Cycle-time reduction

FICCI CE

Cycle-time reduction

Cycle-time is the time required to deliver a product or service to a customer. Long cycle-times not only prevent prompt delivery of product/ service to your customers, but also increase costs. One of the best ways to cut down on your cycle-time is to conduct activities in parallel and eliminate unnecessary waste times as demonstrated on the next slide.

FICCI CE

Broadly speaking, an organization competes on the basis of quality, cost, flexibility and time. These factors are complementary, even symbiotic. Today's discriminating customer demands world-class quality at a competitive price. When all the leading companies in an industry have achieved a high level of quality, a focus on quality alone cannot keep a company competitive.

Cycle-time reduction

FICCI CE

Quality then becomes a common expected factor, which must be complemented by a faster response time and flexibility. Increasingly, cost and quality are viewed as residuals or outcomes of competing on the basis of time and flexibility.

Cycle-time reduction

FICCI CE

In business, time is not infinite and limitless. Competing on the basis of time is defined to include the following:

using time as a strategic weapon

identifying market opportunities

responding to those opportunities before competitors do and

eliminating non-value-added activities.

Cycle-time reduction

FICCI CE

Time-compressed competitors measure the cycle time and lead time of all-important activities. Cycle time is their staple measurement. Cycle time in this guideline is defined as the duration from the initial expression of a customer's need to the point when that need is satisfied. This cycle encompasses the entire value-added chain of a company's product or service delivery process.

Cycle-time reduction

FICCI CE

The overall delivery chain is composed of several key work processes, which in this context are not functional departments, but are the logical outputs performed by groups of people from different functions. Some work processes and costs add value for customers, while others do not. For example, adding cost in the form of better raw materials or hand finishing a portion of the product adds value. But many overhead items, such as factory rework or the cost of idle assets, add cost but no value.

Cycle-time reduction

FICCI CE

Fast-cycle capability contributes to better performance across the board.

Costs drop because production materials and overhead do not accumulate as work-in-process inventory.

Customer service improves because the lead-time from receipt of order to shipment diminishes.

Quality is higher because the production cycle overall cannot speed up unless everything is done right the first time.

Cycle-time reduction

FICCI CE

Time advantage is also an organizational capability - a level of performance that management shapes and builds into the company.

The basic idea is to build on organizational operating systems that perform without the bottlenecks, delays, errors and inventories most companies live with.

The faster that information, decisions and materials can flow through a large organization, the faster the growth and development.

Cycle-time reduction

FICCI CE

In summary, time-advantaged companies enjoy one or more of the following benefits, relative to their peers: increased productivity; pricing flexibility; reduced risks; reduced costs and increased response capability.

Cycle-time reduction

1. Activities Performed in serial

2. Activities performed in parallel

FICCI CE