Another Angle on Speed
In the last issue of
the IPE, the Getting Better article addressed the value and predictability of
the rate of making improvements. In
this article we will look at the value of speeding up processes.
In his book, Closing the Quality Gap – Lessons from
America’s Leading Companies, Alexander Hiam
talks about how to improve quality with the emphasis on time. He describes Westinghouse
Electric’s requirement that all projects and processes be subject to a
cost-time profile analysis.
“It is based on the idea that a company’s investment in any
process is a factor of both the money spent on it and the time spent on
it. As time passes during the
completion of a process, the company’s investment in that process
increases. Therefore, a profile of
investments over time is cumulative.” An example of a cost-time profile for
filling a customer order looks like this.
Figure1. Westinghouse Customer Order Processing
After looking at the graph you might conclude that 28
hours is a pretty decent cycle time.
But if you could do it faster, wouldn’t the customer be
happier? Our normal reaction would
be, “Yes, but it would cost more.
We would have to have more people or faster equipment, etc.” But what if, by studying the process and
taking out inefficiencies and complexity, you could cut costs? That is exactly what Westinghouse
did. They cut the time needed to
handle an electric parts order from 28 hours to 10 minutes and cut the cost of
processing the order by two-thirds.
See the following Cost-Time Graph.
Figure 2. New Westinghouse Customer Order Processing
But doesn’t hurrying to get something done fast
increase the chances for errors? As
it turns out quality and cycle time are directly related. This point is shown graphically in
Figure 3.
Figure 3. Quality Versus
Cycle Time
But why should quality improve as cycle time is
shortened? Isn’t that just
the opposite of what we would think?
We generally think of something that is handmade with slow careful
craftsmanship as being superior to mass-produced things made quickly. George Dorman, former V.P. Human
Resources at Westinghouse explains: “When quality of product and
performance improve, cycle time comes down because you’re eliminating
rework, and false starts, as well as reducing organizational redundancy. Looking at it another way, working to
reduce cycle time forces you to improve your quality performance. In either case, working on the existing
process will eventually get you to zero defects stage, with an associated
minimum cycle time.”
To further substantiate this idea, Hiam
mentions that since most everything can be measured in cycle time, employees
should be trained in cycle time reduction.
And since customers consider cycle time an important gauge of
responsiveness, everything possible should be done to reduce it. Hiam goes on
to say, “This is best accomplished by eliminating the causes of defects
and simplifying processes.
Shortening cycle time has been shown to reduce defects. Cycle time is a critical indicator of
the health of any business.”
So what does all of this boil down to? I can summarize it into three points
1. Improvement can be predicted, and if we have well
trained, committed workers and managers across an organization, working as a
team, we can learn and improve quickly.
2. If we set fast cycle time as a target in everything we
do, we will improve quality as well.
3. As cycle time goes down, we will free up more time to
learn and improve our processes.
All of this becomes a reinforcing circle of
improvement leading to excellence!