23
Feb
2010
Theory of Constraints Golden Nugget
#5 – Assessing super rapid time at an early stage
(RRR)
To fully enroll the Rapid Response (RR) offer, without taking a risk of deteriorating Reliability, it is required to shrink the production buffer to less than one quarter of the industry lead time. Reaching that stage takes substantial time. Much before that stage – when load control is implemented – the lead time is shorter than half the industry lead time. Since the financial benefits of getting even a fraction of the orders in RR prices are so significant, the S&T tree recommends to start offering RR on a limited volume (less than ten percent of the capacity) immediately after load-control is put in place. We know that the company can safely offer lead times which are half the industry lead time as rapid service, but what can the company offer, at that early stage, as super-rapid service?…Click here to continue reading