Section W. Backlog of Orders Is Too High

W. Backlog of Orders Is Too High

Overview

Businesses often lose sales because their delivery times are long due to a backlog of sales. Effectively, this is other Problem Categories expressed in a different form, primarily with respect to capacity and Process Lead Time. For more details see "TimeProcess Lead Time" in Chapter 7, "Tools."

Examples

Any business process that delivers products or services to external Customers.

Measuring Performance

Although the primary driver for the project is the backlog in sales, this should be augmented with measures of capacity and theirs relationship with demand. Measure backlog (in units of time), capacity (in entities per time period), along with Takt and Process Lead Time. See also "TimeTakt Time" in Chapter 7.

Tool Approach

	Examine the validity of the order backlog, Takt and Process Cycle Time metrics; a sound operational definition and consistent measure versus a detailed investigation of Gage R&R will suffice. For more details see "MSAValidity" in Chapter 7.
	Take a baseline measure for Sales backlog, measured in days and dollars Demand level, measured as Takt Time Throughput (capacity), measured as Process Cycle Time
	If the Process Cycle Time is greater than Takt, the process will not be able to keep up with demand and focus should be on increasing capacity. Go to Section B in this chapter.
	If the Process Lead Time is too long, the process is just not responsive enough. This would cause order backlog, so the focus should be on reducing the Process Lead Time. Go to Section G in this chapter.