Reducing lead time is a straightforward way to make customers happy and free up capital. While these primary goals are well-known, the secondary effects are where real transformation happens. In this article, I’ll go through why reducing lead time matters, what unexpected benefits it offers, and how leaders can make the most of these changes.
Just before the end of last year, I observed a cross-functional team tackling a complex challenge: reducing lead time in the flow of logs to a sawmill. These logs arrived via boat shipments from distant locations, creating a long and rigid supply chain. The goal was clear—cut weeks off the process without disrupting operations.
At first, progress was slow. The team analyzed the current way of working and meticulously tested new methods, adjusted coordination points, and refined communication flows. As the changes took effect, something unexpected happened. Even though the actual target was to reduce lead time, the unexpected side effects became just as valuable.
Four out of five team members reported saving time every single week—not just in the specific steps they had optimized, but in their overall workload. No one had predicted this. The one team member who didn’t experience direct time savings, still felt a major shift, "I may not be saving time, but I feel significantly less anxious because I finally have a clear picture of what’s happening."
This experience underscored a powerful reality: reducing lead time isn’t just about speed. It unlocks both tangible and intangible benefits—greater flow efficiency, reduced stress, and a newfound sense of control through increased transparency.
Controlling lead time is essential for staying competitive and companies that lack control are at risk of being at the mercy of external factors. Lead time reduction gives organizations the flexibility to adapt to market changes swiftly and efficiently.
A vehicle manufacturer experienced a few extreme cases where at the end of the distribution phase they had a 34-week lead time before the client received their delivery. Out of these 34 weeks, 24 were managed by a third-party supplier. The lack of transparency in the flow was making it impossible to start making improvements and made the objective of shortening lead times to the client feel completely out of reach, increasing stress and creating a sense of despair.
Key Secondary Effects of Lead Time Reduction
Reducing lead time drives transformation in several ways:
1. Stronger Team Engagement and Purpose
Reducing lead time encourages teams to work together towards a common goal. When employees focus on solving customer needs rather than just completing tasks, they develop a stronger sense of purpose. Engagement improves naturally when work feels meaningful.
2. Increased Productivity
Long lead times force teams to multitask, which drains mental energy and reduces efficiency. By narrowing the focus to the most critical tasks, employees can work more effectively, reducing stress and increasing output.
3. Resource Reduction
A common misconception about lead time reduction is that it demands extra effort and resources. In reality, it streamlines operations and frees up existing capacity, allowing teams to accomplish more without additional costs. Instead, companies can reinvest this capital into other areas like innovation, expansion, or process improvements.
4. Improved Team Dynamics
Lead time reduction often reveals organizational bottlenecks. Identifying and addressing these bottlenecks encourages transparency and trust among teams. Leaders who handle these situations with support and understanding create a healthier work environment.
5. Reduced Stress and Anxiety
One often overlooked benefit is the reduction of workplace stress. When processes are transparent and predictable, employees no longer worry about meeting deadlines or whether others are on track. This mental relief boosts morale and overall productivity.
How to Sustain These Gains
Cutting lead time is only the beginning. To sustain the positive effects, leaders should:
Maintain High Engagement: There is a positive relationship between engagement and involvement. Leaders must ensure that everyone remains part of the improvement work and that they can contribute to ongoing improvements.
Plan for Freed-Up Time: In healthy organizations, extra time is used for further improvements, innovation, or market expansion. Leaders must guide teams on how best to use this time.
Leverage Technology: Emerging technologies can further reduce lead times by streamlining repetitive tasks. Adopting the right tools helps maintain a competitive edge.
Continuously Visualize the Current State: When everyone can see what happens across functions, going back to the old way of working is close to impossible. A visualized flow will create ownership in a team, enabling them to see what needs to be done.
