Increase your velocity: Focus on reducing cycle times

Time has a major impact on the bottom line.
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The lean journey is usually approached incorrectly. Many start by implementing 5S but this soon becomes a major housekeeping event instead of supporting improved velocity. Focus on cycle times. Why? Because they have a huge impact on the bottom line.

Long cycle times are a symptom of poor manufacturing performance and high non-value added costs. Focus on the continuous reduction of all cycle times. Success requires a specific management style that emphasizes proactive problem solving rather than firefighting. Management assumes a coaching role, bringing everyone into the process and supporting them in their efforts to improve productivity, customer satisfaction and profitability.

Product build/test cycle time is an important element of the production flow process and provides an excellent focus for an improvement program. Time is calculated as the hourly work content through the longest path of the lean manufacturing process. In the sequential production process, product build/test cycle time is calculated by starting at the end of the process and following the longest, cumulative, single path back, regardless of whether it traces the main path or trails off to a sub-assembly path. Many manufacturers have increased their on-time delivery and product profit margins by implementing a build/test cycle time reduction program. The main focus is the elimination of all non-value-add activities along the path.

In a Harvard Business Review article by Joseph Bower and Thomas Hout, the authors make a good case for “fast-cycle capability for competitive power.” They observe people in fast-cycle companies think of themselves as part of an integrated system, a linked chain of operations and decision-making points that continuously delivers value to customers. Individuals understand how their activities relate to the rest of the company, how work is supposed to flow and how time is used.

This way of thinking is second nature in many small companies. People find it easy to stay focused on creating value because almost everyone works directly on the product or with a customer. Policies, procedures, practices, or people that interfere with getting the product out the door are easy to see and can be dealt with quickly.

Heighten awareness

As companies grow, distances increase as functions focus on their own needs, support activities multiply, specialists are hired and reports replace face-to-face conversations. Before long the product’s clear visibility and the essential elements of the delivery process are lost. Instead of operating as a smoothly linked system, the company becomes a tangle of conflicting constituencies whose own demands and disagreements frustrate the customer.

“I don’t care what your job is,” the overwhelmed customer finally complains. “When can I get my order?”

Fast-cycle companies – especially the big ones – recognize this danger and work hard to avoid it by heightening everyone’s awareness of how and where time is spent. They make the main flow of operations from start to finish visible and comprehensible to all employees, and they invest in this understanding with training in lean basics. They highlight the main interfaces between functions and show how they affect the workflow, compensating based on group success. And most important, they reinforce the systemic nature of the organization in their operations architecture.

Fast-cycle companies differ from traditional organizations in how they structure work, how they measure performance and how they view organizational learning. Time is used as a critical performance measure. They insist everyone learn about customers, competitors and the company’s own operations.

A few hints to keep in mind when attacking and improving your cycle time management.

Many organizations are fixated on controlling labour content and are constantly asking leaders to reduce headcount, but this may be the wrong approach. First, check the rate at which your customer is looking to receive your product or service. This will determine the required cadence within your operation. Once it’s defined, engineer your process step within a work balance chart. This may tell you to add people within the process even though the overall labour content will not change, but cycle time will improve.

People feel getting an office is a right of promotion, but offices and cubicles are so counter-productive. Any form of wall acts as a barrier and barriers curb open communication. Tear them down. Establish natural work groups or cells and watch productivity grow while cycle time is quickly reduced.

Richard Kunst is president and CEO of Cambridge, Ont.-based Kunst Solutions Corp., which helps companies become more agile, develop evolutionary management and implement lean solutions. Visit www.kunstsolutions.com. E-mail rkunst@kunstartofsolutions.com.

This article originally appeared in the October 2018 print issue of PLANT Magazine.