Published by:
MIT Sloan School of Management
Length: 9 pages
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Abstract
The author examines the simple but profound hypothesis that reducing throughput time (the length of time between the arrival of raw materials at the factory and the shipment of the finished product) is the single most important determinant of improved factory productivity. He concludes that focusing on throughput time forces managers to reduce inventories, set-up time, and lot sizes; in addition, it encourages improved quality, revamped factory layout, stabilised production schedules, and minimised engineering changes. The three research studies on which this article is based indicate that, of all the possible techniques for improving productivity, only the JIT-related ones are statistically, demonstrably effective.
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Abstract
The author examines the simple but profound hypothesis that reducing throughput time (the length of time between the arrival of raw materials at the factory and the shipment of the finished product) is the single most important determinant of improved factory productivity. He concludes that focusing on throughput time forces managers to reduce inventories, set-up time, and lot sizes; in addition, it encourages improved quality, revamped factory layout, stabilised production schedules, and minimised engineering changes. The three research studies on which this article is based indicate that, of all the possible techniques for improving productivity, only the JIT-related ones are statistically, demonstrably effective.