Relationship Between Cycle Time and Quality

High High quality reduces the need for non-value-added

time to check and fix.

Short cycle times reduce opportunities to create

quality problems.

Quality Problems

Low
Short Cycle Time Long
 Cycle Time
Commitment to strengthen customer satisfaction by continuously
Improving Responsiveness and Increasing Utilization.

New Product
Development

Offer
Preparation

Customer Order
Fulfillment

Minimize Elapsed Time & Consistently Meet Delivery

Commitments Associated with Every Business Process
 The Bottom Line...
Business
Goal
Revenue
Cu
s tom
Improved er
Products & Services S ati
sfa
Increased ct ion
Responsiveness

Today
Waste Elimination Cost
Inventory Reduction
 Relationship to Business Success

Improve Improve
Products Responsiveness

Customer Revenu
Quality Cycle Time
Satisfaction e
Cost

Eliminate Increase Asset

Waste Utilization
 Relationship to Business Success

Improve Improve
Products Responsiveness

Permits Pricing First to Market

Options
Become Preferred Fastest to React
Source to Demand Shifts
Retain Customer Meet Schedule
Loyality Commitments
Customer Revenu
Quality Cycle Time
Satisfaction e
Eliminate Unnecessary Effective Change Cost
Activities Managment
Eliminate Scrap ReduceComplexity

Prevent Rework Reduce Working Capital

Eliminate Increase Asset

Waste Utilization
 Underlying Concepts

1. Focus on the Customer

2. Emphasize Speed
3. Measure Performance
4. Design Robust Products/Services
5. Emphasize Prevention
6. Optimize The Process
7. Eliminate Waste
8. Challenge Mindsets
9. Improve Continuously
10. Empower Teams
 Focus On The Customer

Value Is Measured from the

Customers Perception

Quality x Service

Value =
Cost Time
x
Focus On What Should Be Done
to Gain Greatest Impact on Value
 Focus on the Customer
Recognize the Total Supply Chain - Both External and Internal

Supplier
Customer
Supplier

Supplier
Customer
Supplier

External Internal Exteranl

 Focus on the Customer

Experiential Exercise

Who Are Your External or What Would they Say Is of Most Importance?
Key Customers Internal? Quality Service Cost Time

Indicate How You Can Influence the Value of Your

Products or Service to Your Key Customers
(1=Greatest impact; 2=Next Most Important; etc.)
 Emphasize Speed
Long Cycle Times
Lead to High Complexity

Long I.e. Long product design cycle times

result in a large number of designs
in-process that must be managed
on a daily basis
Cycle Time

Short
Low Complexity High
Short Cycle Time Long

Indequate Info Systems

Organization Problems

Wasted Activities

Lack of Standards
Long Cycle Times

Poor Suppliers
Emphasize Speed

Hide The Real Problems

Lack of Training

Communication Problems
 Emphasize Speed

Examples of the Impact of Speed on Business Structure

Offer Installation Support

Offer preparation
reduced from
reduced from 2-day
one week to one day
face-to-face communication
with customer to
online support via extranet
Network design and
installation
reduced from
4 weeks to 1 week
 Measure Performance

What Gets Measured

Gets Done!

If You Don`t Know where You Are, how

Can You Get to where You Want to Be?

People Will React Consistant

with how they Are Measured
 Measure Performance
Most Management Teams Do not Have Appropriate Performance
Measures Available to Manage Customer Satisfaction,
Quality, and Cycle Time for Key Buisness Functions.

Quality, Cycle Time and Cost Commitments

20%

Service Design Procedural Out- Operations

Concepts Methods sourcing
Strategy

Performance Measures 80%

 Design Robust Products/Services

Two
Two main
main considerations
considerations ::
Low sensivity to factors difficult to control
Performs over life cycle without variation
 Design Robust Products/Services
Parameter Design
Output
characteristics
output characteristics
Distribution of

Parameter
Normal distribution of
parameters
Design Robust Products/Services
Parts Reduction Examples

In average Ford car 30,000

components to 22,000
At Philips since 1984
CD Player 75%
VCRs 55%
Tuners 45%
In Swatch watches 150 Amplifiers 40%
components to 51
 Design Robust Products/Services
Task Number Reduction
Function Task
Consolidation
Task A B C D E
(integration)

I I

II
5 tasks
III II+III+IV
consolidated
into 3 tasks
IV

V V

Consolidation
A D+C D+E
of functions

5 functions consolidated into 3 functions

 Eliminate Waste

Continuously
Reduce
Variances

im it
L
pper Value
U
arget Limit
T er
L o w
 Optimize the Process

Suppliers Customers
Requirements Requirements
External
Internal
Process Internal
External

Inputs Outputs

Measure

Understand Customer Needs & Supplier Capabilities

Understand Process Methods and Techniques
Apply MBQA to Optimize the Performance
Measure Performance and Continuously Refine
 Optimize The Process
...Into a pure customer demand driven production.

Hard-/
Software/ Planning/Design/Testing
Skills
Inventory Know-
Final lege Base
Installation

Purchased Parts/ Sub- Support

Services Assembly/
Testing
 Optimize the Process

Hard-/ Central
Planning Work-In- Design Testing/ Installa-
Software/ Data Base
Progress Adapting tion
Skills
Inventory

Feedback
Support
Purchased Work-In- Testing/
Products/ Progress Adapting
Services

Testing/
Store Purchased Adapting
Products/
Work in Services
Progress
 Eliminate Waste

Two Major Events

Identify & Minimize

Resolve Activities
Sources that Add
of Little or No
Variances Value
 Improve Continuously
There is always something that can and should be done to improve
performance!
Getting Better
Every Day

Performance

Time

BREAKTHROUGH
 Empower Teams
Problem Solving

100% Management Management

95%

Management
Workers Teams

15%
Workers Workers

Problems Traditionally MBQA

Observed Responsible Responsible
for their for Their
Correction Correction
 Emphasize Pevention
The Cost of Defects when they Are:

Customer Detected

Prevented Initially Detected

1X 10X 100X

Process
 Emphasize Prevention

Traditional Launch
Company
Design Changes

MBQA
Company

-12 -6 -3 +3
Time (months)
 Emphasize Prevention
Experiential Exercise
If You Want to Guarantee no More than 1 Failure In 1000
End Products, how Many Failures Can You Tolerate at
the First and Second Level of the Supply Chain?
Second Tier First Tier
A11 A1 End Product/Service

A12 A2

A13 A3

A14 A4

A15 A5 1:1,000
Acceptable Failure Rate (Failure:Units)?
 Empower Teams
Example -- Product Design Teams
Customers

Marketing

R&D

Engineering Cross-
Functions
Enterpris

Functional
Manufacturing Product
Team
Purchasing
e

Finance

HR

Suppliers
 Empower Teams
Structure of Design Teams
Weak Team Structure Strong Team Structure
Fuctional Product Funtional Product
Groups Team Groups Team

= Full time Person =Part-time Person

 Empower Teams

Experiential Exercise

What Is our Present Approach to Solving Problems?

Indicate in Pie Chart the

% of Problems Being Resolved by:

Management Personnel
Individual Employees
Problem Solving Teams