Best-in-Class Manufacturing
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Basic No. 8: Cycle Time Management
By Bill Gaw

If your manufacturing team can focus on only one CI project at a time, let it be the reduction of cycle times. Why cycle times? Because they have  a huge impact on a company's bottom line. 

Long cycle times are a symptom of poor manufacturing performance and high non-value added costs. Manufacturers need to focus on the continuous reduction of all cycle times. Achieving success requires a specific management style that focuses on proactive problem solving, rather than "fire-fighting". In this process, management takes on a coaching roll, bringing all their people into the process and supporting them in their efforts to improve productivity, customer satisfaction and profitability.

Product build/test cycle time is an important element of the total production flow process and provides an excellent focus for a process improvement program. Product build/test cycle time is calculated as the hourly work content through the longest path of the lean manufacturing process. In the sequential production process, the product build /test cycle time can be calculated by starting at the end of the process and following the longest, cumulative, single path back through the process, regardless of whether it traces the main path or trails off to a sub-assembly path. Many manufacturers have increased their on-time delivery performance and product profit margins by implementing a program of build/test cycle time reduction. The main focus of such a program is the elimination of all non-value-add activities along the path of the product build/test cycle.

In a Harvard Business Review article by Joseph L. Bower and Thomas M. Hout, the authors makes a good case for "Fast-cycle Capability for Competitive Power". They observe that people in fast-cycle companies think of themselves as part of an integrated system, a linked chain of operations and decision-making points that continuously delivers value to the company’s customers. In such organizations, individuals understand how their own activities relate to the rest of the company. They know how work is suppose to flow, how time is supposed to be used. Many have used our Best-in-Class Manufacturing Team Training Program to change old paradigms.

In small companies, this way of thinking is usually second nature. People find it easy to stay focused on creating value because almost everyone works directly on the product or with a customer. Policies, procedures, practices, or people that interfere with getting the product out the door are easy to see and can be dealt with quickly.

As companies grow, however, the system-like nature of the organization often gets hidden. Distances increase as functions focus on their own needs, support activities multiply, specialists are hired, reports replace face-to-face conversations. Before long the clear visibility of the product and the essential elements of the delivery process are lost. Instead of operating as a smoothly linked system, the company becomes a tangle of conflicting constituencies whose own demands and disagreements frustrate the customer. "I don’t care what your job is," the overwhelmed customer finally complains. "When can I get my order?"

Fast-cycle companies – especially the big ones – recognize this danger and work hard to avoid it by heightening everyone’s awareness of how and where time is spent. They make the main flow of operations from start to finish visible and comprehensible to all employees, and they invest in this understanding with lean manufacturing basics training. They highlight the main interfaces between functions and show how they affect the flow of work. They compensate on the basis of group success. And, most important, they reinforce the systemic nature of the organization in their operations architecture.

Fast-cycle companies differ from traditional organizations in how they structure work, how they measure performance, and how they view organizational learning. They use time as a critical performance measure. They insist that everyone learn about customers, competitors, and the company’s own operations, not just top management.

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