Quick Response Manufacturing

A Companywide Approach to Reducing Lead Times

Rajan Suri

• Publisher: Productivity Press
• Year: 2020
• Print ISBN: 9781563272011
• eBook ISBN: 9781000285604
• Topic: Business
• Subtopic: Operations
• Index: Business

Developed by the author and now being employed by a number of businesses, Quick Response Manufacturing (QRM) is an expansion of time-based competition, aimed at a single target with the goal of reducing lead times. The key difference between QRM and other time-based programs is that QRM covers an entire organization, from the shop floor to the office, to sales and beyond. Providing guidelines for establishing a QRM enterprise, this volume builds upon kaizen, TQM, TPM, and other practice to help organizations streamline all functions of their operation. It shows how to quickly introduce products, along with ways to rethink materials and production management.

Part One
A New Way of Thinking Stems from One Principle

1
QRM: Not Just Another Buzzword

QUICK RESPONSE MANUFACTURING (QRM) finds its roots in a strategy used by Japanese enterprises in the 1980s. In the late 1980s this strategy was documented by several U.S. authors and became known as time-based competition or TBC.¹ The basis of TBC is the use of speed to gain competitive advantage: A company that uses a TBC strategy delivers products or services faster than its competitors. Although you can apply a TBC strategy to any business, including banking, insurance, hospitals, and food service, the focus in this book is on its application in a manufacturing firm. I call this specific application of TBC strategy Quick Response Manufacturing or QRM. By focusing on manufacturing companies, QRM sharpens the principles of TBC as well as adds a number of new dimensions.

You’re probably thinking, “QRM: yet another buzzword? We’ve done JIT and TQM, I’ve read about Reengineering, and I’ve been to seminars about Agility. Do I really need to learn about another continuous improvement program?” Or even, “Not another three-letter acronym. In manufacturing, these fads come and go like tides on the ocean.” But it is imperative for you—a manager working in any area of a manufacturing company—to understand QRM.

The first thing you need to know about QRM is that it is here to stay. The reason is simple: Modern society and technology have produced impatient consumers. They’re always looking for newer products, more features, better functionality, and products customized to their needs. This is what they expect. As a result, manufacturers must respond quickly to their dealers or distributors. In turn, manufacturers expect their suppliers (subassembly and component manufacturers) to have quick response. These suppliers, now as customers, expect quick turnaround from their suppliers-and so on, all up and down the supply chain. In dealing with hundreds of companies in dozens of industries I hear the same story: We’re under pressure from our customers to cut our lead times.

Essentially, QRM relentlessly pursues the reduction of lead time in all aspects of your operations. However, to gain more insight, it is useful to address the definition of QRM in two contexts: externally (as perceived by your customers) and internally (in terms of its implications for organizational policies). Externally, QRM means responding to your customers’ needs by rapidly designing and manufacturing products customized to those needs. As you read this book you will see that in so doing, QRM goes beyond the established goals and even the capabilities of JIT. Equally important is what QRM means internally to your organization. Whereas JIT (or lean manufacturing) focuses on the relentless pursuit (continuous improvement) of eliminating non-value-added waste to improve quality, reduce cost (and reduce lead time), QRM focuses on the relentless pursuit of reducing lead times throughout your operation to improve quality, reduce cost, and eliminate non-value-added waste. However, there is much more to QRM than these short definitions might imply. An analogy serves to drive home the point.

The Toyota Production System (TPS), on which just-in-time (JIT) is based, has as its core principle the elimination of waste throughout the manufacturing system. From this one principle stem the manifold supporting structures needed to implement JIT, such as continuous improvement, Total Productive Maintenance (TPM), SMED or quick changeover, zero defects, etc. Similarly, for QRM you will find that from the single principle of minimizing lead time come implications for organizational structure, manufacturing systems, purchasing policies, office operation structures, capacity planning and lot sizing policies, and much more. Remarkably, the policies that QRM recommends end up being, in many cases, quite different from those in place in most manufacturing organizations today.

What is unique about QRM is that it espouses a relentless emphasis on lead time reduction that has a long-term impact on every aspect of your company. Although QRM uses the viewpoint first proposed in TBC philosophy we now can capitalize on a decade of observing manufacturing companies that have applied TBC to go beyond the original TBC strategy. QRM has refined TBC by:

• Focusing only on manufacturing.
• Taking advantage of basic principles of system dynamics to provide insight into how to best reorganize an enterprise to achieve quick response.
• Clarifying the misunderstandings and misconceptions managers have about how to apply time-based strategies.
• Providing specific QRM principles on how to rethink manufacturing process and equipment decisions.
• Developing a whole new material planning and control approach.
• Developing a novel performance measure.
• Understanding what it takes to implement QRM to ensure lasting success.

So you say, “I know the importance of quick response. You don’t have to sell me on that. But I’ve already implemented tons of programs in my firm. We’ve learned everything there is to know about JIT. We’ve been through five kaizen workshops. I’ve personally read books on time-based competition and time-based manufacturing.” Be that as it may, let me present you with a simple fact. During 1995–96, I interviewed more than 400 U.S. executives and managers in dozens of industries, and even though all of them were from firms that were trying to cut their lead times, more than 70 percent of the policies in use by these managers and their companies were major obstacles to lead time reduction. In fact, some of these policies were the very cause of long lead times. Worse yet, in most cases these managers had no understanding or even awareness that these policies were the source of the problem. If you don’t know that you have a problem, you can’t begin to fix it If more than two-thirds of the policies in use at an average U.S. firm are preventing it from cutting its lead times, what’s the chance that your company too suffers from this malady? Yet companies keep trying program after program without lasting success.

HOW QRM DIFFERS FROM OTHER CONTINUOUS IMPROVEMENT AND QUALITY PROGRAMS

QRM should not be viewed as a radically new initiative that requires you to scrap all the other programs you’ve invested in, like JIT, total quality management (TQM), and kaizen. On the contrary, the QRM program builds upon many of these ideas and should be seen not as a new step but rather as a large step further in your company’s constant quest for competitive strategies. I will discuss these tools, methodologies, and techniques in more detail throughout this book, but a brief explanation of the differences between QRM and these other programs is presented here. Table 1-1 provides some additional points.

Table 1-1. QRM and Other Manufacturing Management Approaches

Approach	Comparison with QRM
JIT (Just-in-Time) Flow TOC (Theory of Constraints)	Best applied with stable demand, higher volume products (need to have the line rate or “rhythm” and need to identify the constraint). QRM can be applied to one-of-a-kind custom products too (with rates and constraints that change from day to day). Western implementations of JIT focus on factory floor and suppliers. QRM expands to the whole organization. JIT has become synonymous with kanban. If used with QRM, the kanban method needs significant modification. However, if JIT/Flow has been implemented, it paves the way for QRM.
TQM (Total Quality Management) Kaizen TEI (Total Employee Involvement)	Quality and kaizen targets can become arbitrary, and employees can lose motivation for ever-improving targets. TEI programs can lose momentum or not show results. None of these builds on understanding manufacturing dynamics. Without this, quality improvement or employee involvement produce only limited gains in responsiveness. By understanding the dynamics, QRM motivates specific quality improvement efforts and focuses employee involvement to achieve goals. If in place, TQM, kaizen, and TEI can thus support a QRM program.
BPR (Business Process Reeingineering)	Both QRM and BPR share principles from earlier literature on time-based competition (TBC). However, QRM focuses these principles, and expands on them, for manufacturing firms. Principles of BPR are not clear, nor are there well-stated implementation steps. Many BPR efforts have failed due to lack of understanding of these points. BPR does not use insights about system dynamics. In contrast, QRM has focused principles and clear steps for implementation, and is guided by our understanding of manufacturing dynamics
SCM (Supply Chain Management)	Seeks to coordinate production/inventory throughout the supply chain. The focus is on optimizing across facilities, rather than how to improve within a facility, like QRM. However, SCM complements the QRM approach to suppliers and customers.
Agile Manufacturing	An evolving concept: Examples of agile behavior have been given, but core principles of how to implement it are still being developed. Agility may take us beyond QRM, but many managers still do not support the core principles of QRM. After a company has mastered QRM it can target agility. By then, the principles may be better understood.

1. JIT or flow and theory of constraints. There are several limitations to JIT. First, most firms that adopt JIT or flow techniques need somewhat repetitive manufacturing and somewhat stable demand. In contrast, companies having a wide variety of products with demand that varies considerably can apply QRM methods—even one-of-a-kind manufacturers. I have assisted in implementing QRM programs at many companies where each order is a custom job. (In such cases, rates and constraints change significantly from day to day, and theory of constraints approaches also are not readily applied.) Second, JIT has become synonymous with the use of a kanban system, which has several drawbacks for QRM. An alternative approach is needed. Third, Western implementations of JIT tend to focus on the factory floor and a company’s suppliers. QRM goes beyond the shop floor to examine all company operations, including office operations, up-front efforts such as quoting, and overall company policies.
2. Business Process Reengineering (BPR). Reengineering also looks at office operations. But the unifying perspective of using lead time as a yardstick, in both shopfloor and office operations, results in specific principles that are more concrete in their application than the general principles of reengineering.
3. TQM, kaizen, and TEI (Total Employee Involvement). The unifying perspective of using time as a yardstick also helps contrast QRM with these programs. Quality and kaizen targets can become arbitrary, and TEI programs can become ineffective if employee involvement is not aimed at the right target. None of these approaches, and also none of the books on TBC and reengineering, contain sufficient explanations of the dynamics of product delivery systems. Both office and shopfloor operations are governed by some simple rules. Once understood, these rules are invaluable in redesigning the delivery system for QRM. By capitalizing on this insight, quality, kaizen and TEI programs can derive specific, meaningful goals from QRM principles.
4. Supply chain management (SCM). This is another current hot issue that seeks to coordinate production and inventory throughout a supply chain. The focus in SCM is optimizing decisions across facilities, but little is said about how to improve within a facility. QRM can complement SCM methods by making each facility more responsive. In addition, you will see that QRM methods can change the fundamental character of the supply chain, rather than simply optimizing the chain under current conditions.
5. Agile manufacturing. This is another recently introduced approach that is still evolving. Leading proponents of agility can give examples of agile behavior, but they are still developing the core principles of how to implement it. In contrast, QRM consists of precise, logically derived, and detailed principles, as well as a methodology for implementing it. Besides, the progress an enterprise makes by successfully adopting QRM will provide a good foundation if it eventually wants to purs...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication Page
• Contents
• Publisher’s Message
• Foreword
• Preface
• Acknowledgments
• Part One: A New Way of Thinking Stems from One Principle
• Part Two: Rethinking Production and Materials Management
• Part Three: Rethinking Office Operations
• Part Four: QRM for Rapid New Product Introduction
• Part Five: Creating the QRM Enterprise
• Appendix
• Endnotes
• About the Author
• Index