Critical Action Planning – Eleven Best Practices For Managing Long lead Items

FabricaRusia
FabricaRusia (Photo credit: Wikipedia)

Vendors have lead times. New custom components can have really long lead times. Long lead components are the most incompressible of project tasks, so you need to manage them closely.

I’ve seen all the screw-ups: parts and orders misplaced, fires at vendor plants, incoming inspection backlogs, you name it. As a project manager, it’s your job to prevent these errors and keep the trains running on time.

Here’s how.

1. When you create and update your project plan, identify all long lead items in the project. Asterisk them, or color code them, for special attention. Then pay attention.

2. Prioritize all tasks needed to get long lead parts on order. Don’t let these tasks slip.

3. Get a confirmation from your vendor that they received/accepted the PO. Savvy project managers don’t leave external communications to chance.

4. If the PO is going to be large, give management a timely heads-up. You don’t want last minute bureaucracy getting in the way of order placement.

5. As soon as you place the order, put the task “Wait for Part XXX” into WIP, with Work-Units of 0.01. This keeps the task in WIP but does not change the scope of the project. Assign a team member to monitor progress at the vendor every week, and to report that status in the project meeting. Check in with the vendor to track the progress of your parts through their process. If they are making a mold, ensure it’s designed on time and manufactured on time, and that the raw materials are ordered on time. As long as the part is on order, leave the task in WIP, as a reminder to check the status. When you receive the part, mark the task complete.

6. Consider ordering from multiple vendors to reduce delivery risk. Vendor accuracy may vary.

7. If a vendor’s internal queue is driving the lead time, place a “placeholder order” with the vendor before the part is fully designed, and substitute the final design before the vendor actually starts to make the part. This helps the vendor plan their capacity. Put the task “Send Final Design to PO XXX” into WIP, with Work-Units of 0.01. While this seems redundant with the tasks to finish the part, it’s a reminder to update the PO.

8. Considering paying an expedite fee for a shorter lead time. If the reduced lead-time shrinks the project timeline, it’s often worthwhile to pay a fee that otherwise seems exorbitant.

9. Make sure incoming inspection is prepared to receive/inspect the parts when they come in.

10. When the part is on order, prioritize all tasks related to qualifying or testing the part. You don’t want the parts sitting around after it arrives. You can’t believe how often this happens.

11. Use this list of best practices as a checklist.

Look back at your most recent project, and measure the time from the start of your project until the long lead order was placed. Was the interval what you expected, and if not, why not?

Then look back at the time interval between the receipt of the long lead item, and the start of the testing/qualification. Was the interval what you expected, and if not, why not?

Most project teams don’t take a systematic approach to managing long lead items. These teams practice “blame the vendor” for the inevitably delayed timelines. You can never eliminate lead times and uncertainty. You can, on the other hand, take a systematic approach, and improve your performance.

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