| Driving a turbo-powered sports car is an | | | | may constitute 40-50% of total time. Some of |
| exciting experience. Step on the gas pedal | | | | the time is lost in travel, some is lost in |
| zero to sixty in a few seconds. Maneuvering | | | | the processing backlog, and some may be lost |
| through traffic.... downshift, accelerate | | | | diverting it to a credit department for |
| past others, upshift....gone. Curves coming | | | | release. If the nonvalue-added time in the |
| up?....downshift...corner..... accelerate. | | | | cycle can be identified, ways to eliminate |
| You notice the responsiveness of this finely | | | | the causes can be devised.An Engine |
| engineered product. You expect this; this | | | | RedesignMost organizations today are designed |
| precision machine was designed for this, and | | | | to compensate for circumstances that could go |
| it is performing to spec.Wouldn't it be great | | | | wrong, particularly on the shop floor. The |
| if you could do this with your business? That | | | | causes are found in the way parts are |
| is...quickly respond to market demand by | | | | manufactured, with delays, queues, missing |
| accelerating new product introduction, . . . | | | | parts, pirated parts, bad parts, and part |
| .or quickly change your product mix,... ...or | | | | shortages.Within the factory, velocity can be |
| maneuver orders through the organization | | | | induced by physically clustering successive |
| quickly,...or move parts across the factory | | | | operations into cells and reducing operation |
| floor with velocity, ....or handling the | | | | cycles and set-up times. Deep organizational |
| unforeseen, the "curves,"..or quickly moving | | | | changes cannot be effective until key |
| decisions through the organization? This is | | | | problems in factory flow and cycle times are |
| maneuverability and turbo power. This is | | | | removedAdding Some AerodynamicsFostering |
| enterprise agility. It can't be done today | | | | innovation, among other things, requires good |
| because the organization wasn't designed for | | | | organization of information. Our current |
| this. The way we have organized ourselves | | | | systems and procedures have been developed at |
| over decades works against us.Our current | | | | length to control an unwieldy information |
| organizational structure is stifling. | | | | channel. When we get past the stifling paper |
| Functional departments result in colloquial | | | | flow, disparate computer systems, and |
| thinking and narrow points of view. Natural | | | | functional organizational walls, the |
| and functional conflicts create internal | | | | homogeneity of ideas will begin to generate |
| adversarial relationships that prevent | | | | quickly.Organizing for ease of sharing |
| sharing of ideas. Classes in the business | | | | information for innovation is a first step. |
| environment cause an "us and them" syndrome. | | | | The information chain must be streamlined and |
| Politics prevail.Worse,..operations are | | | | electronically linked, so that the flow is |
| physically separated from headquarters, | | | | direct. Removing useless and redundant data |
| component plants from assembly, assembly from | | | | existing on screens and reports from the job |
| the market. The factory floor is organized by | | | | stream increases the value of the information |
| process, creating poor product flow. In the | | | | provided. Reducing business cycle times to |
| office people are separated by departments | | | | the time it actually takes to efficiently |
| and physical walls creating poor | | | | process information supports fast movement of |
| communications and information flow. What | | | | physical parts.The Turbo OrganizationHaving |
| happens when we step on the gas? The engine | | | | the ability to produce spontaneously upon |
| floods.The Grand PrixWhy is all this | | | | demand requires short lines of communication |
| important? Competing has taken on new | | | | and velocity throughout the work chain. To |
| proportions. A global resegmentation of | | | | reduce business cycle times, fast |
| markets emerging is changing the world | | | | communications and decisions are required |
| economy. U.S. manufacturers face stiff | | | | throughout the organization. This means |
| offshore competition in most markets. | | | | reducing numbers of vertical and horizontal |
| Companies failing to respond to the challenge | | | | management layers. Physical walls have to |
| will find themselves left behind in the | | | | come down. Organizing around business cycles, |
| dust.The U.S. in ReverseIn 15 years, the U.S. | | | | and physically clustering people in cells for |
| lost significant world market share in key | | | | fast, effective communications is one way to |
| industries: wide-bodied aircraft, | | | | do it.A Faster, Lighter VehicleInducing |
| semi-conductors, automobiles, and steel. | | | | velocity throughout a business has a profound |
| There is almost no production of VCR's, | | | | effect on time and cost. The need for |
| camcorders, tape players and recorders, | | | | nonvalue-adding functions disappears, and the |
| radios, phonographs, or compact disc players | | | | functions designed to accommodate exceptional |
| in the U.S. Imports in other industries | | | | circumstances fall out. The organization |
| continue to increase. Industries under | | | | chart becomes flatter. Following this is a |
| intense foreign competition include farm | | | | dramatic reduction of overhead.The Winner's |
| machinery, lawn and garden equipment, machine | | | | CircleYou have to ask yourself what it could |
| tools, bicycles, and process controls. | | | | do for you if you could respond to a dynamic |
| Foreign competitors deliver high quality | | | | market with velocity in delivery and new |
| products with one pass through the factory, | | | | product introduction, and manufacture high |
| while U.S. production is consumed in fixing | | | | quality products at low cost. Chances are, |
| mistakes.Back to the Drawing | | | | when you're able to do this, you will be in |
| BoardOrganizations need to be fast and | | | | the winner's circle, and the trophy will be |
| flexible to change with market dynamics. All | | | | the new results on the "bottom |
| physical and logical events must be enacted | | | | line."BIOGRAPHYRichard G. Ligus is President |
| swiftly, accurately, and effectively to | | | | of Rockford Consulting Group, Ltd., located |
| compete in the next century. The faster that | | | | in Rockford, IL., with over 30 years |
| parts, information, and decisions flow | | | | experience in manufacturing, procurement, |
| through an organization, the faster the | | | | transportation and distribution. He |
| response to customer needs. The keys are flow | | | | specializes in developing and implementing |
| and time.Every business has basic cycles that | | | | supply chain strategies. Rich is an author |
| govern the way that paper is processed, parts | | | | and a speaker, and has developed seminars |
| are manufactured, and decisions are made: | | | | with the American Management Association. He |
| customer order, product development, | | | | is certified by both the Institute of |
| production, procurement, etc. Examining the | | | | Management Consultants and the The National |
| flow of documents within the cycles and the | | | | Bureau of Certified Consultants.Rich has a |
| time consumed can be revealing. A customer | | | | bachelor of science degree in mechanical |
| order cycle begins with the placement of an | | | | engineering from the New Jersey Institute of |
| order. It ends with the payment for goods or | | | | Technology, and a master of business |
| services rendered. There are activities in | | | | administration degree from Rutgers |
| between the two events that consume time. | | | | University. He is a member of CASA/SME, and |
| Some add value, such as packing and shipping, | | | | has been listed in Jane's Who's Who in |
| and some are nonvalue- adding and delay time, | | | | Aviation and Aerospace. He has been a speaker |
| such as moving the order around the building | | | | at IMTS, USCTI, APFA, NEPMA, MCAA, Hand Tools |
| from mailbox to mailbox, or repeating | | | | Institute, CASA/SME, and others. He has |
| motions.When a cycle ends, a lot of | | | | appeared several times on WREX-TV, |
| nonvalue-adding time has been consumed that | | | | Mid-Morning Magazine. |