Lead times, order release mechanisms, and customer service

Lead times play a crucial role in manufacturing performance. They affect work-in-process as well as finished goods inventories, information requirements, quality management practices, and customer service. The impact of lead times on order release mechanisms is well understood. For example, in push systems, orders are released in anticipation of future requirements using lead time offsetting. The impact of order release mechanisms on lead times, however, is ill understood. In this paper, an experimental study is conducted to assess the interaction between order release mechanisms and lead times with a special emphasis on customer service. In particular, the behavior of push, pull and long-pull systems are investigated. Simulation experiments show that load-dependent order release mechanisms yield superior performance even in an environment with high degree of uncertainty.