02. value time flexibility
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Providing value to the
customer
Operations Function is the Key
Performance
Value =Cost
(the above Value Equation was developed
by Procter and Gamble)
Performance = 1 x Quality + 2 x Speed +
3 x Flexibility
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Quality : How well goods or services meets /exceeds customer expectations.
Speed : Time needed to deliver the goods /services.
Flexibility : How easily firm can change theproduct or process to meet specific needs of
the customer.
1 2 3 are weightages ( will vary from situationto situation related to product & market )
Cost Direct Indirect
Objective Subjective
Cost to Acquire use and dispose of the goods
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Quality - you will study in detail when you study
..TQM
Understanding Time [ or Lead Time ]
* Speed * Response Time * Quickness Etc
The Interval between start and end of any
activity or series of activities
in Lead Time : Mean / Average
: Range: Variability
All are important to customers
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Categories of Lead Times
Design Lead Time
From Product Concept to design
From design to prototype
From prototype to job one
Also
From product introduction to product
revision
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Sourcing Lead Time
Supplier Selection
Supplier certification / registration
Indenting . Order Processing
Order receipt by supplier till despatch
Transit time.
Receipt / Inspection / Taking into stock
Response time to attend to problems and
revision requests.
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Manufacturing Lead Time
Order Registration.
Translation to works order.
Processing from start to end.
Putting to distribution system.
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Distribution Lead Time
Re Packing
Despatch
Transit
Installation / Commissioning
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Complaint Attending Lead
Time Registration of Complaint
Analysis
Initiating Action
Attending to complaint
Getting Feed Back
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Total Product Delivery Lead TimeIs the sum of
Design Lead Time
Sourcing Lead Time
Manufacturing Lead Time
Distribution Lead Time
Depending on the situations and inventory policy, some
or all components of lead time will be present.
TPDLT has to match customer lead time that is the
time he is ready to wait for the given product or
service. Here againwe need to consider competitors.
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Time to Market
Time taken to conceive, design, produce and
deliver a new product.
Time to product
Time taken to deliver to a customer an existing
product ( from order to delivery).
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Two time based strategies
1. Fast to market. 2. Fast to product.
Fast to marketThis is a strong and effective strategy
especially in fields where
Technology or Fashion advancement is. fast.
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Fast to Product
Is also an effective strategy to compete in market
where the customer is not ready to wait once he
decides.
This strategy incidentally also improves
performance in quality, inventory, flexibility and
cost. [ how? ]
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Lead Time to Market
Product OldTime
NewTime
Honda
AT & T
Navistar
Hewlett Packard
Cars
Phone
Trucks
Printers
5.0 years
2.0 years
5.0 years
4.5 years
2.0 years
1.0 years
2.5 years
22.0
months
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Lead Time to Product
Product Old Time New Time
General Electric Circuit breaker
boxes
3 Weeks 3 days
Motorola Pagers 3 weeks 2 hours
Hewlett Packard Test equipment 4 weeks 5 days
Brunswick Fishing reels 3 weeks 1 week
Matsushita Washing machines 360 hours 2 hours
Harley -Davidson Motorcycles 360 days < 3 days
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Time based Competition in Europe Olivetti (typewriter production) Through put
time reduced from 20 days to 3 days.
Michelin (steel cord): Setup time reduced by 90percent.
Uno a Erre (world leader in gold jewellery)Production lead time reduced by 90 percent.
Fiat Aiazione (parts of aircraft engines): Leadtime reduced by 50 percent.
Innocenti S. Eustachio (manufacturingequipment)Lead time reduced by 30 per cent.
Europa Metalli (world leader in non ferrousmetals) Set up time reduced by 70 percent.
[ these are examples of 1990s think now ]
time an enigma ?
Fl ibili
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Flexibility
An Operations Strategy
The ability of an OM System to
respond quickly to changes.
Measured by range and time to
externally and internally generated
changes.
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Externally Generated
Changes in Product
Design, volume, Mix,
Life Cycle ,
delivery Time , etc..
Internally Generated
Machine Breakdown
Absenteeism
Materials Connected
Issues
Process and technology
development
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Types of Flexibilities
Mix Flexibility Range.
products/volumeChange over flexibility From one product to
another
Modification flexibility Minor modification in
product
Volume flexibility Increase or decrease in
volume
Rerouting andprogramme flexibility
Due to breakdown andother problems
Material flexibility Variation in type and
quality of materials
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