This document discusses time-based competition and reducing lead times in manufacturing, service, and office industries. It provides examples of metrics used to measure lead time reductions and outlines keys to making improvements like value stream mapping, attacking non-value added time, using standard work, and visual metrics. The document also includes examples of standard work for estimating quotes and metrics boards used to track work in process and inventory.

1. Time-Based Competition
(Key to Growth & Prosperity in Manufacturing,
Office, & Service Industries )
Jim McCarthy
April 6, 2015
© Product Ventures, Inc. - Eden Prairie,MN. 1

2. What is the One Resource?
That can’t be:
1. Rented
2. Leased
3. Or Bought
At any Price!
2 2

3. Time
3
“Time waste differs from material waste in that there can
be no salvage. The easiest of all wastes, and the hardest
to correct, is this waste of time, because wasted time
does not litter the floor like wasted material.”
- Henry Ford, 1926

4. Time Drives Everything:
(The Short List)
4
1. Customer Satisfaction
2. Industry Reputation
3. Safety
4. Quality
5. Production
6. Morale (less frustration)
7. Revenue
8. Profits
9. Process Variation
10. Forecasting
11. Inventory
12. Cash Flow
13. Growth
14. Job Security
15. Continuous Improvement

5. Why Reduce LeadTime?
1. Customers want what they want when they
want it.
2. Customers could care less about our “work
days” or “shift schedules”
3. As customers trim staffs , inventories, & their
lead times, they will require 24/7 time
reductions from us
4. International customers especially sensitive to
Time-Based suppliers
5

6. LeadTime Reduction Why do it?
Time-Based Competitors:
(as compared to competitors in same industry)
A. Grow at least three times faster1
B. Two times more Profitable1
C. For every quartering of lead time, productivity of labor & of
working capital can often double & costs reduced by 20%1
D. Introduce new products four times faster2
E. Inventory turns two to four times higher3
1. Competing Against Time, Stalk & Hout, pp. 77-78
2. ibid, p. 110
3. ibid, p. 157
6

7. LeadTime Reduction Why do it?
1. Speed allows us to compete with “best cost” countries
2. Quality improves - doing “stuff” over again does not support short
lead times – Quality has to improve if lead times are to drop
3. Less things to juggle: 100 orders / week & 10 pieces / part & you
have a 10 week lead time, you have 100 x 10 x 10 = 10,000 things to
worry about. If you have a lead time of one week you only have
1,000 things to worry about! (Less confusion & chaos)
4. 60% Lead Time reduction = a 14% cost reduction1
1 – It’s About Time, Dr. Rajan Suri, - “Power of Six Rule”, Pgs. 165-166
7

8. LeadTime Reduction
Have Multiple Plants? Why should all do it?
1. As more & more projects pass through multiple
plants, we need to shorten overall lead times.
2. Customers will require shorter lead times no
matter how many plants their products go through.
3. To do this, we need to pool our resources across
plants to develop enhanced improvement
techniques for meeting these challenges.
8

9. Ability to Embrace Customers Who are in a Hurry!
1. The least attractive customers are those who will wait
for what they want.
2. The least attractive customers are those who will wait
because the price they want to pay is low compared
to the prices the more impatient customers will pay.
3. Time-based businesses let their competitors have the
patient customers while they embrace the impatient
ones.
9

10. Will it Work in the Office?
Continuous Improvement in the Office Can
Be a “New Frontier” For Many Folks –
This is all about “people” & not tools!
Some Common Myths & Perceptions:
1. Continuous improvement applies to “shop” only
2. “Intellectual” & “creative” tasks can not be structured
3. Measurement of office work is not possible
4. Every job is too different to apply any improvement tools
5. Automation is the 1st & only choice for office improvement
10

11. Office Project: “Customer Order to Acknowledge”
VA= Value Added Time ; NVA = Non Value Added Time
11
Parameter “Was”
(March 6,
20007)
“Is”
(June 12,
2007)
Delta
(Difference)
%
Improve-
ment
Remarks
Total Lead
Time
(Average)
67.88
Hours
11.30 Hours - 56.6 Hours 83.4 %
6 Times
Faster
Total Lead
Time
(Worst 10)
104-306
Hours
51-120
Hours
-53 to –186
Hours
51% - 61%
Inventory
(Average)
155 Orders 36 Orders -119 Orders 77%
VA/NVA
Ratio 0.29% 1.58% +1.29% 445%
VA “was”
12 Minutes
Distance
Walked
9,111 Feet
(1.73 miles)
2,620 Feet
(0.49 Miles)
-6,498 Feet
(1.22 Miles)
71.3%
(Distances
are Per Day)

12. Metric Baseline
(2013- Jan.-
Aug., 2013
As of
March 2014
Delta
(Diff.)
%
Improv-
ement
Remarks
Lead Time
(Average)
27.14
Days
11.65
Days
15.49
Days
57% Charter Target
= 50%
Lead Time
Standard
Deviation
37.2
Days
13.31
Days
23.89
Days
64%
95th Percentile
Days
96.1
Days
37.5
Days
58.6
Days
61%
On-Time
%
33% 86% 53%
161%
53% “absolute”
& 161%
“relative”
Average Days
Tardy
13.27 Days 1.11
Days
12.16
Days 91.6%
12 Times
Better
(1.2 Orders of
Magnitude)!
Quoting Results as of 2014
12

13. Keys to Time-Based Improvements:
13
1. Chartered project with clear expectations
2. Value Stream Mapping to “see waste”
3. Attack “White Space1” first - (24/7 Mindset)
4. Standard Work – Clarify expectations & do it the same
5. Measure – Can’t improve what you don’t measure
6. Protect Constraint (keep the surgeons operating)
7. Visual Process – abnormalities/expectations obvious
8. Project Management- worthless if you can’t execute!
1- “White Space” is time you are not working on the product
13

14. What Should it Look Like?
Visual Management Triangle
We See
Together
We Act
Together
We Know
Together
14

15. 15
Pg.15
Value Stream
Mapping – Shows
Opportunities for
Time-Based
Improvements

16. 16
Touch Time
White Space
Working on product 3.2% of time! :
𝟏 𝑫𝒂𝒚
𝟑𝟏 𝑫𝒂𝒚𝒔
= .032 x 100= 3.2%
4 hrs. 10 hrs. 6 hrs. 4 hrs.

Order
Capture
6 days
Phase 1
10 days
Phase 2
8 days
Write/Send Report
7 days
Total Lead Time = 31 days
Work on 97% or 3% to Reduce Overall Time?
Total Touch Time = 24 Hrs. (1day)
4 Total Operations in Our Example
(Customer wants product in 21 days vs. 31 days)

17. Metrics
Rule One of Lean Metrics:
You can’t improve (or lead) what you don’t measure!
Imagine you are at a Twins baseball game & there is no
scoreboard – wouldn’t you feel cheated?……
 Always establish baselines and measure results on an on-going basis to
display progress.
 Measure the “process” not the people. – Empower improvement by
changing the System.
Use pareto charting (80 /20 rule) to establish the “critical few”.
17

18. Without “Real Time” Visual Metrics:
It’s like trying to drive forward
by looking in your Rear View Mirror!
18

19. Page 9Company Confidential
Visual Queue Layout
 System rolled out to all Sales Coordinators and Scheduling
Department
System will provide Visual Identification of Bottlenecks and Delay Issues
19
Bins (Modified Post
Picture):
•To Scheduling
•NARS to Engineering
•NARS
•Waiting for Customer Info.
•Waiting to Print
Acknowledgement
•Acknowledgements to Fax
Prototype
Bin System
Shown
Two Bins
Added Later
In Project
19
Customer Order to Acknowledge Process
19

20. 20
2
12
Daily stand-
up meetings
Quoting - Standard Work for Flow – I.D.: GSW-QUOT- 001 Travel Path = Receipt of Request For Quote to ‘Quote Submission’ (to Customer)
Drawing Scale: (Not to Scale) Original Issue 11/19/13 – J. McCarthy (Preliminary version 2/13/14) Distribution:
1
Standard Work Sequence
Note: Pitch times are Per Pitch Schedule – (PPS)
Flow is pictorially shown for one estimator & is typical for all estimators
2
4
5
6
7
8
8A
9
Minimum Cell / Operator Requirements – (Metrics & Audits)
Metrics / Chart Name
(Form No./I.D.)
Frequency Remarks
24/7 Process Time
(L014)
1X /day (Min.)
Prog. Mgm’t.____________ Date________ Finance ____________ Date_________Sales_______________Date________ Materials _________Date_______
FIFO
3
6
10
General Notes & Instructions:
Display Metrics, Audit
Record, & B.O.K.
Time
7 - 8 AM
8 - 9 AM
9 -10 AM
10 -11 AM
11-12 Noon
12 – 1PM
1 - 2 PM
2 – 3 PM
3 – 4 PM
4 – 5 PM
PM’s
PM’s
PM’s
Est./SA
SA
SA
EST.
SA
SA
EST.& SA
Pitch Schedule (Time Slicing) by Function
Monday – Friday (except holidays)
“MS Outlook®” to be programmed for required pitch schedule alerts
Estimating__________________Date_______ Quality _________ Date_____
Matl’s.
Matl’s.
Matl’s.
Finance
FA/Cont.
FA
FA/Cont.
Pitch #
1
2
3
4
5
6
7
8
9
10
Metrics War Room Metrics
MetricsMetrics
Metrics
Metrics
P40 (Big Lake)
P10 (New Brighton)
(unless otherwise noted)
Metrics Metrics
Estimator
# 3 (LH)
Seven Program
Managers
Between Plant 10 & 40
(not co-located)
P10 or P40
Quoting
Manager (CS)
Office
(Estimator # 5)
Standard Work Audit
(L020)
See Remarks
Tier 1 (Quoting Mgr.) – Weekly; Tier 2 (Sales
Mgr.) - Monthly, Tier 3 (Gen. Mgr.) Bi-
Monthly
Quality – Data Tracking
(L006)
Daily as issues occur
Operator Station Metrics
Boards (L061)
Daily (see remarks)
Update inventory & pitch per pitch schedule,
update delays & absences when known.
Cell Meeting Attendance
(L003)
Daily (Mon-Fri.)
Cross Training (L015) Monthly
Program Manager (PM) (or other recipient) receives RFQ
via. email, faxes, mail, etc., fills in Quotation Qualification
Checklist xxx, & sends same to Sales Admin. (PPS).
Sales Admin
(CU)
Estimator
# 2 (PB)
Estimator
#1 (DS)
Electronically coupled to P10
Sales Admin. (SA) creates Funnel I.D. # in Funnel & transfers
drawings into Vault (PPS). SA Assigns estimator per Est.
Qualification Matrix/SWIP limits & emails (with funnel symbol).
Estimator (Est.) does “quote/no quote” evaluation (PPS) &
completes checklist (# xxxxxx). (“No quotes” excluded from
flow unless vetoed by management within 2 calendar days.)
Est. creates BOM, outside RFQ (checklist XXX), & sends to
Materials (PPS). Est. requests any missing data from customer.
Est. continues process until stopped due to information flow.
Est. Pre-schedule Management Review Meeting ≥3 days ahead.
Customer
RFQ
1
Suppliers
12
22
34
Materials reviews & sends to outside suppliers for RFQ with
expectations for timing, receives/reviews supplier quote &
sends (no SWIP limit on return) to respective estimator (PPS).
5
5
Est. roughs-in cost planner, estimates hours, evaluates
equipment needs, & non reoccurring costs per WI- xxxxxx &
finalizes once step # 5 is complete. (PPS)
Est. reviews Quote with Operations: (machine capacity/
availability) & Engineering (technical & manpower ) - PPS
Operations &
Engineering
Review 8
Finance prepares, approves, & sends (no SWIP limit on
return) Multi-Year Cost Plan to requesting estimator (PPS).
Advise RTI Corp. ≥ 3days before formal submittal.
Est.: If quote is ≥$1MM (≥$0.75MM-Government), send to
Finance to prepare Multi-Year Cost plan (PPS). If below these
thresholds skip steps 8/8A & go to step 9.
Est. reviews with internal management (PPS), makes required
changes until approved & notifies SA of DOA approval.
SA sends quote to customer within 4 hrs.
7
To
Finance
8A
To Originating
Estimator
7
9
Customer
10
(A) SWIP levels not to be violated without Quoting Mgr. approval. Notify Mgr. within 4 hours if SWIP is, or could be, exceeded
(B) SWIP levels are “RFQ” items except for Materials’ items which are per materials (supplier) RFQ item
To
Sales Admin.
QRM No. Monthly
5S Monthly Quoting Manager
(C) SWIP levels to be posted at each work station: Estimating, Materials, & Finance – Update Operator WIP metrics when changes are known.
(K) Value Stream members are expected to “flex” (help in all areas) where lead time goals could, or are, being compromised.
(G) Pitch schedule variances are to be reported to Quoting Mgr. prior to next “due” pitch increment.
“Passing” must
be authorized by
Quoting Mgr.
(H) “Pitch compliance” (per pitch schedule) is: inspection for, & action on, quoting elements & related requests/actions to support Std. Work goals.
#
Pitch
&
Metrics
log
Station
Status
Total Station Inventory
(circle SWIP- max. or range).
Move markers to show
inventory in all 3 locations
(see Key & WIP/SWIP notes)
Number @ Remote locations
Suppliers, Customers, etc.
Number of
Quotes
‘Not Started’
# #
Typical Operator Station
Metrics Board - updated
daily & reset monthly
(Form: L061)
Key: Symbols & Abreviations:
BOM = Bill of Materials,
SWIP = Range of, or Max.(if no range shown) allowable work in process
PPE = Per Pitch Schedule (Pitch = product movement times)
BOK = Book of Knowledge (stores cell data)
Electronic communication (primarily email) =
FA = Financial Analyst, Cont.= Controller
PM = Program Manager, SA= Sales Admin., Est.= Estimator,
Matl’s. = Materials Department or Operator
RFQ = request for quotation
WI = Work Instruction
Q-ROC = Quick Response Office Cell
HVM = High Velocity Machining
PCA = Pumps, Controls, & Actuators
FIFO = First in, First Out
SW= Standard Work
Operation sequence (number) =
Walking =
Remote Location =
#
WIP (Work in
Process) Symbol
x
Remarks
SA (overall process), Matl’s., & Finance loops,
before daily “stand-up” meeting (GSW-QUOT-002)
Tier 1 (Quoting Mgr.) – Weekly; Tier 2 (Sales Mgr.)
– Monthly; Tier 3 (Gen. Mgr.) - Bi-Monthly
Shows opportunities for improvement
(each operator)
Operators update inventory, pitch compliance, delays, & absences
when known (“real time” basis). Retain in BOK (by Month)
Attendees fill out before daily stand-up meetings
@ 8:30 AM (Agenda=GSW-QUOT-002)
Quoting Manager or Designee
Measures QRM No.,& lead time days for both
average & 95th
percentile
Prelim copy 2/13/14
#
SWIP (Standard Work in Process)
Symbol - circle around maximum
number or range (inside triangle)
Phantom Lines
Estimator
I. D. #
PCA
Large
Assys.
HVM
Hard
Metals
Specialties
1 x x x
2 x x x
3 x x x
4 x
5 X x x x
Estimator Qualification Matrix (Major Areas)
Estimator
# 4 (DK)
Vault
(Drawings)
Funnel
(Quote
Data)
Quote Review
Meetings
Finance (PH, BJ)
(L ) Materials & Finance Value Stream operators responsible/accountable for their entire “Loop’s” daily performance (Metrics & Continuous Improvement).
(J) Subordinate all resources to constraint (Estimating) - must ensure constant “work feed” and timely assistance to minimize “throughput” compromise.
(D) Reduction of inventory (WIP) is an “on going” goal to continually reduce lead times, provide spare capacity, & minimize “job passing”
Quote Win Rate Monthly % won & which jobs - SA
4
4
4
4
1
1
1
4
1
1
1-3
1-3
1
1
1
1-6 2
1-3
(E) Quoting Team may “collectively” change SWIP (Max. & Range levels) to support trials for continuous improvement. (Must advise Quoting Manager).
(S) Quote review & approval requirements shown in “Quote Approval Schedule” – Official DOA documents govern in case/s of conflict
(M) Quoting team & support/review functions are responsible for pre-arranging backup coverage (in their absence) to ensure cell performance & reporting
(O) Quotation Qualification Checklist “(xxxx)” completion required by quote requestor, & Quoting Manager approval prior to any quoting activities.
Approval
Notification
9A
9A SA receives DOA approval & files same. (PPS)
% on Time, No of Quotes
Submitted
Monthly
Shows customer % on time & no of quotes
submitted during month - SA
(See Page #2 for current 24/7 timeline expectations & “start date” probabilities.)
“No Quote”
Est. Mgr.
Reviews &
sorts “Quote/
No Quote” @
7:30-8:30 AM.
V.P. Sales &
Est. Mgr.
confirm @ 4PM
DOA / Review
‘Same Day’
Review
Required
Except
RTI
Corporate =
3 Days
(24/7)
Max.
(F) Capacity triggers (with prioritization) to address SWIP violations/variances to be posted & updated by Quoting Manager
(N) Shared resource definitions-need to define for estimators (what takes priority & what % of time is committed to authorized RFQ’s ????????
(Q) Max ‘work ahead window’ = 7 days ahead of actual “projected lead time” to meet customer date (based on RFQ complexity/current lead time & WIP)
(I ) “Trouble Bin” (reviewed daily @ stand-up meetings) for “job issues”, Customer time extensions , potential or actual ‘need date’ misses, etc.
Trouble “Trouble Bin”-
reviewed daily
for ‘flow issues’ &
countermeasures
WIP & SWIP
Staffing & Accountability
Flow & Pitch
Scheduling & System Controls
Review & Approvals
Quote Approval Schedule
Est. Mgr.
or
PM
Sales
VP
PM
Director
Finance
Controller
(Multi-Yr. Plan)
General
Mgr.
RTI
Corp.
≤250K X
>250K - 1MM X X X
>1MM X X X X X X
750K - 1MM
(U.S. Gov. only)
X X X X X X
Quote $
Value
K=1,000
MM=1,000,000
Quote Review Functions Required to Approve = X
Yellow Highlighted = Declaration of Authority (DOA) Requirement
Materials JC,DG,
NW,LS (As Req’d.)
SWIP shown is for
entire Matl’s group
SWIP shown is for
entire Finance group
(P) “Repeat Work” is to be quoted by applicable Program Manager & is not to be processed by this value stream which is intended to Quote “new work” only
(R) Requests with missing/incorrect information shall be returned to “upstream” provider (PPS) for correction to limit “defect flow” in quoting system
M
February 14
T W T F S S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 1 2
Daily Issues
Pg. 20
“Standard Work for Flow”
is Critical to Daily Time-Based
Execution and Sustainability
(Rule Book on one sheet of paper)

21. Daily LeadTime Metrics – Quoting
(When can we go to hourly tracking?) LeadTime
Metrics – Quoting
Daily LeadTime Metrics – Quoting
can we go to hourly tracking?)(When can we go to hourly tracking?)
21
28 61 33 42
C
C
C
C
C
C
C
C C C C
C
C
C
C
C
C
C
C
C CC C
C C C C
C
C
C
C
12 Day
Goal Line Customer
Want
Days = 8
Actual
Days = 8
Overflow Line
= 28 Days

22. Quoting-Daily Operator Metrics (Estimating, Materials & Finance)g -
Daily Operator Metrics (Estimators, Materials, & Finance)
22
Total
WIP
Total Not
Started
Pitch
Compliance
Operator
Loading (%)
Metrics
Compliance
Absences &
Issues (Daily)