11. Reduce lead times for production. Another key principle of OPT is to minimize the lead time necessary to manufacture a product. A lead time is the time interval between receiving and shipping an order. Lead times can be critical because consumers of industrial products generally want rapid delivery. Industrial products are often not manufactured un¬less specially ordered. Consumer products such as watches or mattresses are typically made for inventory based on anticipated demand. Goods are then sold from inventory as orders are received. Why does a long lead time lower productivity? One problem is that the manufacturer cannot collect much money until the job is finished, and may have trouble meet¬ing expenses. Another problem is that industrial customers may lose pa¬tience with a slow order. Consequently they may choose another supplier the next time. Short lead times help retain old customers and attract new ones.
