Lead Time

In this case study, we are going to look at a manufacturing company that sells replacement parts for vehicles. Management decided to reduce the lead time by 40% in order to increase customer satisfaction. Currently, it is taking the company 10 days to deliver an order from the time a customer makes it, leading some customers to lodge complaints. With a 40% reduction, their lead time will go from 10 to 6 days. They have planned to achieve this goal in a space of three months.

After analyzing their manufacturing process, the Six Sigma team identified some activities that did not add value. As you know, any non-value-adding process in a Six Sigma project needs to be eliminated because it is essentially waste. Some of the wastes identified were waiting, motion and defects.

At this point, the team started brainstorming potential root causes using a fishbone diagram. Using this tool, they identified seven root causes. After analyzing the data they found out that two of them were not part of the problem, meaning they were left with five potential root causes that contributed to wastes identified. 

For example, it was discovered that poor manufacturing plant layout led to employees having to take unnecessary steps to use several tools and equipment. This wastes time, something that can add up over time, and increase the costs (as we know, time is money). Overall, for all wastes identified, the team did things like:

  • Improving the manufacturing plant’s layout by moving tools and equipment close to employees who need them
  • Developed standard operating procedures; e.g minimum steps and materials required to complete an order
  • Tasks were streamlined to ensure they don’t take too much time
  • Monitoring was put in place to ensure the lead times are reducing instead of increasing

Over time, the number of complaints reduced and customer satisfaction increased. With the manufacturing process running faster, costs were also reduced due to saved time. Not only that, but they were able to take 15% more orders and increase the bottom line.

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