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The U.S. manufacturing firms have conventionally emphasized on scale and cost management strategies based on the division of labor practices formalized by Frederick Winslow Taylor and pioneered by Henry Ford. As per QRM, the high degrees of labor specialization and hierarchical department structures at purely cost-based organizations have these negative effects on lead times
- Products and product orders require long routes through numerous departments
- Hierarchical communication structures involving various management levels require a significant amount of time to resolve even routine issues
- Focus on efficiency and resource utilization encourages workers and managers to build backlogs, slowing the response to customer requests
- Trying to minimize costly machine setups, managers and workers resort to running large batch sizes. Large batch sizes result in long run times, leaving other jobs waiting and increasing lead times
- Making large product quantities to stock leads to high inventory, often prone to inventory obsolescence – when stored products have to be discarded because of market or engineering changes
- Low skill levels lead to low quality and high levels of rework
All the above factors lead to long lead times which cause wastages in the organization, increase the overall costs as well as decrease an organization’s competitiveness.
QRM recommends that attention is paid by organizations for reducing lead time which will have positive impact on customer relations, quality as well associated costs.
