delivery deadlines and less inventory, collapse into total confusion as they consider yet a third apparently unrelated factor: lot size.
Maybe someone will seek to clarify things by asking, "Let me get this straight. We cut delivery deadlines in half by cutting inventory in half, which means cutting lot sizes in half. But doesn't that mean well also be cutting our production output in half?"
Now they are getting somewhere. You can continue by adding, "Cut output in half? Yes, I suppose it does. But you