Minimum Lead Time

Minimum Lead Time

Action Minimum Time Required Day

Order Placement Minimal Saturday

Order Entry 1 Day Tuesday

Bicycle Assembly 4.8 Hours Tuesday

Shipping from Factory to hansha 1 Day Wednesday

Shipping from hansha to Customer 1 Day Friday

Under the POS system, assuming all of the best-case times communicated are correct, the minimum lead time for a bicycle ordered on Saturday would be a 6 days. That means a bike ordered on Saturday would arrive on Friday. Other days could provide shorter lead times, but a couple things interfere with orders placed on Saturday. The order isn't entered at the factory until Monday morning since POS is currently planned for 1 shift, only on weekdays. Additionally, shipping from Factory to customer is projected to take only 2 days, but the 2nd day would occur on Thursday, and all hansha are closed on Thursday. Therefore the bike arrives on Friday. All this being said, this is still a best case scenario. If there was an abnormally large number of orders then all stages could be delayed since bikes in the POS process in were being made to order rather than made to stock. Although with the order placed on Saturday there is still one day to work with considering the hansha are closed on Thursday. Additionally, if the retailers were willing to buy the fitting scale, but not a fax machine, then customer orders would be moved back to the original 10 day order processing time. To reduce costs, National would have to have a shipping schedule so they weren't sending partially full trucks to each hansha every day. That being said, customized bikes may have to wait a bit before they could be put in a truck to be sent to the hansha.

All of this being said, National Bicycle can only make 26 custom bicycles per day in their planned 480 minute work day. This is obviously not appropriate considering they get up to 120 orders in a day during the peak season.

National should be offering a 1 week lead time to their customers. If they can even beat this estimate, customers will be happy. In order to do this, there are simple steps that National can take. While there may be gains to be made in other parts of the supply chain, changing their plant operations plan will give them the most gains, and actually allow them to handle the demand during peak season. To do this, they should add additional acid baths, and change assembly so it's like an assembly line rather than having a single operator doing everything. This will change the bottleneck, and significantly reduce throughput time so they can handle all the demand.