MIT Sloan Management Review

Management of Technology and Innovation, Operations Management and Research

 

The Merit of Making Things Fast

By Roger W. Schmenner

October 15, 1988

THE AUTHOR EXAMINES THE SIMPLE but profound hypothesis that reducing throughput time (the length of time between the arrival of raw materials at the factory and the shipment of the finished product) is the single most important determinant of improved factory productivity. He concludes that focusing on throughput time forces managers to reduce inventories, setup time, and lot sizes; in addition, it encourages improved quality, revamped factory layout, stabilized production schedules, and minimized engineering changes. The three research studies on which this article is based indicate that, of all the possible techniques for improving productivity, only the JIT-related ones are statistically, demonstrably effective. Ed.

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AN AUTO PARTS MANUFACTURER in Northern Europe started to slip in profitability. For historical reasons, manufacturing was organized in a very disjointed way with facilities scattered over the countryside, each managed independently and concentrating on only a part of the full production process. Consolidation seemed advisable to regain profitability and the managing director pondered which of several organizing themes he might adopt to guide the unit’s retrenchment.

  • A manufacturing manager with a midwestern specialty chemicals operation wondered how he could revitalize his company’s manufacturing function. The time seemed ripe: the flow of products out of R&D was slowing to a trickle, and the level of the company’s inventories was beginning to alarm top management. While the principles of “just-in-time” (JIT) manufacturing appealed to him, the manager was uncertain how to apply them to his operation, since the layout was inflexible and it wasn’t possible to use different equipment.
  • A Swiss precision machine maker was eager to involve the workforce to improve production, but did not know how to draw on the knowledge and energy of teams that were already established. The workforce had seen program after program come and go and were understandably skeptical.

The technologies and characteristics of these three operations were different, but in each case the managers arrived at the same solution—the reduction of throughput time. Also called cycle time, lead time, and manufacturing... To read the complete article, login or sign-up using the form below.

 
 

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