In the 80's companies started:

2. Compressing time to manufacture and distribute their products Cutting time to develop and introduce new products Increasing the technological sophistication of products Reducing cost Broadening their product line Covering more market segments In the 80's companies started: These innovative companies are becoming time-based competitors.

3. Zero in on time consumption as the critical management parameter Define customer focus also in terms of time Direct their value delivery systems to their most attractive customers, and drive their competitors to the less attractive customers Set the pace of innovation in their industries Baffle their competitors! Characteristics of Time -based Competitors The journey to becoming a time-based competitor begins with a vision of what could be.

4. Close supplier relations Total QC Simplified production flows Employee decision making on the factory floor Kanban system of component flow on shop floor Just-in-Time (JIT) Originated in Toyota (Toyota Production System) and was widely copied in Japan "Born of the need to make many types of automobiles in small quantities with the same manufacturing processes"

5. Simplify Balance Collocate Reorganize reporting and work control Employ better metrics Streamline These are the keys to to avoiding wasted time when no value is being added

6. "A business is a collection of systems for providing value to customers. The company's resources should be organized to support the value adding process" Time-based organizations are very different from functional- or control-oriented ones. Consider what parts of the company add value to the product the customer is buying and what parts just -- plan -- pass data -- mediate -- administrate -- raise questions -- record Ideas "Senior management thinks it is lubricating the process by adding the support activities -- it is really slowing down the working."

7. Complexity in a US consumer electronics company -- 35-55 people -- 8-11 functional heads -- 5 locations, 10 buildings, 3 countries -- 100 inter-dependent output points -- changing market Delays possible everywhere and changes trigger even more chain reactions "Feature creep" leads to delays Support functions gate key activities like design spec, vendor selection, prototype approval, etc. Product Development Support functions may add little to the direct monetary costs to the program, but they add significant time costs, by delaying key sequence resources.

8. Extreme collocation Program managers average 10 years in position, with 6 month average product development time --> 20 program experiences --> Compare US managers average of 18 months in position, and 1 year product dev time = ~1 program experience Product Development in a Taiwan competitor Fast innovators are are structured for ease of coordination and speed of execution Slow innovators are are structured for functional control, cost efficiency, and risk avoidance, resulting in multiple hand-offs, errors, slowness and no accountability for program failure ( false local metrics substitute for the real global ones).

9. In time-based organizations people think of themselves as a part of an integrated system, a linked chain of operations and decisions that continuously delivers to the customers Main sequence activities are those that directly add customer value in real-time. --> these must be organized into a clear consistent sequence Support work is needed to accelerate the main sequence, but this should be performed off-line either as preparatory work, or concurrently with the main sequence Segregate support and main line in different groups (so that they do not compete for time), but locate near each other Do not organize and control around departments, functions, and skill sets How Work is Structured Don't hold up the main sequence. "Time compression requires substantive change; it cannot be gained simply through elegant thinking and computer links."

10. Off-line activities examples -- Technology refinement -- Credit checks -- Pricing -- Scheduling Turn in-line into off-line -- Invest in preparation -- Invest in technology development -- Have libraries of processes worked out Turn in-line activities into parallel activities Off-line Versus In-line Free the main sequence of support activities, and never place both in the same group!

11. -- design systems more carefully -- do staff work right -- invest in on-line data bases -- understand linkages throughout the system Upstream-Downstream • To get a time-compressed flow of work, upstream planning is needed • -- smooth interfaces to pass on work • -- marketing must get its story right with product planning DOWNSTREAM UPSTREAM Where problems surface Where you need to fix them Continuous flow through the main sequence is the only way to reduce time.

12. Create and share information spontaneously (early and rapidly) "A company that works well is something like a communication network, with each station performing a particular role and each sending and receiving messages continuously." " Many companies ... rely less on network learning and more on additional structure and buffers. ... They will increase the number of formal control points .. stock more inventory .. add slack capacity." --> All of this is costly and will slow down the company. Information Sharing The solution to achieving greater variety of product and flexibility and fast response is closed loop teams.

13. These teams -- include everyone necessary to make the deliverable flow -- include all needed functional people and decision makers -- are self-scheduling -- own to one objective: to make the deliverable flow on time -- are empowered to act -- have short lines of communication Closed Loop Teams Deja vu? Yes, long before DICE or tiger teams or any other buzz words were invented.

14. These teams solve the problem of variety and time, because -- they are close to the problem and see it -- they can change the current process to solve the problem -- they can re-structure their own organization to attack the problem of queues and departmental wait times -- they can act more concurrently by sharing information earlier and customizing their data bases for sharing -- their goals are clearly defined and they desire the achievement and know they can go after it Closed Loop Teams "By bringing people from product engineering, manufacturing, marketing and purchasing together throughout the development process, and by giving them authority to make real technical and business decisions, these companies have cut significant time and expense out of bringing new products to market."

15. Ex. Kelly Johnson at Lockheed of U-2 fame -- bypasses organization's regular practices -- circumvents rules rather than re-writing them -- does not do most of the organization any good: in fact slows them down further -- unsustainable "Skunk Works" " Most organizations, while desiring the benefits, will not pay the price of revised methods and procedures for setting up a Skunk Works type of operation. They will not delegate the authority to one individual, as Lockheed did in my case from the very first Skunk Works."

16. These teams can also be used -- for routine business problems -- to attack undefined problems that crop up from time to time Closed Loop Teams "Putting together teams without changing the embedded work routines and management practices will not compress time."

17. "Time is the best diagnostic measure and design parameter available" "It is cost that doesn't add value that takes up most of the time in business" Measuring Performance

18. Physical measures (objectively measurable) Customer measures Cost is a bad measure -- some costs add value, some detract from value, some add zero value cost includes arbitrary allocations and deferrals: accountants can juggle with these quite creatively -- cost need not measure performance, it may measure utilization of sunk costs Rules of Measurement Physical way of looking at a business gives more insight into how to improve results.

19. Once physical activity is laid bare the right questions can be asked. Examples: why do this step twice? why are certain tasks serial not parallel? why does this process have a 50% yield? why invest in speeding process A and let the stuff then wait at the next process B? Time & Cost are strongly related but looking at cost first doesn't tell anyone where to save time. Time Mapping Cost reduction Time reduction Time reduction Ex. You can actually create bottlenecks by downsizing! Cost reduction

20. Time and Quality measures usually reinforce each other: --> error rate --> yield Cycle time --> rework A manager can use Time to locate quality problems by a time-wasted analysis Time Mapping (contd.)

21. Managers know the org chart and the review dates but not how to approach fixing the system that does not perform We don't need an engg systems flow chart with hundreds of stocking points, flows, and decision points but a few essential sensitive interactions that make or break it then assimilate and interpret them to find the problems System Mapping explains contradictions helps consensus commits function heads because they understand, revise and design the new system provides inspiration for lateral thinking and creative analysis of the problem Interaction Map of Company

22. Examples lead time cycle time machine uptime product yield inventory turnover Find yours: example how sales people spend/should spend their time You can be wrong with traditional metrics: examples backlog does not mean rising demand necessarily %late shipments does not give a clue to your efficiency Metrics

23. Example : New Product Test Cycle time reduced from 2 months to 3 weeks for all products delay cause was wait time due to non-coincident arrival of information required to conduct test One division had "bumping" rights previously; now all are happy with the standard 3 weeks Cumulative Elapsed Time Bar Day 1 Day n (shaded region shows time when work is actually being done)

24. Another book: "Continuous Process Improvement" Simplifying Work Flow Systems George D. Robson The Free Press $ 35