Going beyond lean: focusing on time, not cost, can save your company a bundle

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Author: Rajan Suri
Date: Apr. 2010
From: Industrial Engineer(Vol. 42, Issue 4)
Publisher: Institute of Industrial and Systems Engineers (IISE)
Document Type: Article
Length: 3,135 words

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A CORE MISSION OF THE INDUSTRIAL engineering profession is to develop and promote application of techniques for productivity improvement. To support this mission, we train industrial engineers to apply the tools best suited to each circumstance. Although lean manufacturing has been very successful, lean tools may not work everywhere.

The Center for Quick Response Manufacturing has dealt with more than 200 partner companies during the past 15 years. The following issues surfaced repeatedly:

* The origins of lean are in the Toyota Production System with high-volume production. Companies today offer an increasing variety of product options and even custom-engineered products. Our partners could not see how to apply lean methods in such cases.

* Lean tools eliminate variability. For strategic reasons, some of our industrial partners did not want to eliminate certain types of variability.

* Executives wondered what their competitive edge was if everyone was implementing the same lean strategies.

* As researchers, we were thinking that the Toyota system was designed more than 40 years ago. How can we forge new ground for the IE profession if we focus only on refining and implementing 40-year-old methods?

These considerations led us to develop quick response manufacturing (QRM), a company-wide strategy to reduce lead-times. Externally, this involves rapidly designing and manufacturing products for specific customer needs. The internal aspect focuses on reducing lead-times for tasks within the enterprise, such as the time to approve an engineering change. Implementations have shown that reducing external and internal lead-times results not only in quick response, but improved quality and lower cost. Using QRM, companies with high-variety and custom products have reduced lead-times by 80 percent to 90 percent. Lead-time and cost reductions enabled companies to compete against low-wage countries.

If you already invested in strategies such as Six Sigma or kaizen, QRM does not require that you dismiss them. Instead, QRM builds on and unifies these strategies under one overarching goal--reducing lead-time. If you are implementing lean, QRM will enhance your lean program. Core lean tools such as takt times, standard work and level scheduling stem from repetitive production and eliminate operational variability. To examine this approach, two types of variability are defined:

* Dysfunctional variability caused by errors and poor systems. Examples are rework, machine breakdowns and constantly changing priorities.

* Strategic variability introduced by a company to maintain its competitive edge. Examples are serving markets with unpredictable demand, offering a high variety of options and custom products for customers.

The QRM approach is aligned with lean in getting rid of dysfunctional variability. However, you may not want to eliminate strategic variability if it is your competitive advantage. In QRM you do not eliminate strategic variability; you exploit it. Hence, QRM takes lean strategy to the next level (See Figure 1), increasingly appropriate for today's markets.

Challenges to reducing lead-time

Companies understand the need for quick response. But there are misconceptions about how to reduce lead-times. QRM is based on the following four core concepts: realizing the power of time, rethinking organizational structure, understanding and exploiting system dynamics,...

Source Citation

Source Citation
Suri, Rajan. "Going beyond lean: focusing on time, not cost, can save your company a bundle." Industrial Engineer, vol. 42, no. 4, Apr. 2010, p. 30+. Accessed 18 Apr. 2021.
  

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