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Total Cycle Time Reduction

Organizations should be concerned about their cost and efficiency of operation. A key element in these factors is the time it takes to get "things" done. These "things" include both administrative and service functions as well as manufacturing of products. Reduction of operational times can result in dramatic improvements in both cost and efficiency. In addition, cycle time reduction can result in significant quality improvements.

In discussions with its customers in the mid-1980s, Motorola found that the largest number of complaints about doing business with Motorola was related to time issues. (In the early 1980s, the complaints were concentrated on product quality.) These complaints ranged from very long promised delivery times and, then, frequent delinquencies, to finding the correct person in Motorola to answer questions and the length of time to get phone calls returned. In short, Motorola was perceived as being a difficult and unresponsive company with which to do business.

At the same time, Motorola was faced with concerns about inventory levels, product obsolescence, rate of new product introductions, and manufacturing costs. Introduction rates, business costs, and inventory levels, which had been acceptable in the 1970s, were no longer allowable in the competitive environments of the 1980s and 1990s. Profits, necessary to sustain growth, were being threatened by competition, which was doing better than Motorola in a number of these arenas.

Initial efforts in cycle time reduction were primarily motivated by cost and profit considerations, with additional incentive provided by customer dissatisfaction. These early efforts were focused on the manufacturing lines. Internal reviews of the manufacturing operations were performed, and opportunities for improvement were identified. Tools, such as Just In Time (JIT) methods for reducing inventories, obtaining rapid set-up/change-over times, and configuring proper line layouts, were addressed. While these were successful in achieving improvements, it became obvious that only a fraction of the customer concerns were being addressed.

Motorola then arrived at the concept of Total Cycle Time, which was defined as the total time elapsed between the expression of an interest by a customer and receipt of a product or service by that customer. This definition highlighted that functions in addition to manufacturing were important in meeting customer expectations. Such administrative/service areas as order entry, credit approval, purchasing, shipping, accounts receivable, and staffing also played a major role in this Total Cycle Time. Even though some of Motorola's manufacturing cycles were long in duration, administrative/service functions often consumed more than one-half of the total elapsed time. What was happening inside Motorola was both invisible and unimportant to the customer. All the customer was concerned about was how much total time elapsed from placing an inquiry or order until they were satisfied. To the customer, delays in purchasing parts from a supplier look exactly the same as delays in the production line.

"Work smarter, not harder" is a commonly heard cliché. This certainly sounds nice, but how is it actually accomplished? The best answer is to eliminate unnecessary work, concentrating only on the essential work. Most important, the determination of what is and is not value-added work must come from the customer of the product or service, not the performer of the work.

The primary tool for cycle time reduction is a process called Cross-functional Process Mapping. This technique involves developing "maps" of the process flows with the additional intelligence of what functions are involved at each step of the flow. Maps are developed for both "the way things have always been done" and "the way things should be done." The essential question that is answered in the transition between the two maps is, "What value, in the eyes of the customer, does this step add?" Action plans are developed as part of the mapping process to ensure that the transition to the desired state is achieved. These maps are developed by cross-functional teams, with each of the critical functions represented in the same room at the same time during the mapping process. (A side benefit of the mapping process is an increased understanding of the roles and responsibilities of all the other functions, increasing the effective teamwork of the entire organization.)

It has been Motorola's experience that, to obtain the best results, outside facilitation for the mapping process is required for the first one or two processes that a given group of individuals are formed into cross-functional teams to mapping. Individuals within the organization can have a vested interest (past, present, or future) in the organization and cannot ask the necessary difficult questions to challenge the existing institutionalized bureaucracy. An outsider is "bulletproof," overcoming the natural reluctance of an insider to ask the difficult, sometimes embarrassing questions. After an organization has the experience and maturity of one or two successful mappings, outside facilitation may no longer be required. Internal facilitators may then be trained in Cross-functional Process Mapping in order carry on the process of continuous improvement.

The Motorola University Applications Consulting Team (ACT) is experienced in the mapping processes. ACT has applied them to a wide variety of organizations and functions within Motorola, as well as a diversified group of outside companies that include customers and suppliers of Motorola. What are the typical results the ACT has achieved? For strictly manufacturing and engineering processes, reduction of cycle time from historical levels is typically 60% to 70%. This means that a process that usually takes three weeks can be reduced to one week. For strictly administrative or service processes, the usual reduction in cycle time is in the range of 90% to 95% -- a reduction factor of 10X to 20X! The large difference results from the fact that manufacturing organizations have always had pressure to do things faster, while far less emphasis is normally applied to the service and administrative processes.

What are the benefits of such reductions? The obvious cost reductions and productivity increases occur. Another and perhaps more significant, long term benefit usually occurs also -- improved quality. Consider that it now takes ten weeks to do something. Start it today, and the final result can be inspected ten weeks from today. This is a ten-week cycle time. If the result is examined for potential improvements, these improvements can be tried in the next complete process, starting ten weeks from today and finishing twenty weeks from today. The cycle time is equivalent to a cycle of learning. If, on the other hand, the cycle time was reduced to one week, learning could occur every week. Reduced cycle time reduces the time for a cycle of learning. If the effort is taken to improve the process based on examining the most recent results, shorter learning cycles can result in more rapid quality improvement. As such, reducing cycle time can be the single most potent quality tool available to an organization.

Only organizations that have a willingness to improve through change should consider mapping as a tool for cycle time reduction. It is a guarantee that some of the work now considered sacred will face scrutiny and, perhaps, elimination. Further, management support, involvement, and participation are basic requirements. Those involved in the initial mapping must understand how today's processes actually work. Those involved in developing the map for improvement must be decision-makers empowered to commit their functions to the necessary changes. A mix of both types of individuals is desirable in both mapping sessions.

Revision: 11/30/2000

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