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

The role of time in competitive advantage

Key issues
1
What is time-based competition? How does time-based competition link to other initiatives? What is the purpose of time-based competition?

The role of time in competitive advantage Definition and concepts

quality cost

business advantage

Time-based competing time The timely response to customer needs

The role of time in competitive advantage Traditional opinion

Fast delivery

High quality

Low cost

The role of time in competitive advantage

prevention

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.

The role of time in competitive advantage

Improving quality

Cost increasing Reducing lead time

The role of time in competitive advantage Time-based initiatives

Finding sources and causes of breakdowns

Time reduction

Cost reduction

Quality improving

Finding sources and causes of delays

The role of time in competitive advantage Time-based opportunities to add value

Increased responsiveness to customer needs
deliver a product or service on time deal with customer queries and complaints on time High level of responsiveness to customer Customer royalty

Managing increased variety

Reducing overall lead-time Reducing product complexity Reducing process set-up time Production with more frequency and smaller batches Increased variety of products

The role of time in competitive advantage Time-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

The role of time in competitive advantage Time-based opportunities to add value

Improved return on new products
Cost or revenue Sales revenue Break-even point Total cost

Product life shrinking Time Product life end

The role of time in competitive advantage Time-based opportunities to add value

Reducing risk by relying less on forecasts

The role of time in competitive advantage Time-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

The role of time in competitive advantage Time-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.

The role of time in competitive advantage Limitations 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.

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

P:D ratios and differences

Key issues
1
What are P- and D-times?

Why are P- and D-times important to logistics strategy?

P:D ratios and differences

Using 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?

P:D ratios and differences Using time to measure supply chain performance
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

P:D ratios and differences Using time to measure supply chain performance
D-time (Demand time)
The time for which a customer is willing to wait to have their demand fulfilled
D-time

[ expected minimum , expected maximum ]

Manufacturers with short D-times face increased supply chain challenges compared with those who have long D-times.

P:D ratios and differences Consequences when P-time is greater than D-time
Assembly and test

Source

Make
Logistics lead time: P-time

Deliver

Customers order cycle

Order fulfillment: D-time P-time D-time

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

Time-based process mapping

Key issue
How do you go about measuring time in a supply chain?

Time-based process mapping

Stage 1: create a task force Stage 2: select the process to map Stage 3: collect data Stage 4: flow chart the process Stage 5: distinguishing between value-adding and non-value-adding time Stage 6: construct the time-based process map Stage 7: solution generation

Time-based process mapping Electro-Coatings case

Goods in Book job in Job set-up Degrease Etch Plate

Dispatch

Pack

Book out

Inspect

Polish

Heat treat

Track the process ( initial map, 12 steps)

Time-based process mapping

Electro-Coatings case
Goods in Take goods off lorry Put job on goods-in counter Sign for goods Write out route card Move goods to inspection Book job in Give job a job card Put route card into progress rack Move job to awaiting processing shelf Job set-up Plan who will do the job Move job on to shopfloor Sign off job card Go to jig store Check jigging Clean jigging

Degrease Wash all 300 components Place in tric vat Wait to cool Rinse Put 50 on to bar Wet blast Rinse Put 10 on to blasting jig Wet blast Rinse Move on to plating jig Put into oven to dry Etch Connect etching anode Place jig in HCTI bath Dip rinse Hand rinse Remove etching anode

Time-based process mapping

Electro-Coatings case
Plate Connect plating anode Strike and plate Drag out Rinse Remove plating anode Check chrome thickness Wait until near end of shift Remove staining Hot water rinse Air blast dry Heat treat Wait for oven to become available De-embrittle job in oven Remove job from oven Wait to cool down

Polish Wait for polish Polish Load on pegboard

Inspection Take to inspection Wait for inspection Micrometer and visual inspection Pack Book out Note packaging job Wait for packager Pack Dispatch Weigh packaging Fill in TNT documentation Place package on TNT pallet Enter TNT No. in system TNT collects at 5pm

Time-based process mapping

Electro-Coatings case
Total time 0.00 4.32 24.73 32.00 33.60 44.55 49.05 52.95 63.45 63.85 68.70 Goods in Book job in Job set-up Degrease Etch and plate Heat treat Polish Inspect Book out Pack Dispatch

Wasted time 3.91 20.00 5.50 1.00 8.75 0.00 1.95 9.50 0.00 4.00 0.00

Activity time 0.41 0.41 1.77 0.60 2.20 4.50 1.95 1.00 0.40 0.85 0.40

Time-based process mapping

Electro-Coatings case
1

People?
2

Methods?
4

Machines?

Materials?
3

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

Managing timeliness in the logistics pipeline

Key issues
1
When P-time is greater than D-time?

What time-based strategies and practices can help to improve competitiveness

Managing timeliness in the logistics pipeline Strategies to cope when P-time is greater than D-time
Strategy when P-time > D-time

Short term
Make-to-order Make-to-stock

Long term
Marketing Product development Process improvement

Managing timeliness in the logistics pipeline Practices to cope when P-time is greater 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

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

A method for implementing time-based practices

Key issue

How can time-based practices be implemented?

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 Map whole process Understand Find out activity time/wasted time Compare the P-time and D-time process Compare total activity time and D-time Identify steps that do not Identify unnecessary process steps add value to customer and large amounts of wasted time Identify large amounts of wasted time

Understand the causes of waste Feedback Change the process

Identify the causes of unnecessary process steps and wasted time

Choose solutions that will make the process more responsive Evaluation Adjustment

Review changes

Wholesalers or Customers Regional Wareh. Retailers or Suppliers Sales Comp.

Suppliers

Customers

DC

Production unit/Factory Warehouse Administrative Activities Order Order handling Invoice Lot Sizing Place Production Orders Payment Delivery Control

Local Warehouse

Sales Company

Administrative Activities Order Order handling Invoice Lot Sizing Place Production Orders Payment Delivery Control Customer

Physical Activities Physical Activities Receiving Receiving Transport Picking Transport Picking Storing Packing Packing Storin Transport Planning Transport Planning g

Production unit/Factory Warehouse Administrative Activities Order handling Lot Sizing Place Production Orders Delivery Control Physical Activities Picking Receiving Storing Packing Transport Planning

3-45 days

35 days 1-4 days

1 day 10-25 h

13-26 days 2-3 h

16 days

Total Lead Time = 70-130 days Best Practice = 28 days

1-2 days

F = Factory warehouse CW = Central warehouse N = National warehouse R = Regional warehouse

R N F CW F R N F F N CW F N

F = Factory without stock DC = Distribution Centre

F N N N R N N

R N

US ASIA

N N N