Standard lead times are misleading because they don’t account for real-world data. Here’s how JobPack® can fix it.
A customer contacts you about an order they’d like to place. They ask you: What’s the turnaround on this? You look at your chart and say “for the size and type of order you’re requesting, we can get it back to you in two weeks.” The customer is impressed, and you land the sale.
Two weeks later, the customer calls to ask about the status of their order, and it becomes your job to inform them, with some embarrassment, that you’re running behind the estimate, and it will take a few more days to finish. Now the customer is less impressed, and you have egg on your face.
Unfortunately, for all too many manufacturers, this scenario is a common occurrence. Manufacturers rely on standard lead times to set expectations with a customer about turnaround. And in many cases, these expectations seem perfectly reasonable. Then, when it comes to doing the work, all the problems seem to surface at once. The perfectly reasonable estimate evaporates, and in hindsight you start wondering how you could ever have been foolish enough to promise it.
Well, it’s not hard to assign blame, and as it turns out, the fault in this scenario lies with the lead times themselves. Here’s why.
1. Standard lead time doesn’t reflect current capacity.
The first and most crucial problem with standard lead times is that they’re often based on how a job would run if there were no other jobs running at the same time. This is stating the obvious, but the implications are sometimes less clear. For instance, a job may primarily involve one or two machines, and looking at the production schedule a manager may see that there’s an opening on those machines and assume that there will be space to fit another job in as planned.
But the actual situation more closely resembles a game of Tetris: the new project is unlikely to be the exact shape needed to fill that gap. It may not fit into the space as neatly as it first appeared, or it may leave awkward gaps in other parts of the schedule that throw off other projects. As a result, adding in the new project affects those around it, which can throw off the standard lead time of orders already being filled as well as that of the new order.
2. Orders are changed or shifted during production.
Projects frequently disrupt each other in unexpected ways. When this happens, it’s up to the scheduler to work out a solution. For instance, maybe they had planned to complete an order on the saw in one day, but partway through the morning the operator notices that the saw is running slow and decides to switch out the blade. This ends up being a longer process than anticipated, and puts the order behind by a couple hours.
Now there’s an overflow from one day to the next. The scheduler had hoped to fit two smaller orders into the next day, but there’s only time to complete one, so the second order gets knocked to next week. It doesn’t take much of this kind of cascading to have noticeable effects on standard lead times. And, since it’s simply unreasonable for a standard lead time to perfectly account for unforeseen circumstances like the need to change a saw blade, it follows that it will eventually be off for one reason or another.
3. Lead time doesn’t account for special requirements.
Another common problem with standard lead times is that they’re just that: standard. And many customers have orders that are the opposite of standard. Their order may require a special chemical treatment, or a final finishing step, or they may be working in an industry that requires additional quality control inspections.
When these situations occur, manufacturers need to be able to adjust the standard lead time to provide an updated estimate, but if these adjustments are happening as a “best guess,” then it’s more likely than not that they’ll fail to account for every factor.
4. The standard lead time is flawed.
Finally, there are circumstances when the lead time has simply been calculated poorly. Someone with an overzealous mindset tried to figure out the fastest possible turnaround time, and the answer they derived in perfect-world conditions simply isn’t achievable under production conditions.
In a case like this, it’s best to scrap that lead time entirely and begin working out a new lead time based on your current averages. There are likely many adjustments your company can make to try to create more efficient lead times, but they’re only going to work if you begin with an accurate baseline.
Standard lead time is a reasonable baseline, but it can’t be your only metric.
At the end of the day, standard lead times are a fine rule of thumb to help you keep track of how your factory operates. But they can only ever be a guideline—not a guarantee. For accurate lead times, you need to be able to adjust your estimates based on data about how your shop floor actually operates.
JobPack® offers that insight. Not only does our machine monitoring software provide owners, managers, and schedulers with a live overview of their operations, it also gathers performance data to help your company understand what your lead times are actually like.
With real operational data at your fingertips, and deep visibility into your production process, you can move away from standardized estimates and toward adjusted, accurate delivery dates. So, the next time you want to impress a customer with a delivery just as promised, run your plan through JobPack® first.8