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3 Benefits from Lead Time Improvements

Lead times at companies are often much greater than the actual time spent on processing a request, especially at administrative organisations. It is symptomatic for organisations failing to see that there is a direct connection between shorter lead times and better quality, costs and workloads. This is why a deadline should never be the driving factor for handling requests.


Fact: Why shorter lead times matter

You have undoubtedly experienced it in your personal life. You request a document from your city or from an insurer. Despite your request being relatively easy and straight forward, it takes the company weeks to complete it. You might even admit that your own organisation does a similar thing.

The fact of the matter is that delays in any process work counterproductive, because a larger lead time has an inadvertent effect on quality, costs and workloads. So if you can positively impact lead time, not only will your customer benefit from it, you will too. Now you might be thinking:

“Sounds good, but most requests really are not that urgent. Besides, we are already busy, and resources are already stretched at best. Doesn’t working faster always come at higher costs and at the cost of carefulness?”

Let’s dissect the topic to understand why it matters and what you can gain.


Let’s talk about WIP

We will start with an example that everyone can relate to. For the request of a building permit, Town X has a lead time of 36 days. Each day, they receive 10 new requests. In this example, the amount of Work In Progress (WIP), or the total number of open cases, is 10 x 36 = 360 requests. Meanwhile, staff only spends a few hours on each request.

This is the key to the principle. There is a direct link between optimising workload and lead time, which in turn influences processing time. For example, if the lead time of 36 days is reduced to 6 days, that will also reduce the average WIP to 10 x 6 = 60 requests. Imagine the focus that this brings to an organisation.


Let’s talk benefits

Benefit 1: Quality Improves

With a lower WIP, the team has increased focus on a fewer cases. All open cases will be relatively new; there are no old cases in the system. There is less confusion and colleagues can stay on top of individual cases, knowing them in detail. In short; less WIP leads to fewer mistakes and higher quality.


Benefit 2: Costs go down

Mistakes are not only annoying, but also expensive. As proven by Toyota, whenever someone makes a mistake in a process, the time it takes to correct it far outweighs the time it takes to do it right first time.

Another direct cost saving relates to the customer’s draw on an organisation’s resources. If the lead time of their request decreases, it naturally leads to less contact points and changes, ensuring you spend less time and money on each case.


Benefit 3: Workload Decreases

Shortening lead times, or delivery times, is often incorrectly linked to an increase in workload or stress levels. In practice, the opposite is true.

Imagine that 5 people are working on requests and there are, as in the example, 360 requests in the organization. On average, each employee will have 72 files on their desk. When the lead time is shortened and the WIP as in the example drops to 60, the average number of requests per desk drops from 72 to 12. It takes those employees far less effort to manage the 12 cases, resulting in a very different experience, especially if that is an amount they can complete in a working day.

Get the Outcomes

The main point is that only bad things happen when you wait. The simple mathematics behind lead times show us that you can positively impact a lot of different factors in your organisation. Key to getting to those benefits is to investigate your process, together with your team, to find where the opportunities are.

Want to know how we tackle it? Let’s talk!

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