As I see the situation, "handling" dead time is like handling any process which, upon examination and evaluation, seems to offer an opportunity for increased efficiency and, therefore, increased profitability for the parties concerned.
Dead time can arise from a number of causes, so it is necessary to list the applicable causes and examine each for opportunities to increase efficiency.
Some examples of dead time might include the dead time resulting from
- no work available
- machine or process changeover from one product to another (big factor in job shops)
- unscheduled repair or maintenance
- stoppage in flow of materials (supply chain)
- absenteeism of operators for critical step in process
- strikes or other organized work stoppage
- sabotage (subtle - LOTS of reasons for sabotage, ranging from simple mischief to criminal intent (paid by competitors, desire to manipulate stock price, etc.)
A good manager pays attention to dead time, charts it like any other systemic-caused nonconformity, and seeks corrective/preventive solutions.
It might be a good topic for a new thread to discuss each possible "cause and cure" - certainly, many Lean advocates always put dead time in their crosshairs.