Post on 12-Jul-2015
transcript
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
Managing timeliness in the logistics pipeline
A method for implementing time-based practices
school.edhole.com
The role of time in competitive advantage
Key issues
11What is time-based competition?
22How does time-based competition link to other initiatives?
33What is the purpose of time-based competition?
school.edhole.com
The role of time in competitive advantage
Definition and conceptsDefinition and concepts
business advantagebusiness advantage
quality cost
timeTime-based competingThe timely response to customer needsschool.edhole.com
The role of time in competitive advantage
Traditional opinion
High quality
Fast delivery
Low costschool.edhole.com
The role of time in competitive advantage
Quality movement of 1980s showed that good quality actually reduces costs by such measures as:• designing the process so that defects cannot
occur;• designing the products so that they are easy
to make and distribute;• Training personnel so that they understand
the process and its limitations.
prevention
school.edhole.com
The role of time in competitive advantage
Improving quality
Reducing lead time
Cost increasing
school.edhole.com
The role of time in competitive advantage
Time-based initiativesTime-based initiatives
Finding sources and causes of breakdowns
Finding sources and causes of delays
Time reduction Cost reduction Quality improving
school.edhole.com
The role of time in competitive advantage
Time-based opportunities to add valueTime-based opportunities to add value Increased responsiveness to customer needs
Managing increased variety
deliver a product or service on time
deal with customer queries and
complaints on time
High level of responsiveness to
customer
Customer royalty
Reducing overall lead-time
Reducing product complexity
Reducing process set-up time
Production with more frequency and
smaller batches
Increased variety of products
school.edhole.com
The role of time in competitive advantage
Time-based opportunities to add valueTime-based opportunities to add value Increased product innovation
• Reducing new product development lead time Innovation through product design faster than competitors Competitive advantage
Improved return on new products• Putting new product earlier to market can
– Extend the sales life of the product– Charge a higher price– Won new customers– Build a high market share through building on the initial
leader
school.edhole.com
The role of time in competitive advantage
Time-based opportunities to add valueTime-based opportunities to add value Improved return on new products
Time
Cost or revenueSales revenue
Total cost
Break-even point
Product life end
Product life shrinking
school.edhole.com
Time-based opportunities to add valueTime-based opportunities to add value Reducing risk by relying less on forecasts
The role of time in competitive advantage
school.edhole.com
The role of time in competitive advantage
Time-based opportunities to reduce costTime-based opportunities to reduce cost Reducing working capital
• Eliminate unnecessary steps and wasted time• Focus: inventory (raw materials, work-in-process
goods and finished goods)
Reducing plant and equipment capital• Remove the equipment not employed in activities• Focus: racking and pallets formerly used to store
inventory
school.edhole.com
The role of time in competitive advantage
Time-based opportunities to reduce costTime-based opportunities to reduce cost Reducing development costs
• Elimination of rework and reduction of distracting superfluous projects
Reducing quality costs• Reducing lead time so as to accelerate feedback
and hence reduce time between error being made and problem being detected.
school.edhole.com
The role of time in competitive advantage
Limitations to time-based approachesLimitations to time-based approaches Limitation to the need for speed
• Not all operating environments require speed.• Not all customers value speed.
Limitation to degree of speed required• Time-based approaches are not about managing
exceptions but managing for speed reliably.
school.edhole.com
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
Managing timeliness in the logistics pipeline
A method for implementing time-based practices
school.edhole.com
P:D ratios and differences
Key issues
11What are P- and D-times?
22Why are P- and D-times important to logistics strategy?
school.edhole.com
P:D ratios and differences
Using time as performance measureUsing time as performance measure Time elasticity of price (Stalk and Hout, 1990)
• The price that customers are prepared to pay is often related to the delivery speed.
Performance can be measured by time• Do we meet the target the customer has set for us?
• How good are we compared with the competitors?• Is our performance getting better or worse?
school.edhole.com
P:D ratios and differences
Using time to measure supply chain Using time to measure supply chain performanceperformance P-time (Production time)
• The time it takes to pass a product or service through supply chain
• including the time needed to procure the longest lead time parts and the total manufacturing time
P-time = customer raises order deliver product to customer
school.edhole.com
P:D ratios and differences
Using time to measure supply chain Using time to measure supply chain performanceperformance D-time (Demand time)
• The time for which a customer is willing to wait to have their demand fulfilled
• Manufacturers with short D-times face increased supply chain challenges compared with those who have long D-times.
D-time [ expected minimum , expected maximum ] ∈
school.edhole.com
P:D ratios and differences
Consequences when P-time is greater Consequences when P-time is greater than D-timethan D-time
Source Make Deliver
Customer’s order cycle
Order fulfillment: D-time
Logistics lead time: P-time
P-time - D-time
Assembly and test
school.edhole.com
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
Managing timeliness in the logistics pipeline
A method for implementing time-based practices
school.edhole.com
Time-based process mapping
Key issue
11How do you go about measuring time in a supply chain?
school.edhole.com
Time-based process mapping
Stage 1: create a task forceStage 1: create a task force
Stage 2: select the process to mapStage 2: select the process to map
Stage 3: collect dataStage 3: collect data
Stage 6: construct the time-based process mapStage 6: construct the time-based process map
Stage 5: distinguishing between value-adding Stage 5: distinguishing between value-adding and non-value-adding timeand non-value-adding time
Stage 4: flow chart the processStage 4: flow chart the process
Stage 7: solution generationStage 7: solution generationschool.edhole.com
Time-based process mapping
Electro-Coatings caseElectro-Coatings case
Goods in
Book job in
Job set-up
Degrease Etch Plate
Dispatch PackBook out
Inspect PolishHeat treat
Track the process ( initial map, 12 steps)Track the process ( initial map, 12 steps)
school.edhole.com
Time-based process mapping
Electro-Coatings caseElectro-Coatings caseGoods inGoods inTake goods off lorryPut job on goods-in counterSign for goodsWrite out route cardMove goods to inspection
Book job inBook job inGive job a job cardPut route card into progress rackMove job to ‘awaiting processing’ shelf
Job set-upJob set-upPlan who will do the jobMove job on to shopfloorSign off job card Go to jig storeCheck jigging Clean jigging
DegreaseDegreaseWash all 300 componentsPlace in ‘tric’ vatWait to coolRinse Put 50 on to barWet blast RinsePut 10 on to blasting jigWet blast RinseMove on to plating jigPut into oven to dry
EtchEtchConnect etching anodePlace jig in HCTI bathDip rinseHand rinseRemove etching anode
school.edhole.com
Time-based process mapping
Electro-Coatings caseElectro-Coatings casePlatePlateConnect plating anodeStrike and plateDrag outRinseRemove plating anodeCheck chrome thicknessWait until near end of shiftRemove stainingHot water rinseAir blast dry
Heat treatHeat treatWait for oven to become availableDe-embrittle job in ovenRemove job from ovenWait to cool down
PolishPolishWait for polishPolishLoad on pegboard
InspectionInspectionTake to inspectionWait for inspectionMicrometer and visual inspection
Book outBook outPackPackNote packaging jobWait for packagerPack
DispatchDispatchWeigh packagingFill in TNT documentationPlace package on TNT palletEnter TNT No. in systemTNT collects at 5pm
school.edhole.com
Time-based process mapping
Electro-Coatings caseElectro-Coatings caseTotal time Wasted time Activity time
Goods in 0.00 3.91 0.41
Book job in 4.32 20.00 0.41
Job set-up 24.73 5.50 1.77
Degrease 32.00 1.00 0.60
Etch and plate 33.60 8.75 2.20
Heat treat 44.55 0.00 4.50
Polish 49.05 1.95 1.95
Inspect 52.95 9.50 1.00
Book out 63.45 0.00 0.40
Pack 63.85 4.00 0.85
Dispatch 68.70 0.00 0.40school.edhole.com
Time-based process mapping
Electro-Coatings caseElectro-Coatings case
1
2
3
4
People?People?
Machines?Machines?
Materials?Materials?
Methods?Methods?
school.edhole.com
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
Managing timeliness in the logistics pipeline
A method for implementing time-based practices
school.edhole.com
Managing timeliness in the logistics pipeline
Key issues
11When P-time is greater than D-time?
22What time-based strategies and practices can help to improve competitiveness
school.edhole.com
Managing timeliness in the logistics pipeline
Strategies to cope when P-time is Strategies to cope when P-time is greater than D-timegreater than D-time
Short term•Make-to-order•Make-to-stock
Strategy when P-time > D-time
Long term•Marketing•Product development•Process improvement
school.edhole.com
Managing timeliness in the logistics pipeline
Practices to cope when P-time is Practices to cope when P-time is greater than D-timegreater than D-time
•Control
•Simplify
•Compress
•Integrate
•Coordinate
•Automate
Optimizing throughput and improving process capability
Untangling process flows and reducing product complexity
straightening process flows and reducing batch sizes
Improving communications and implementing teams
Adding customer-specific parts as late as possible
Using robots and IT systems
school.edhole.com
Content
The role of time in competitive advantage
P:D ratios and differences
Time-based process mapping
Managing timeliness in the logistics pipeline
A method for implementing time-based practices
school.edhole.com
A method for implementing time-based practices
Key issue
11How can time-based practices be implemented?
school.edhole.com
A method for implementing time-based practices
Understand need to change
Importance of supply responsiveness to customer
D-time target that customer set
Total P-time
Understand process
Map whole processFind out activity time/wasted timeCompare the P-time and D-time
Compare total activity time and D-time
Identify unnecessary process steps and large amounts of wasted time
Identify steps that do not add value to customer
Identify large amounts of wasted time
Understand the causes of waste
Identify the causes of unnecessary process steps and wasted time
Change the process
Choose solutions that will make the process more responsive
Review changesEvaluation
Adjustment
Feedback
school.edhole.com
SuppliersRetailers orSales Comp.
CustomersWholesalers orRegional Wareh. Suppliers Customers
DC
school.edhole.com
Picking Packing
Transport Planning
Receiving Storing
Order handling Lot Sizing
Place Production Orders Delivery Control
Customer
Local WarehouseProduction unit/Factory Warehouse
OrderInvoice
Payment
Transport
Order handling Lot Sizing
Place Production Orders Delivery Control
Picking Packing
Transport Planning
Receiving Storing
Order
Invoice
Payment
Transport
Administrative Activities Administrative Activities
Physical Activities Physical Activities
Sales Company
Picking Packing
Transport Planning
Receiving Storing
Order handling Lot Sizing
Place Production Orders Delivery Control
Production unit/Factory Warehouse
Administrative Activities
Physical Activities
1-2 days 2-3 h
3-45 days
10-25 h1-4 days
1 day35 days 13-26 days 16 days
Total Lead Time = 70-130 days
Best Practice= 28 days
school.edhole.com
F
•
F = Factory without stock DC = Distribution Centre
FF
F
FCW
F = Factory warehouse CW = Central warehouse N = National warehouse R = Regional warehouse
N
R
N
N
N
NN
N
N
N
NF
R
N
N
•
•
N
N
F
RR
R
CW
US
ASIA
school.edhole.com