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Taking steps to achieve world-class manufacturing and overcome the competition.

Use time-based competition as one of your most powerful strategic weapons! Drive down the time it takes to develop and deliver new products, dramatically reduce inventory and manufacturing time, slash the cost of quality and win back market share. The question remains: How can you do it and become a fierce competitor?

Substantial market share has been lost over the years to foreign competitors. No industry is immune. The pressure is on to be nothing less than the best. Reducing cycle times in your company is a new way of tackling the problem. It is a new world-class manufacturing strategy that is making companies fiercely competitive. Companies who are doing it are cutting out 50 percent of the time to develop and introduce new products. They have already reduced factory throughput time by 98 percent.

But being the best takes radical change and it is no easy matter. Becoming a time-based, world-class company requires overcoming organizational inertia. Often overlooked are outdated cultures, ineffective management skills, bureaucratic red tape and a reward system that does not fit.

Companies must streamline factories, systems and organizations, and open up lines of communications. They must break down barriers between departments and put an end to the "we've always done it that way" argument. Companies have to get employees highly involved in assuming new responsibilities if they are going to compete in the tough global markets of the 1990s. The integrated change model provides a way to do it. It utilizes social and technical application tools, emphasizing continuous improvement, with high involvement of people.

This internally developed, exclusive cycle-time reduction program guides and facilitates a company. It provides a master plan that takes a company through the steps necessary to reduce total cycle time. This broad approach covers all parts of the organization: marketing, manufacturing, engineering, accounting, etc. It includes the full service chain from customer through warehousing, distribution, assembly, production and supply.

The integrated change model

At the heart of the program is the integrated change model. Managing large scale change requires a comprehensive master plan as well as accountabilities for getting work accomplished. The integrated model provides that plus more. It is the shell of a master plan for reducing cycle times in a company. It consists of three dimensions:

The Closed Loop -- Large scale change requires managing in phases or stages to control the effort. The first dimension consists of four stages, looped as a continuous process: diagnosis, action planning, building capabilities and performance results.

Stage 1 (diagnostic action) is preparation and discovery. It begins with awareness raising and data gathering to discover problems and build a case for change.

Stage 2 (action planning) guides in the development of a vision, processes, structure and a master plan with executable steps.

Stage 3 (building capabilities) guides in implementing master plan through team building and high involvement activity.

Stage 4 (performance results) guides a company in measuring the results of the plan to close the loop. The loop is a continuous process that returns to stage 1.

Six Keyholes -- The second dimension consists of six keyholes: strategy, process, structure, staffing/skills, culture and organizational systems. Working through the strategy keyhole, one can build a fast-cycle company vision that provides direction. Develop a new plan for the firm, then align divisions, departments, work groups, jobs and resources with the new strategic direction. Define where the company should be in terms of market share, people issues, profit, product lines, etc., by setting goals in terms of specific outcomes.

In the process keyhole, define new methods of converting materials and data into products and services. The focus in this keyhole is the reduction of cycle times using state-of-the-art innovative methods and techniques. Revise production methods, work flow and equipment. Simplify flow, integrate processes, reduce set-ups and use automation. Remove delays and interruptions in the factory and office and reduce overall throughput time.

Through the structure keyhole, design the logical and physical architecture to support the new direction. Define how the company can physically or logically organize to produce fast cycle products or services. Revise the way your organization is designed and define relationships between groups. Revise job structures and determine where power is allocated. Specify rules, procedures and policies to control operations and direct organizational behavior.

Using the staffing/skills keyhole, define the mix and quality of human resources required to develop a fast-cycle company. Determine the skills needed to cope with complex problems. Define mechanisms for selecting, training and developing employees.

Working through the culture keyhole, facilitate the measuring of climate, organizational behavior, attitudes and management style. Define the character of the organization, and the new norms, values and beliefs that drive behavior. Devise the new principles that guide human actions for the fast cycle company and cascade them throughout the organization.

The organizational systems keyhole defines performance measurements and rewards. In this segment, close the loop, sanctioning the new culture, and devise new rewards for cooperative efforts and new behavior. Reward adherence to new principles and achievement of new objectives. This type of program links the six keyholes into an approach for managing change.

Change Strategy --The third dimension consists of three levels of focus for change strategy: organization, group and individual. They are used in the four stages and must all be addressed for organizational effectiveness. They include responsibility and accountability.

Using team building techniques, facilitate the process of diagnosis at each level and develop technical and organizational strategies. Using high involvement, transform them into executable and measurable short-term actions. This is the way work gets accomplished.

Develop concise objectives for all managers that focus on cycle time reduction. Each manager has a short-range action plan for which he or she is accountable. Measure the successes and link them with the performance system.

Summary

The integrated change model provides a comprehensive methodology for large scale change and implementation of time-based strategy. It provides the means of becoming world-class, and provides a new approach to competing in the 1990s.

Richard G. Ligus is founder and president of the Rockford Consulting Group, Rockford, Ill., with experience in manufacturing, distribution and organizational development. He specializes in consulting and facilitation and frequently speaks about manufacturing strategies.
COPYRIGHT 1992 Institute of Industrial Engineers, Inc. (IIE)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Market Strategies
Author:Ligus, Richard G.
Publication:Industrial Management
Date:Sep 1, 1992
Words:1028
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