Logic - Responsiveness

Responsiveness (sometimes called delivery time) is fundamentally linked to demand. If demand is significantly higher than the current maximum possible capacity, the only way that reasonable responsiveness can maintained is by getting extra capacity (either by subcontracting or by direct investment in capacity expansion), or by bringing in extra stock from the previous period. Other demand management strategies can also be employed such as raising the product price.

If, however, demand and theoretical capacity are closer, then a number of the techniques of Just-in-Time (JIT) and Total Quality Management (TQM) may be employed to increase increase available capacity closer to the theoretical maximum.

Techniques to reduce leadtime include:

• product redesign to reduce the complexity of the product,
• reducing the product line so that only the higher margin products are produced,
• reducing the batch size used in production,
• and reducing the setup time so that the benefits of smaller batches are not offset by less available capacity.