A shorter lead time always leads to improvements

You have undoubtedly experienced it in a private situation. You request a document from your town or city, or from an insurer, and then you wait for weeks. While the amount of time that the company actually works on your request is a few hours at the most. And perhaps you also recognize this situation in your own work environment.

Gains from shorter lead times
Especially in administrative organizations, lead times of services are often many times greater than the actual processing time needed. By shortening the lead times, much can be gained. Not only for the customer’s point of view, but also for the organization and its employees. Now, I hear you thinking: “Sounds good, but most requests don’t have to be acted upon immediately. Besides, we can’t work any faster. We’re already very busy. And doesn’t working faster always come at higher costs and at the cost of carefulness?”

A shorter lead time leads to less work on hand
Let’s start with an example. For the request of a permit, Town X has a lead time of 36 days. Each day, 10 requests come in. In this example, the amount of work in progress (WIP), or the number of open cases on hand at any one time, is 10 x 36 = 360 requests.

Meanwhile, the staff are busy with each request for only a few hours. Say the lead time of 36 days is reduced to 6 days. The average WIP then drops to 10 x 6 = 60 requests. Work in progress normally reduces in line with the reduction in lead time.

Three major benefits
A shorter lead time and the associated reduction in the amount of work in progress results in – besides better service to the customer – 3 major improvements:

  1. Quality goes up!
    With a lower WIP, the team has to divide its attention among fewer files. And all open cases are relatively new; there are no old cases in the system. There is less likelihood of confusion and colleagues know more quickly what a certain question is about. A shortening of the lead time with the resulting lower level of WIP leads to fewer mistakes and higher quality.
  2. Costs go down
    Mistakes are not only annoying but also expensive. Typically, more time is spend on cases when lead times are longer. Also, customers often call to ask about the status of a request or to change their request. And having to answer these telephone calls costs money. If the lead time is shortened, it not only leads to fewer mistakes but also to fewer telephone calls. So, costs go down.
  3. Work stress goes down
    It is often thought that a shorter lead time provides more stress. Actually, the opposite is true. Suppose that 5 people work 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. That results in a very different experience, especially if that is an amount that can be processed in a normal work day.

In general we can say that a shorter lead time leads to higher quality, a reduction in costs, and less internal stress. Are you curious about our vision, or do you want to get started with your team? Try the Process Modeler for 30 days for free.

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