In order not to get any confusion about what lead time is, there is an unambiguous definition: the Manufacturing Critical-path Time or MCT.
MCT = the time in calendar days starting with the customer order, through the critical path, until the delivery of the first product of that order
- including materials
- including working processes and intermediate stocks
- including waiting times for information
How do you determine the MCT of the process?
Let’s have another look at the lawnmower that the producer delivers out of stock. When I place an order and receive the lawnmower after two days. Is the MCT two days?
The answer is no. The delivery time is two days but before the product came to stock a lot of time was already spent on the lawnmower. How much? To know the answer we have to look at the process before the product came on stock (upstream). It appears that there is an assembly department that can assemble the lawnmower within one day. Is the MCT now three days?
The answer again is no. Before the assembly there is a production department which can produce all the items that are needed for the lawnmower. It will take them five days to do so. Is the MCT then eight days?
Still the answer is no. For the production of parts we need certain critical materials, and they have a delivery time of 14 days. Is the MCT then 22 days?
Again no, we haven’t finished yet. We also have to take the stocks into account. In practice when there is a change in design, normally we first try to finish the old stocks instead of throwing them away. This consumption will be reflected in the lead time. Supposedly stocks are worth four days of production, then the MCT will be increased with four days, making a total of 26 days.
In other words the lawnmower with a delivery time two days can easily have an MCT of 26 days. This means that 26 days before the delivery of the product the process was started to have the lawnmower delivered in time.
In an MCT diagram the starting point (day 0) is placed on the right. This is the mutual point where all the activities come together. It is the point where the product or service is delivered to the customer. From this point we can see directly what lead times the different processes have. For example we can see in this diagram that the cast parts take 118 days and are
therefore the longest and critical path. MCT is a very useful tool and it has a number of advantages:
- First of all an MCT diagram is very easy to understand. It takes very little explanation and it gives a clear insight.
- Second you can see the critical path in one quick view.
- Waiting times are shown proportionally so you can make a quick choice where you can realise the highest reduction of lead time.