Optimizing lead time boosts profits in decentralized firms, revolutionizing performance measurement.
The article discusses how to measure performance in a company where different departments affect costs and production time. By assigning the right importance to lead time, companies can maximize profits. To do this, managers need to understand the balance between cost and lead time in each department. By using lead time measures, companies can estimate costs more accurately and make better production decisions. To improve profits, companies can invest in understanding customer needs, reducing cycle times, improving quality, and conducting customer surveys.