The Goal - Increasing Lead Time

Rating: 5.0 of 5. 1 vote(s).

Alex and his staff have successfully pitched a new marketing campaing to advertise two week lead times on all products. Everything goes well until the plant takes on more work than it can handle. This leads to roaming bottlenecks, missed deadlines, extreme and unplanned overtime and worst: telling marketing to bump the lead time back to four weeks. Chapter 39, pages 320 - 326

D: Increase lead time to four weeks
D': Keep lead time at two weeks
B: Maintain my promised deadlines for future orders
C: Maintain consistency and remain competitive
A: Satisfy the customer
Click on the icons on the arrows to see assumptions and injections
In order to Satisfy the customer I must Maintain my promised deadlines for future orders and in order to Maintain my promised deadlines for future orders I must Increase lead time to four weeks. But, in order to Satisfy the customer I must also Maintain consistency and remain competitive and in order to Maintain consistency and remain competitive I must Keep lead time at two weeks. I can't both Increase lead time to four weeks and Keep lead time at two weeks.
RelationAssumption(s)Injection(s)
D-D'1. Lead times must be the same for every customer.
2. I cannot promise a two week lead time when I need four weeks of lead time.
1. Differ lead times based on their impact to bottleneck resources and current capacity at non-bottlenecks.
2. Promise a two week lead time at a higher price with an option to discount price if order ships late.
B-D1. Current orders are shipping late.
2. Management has not devised a solution to ship orders before four weeks.
3. The inventory needed to accumulate before the bottleneck is now two weeks.
1. Minimize the number of late orders and work with customers to reach an amicable solution.
2,3. Temporarily increase the capacity of non-bottlenecks until a full analysis of the situation can be performed.
C-D'1. Other companies can match my two week lead time.
2. Changing the lead time after launching a new sales campaign shows unreliable service.
1. Change the focus of the campaign to another factor my company excels in.
2. Change the new sales campaign to match the new lead time and spin the shorter lead time as a limited-time promotional campaign.
A-B1. Late orders cost the customers money.
2. Customers rely on promised deadlines to conduct their business.
3. Customers expect to receive the service they agreed upon.
1. Offer a refund or discount on late orders.
2, 3. Need assistance
A-C1. Customers are now used to a two week lead time.
2. Customers will be intolerant of a longer lead time.
3. Customers will take business to a better-performing (more consistent) firm.
1,2. Verify and match product lead time of competitors for the same product.
3. Promote another strength of the company to take their minds off competitior consistency.