This document discusses how focusing on reducing lead times through applying lean principles like Quick Response Manufacturing (QRM) can provide significant competitive advantages for businesses. It provides examples of companies that reduced lead times from 75 days to 4 days and from 3-5 days to 1 day for quotations. Shorter lead times allow delivering orders before competitors can even provide a quotation. The document advocates adopting a time-based focus rather than a cost-based focus and reorganizing production around cells rather than functions to reduce lead times through all aspects of the business from design to shipping. Implementing QRM and focusing on lead time reduction is presented as a company-wide strategy that can provide opportunities to gain an advantage over competitors.

1. Competing on Time
-
World Wide
HAN Lean-QRM Center
HAN University of Applied Sciences
Vincent Wiegel

2. What if…
Your offers would reach your customer
24 hours after the enquiry?
Your lead times including design &
engineering would be 4 rather 50 days?
What would be the implication for your
business?!

3. Potential: 50-90% faster
• National Oilwell Vargo: from 75 to 4 days
– In addition: 99% defect free & part costs -30%
• BoschScharnieren: from 3-5 days to 1 day for quotations
• Bakeware producer: production leadtimes from 55 days
to 27 days
• Coil producer: from 47 hours to 1 hour (including
engineering!)
• All inluding customer specific engineering/design/…
Imagine: Delivering the order before your competitor
even has made a quotation!

4. Response time spiral
Long lead times
High WIP
and Inventory
Hot jobs,
Expediting
Safety Time
inserted
Inaccuracy of
Planning
Regular jobs
delayed

5. Leadtime
0 % 100%
Utilization
The Miraculous Effect
of Spare Capacity

6. From burden to advantage
Using variability such that it does not
interfere the production flow
Type
variability
Strategy
Rush order, replanning
Material shortages
Wrong specs
Many product-options
Customer specific
Fast adaptation
Exploit
Reduce
Dysfunctional Strategic
Copyright © 2010 R. Suri – used with permission

7. From burden to advantage
Using variability such that it does not
interfere the production flow
Type
variability
Strategy
Exploit
Reduce
Dysfunctional Strategic
Copyright © 2010 R. Suri – used with permission
QRM:
competitive
advantage

8. Cost versus Time
Order entry
5 days
Design /
Component
production
12 days
Order processing /
Assembly
9 days
Shipping 9 days
3 hrs 12 hrs 2.5 hrs 2 hrs
Total Lead time: 35 days
Time-Based (QRM) Focus
Processing
time
Lead time
Cost-Based Focus
Copyright © 2010 R. Suri – used with permission

9. Manufacturing Critical-path Time

10. 4 key components
• Lead time results from
complex interaction
between men, materials
and machines
QRM for
• Material planning
• Production (POLCA)
• Supply chain
• Office
•Cells vs functions
•Multi-skilled vs specialists
•Ownership at cells
•Time instead of efficiency
as performance indicator
• Lead time as driving factor
for decisions
• But what is lead time
• It’s impact on the business
I Focus on
Time
II Organisation
III System
dynamics
IV
Company
wide
strategy

11. Focus on opportunity / threat
Define the focus of the QRM project:
focussed target market segment
Select processes using criteria
• Preferably long lead times, high
levels of inventories/WIP
• Large problems with quality or
delivery (frequent rush jobs)
• Significant added value
• Complex flow through the business
(order passes through many
functional departments)

12. Thank you for your attention
To find out more about Lean & QRM
http://www.han.nl/lean
http://www.slideshare.net/
Succesvol LeanIt’s about time