What Kind of "Numbers" can a Company Expect After Implementing Quick Response Manufacturing?

Quick Response Manufacturing (QRM) is a company-wide approach to lead time reduction that has been shown to be successful at many manufacturing enterprises. Currently, there i literature on QRM principles, how to implement QRM, and also its potential benefits. However, this literature tends to be anecdotal and descriptive, and the link that ties and quantifies actual cost benefits achieved with specific lead time reduction targets has not been formally established yet. The purpose of this study is to obtain more empirical data and develop rules to quantify the benefits of QRM. In this study, we gather detailed data from several company projects on lead time reduction. Then we use a recently developed methodology to quantify the benefits of QRM more accurately, from this data. In parallel to this, based on some hypotheses, we derive a simple functional form for the impact of lead time reduction on costs. We refine this functional relationship via the empirical data. As a result, we derive a simple quantitative "rule of thumb" that managers can use to set lead time reduction targets. The empirical data also clearly shows a baseline - link between lead time reduction and cost savings achieved. In addition, we present data on the impact of lead time reduction on several other performance measures including quality, labor productivity and on-time delivery. Although this is a preliminary study on these issues, we hope the general approach, and the simple rule of thumb, would be of immediate use to both practitioners and researchers in this field.