Dynamic planned lead times in production planning and control systems: does the lead time syndrome matter?

Abstract

Many companies in practice want to dynamically adjust planned lead times in their production planning and control systems in response to demand fluctuations. But for decades it has been recognized that this can lead to escalating planned lead times and realized throughput times.Authors have highlighted the negative impact of this "lead time syndrome", especially in the context of Material Requirements Planning systems, prompting the development of alternative concepts intended to overcome its vicious cycle, such as Workload Control. Yet some authors have shown that increasing planned lead times has advantagesit can improve end-item service levels. To resolve this paradox, we conjecture that the effects of the lead time syndrome are limited when demand is independent of internally planned lead times, such as in make-toorder companies, and subsequently use simulation to prove this conjecture. We show that although dynamic planned lead times have a detrimental effect on performance in make-toorder systems, it is not an increase in planned lead times that leads to a performance loss. Rather, it is the decrease of lead times in low load periods that increases workloads in upcoming periods of high load. This questions the use of upper bounds (WIP-cap) in these contexts.

Investigation of Workload Control Methods for Shops with Re-Entrant Flows

“…Thürer & Stevenson [32] worked on integrating order release and sequencing rules by prioritizing jobs which were applied for the longest queue resources that showed the best performance. Thürer et al, [33] investigated the effect of lead time syndrome in MTO shops with independent demand cases which showed that decreasing the lead time during low loads would lead to an increase in workload during high loads. The principle of WLC has been widely recognized in complex job shops and a considerable amount of studies have incorporated re-entrant flows.…”

Research on Supply Chain Coordination Decision Making under the Influence of Lead Time Based on System Dynamics

“…Planning for lead times depends on the stochastic variability of the activity's resource requirements, as well as the flexibility and utilization of the resources associated with the activity [21]. Moreover, there is a limit to the reduction and increase in lead times, beyond which there is a loss of performance or a doubling of the burden on practitioners [22]. Most of the literature focuses on the impact of lead time and other prefabricated times on supply chain performance and market demand.…”

Assessing the Determinants of Firm Performance Among Manufacturing Companies: A Qualitative Analysis

“…Lead time is a crucial component of efficient materials management that aims to ensure prompt delivery of supplies, components, and work-in-progress. Lead time's primary goal is to genuinely help the business get competitive advantages while providing the right product at the right time and location, thereby delighting the client (Thürer et al, 2022). According to (McCarthy & Golicic, 2002), the key advantages of materials management are improved quality control, lower material costs, and improved supply continuity with shorter lead times.…”