1. Competing with Time Leeds School of Business University of Colorado
Boulder, CO
Professor Stephen Lawrence

2. Sources of Competitive Advantage
Low wage rates
COST-
BASED
MGMT
Scale economies
Focused production
TIME-
FLEX
MGMT
Blackburn, “Time-based competition,’’ in Strategic Manufacturing, Moody (ed), Dow Jones-Irwin, Homewood IL, 1990.

3. Examples of Time Competition
Overnight package delivery
Web-based information retrieval
Online shopping, banking, and ecommerce
Self-checkout at grocery
Airline and rental car check-in
Lift ticket scanners
Fast food, ready-to-heat meals

4. Lead Time and Time Competition
Speed often is measured in terms of:
Quickness—measured by the mean
Reliability—measured in terms of range and shape of the lead time distribution
Lead time – important determinate of “speed”
Lead time means several things
important to define exactly

5. Lead Time Strategies Engineer to Order Make to Order Assemble to Order
designed to customer specification
Make to Order
standard design, produced only upon order
Assemble to Order
subassemblies produced, assembled upon order
Make to Stock
finished product made prior to order

6. Comparative Lead Times
Internal Leadtime
Customer Leadtime

7. Lean Concepts Lean Systems Goal of Lean Systems: SIMPLIFY!
produce only what is needed only when it is needed!
Goal of Lean Systems: SIMPLIFY!
Reduce inventories;
Reduce setup times;
Reduce information flows;
Fewer, more reliable suppliers;
Design products for manufacturability
Reduce WASTE of all types!

8. Sources of Waste Overproduction Waiting time Transportation
Unnecessary processes
Inventory
Motion and activity
Defects Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

9. Basic Elements of Lean Systems
Flexible resources
Cellular layouts
Pull production system
Kanban control
Small-lot production
Quick setups
Uniform production
Quality at the source
Total productive maint.
Supplier networks
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

10. Flexible Resources Multifunctional, cross-trained workers
General purpose machines
Study operators & improve operations
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

11. Standard Operating RoutineCh
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

12. Cellular Layouts
Group dissimilar machines into a manufacturing cell to produce family of parts
Work flows in one direction through cell
Cycle time adjusted by changing worker paths Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

13. Mfg Cell With Worker Routes
Enter
Worker 1
Worker 2
Worker 3
Exit
Key:
Product route
Worker route
Machines Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

14. Worker Routes Lengthened As Volume Decreases
Cell 1
Cell 5
Cell 3
Cell 2
Cell 4 Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

15. Kanban Production Control
Kanban card indicates standard quantity of production
Derived from two-bin inventory system
Kanban maintains discipline of pull production
Production kanban authorizes production
Withdrawal kanban authorizes movement of goods Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

16. Kanban Squares X X X X X X Flow of work Flow of information Ch 15 - 14
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

17. Small-Lot Production Requires less space & capital investment
Moves processes closer together
Makes quality problems easier to detect
Makes processes more dependent on each other Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

18. Reducing Setup Time Preset desired settings Use quick fasteners
Use locator pins
Prevent misalignments
Eliminate tools
Make movements easier Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

19. Inventory Hides Problems
Bad
Design
Poor
Quality
Lengthy
Setups
Machine
Breakdown
Inefficient
Layout
Unreliable
Supplier Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

20. Lower Levels Of Inventory To Expose Problems
Bad
Design
Poor
Quality
Lengthy
Setups
Machine
Breakdown
Inefficient
Layout
Unreliable
Supplier Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

21. Uniform Production Results from smoothing production requirements
Kanban systems can handle +/- 10% demand changes
Smooths demand across planning horizon
Mixed-model assembly steadies component production Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

22. Kaizen Continuous improvement Requires total employment involvement
Essence of JIT is willingness of workers to
spot quality problems
halt production when necessary
generate ideas for improvement
analyze problems
perform different functions Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

23. Visual Control Library shelf Work station Visual kanbans Tool board
Machine controls
Better
Good
Best
30-50
How to
sensor Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

24. Benefits Of Lean Systems
1. Reduced inventory
2. Improved quality
3. Lower costs
4. Reduced space requirements
5. Shorter lead time
6. Increased productivity
7. Greater flexibility
8. Better relations with suppliers
9. Simplified scheduling and control activities
10. Increased capacity
11. Better use of human resources
12. More product variety Ch
© 2000 by Prentice-Hall Inc, Russell/Taylor Operations Management 3/e

25. Benefits of Lean Systems
Order-to-finish
Company Product Old New
GE Circuit breakers 3 wks 3 days
Motorola Pagers 3 wks 2 days
Hewlett-Packard Electronic test equip 4 wks 5 days
Brunswick Fishing reels 3 wks 1 wk
Matsushita Washing machines hrs 2 hrs
Harley-Davidson Motorcycles 1 yr 3 days
``How managers can compete through speed,’’ Fortune, 2/13/89

26. Order Management Systems
Order planning,
Sales forecasting
Capacity planning
Order generation
Cost estimation
Pricing
Order receipt
Order prioritization
Scheduling
Fulfillment
Billing
Returns and claims
Post sales service
Shapiro, Rangan, & Sviokla, “Staple yourself to an order,” HBR, 1992.

27. Business Process (Re)Design
Identify your key processes
Analyze the steps involved in each
Improve for effectiveness and efficiency
Ask yourself: Where is the web?
Spell out the new process
Remember change management
Go deep, don’t stay shallow
How to reengineer your unit, HBS Press, 2000

28. Proven Strategies Start from scratch Wipe out approval
Don’t expedite current operations
Wipe out approval
Cut away layers of management
Form multi-functional teams
Increase communication
Develop clear but honest deadlines
Benchmark capabilities
Improve distribution
Close the sales-engineering-factory-warehouse loop
Develop a “time-based” culture
Change performance statistics