The effect of work-in-process inventory levels on throughput and lead times

Just-in-Time programs are designed to reduce raw materials and work-in-process inventories. A benefit of the reduced inventories, in addition to reduction of inventory carrying cost, is a reduction in lead times and increased flexibility in responding to customer orders. Although the benefits are attractive, there may be offsetting costs, such as reduced throughput, unless action is taken to reduce product and process variation.