Three methods to quickly shorten the lead time in the offices

By Pascal Pollet, Sirris – 13th of January 2018

The importance of office processes such as drawing up a tender layout, order processing, engineering, work preparation and planning is often underestimated in production companies. However, these processes have a big impact. The lead times in the office processes often represent 30-50% of the total lead time and often determine a quarter of the costs. Moreover, the reaction speed in the office has a major impact on the success rate of tenders.

In recent years many companies have invested in digital tools such as ERP, CAD / CAM and PLM, to support the internal processes. Digitization has helped to offer an ever-expanding range, but it has often not succeeded in drastically shortening the lead time. For example, it is typical that more than 95% of the lead time still consists of waiting time. Furthermore, people are commonly working on an order less than 5% of the time. So clearly there is still room for improvement. A number of organizational measures often prove sufficient to shorten the lead time in the office by 50 to 80%.


Rethink the processes with the focus on speed

Many office processes are unnecessarily complex and fragmented over several people. As a result of a number of simple interventions, the number of handovers can often be limited so that the lead time can decrease quickly. A classic example is a check of the creditworthiness for which an order form sometimes passes through the financial department. However, a check on creditworthiness is a simple operation that can quickly be taught to other employees in the process.

Linking the process parallel to the office steps instead of a sequential outcome is also a powerful tool in shortening the lead time. In some cases it is possible for example, to purchase the items with a long delivery time in parallel with the work preparation, instead of waiting for the complete work preparation.

Different types of order deserve a different process run. For example, simple orders can often be handled in fewer steps than complex or new orders. By not pushing all orders through the same process, the resources are less burdened and the lead time is shortened at the same time.


Provide correct information at the source

In office processes everything is dependent on correct information. With custom-made products, the order forms are often unclear, incomplete, or even exist of impossible product combinations, which means that a lot of valuable time is lost. Such problems arise, among other things, when Sales or the clients deliver the orders without regard for the order processors. Sometimes, due to the long delivery times, clients deliberately send out order forms with incomplete information too early, in order to reserve a production spot for their customer.

This is often a difficult problem to get under control, but it still pays dividends to tackle it. Depending on the nature of the problem, different solutions emerge. Either move the checks and the responsibility for the correctness of the order forms as close as possible to the source of the errors (sales and client network), use standardized order forms and checklists with fixed entry fields and provide good product training for Sales. In the case of technically complex products, sales people should call in the technical specialists at an early stage in order to prevent later problems.


Cross-functional teams

Often the most powerful tool in shortening the office lead time is the creation of a cross-functional team, in which the various disciplines (order processing, planning, purchasing, sales, work preparation), are brought together in one team that is responsible for the entire process. In larger companies, it is often necessary to form several teams that are each specialized in a particular product segment.

The magic of such a team starts with the colocation: bringing the team members together in one location. For example, at the same table island. Due to the proximity of the team members, communication improves and the lead time can often be reduced by half.

In addition, a lot of attention must be paid to cross training. Through cross training, the number of handovers can be limited, the team members can assist each other and ideas come to improve the process itself through the broader understanding of the process.

In a classic functional organization, the main focus is on increasing the efficiency of the individual process steps. This typically results in sub-optimizations that undermine the whole. In order to avoid this, the attention of the teams must primarily be focused on shortening of the lead time. After all, the lead time is a good measurement of the quality of the cooperation within the team. Team members who work well together, balance the work better, make the work easier for each other and minimize the handover problems which leads to the reduction of the lead time. In order for such teams to succeed, the organizational structure must also be adjusted. The team members are no longer allowed to report to their old hierarchical lines, but they must all report to the same manager in order to break through the old departmental way of thinking.

Such cross-functional teams are a core element within Quick Reponse Manufacturing (QRM), where they are commonly known under the name of Quick Response Office Cells (Q-ROC’s). Quick Reponse Manufacturing is a production strategy for high mix / low volume production companies, who primarily focus on lead time reduction. By focusing on the lead time, the performance of the system can be optimized in its entirety and the undesired sub-optimizations can be avoided.