Reducing Lead Time for Electrical Switchgear

This paper highlights some of the key problems in reducing lead times for engineered-toorder construction products, specifically items of equipment such as electrical switchgear (“permanent plant equipment” in the jargon of the process industries). Lead time reduction has long been considered a fundamental objective in overall business improvement and is a cornerstone in lean thinking. The benefits include reduced inventories and costs, greater flexibility and responsiveness, and better satisfied customers. In construction projects, shorter lead times could significantly reduce the number of change orders and/or make projects more robust to changes. The authors suggest that the focus on reducing engineering lead times will have a greater impact on lead time reduction than a further focus on the manufacturing stage and that the product specification stage may play a more significant role in lead time reduction. An example of a switchgear supply chain demonstrates how long lead times lead to inadequate information from various players in the product specification stage impairs the process and leads to a chain reaction further down the supply chain. As a result, numerous design iterations and change orders occur, which further propagate the long lead times. This pernicious system dynamic is further complicated by the fact that some players in the switchgear supply chain profit from (or believe they profit from) change orders.