1. Lead Time Reduction
We’ve discussed the “7 Types of Waste” and you’ve begun to understand what waste looks like in the process.
The next step is to use Lead Time Analysis to find out exactly where waste exists, so that we can go about eliminating it.
Key Points:
Tool to surface where waste resides
Concept on value added & non-value added
Recognize time is money and a key competitive advantage
Lead time reduction graphic tool
Ask question how much VA in process being studied, then look back when determined (usually less than 5% VA)
Value in this being monitored by an organization and displayed in work area (a simple visual tool, don’t computerize)
Method of lead-time reduction:
Reduce
Combine
Eliminate
Paper wall with flow - visual impact

2. Purpose of Lead Time Analysis
To document all steps in a process
To quantify the time and distance of each step in a process
To identify where value is being added to the process
To understand how non-value added activities drive cost in a process
To learn that reducing Lead Time contributes directly to improving Q,S,T, P and Customer Satisfaction.

3. $ 12 3 9 6 1 2 4 5 7 8 10 11
What does this slide say to you? (Time equals money.)
Do you agree? Why? (The more time invested in a product or service, the more money is involved.)
In today's business environment this is even more true. An appropriate lead time is a competitive advantage. It allows a company to bring products to the market sooner, react quicker to necessary changes, respond to market/customer demand in a timely manner, and reduce the time it takes to process anything. This boils down to developing a process that allows workers to accomplish their tasks, while creating the time to do other value added work.
Lots of new businesses are built on reduced lead time. Can you think of any? (The fast food industry.)
All of this suggests that reduced lead time can equate to money in a company’s pocket.

4. Lead Time - Oil Change Car Dealer A Call: make appointment Take car in
Write up order
Wait for shuttle
Call: See if car is done
Get ride back to dealer
Check with service
Pay cashier
Look for your car
Check oil
Drive away
Traditional
8 Hours
Car Dealer B
Drive into lube area
Wait
Pick up car
Drive off
Improved
29 Minutes
Quick Lube
Write up & pay while
oil is being changed
Ideal
10 Minutes
Here is a real life example of lead time reduction. It has changed the way we think about a process, created a whole new service industry, and established a new level of expectation for this business.
Read the transparency

5. Lead Time Reduction Cost Quality
Eliminates waste because the more time it takes to complete a product or service:
Another aspect is shown here.
The more time it takes to complete a product or service, the more handling, tools & equipment, hand-offs and inventory, etc. is involved.
As a result, the cost is certainly higher, while the quality is jeopardized.
Wait for participant responses.
Quality
Cost

6. Lead Time Lead Time Start Finish Definition:
Total time required to complete one unit of a product or service.
What is your definition of the term “Lead Time”?
Read the transparency.
Lead time begins with the first receipt of a customer order and ends with customer receipt of the product or service. Everything in between is the lead time.
The scope of the lead time can vary for the purposes of analysis.
For example, the extreme might be from the point of the ore being in the ground to the customer selecting a vehicle at the dealership.
Another lead time study could be on any process within that larger extreme.
This brings up an important point. The “customer” can be external or internal to an organization. The next person or process down the assembly line is the “customer” for the preceding process.
Talk about who the customer is for the study area.
Lead Time
Start
Finish

7. Every Process Has a Lead Time
Business plan development
Painting process
Tool & die manufacturing
Stamping operation
Building a house
Income tax refund
Servicing your car
Receiving materials and building customer products
Banking process
Grocery shopping
It is important to remember that every process has a lead time. Some examples are shown here. We’ve all seen how the lead times for these services have changed and shortened over the last several years.
Ask the group if they can suggest some other examples that really emphasize this point. Discuss with group.

8. Lead Time Reduction Graphic Tool Process
The Lead Time Reduction Process:
1. Identify the product/service you provide.
2. List all steps required to complete product, from start to
finish.
3. Identify time now required to complete each step.
4. Identify steps that add value to the product.
5. Graph process (see graphic tool ex. to right).
6. Analyze & eliminate time needed for non-value added
(“NVA”) steps.
7. Analyze & reduce time needed for value-added (“VA”)
steps.
8. Graph this process.
9. Identify the “ideal” process (ideal = minimum time for
“VA” steps with no “NVA” steps).
10. Graph ideal process & work to achieve it.
Directions for use of graphic tool:
Make one box for each step
Make box height roughly proportional to
time required for step
Put “VA” boxes on left
Put “NVA” boxes on right
Put boxes in correct order
Label boxes (name of step and time
required) 1 2 3 4 5 6 7 8
Let’s take a look at the lead time reduction process and the graphic tool we use to display it.
(If the group has a reference booklet or cards with the graphic tool on it, refer to them.)
The lead time reduction is a 10-step process as outlined on the left of the slide.
The graphic tool illustrates steps 5, 8, and 10, and allows the team to focus on the elimination of waste. This visual is an excellent tool to constantly display in the worksite area as a demonstration of progress and objectives.
(Walk through the process and graphic, emphasizing the thrust to shrink the time/size of the boxes by concentrating first on the non-value added, and then the value added steps. Note that this is continuous improvement.)
(Depending on the group and their knowledge, you can walk through each step with the corresponding slide or skip the detail as being redundant. It is very effective to “tell a story” and do a charting demo.) 1 2 3 4 5 6 7 8 1 3 4 6 8
Current
Future
Ideal

9. Lead Time Reduction Process
Step 1: Identify the product or service you provide, i.e:
- Finished product
- Administrative service
- Repair
- Parts ordering
- Sub-assembly
- Procedure
- Therapy
- Consultation
The lead time reduction process has ten steps.
Read the transparency

10. Lead Time Reduction Process
Step 1 (Continued):
Identify the beginning of the process
Identify the end of the process
Read the transparency.
We need to make sure the scope is not too large for our group to work on. Working on too large a scope can tempt us to concentrate effort on previous and subsequent operations, rather than the narrower focus area that this team was specifically selected to study.
At the same time, we need to make sure that our scope is not too narrow. It should be broad enough to include both our “supplier” and our “customer” so that their input in the process can help us arrive at the best overall decisions coming out of our workshop.

11. Lead Time Reduction Process
Step 2:
Walk through the process in the natural sequence:
- “First we Then we Then we . . .”
Identify individual steps
Number steps
Read the transparency
It is critical that we physically walk through the process where it occurs, versus documenting the process steps from memory or the comments of others.
To completely and correctly complete this exercise, we must leave the room and actually go to the worksite to gather data.
Many times we find that things are not as we believed or recalled them to be.

12. Lead Time Reduction Process
Step 3: Take Measurements:
Identify the time required for each step:
- Follow one unit through the process
- Review records where necessary
- Minimize “guesstimates”
- Wait time =
Identify associated measures
- Measure distance traveled for “move” steps
- Note batch size / quantity
Read the transparency
The simplest way to deal with storage time is through the calculation shown. This reflects the speed with which a part can flow through the system, other than that associated with machine cycling and handling.
Average inventory
Average throughput

13. Lead Time Reduction Process
Step 4:
Identify steps as Value-Added (VA) or Non-Value-Added (NVA):
Value-Added (VA)
- Any activity that the customer is willing to pay for.
- Why the customer is here, such as:
- Treatment
- Assembly
Read slide and discuss the concept of value added and non-value added carefully.
It is important to understand this definition. However, we will not spend a lot of time discussing whether a step is Value Added or Non-Value Added, as ultimately we will try to impact both.
A factor in understanding Value Added is recognizing the exact customer for the process. The ultimate customer is the person on whom we will focus.
Does the ultimate customer consider the step to be something they are willing to pay for? This determination for if something is value added must be made from the perspective of the ultimate customer.
(Ask the team who the customers, both internal and external, are for the process. Write up a chart list and hang it on the wall.
Now ask them who the ultimate customer is and circle that item to help them stay focused on the customer who ultimately drives the business!)
Do not be distracted by other customers.

14. Lead Time Reduction Process
Step 4 (Continued):
Non-Value-Added (NVA)
- Any activity, operation, or use of resource that does not
conform to customer expectations.
- Non-Value-Added describes something that the customer
does not perceive as adding value, even though it may be
necessary because of current process limitations, such as:
- Re-work
- Inspection
- Waits
- Moves
Read the transparency

15. PROCESS STEP DESCRIPTION
Lead Time Analysis
Process / Product Description: ____________________________________ Page ____ of ____ S T E P # T I M E D I S T. Q T Y. V A N V A
PROCESS STEP DESCRIPTION
This is a form you will use to collect lead time data.
Collect the lead time data on this form, documenting:
- all process steps
- numbering the steps
- time
- distance
- quantity if applicable,
After data is collected and documented, return to the classroom and discuss the VA/NVA classification as a group.
Date completed: ______________ Prepared by: ______________________

16. Lead Time Reduction Process
Step 5:
Graph the process:
- Make one box for each step
- Make box height proportionate to time required for step
- Position “VA” boxes on left
- Position “NVA” boxes on right
- Put boxes in correct order
- Label boxes with:
- Number of step
- Activity of step
- Time required
- Distance traveled
- Quantity (if applicable)
Read the transparency.

17. Lead Time Reduction Process
Step 5:
Summarize Information:
- Total the number of VA steps & NVA steps
- Total the time required for VA steps & NVA steps
- Determine % of Value Added work:
Read the transparency
Ask the team to estimate the amount of value added work for the study area. Note this for reference after the process has had the lead time determined.
(The amount of value added work can be a very powerful tool for jolting a group on the amount of waste at the worksite. Comparisons from current state value added to after plans and actions take place can be worthwhile to show the group the real impact of their efforts and how much still needs to be done.)
VA Time
VA Time+ NVA Time
X 100
% VA =

18. Lead Time Reduction Process
Step 6: Analyze & eliminate NVA activity
Step 7: Analyze & eliminate VA activity
Reduce
Eliminate
Combine
Read the transparency
Now that we have seen where the waste is, we can focus our efforts on RECing the process: reducing, eliminating and combining steps in the process.

19. New Allergy Clinic Tx room H a l Waiting Room #2 w Sign-in Desk #2 y
Storage D o r
Sign-in Desk #1 H a l w y
Draw up a quick sketch of an allergy clinic in a single color to help illustrate what the patient went through to gain his expectation: to get an allergy shot!
Tell the team how the patient anticipated that as it was a new clinic, it would run much smoother and be a value-added experience.
As you describe what actually happened, draw a path through the illustration, noting interactions with various clinic employees. Tell the team that the patient decided there was opportunity for improvement, and that he/she did a lead-time analysis on his/her experience, leading into the use of the following slide.

20. Lean Implementation Workshop Lead-time Analysis
Process Step Description
Lean Implementation Workshop Lead-time Analysis N V A D i s t. T m 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Patient MOVES to desk #1
Patient signs in (first time)
Patient MOVES to waiting room #1
Patient WAITS
Patient MOVES to desk #2
Patient signs in (second time)
Patient MOVES to waiting room #2
Patient MOVES to treatment room
Patient gets allergy shot
Patient MOVES to reception desk line
Patient is checked for allergic reaction
Patient MOVES to exit
.25 20 .5
25’
20’
50’
15’
10’
75’
Process / Product Description: Patient trail for allergy shot process Page 1 of 1
Take the team through this illustration, correlating with the paper chart map of the clinic. When you have finished, remind them that this was a study of one patient, just as they will follow just one patient or document through the process. Emphasize that all steps were captured, and that time and distance was noted in consistent measurements.
Ask them which step or steps would they consider to be value-added.
Mark those steps on the flimsy cover.
Write up or refer to a completed example of a graphic chart of the patient’s lead-time, so that the team can see how the information was transferred from the information gathering sheets to the large graph. Talk through the placement of value-added vs. non-value-added, and the longer process steps being illustrated in larger boxes. Number the steps as you go, and illustrate time and distance as well.

21. 4 10 13 Current Leadtime Reduction Improved Process Ideal 1 2 3 5 6 714 9 1 2 4 7 3 8 10 12 15 16 13 5 11
16 steps
54 minutes
245 feet
10 steps
21 minutes
95 feet
Improved
Process
Ideal
Current
Leadtime
Reduction
(Cover the improved and ideal state, showing the team only the current state. Note the number of steps, the total time & the total distance. Note the fact that the patient considered only 2 steps to be value-added: the shot itself, and the inspection of his arm for a possible reaction.)

22. Lead Time Reduction Process
Steps 6 & 7 (Continued): Improvement tools:
Simplification
Problem solving / prevention
Machine / facility layout
Multi-functional employees
Standardized operations
Set-up time reduction
Total planned maintenance
Supplier relations
Visual controls
Reduction of variation
Read the transparency
The lean tools now come into play as waste eliminators.

23. Lead Time Reduction Process
Step 8:
Graph the improved process
- Using results of steps 6 & 7
Step 9:
Identify the ideal process
- Ideal process is one with no NVA activity
and minimized VA steps and time
Step 10:
Graph the “ideal” process
Read the transparency

24. Lead Time Reduction Process
Step 11:
Repeat the process
Read the transparency
This is critical. We must continue to go through the cycle again, and again. Each time we will make an impact (although typically, less and less).

25. Value-Added Time + Non-Value-Added Time
Leadtime Analysis Graphic Tool
Time
Value-Added Process Steps
Non-Value-Added Process Steps
Time
Wait
Move
This is the lead time reduction graphic tool worksheet.
Use this to take all the steps and times through observation and identify the process flow:
- put a box around the description, and number the step
- make the size of the box in proportion to the time for the step
- detail time for each step
- detail distance for each step
- total the VA time
- total the NVA time
- document the combined VA & NVA total time
- calculate & document the VA% against the combined total time.
- calculate & document the NVA% against the combined total time.
Wait
Inspect
Wait
Move
Wait
Total VA
Total
NVA
Value-Added Time
Value-Added Time + Non-Value-Added Time
% Value-Added =
x 100

26. Leadtime Analysis Graphic Tool
1. Store raw material
2. Process
3. Wait
4. Move
5. Wait
8. Wait
10. Wait
9. Move
6. Inspect
13. Store finished goods 1 60
11,520
8,640
115 3
5,760
4,320
10,080
Leadtime Analysis Graphic Tool
Value-Added Process Steps
Non-Value-Added Process Steps
Min.
7. Process
11. Process 2
x 100 = .14% Value-Added Activity
64 min. Value-Added Time
44,937 min. Total VA & NVA Time
12. Process
VA = 64 min.
NVA = 44,873 min.
(31.16 days)
This is an example of a competed lead time graphic worksheet.
Make ure each participant has a Lead Time form.
Explain: We are going to the floor and will document every step including the time it takes for each step for the identified process.
Have the participants look at only the area/process that has already been identified for this workshop.
If the process is long you may want to divide the group in two and have one start at the beginning of the process through the mid-point and have the second team go from mid-point through the end.
Document each of the process steps and the lead time. Also document for each step if it is value-added or non-value added.
Calculate the lead time and the percentage of value-added and non-value added. Document the calculations on the flip chart and post.
Document and post the base line calculations for productivity, lead time, inventory, and floor space as it exists now prior to the workshop completion.