A few days ago I wanted an omelette for dinner. Sadly I found out that I did not have any eggs at home. I live downtown and I have a supermarket very close to my apartment, so I decided to go to the supermarket just to buy the eggs I needed. I took to me 2 minutes to get there, 5 minutes to buy them and 2 minutes again to come back home. Total Lead time = 9 minutes.
I was quite happy about the shopping experience. Why? Consider the benefits of having the supermarket so close:
- I can buy small portions of food anytime, so I don’t need big storage areas at home (= fewer inventory areas wasted in my apartment).
- I don’t need a big fridge to keep food fresh for long periods of time (= inventory areas are cheaper and power consumption is lower)
- I don’t need a car to get my food ( = cheaper transport, better for the environment)
- The weight of my shopping bag is low ( = this is great from a health & safety perspective)
- I don’t need to have big amounts of food at home, so I can keep my money in my pocket and not in my cupboard / fridge (= more cash is available).
- My shopping list is short, so it is very easy to write down and to remember all the items ( = no need of sophisticated scheduling systems, errors are easier to find)
- I can buy my food 30-45 minutes before I use it, so it’s ok if some friends come over unexpectedly (= emergencies and crisis are easier to handle)
- I can adapt easily to my own circumstances, like if I need special food because I’m sick ( = customer satisfaction is easier to get because the “moment when I buy the food” and the “moment when I eat the food” are close. No need of “special offers” to get rid of the food I’ve already bought but don’t need anymore)
It’s a good idea to keep the lead time controlled and to make it as low as possible. Reducing lead time improves all classic KPIs (Health, Quality, Delivery, Cost) and not just cost. Additionally, it gives you something extremely important but difficult to measure: flexibility. And flexibility can really make a big difference to your process.