What is ISO 9000 2000?  

=================================================
MANUFACTURING BASICS & BEST PRACTICES BULLETIN

Now serving 6714 subscribers

Competitive Knowledge for Manufacturing People 
=================================================

November 29, 2004

Hi [[firstname]], welcome back. 

At Palomar Systems, when we introduced a new multi-
functional component test system, one of our primary 
goals was to increase our product’s profit margin 
from the usual 32 percent to a new high of 42 percent. 
How were we going to do that?

To accomplish this goal, we decided to focus on 
reducing our build and test time. Our plan was to 
implement a sequential production assembly line 
supported by a point-of-use “just-in-time,” supply 
chain. Supply chain and cycle time management were 
to be the keys to our success. When we first started 
production the “build/test” cycle time was averaging 
42 days. How did we do?

At the end of the first year of production the cycle 
time was averaging 12 days. OUR PROFIT MARGIN WAS AT 
38 percent. By the end of the second year the cycle 
time was 8 days and the profit margin was at 52 
percent.

This is one of hundreds of success stories of how 
companies have stayed competitive by focusing on 
reducing cycle times. If your company is having trouble 
with designing and implementing a cycle time reduction 
program, you'll want to be sure to read this week's 
bulletin, “Cycle Time Management.” 

Have a nice day, keep the faith, and stay connected.

Bill Gaw
bg@bbasicsllc.com
760-945-5596

P.S. If you need help with your cycle time reduction 
program check out our training module at: 

http://bbasicsllc.com/training-modules.htm 

and scroll down to Best Practice #5.

=================================================
BUSINESS BASICS & BEST PRACTICES BULLETIN

Now serving 6714 subscribers

Competitive Knowledge for Manufacturing People 
=================================================

CYCLE TIME MANAGEMENT
“Gaining a Competitive Edge.” 

If your manufacturing team can focus on only one 
project at a time, then let it be the reduction of 
cycle times. There just isn’t any other more important 
company success factor to pursue than cycle time 
management. 

HOW TO IMPROVE YOUR MANUFACTURING PERFORMANCE 

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 cycle times are an important element of the 
total production flow process and provide an excellent 
focus for a process improvement program. Product cycle 
times are calculated as the hourly work content through 
the longest path of the manufacturing process. 

In the sequential production process, the product build 
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. 

IMPROVING ON-TIME DELIVERY AND PROFIT MARGINS

Many manufacturers have improved their on-time 
delivery performance and product profit margins by 
implementing a program of build 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 cycle.

In a Harvard Business Review article by Joseph L. Bower 
and Thomas M. Hout, the authors make 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 supposed to flow, how time is supposed to be 
used.

SMALL COMPANIES FOCUS ON QUICK-TURNAROUNDS

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.

BIG COMPANIES HAVE OBSTACLES TO OVERCOME

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 
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.

If you need help with your cycle time reduction 
program check out our training module at: 

http://bbasicsllc.com/training-modules.htm 

and scroll done to Best Practice #5.

================================================= 
You are welcomed to print and share this bulletin with 
your manufacturing teams, peers, suppliers and upper 
management ... better yet, have them signup for their 
own copy at:

http://bbasicsllc.com/subscribe.htm

With the escalating spam-wars, it's also a good idea 
to WHITELIST our bulletin mailing domain via your 
filtering software or control panel: 

bizbasics@getresponse.com

This will help guarantee that your bulletin is never 
deleted unexpectedly.


==================================================

Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596

Manufacturing Knowledge you’ll not find at offsite 
seminars nor in the books at Amazon.com

Lean Manufacturing - Balanced Scorecard 
ISO 9000:2000 - Strategic Planning - Supply Chain 
Management - MRP Vs Lean Exercises - Kaizen Blitz 
Lean Six Sigma - Value Stream Mapping

All at one Website: http://bbasicsllc.com

===============================================

  STAY CONNECTED

To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. 

We'll also send you our free Special Report, "Five Change Initiatives for Personal and Company Success."

Your personal information will never 
be disclosed to any third party.

Manufacturing leaders have a responsibility to educate and train their team members. Help for developing a self-directed, World Class Manufacturing training program for your people is just a click away:

http://bbasicsllc.com/training-modules.htm

You are welcomed to print and share this bulletin with your manufacturing teams, peers, suppliers and upper management ... better yet, have them signup for their own copy at:

http://bbasicsllc.com/subscribe.htm

With the escalating spam-wars, it's also a good idea to WHITELIST our bulletin mailing domain via your filtering software or control panel: 

bizbasics@getresponse.com

This will help guarantee that your bulletin is never deleted unexpectedly.

Manufacturing Knowledge you’ll not find at offsite 
seminars nor in the books at Amazon.com

Lean Manufacturing - Balanced Scorecard 
ISO 9000:2000 - Strategic Planning - Supply Chain 
Management - MRP Vs Lean Exercises - Kaizen Blitz 
Lean Six Sigma - Value Stream Mapping

All at one Website: Good Manufacturing Practices

COMPETITIVE KNOWLEDGE MENU
(Click on any subject below):

Your company can reach its full potential in all aspects of the business. All you need is the right knowledge and training. You will find much of it  it here, at the Business Basics' Website:

Competitive e-Knowledge for anyone ... anywhere ... anytime
Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596