INFORMATION TECHNOLOGY

Information consists of all the recorded quantitative (i.e., numerical) and qualitative (i.e., comments, perceptions, notes) data. Information can be recorded in a variety of forms, including computer, Rolodex cards, or various file folders. In its scope, information contains a great variety of data. In it, we can find schedules (what is to be run, where, when, and in what quantity), cost standards, product designs, forecasts, routings (what equipment we will use to build an order and the se­quence in which the equipment is needed), inventory records, time stan­dards, past historical demands, capacity levels, and product data (e.g., planned leads)—to name a few example of information. Information can be viewed as the life blood of any company. Nothing can be made or planned without information. The information needed must exist somewhere, if we are to build to schedule (even if it is in someone's head).

Information not only represents a base on which we, as operations managers, can plan current and future activities, it also represents a base on which learning, either at the individual or corporate level, can take place. With information, we can record our past experiences. In­creasingly, we now recognize that with the proper uSe of information, we can reduce our reliance on buffers in the form of excess inventory (safety stock), lead time (safety lead time), or capacity (safety capac­ity). Furthermore, information's power is greatly enhanced when it is shared with the partners in the supply chain.
Increasingly, firms are realizing that good informa

ion (coupled with the ability to effectively and efficiently store and retrieve) is among the most valuable resources they own.

Firms are now struggling to implement such new information sys­tems as enterprise resources planning (ERP), supply chain scheduling systems, advanced planning systems (APS), and manufacturing ex­ecution systems (MES). These systems represent significant invest­ments of time, resources, and money. Firms are implementing these systems because they realize that their firms must be better at manag­ing the information resource and of using the capabilities offered by this resource to enhance their abilities to deliver superior value to their customers. However, one lesson that many firms are now learning is that the challenge of implementing such systems is a massive under­taking and one that should not be undertaken lightly.

TIME-COMPRESSION STRATEGIES

Increasingly, the modern manager is living in a world where speed is of the essence. We are starting to loam that there is value in designing and delivering products and services in shorter time periods. However, most managers find it difficult to deal in the world of reduced lead times. In many cases, the response of managers to the demand of this new environment is that of taking existing approaches and placing them under greater pressure (the brute force approach). Such an approach only works for a short period of time. Ultimately, if we are to succeed, we need to develop new strategies. These strategies underlie such ap­proaches as the kaizen event. The following are the most important of these strategies:

• Less of/system simplification. This first value strategy is built around the simple premise that value is a direct result of processes. To enhance the value generated by this process, it is necessary that the process be documented and analyzed and any non-value-add­ing steps be eliminated, rethought, or repositioned.
• As one/system integration. This strategy is based on the view that the ability of any system to reduce lead time is seriously compro­mised when activities are sequentially arranged. Sequential pro­cesses require more lead time. Second, strong barriers between func­tional areas often become "black holes" where orders or designs become lost or misplaced. Third, functional barriers may delay re­visions in a sequential process and raise the cost of implementing them. System integration often works to improve a firm's organiza­tional structure and information sharing. By bringing together the critical parties both from within and without the firm (e.g., custom­ers and/or suppliers), this strategy tries to ensure that all of the needed information is made available from the outset. The results are bet­ter designs and better carried out actions—all of which reduce time and increase value.
• Same as/standardization. Instead of treating each task in a pro­cess or each part in a product as unique, the "same as/standardiza­tion" strategy tries to make use of steps or parts that are common or standard. Standard processes eliminate the problem of designing a new product and learning or developing a new process. Instead, people work with a familiar process, freeing their attention to focus on designing the product within the context of the standard pro­cess. Our customers do not want to pay us to reinvent the wheel. They want to have quality products that meet their needs, provided in a timely and cost-effective manner. Similarly, people working with standard process can respond to each order in the same way, reducing lead time and increasing predictability.
• At once/parallel activities. Unlike the other strategies, the "at once/ parallel activities" strategy focuses on the sequence of tasks in a process. In any process, tasks can appear either within or outside the critical path, the sequence of activities that define the minimum lead time needed to complete a task or project. Adding an activity to this path always increases lead times, but one can reduce lead times by moving any activity off the critical path so that it occurs at the same time as, or in parallel with, the remaining activities on the critical path.
• Watch it/variance control. This strategy focuses primarily on the predictability of the process. It attempts to reduce waste and lead times by identifying activities or tasks with the highest levels of variance, measured by dispersion or spread in observed data. High variances characterize an unpredictable process. Managers often respond to the problems created by high variability by stretching lead times to buffer or protect the system. Variance control identi­fies tasks with the highest variance and examines them to uncover the reasons for the variance.
• Not here/focus on core competencies. This strategy recognizes that no firm can excel in all dimensions. In other words, we cannot do all things equally well. As a result, we should focus on those things or activities that we do well (or in which we have a competi­tive advantage) and turn to others (specifically our suppliers) to provide the activities or products in those areas that are not strengths for us.
• Better than/automation. This strategy tries to enhance value and reduce waste by replacing older, less efficient procedures and tech­nologies with newer, more efficient ones. This strategy is based on two important assumptions: (1) that new technologies are inherently better and take less time, and (2) that problems with lead times result primarily from technology rather than process characteristics. The introduction of new technology or automation may or may not change the processes that use the technology.
• More of/excess resources. This strategy assumes that problems occur because of resource constraints as orders must compete for access to scarce resources such as workers, machines, tools, or material. Two fairly simple actions can reduce these delays. First, the firm can introduce new resources, in the form of additional la­bor, unused machine capacity, and inventory. Most firms deploy such new resources at bottleneck sites, areas where resource short­ages constrain process flows. A second excess resources response affects human resources by developing a highly skilled, cross-trained work force. Such workers can more easily accommodate variations in product mix or workload.

To Be Continued

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