Reducing Cycle Time
Another popular TQM technique is reducing cycle time.
Cycle time
is the time needed by the organization to develop, make, and distribute
products or services.
28
If a business can reduce its cycle time, quality will often improve.
A good illustration of the power of cycle time reduction comes from GE. At one point,
the firm needed six plants and three weeks to produce and deliver custom-made indus-
trial circuit breaker boxes. By analyzing and reducing cycle time, the same product can
now be delivered in three days, and only a single plant is involved. Table 15.3 identifies a
number of basic suggestions that have helped companies reduce the cycle time of their
operations. For example, GE found it better to start from scratch with a remodeled plant.
GE also wiped out the need for approvals by eliminating most managerial positions and
set up teams as a basis for organizing work. Stressing the importance of the schedule
helped Motorola build a new plant and start the production of a new product in just
18 months. Nokia used to need 12 to 18 months to design new cell phone models, but
can do it now in 6 months.
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Table 15.3
Guidelines for Increasing the Speed of Operations
1. Start from scratch. It is usually easier than trying to do what the organization
does now faster.
2. Minimize the number of approvals needed to do something. The fewer people
who have to approve something, the faster approval will get done.
3. Use work teams as a basis for organization. Teamwork and cooperation work
better than individual effort and conflict.
4. Develop and adhere to a schedule. A properly designed schedule can greatly
increase speed.
5. Do not ignore distribution. Making something faster is only part of the battle.
6. Integrate speed into the organization’s culture. If everyone understands the
importance of speed, things will naturally get done more quickly.
Source: From Fortune, February 13, 1989. © 1989 Time, Inc. All rights reserved.
Many organizations
today are using
speed for competitive
advantage. Listed in
the table are six
common guidelines
that organizations
follow when they
want to shorten the
time they need to get
things accomplished.
Although not every
manager can do each
of these things, most
managers can do at
least some of them.
outsourcing
Subcontracting
services and
operations to other
firms that can
perform them
cheaper or better
cycle time
The time needed by
the organization to
develop, make, and
distribute products
or services
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