Definition
Time based competition is an operational strategy focusing on compressing total throughput time in an organization. Compressing time has a cascading affect on quality and cost. As cycle times are reduced, productivity increases proportionally. A fifty percent reduction in cycle time and a doubling in work-in-process inventory turns causes productivity to increase from 20-70 percent. As productivity increases, resource capacity is freed. Two things happen: costs decline, and the organization becomes capable of producing significantly more output with less resources: a winning combination
Most manufacturing companies spend anywhere from 5-10 percent total time actually adding value to the product, i.e., transforming the part or moving it closer to the customer. The rest of the time is waste, resulting in higher costs occurring with loss of time.
Inducing velocity throughout a business has a profound effect on time and cost. The need for nonvalue-adding functions disappears, and the functions designed to accommodate exceptional circumstances fall out. The organization chart becomes flatter. Following this is a dramatic reduction of overhead.
How to Reduce Total Cycle Time
Understanding the way an organization functions is key to the redesign for time-based competition. The structure dictates how labor is divided and how power is allocated. Physical proximity normally follows structure, both of which have a direct impact on ease of information sharing and time.
In a traditional functional organization, communication walls begin to build as the organization grows. Over time, functional entities develop and become self-serving, losing sight of the mission of serving the customer.
Sequential decision-making becomes prevalent, coupled with poor or non-existent communications. The organization develops functional empires, fraught with politics and narrow points of view. The result is an organization slow in decision-making, heavy with vertical layers of management, bureaucratic in nature, low in productivity, and generally ineffective.
Every business has basic cycles that govern the way that paper is processed, parts are manufactured, and decisions are made. They may be documented in the form of procedures or routings. Examples of business cycles are customer order, product development, production, and procurement.
A customer order cycle begins with the placement of an order by a customer. It ends when you are finally paid for goods or services rendered. But there are activities in between the two events that consume time. Some add value, such as packing and shipping, and some are non-value adding and delay time, such as moving the order around the building from mailbox to mailbox, sitting on a desk, or repetitive motions.
When a cycle ends, a lot of non-value adding time has been consumed that may constitute 90-95 percent of total time. Some of the time is lost in travel, some is lost in the processing backlog, and some may be lost diverting a customer's order to a credit department for release. If you can identify the non-value added time in the cycle, you can devise ways to eliminate the causes.
Long sequential strings of cycles make up the mainstream order flow and contribute to long throughput times. Poor physical logistics worsen the time delays; i.e. when distribution is physically separated from the main assembly plant, or engineering is separated from sales, etc. Component plants located overseas add even more to the overall throughput time of the service chain of events.
Mainstream value-add activities are identified on flow process charts. Flow process charts are analyzed for activities that delay mainstream activities. Delays can be moves, slow operations, inspections, as well as waiting time. Cutting cycle times fifty percent per established period of time is a good goal. The process is continuous.
It is not uncommon for the manufacturing time to only consume 40 percent of the total time a customer has to wait. Yet the value-add time in the plant is generally 5-8 percent of the manufacturing throughput time. The way to identify the activities is to use process mapping.
Mapping process flow is a fundamental step in reducing total cycle times. Mapping the flow and tracking time for each of the events provides a basis for analysis. The process is not difficult, however it is time consuming. It provides a step by step image of work flow, systems, procedures, and volumes. It reveals the relationships between the tasks.
A process is any series or combination of tasks or activities which produce a result. The result could be a machined part, a drawing, or a requisition for materials. Cycles are sequences of recurring successions of processes or events. The cycle time is the time from the beginning of the first step of the process until the beginning of the first step of the next process. Processes can be decomposed into smaller activities. Traditionally those activities may be performed in a sequential manner. In this situation each step is completed before the next one begins.
Once cycles are mapped, the opportunities to compress time can be pursued. The goal in compressing time is not to devise the best way to perform a task, but rather to either eliminate the task altogether or perform it parallel with other tasks so that the overall system response time is reduced. A basic premise of reducing total cycle times is to separate activities between in-line and off-line.
Extending this approach to the entire supply chain and focusing in on the mainstream activities that add value is key. Each of the steps can be further decomposed into smaller activities. By providing the output, such as transferring information, from smaller activities much sooner to the subsequent smaller activities, time can be compressed.
The Issues
Consulting firms coin phrases to promote their company: Time Based Competition, World Class Manufacturing, Lean Manufacturing, etc. The essence of the new approaches quite often amount to nothing more than "old wine, new bottles." Just like anything else, time based competition is no panacea, nor should it be embraced as a religion. It is an operational strategy that, if implemented properly, will provide a new dimension to competing: quickly introducing new customerized high quality products and delivering them with unprecedented lead times, swift decisions, and manufacturing products with high velocity.
Pragmatic Applications
TBC
is an excellent tool to use in inducing velocity within an operation.
Process mapping can reveal the constraints and bottlenecks in an
operation. This identification
can facilitate the streamlining of processes, increasing both
productivity and throughput. We suggest initially identifying and
mapping the critical path processes to discover the bottlenecks that
affect the total throughput time, and reengineering those first.
Bottlenecks will shift from one operation to the next as each one is
resolved. This is an application of basic constraint theory, and will
get results that have greater impact on the company.
Our Approach: Tools from a Toolchest
Rockford Consulting Group applies concepts and technologies as the situation warrants, that will result in the ultimate benefit to our clients. We treat strategies, technologies, and methodologies as tools in a toolchest, and use them when they offer practical solutions and achievable results. We believe that each client situation is unique, with its own unique set of solutions. (Please see our time based competition consulting services Time Based Competition Consulting Services )
Why Us?
Rockford Consulting Group can provide long-term assistance to many companies in a variety of industries. The firm has a cadre of the best supply chain consultants in the world today, providing high quality professionalism through the use of experience and innovation.
We subscribe to the Institute of Management Consultants Code of Professional Conduct. All consultants engaged on projects adhere to its principles. Whenever possible we will use consultants certified in their particular specialty area. Certification assures that consultants have substantial prior experience in their specialty, and their competencies have been tested by the IMC, and verified by a number of clients. This assures our clients that we are assigning the highest qualified consultants in the profession.
We provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. We refer you to our Qualification Statement for further details on our background, areas of specialization, concepts and technologies applied, staffing, operating policy, approach, companies and industries served, case studies and references. Equally as important, we train our clients to sustain new methods of manufacturing and the consequential benefits over time. Your company will benefit directly from this training.
We have achieved an efficiency in our approach to assignments that allows us to provide high quality technical and managerial advice in a much shorter amount of time than could be accomplished years ago. We are able to do this because of the extensive consulting experience that each of our specialists has.
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