om lec8 quick respose manufacturing system
TRANSCRIPT
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Prof. Raza KhanOperations ManagementLecture 41
Operations
Management
Quick ResponseManufacturing/Management
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Prof. Raza KhanOperations ManagementLecture 42
What is Quick Response
Manufacturing?Recently popularized strategy of Time BasedCompetition (TBC)
Using speed to gain competitive advantage
Can be applied to any business (banking, insurance,hospitals, )
Our focus is on Manufacturing companies This specific application of TBC is called
Quick Response Manufacturing (QRM)
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Prof. Raza KhanOperations ManagementLecture 43
What is Quick Response
Manufacturing (contd)Quick Response Manufacturing implies Rapid development and introduction of new products
Rapid delivery of existing products
Potential for Reduction of Lead Times for allactivities
50%, 75% or even 90% reduction!
Opportunitiesand Challenges!
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Prof. Raza KhanOperations ManagementLecture 44
Benefits of Quick Response
InnovationShorter lead times to bring new products to market has many
advantages:
Beating the competition to market
Hitting the market at the same time but with newer technology
Plus doing it in less time with fewer resources!
Concept MarketCompetition
QRM CompanyConcept Market
2010 20122011
Concept Market Competition
QRM CompanyConcept Market
2010 20122011
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Prof. Raza KhanOperations ManagementLecture 45
Benefits of Quick Response
ProductionAim is to shorten Lead Times to manufacture existing
products. Why is shortening lead times key tocompetitiveness?
Obvious reasons: Fast response when customers have urgent need
Happy customers mean more business
Less obvious, but Fundamental Reason:Group Workshop
What are all the types of Waste in the system (whole system)due to (because) of long lead times?
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Prof. Raza KhanOperations ManagementLecture 46
The QRM Detective Learning one question to ask
Results of asking the question
Hence, less obvious but fundamental reason forimplementing QRM Higher quality, lower WIP, more productivity
Elimination of all forms of waste
Improved integration of processes, and better work environment
Lower total operating cost
Key Idea: Searching for ways of squeezing out time leads to all theimprovements
Benefits of Quick Response
Production (contd)
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Prof. Raza KhanOperations ManagementLecture 47
Results of QRM Strategy Companies become formidable competitors!
Typical Sales Pitch: Well deliver the product that you want (customized)
Well deliver it faster than anyone else
Well beat or match anyone elses price
Our quality will be second to none
There is no room for competition to get in!
Typical Financial Results: Growth Rate: three times the average for that
industry
Profitability: twice the average for that industry
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Prof. Raza KhanOperations ManagementLecture 48
QRM Principle
Requires major organizational restructuring
Why?
Need to understand how most companiesare organized today
QRM Principle:
Find whole new ways of completing a job, with a
primary focus on minimizing lead time
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Prof. Raza KhanOperations ManagementLecture 49
The Response Time Spiral in Office
Operations Long LeadTimes
Inaccuracy in
Planning
Safety Time
Inserted
Large No. of
Active Projects
Hot Job
Expediting
Regular Jobs
Delayed
Depts. Need to
Plan Ahead
Past Performance
Problems
Loss of FocusUnacceptable Lead
Times, or Planning
Errors
Additional Loss of
Focus
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Prof. Raza KhanOperations ManagementLecture 410
Eliminating the Spiral Cant be controlled: must be killed!
Focus on reducing the consumption of time
throughout the system
Requires major paradigm shift in managementthinking
QRM Principle:Find whole new ways of completing a job,
with a primary focus on minimizing lead time
Cost-Based Time-Based
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Prof. Raza KhanOperations ManagementLecture 411
Cost Based ThinkingMinimizeCost
Break into simple
(specialized) steps
Low Skills,
Low Wages
Functional
Departments
Managers
Minimize Cost
Minimize Resources,
Maximize Efficiency,
Maximize Utilization
Ensure Backlog,
Batching
Long FeedbackLoops,
Backtracking,
Expediting
Poor Quality,
Long Lead Times!
High Cost
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Prof. Raza KhanOperations ManagementLecture 412
Seven Key Principles for RestructuringYour Company for Quick Response
1. Organization Functional Product-Oriented
Locate all resources
needed to complete a
given product together:
Work cells
2. Structure Hierarchical,Multi-Level
Flat, Multi-
TeamMany Cell-based
teams
3. TeamMembers
Narrow,Specialized
Cross-Trained
Skills needed toperform multiple
tasks in their cell
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Prof. Raza KhanOperations ManagementLecture 413
Key Principles (contd)4. Management Top down
Control
Team
Ownership
Ownership of entire
delivery process by cell-
based teams
5. Scheduling Complex,Centralized Simpler,Local
Teams take
responsibility forplanning and
scheduling their
resources and jobs
6. Flow Goal isEfficiency
Keep jobs
moving
Move jobs to
next operation as
soon as
completed
7. Improvement LocalizedEffects
System-
wide Effects
Teams now
discover ways to
reduce lead time,
improve quality
and productivity
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Prof. Raza KhanOperations ManagementLecture 414
QRM Principle Organize around main sequence of processing steps
needed to serve the FTMS (Focused Target MarketSub-segment)
Create a Quick Response Office Cell (Q-ROC)warning: do not re-organize entire company atonce. Q-ROC: A closed loop, co-located, multi-functional, cross-
trained team that can complete all the processes needed for theproduct.
This is office version of a cell