MPC - Lead time syndrom

5 important questions on MPC - Lead time syndrom

Why are long lead times bad? [3]

  • Result in high inventory;
  • You have to predict demand for a longer period of time, high variability;
  • More WIP, need more space, loosing overview

How is the lead time calculated?

Backlog/capacity

Explain the lead time syndrom

Increase in backlog -> increase in leadtime -> customer orders more because of later delivery -> increased backlog -> etc.
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What are the drawbacks of increasing lead times? [5]

  • Even stronger fluctuating external lead times;
  • less customers;
  • reduced quality and flexibility;
  • increased inventory levels;
  • higher management burden;

What is a solution for the lead time syndrom?

Intervention: temporarily increase capacity by only 1

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