OM Lec8 Quick Respose Manufacturing System

8/13/2019 OM Lec8 Quick Respose Manufacturing System

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Prof. Raza KhanOperations ManagementLecture 41

Operations

Management

Quick ResponseManufacturing/Management


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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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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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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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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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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


Production (contd)


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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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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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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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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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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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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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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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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

OM Lec8 Quick Respose Manufacturing System

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