Most of us think we are time-efficient and strategic when we manage our manufacturing projects but we’d likely fail muster if Dr. Rajan Suri, emeritus professor of industrial engineering at the University of Wisconsin-Madison, came onsite to audit our operations.
Suri is internationally regarded as an expert in manufacturing systems and has served as editor-in-chief for the Journal of Manufacturing Systems. He also developed an innovative program called quick-response manufacturing (QRM) that helps U.S. manufacturers reduce lead times by as much as 80% to 90%. In 1993, he founded the Center for Quick Response Manufacturing (QRM) at UW-Madison, which has collaborated with over 200 companies to implement QRM strategies. In 2010 Suri published It’s About Time: The Competitive Advantage of Quick Response Manufacturing to describe these methods.As a result of these and other contributions to the field of manufacturing, Suri was inducted into Industry Week’s Manufacturing Hall of Fame in 2010.
Dr. Rajan Suri
Four Core Concepts
QRM transforms productivity by reducing both external and internal lead times throughout an organization. Reducing external lead times means rapidly designing and manufacturing products for specific customer needs.
“The internal aspect focuses on reducing lead times for all tasks within the enterprise, such as the time to approve an engineering change or the time to issue a purchase order to a supplier,” says Suri. “Reducing these lead times results not only in quick response, but also improved quality and lower cost. Using QRM, companies with high-variety and custom products have reduced lead times by up to 90%.”
Suri has identified four core concepts that are the foundation of QRM:
- Realizing the power of time. Lead time is much more important than most managers realize; long lead times create many organizational costs that are four to five times greater than labor costs.
- Rethinking organization structure.QRM transforms traditional functional departments into a network of advanced QRM cells that are applied across the company.
- Exploiting system dynamics. By getting managers to understand how capacity, batch sizes, and other factors impact lead times, QRM enables them to make improved decisions that result in shorter lead times.
- Implementing a unified strategy enterprise-wide. QRM is not just for the shop floor; it is applied throughout the enterprise, including material planning and control, purchasing and supply chain, and new product development.
It’s About Time: The Competitive Advantage of Quick Response Manufacturing by Dr. Rajan Suri.
Think Soft, Not Hard
It is surprising to learn from Suri that only 7% of the price of a product made in the U.S. is due to direct labor (people who actually work on the fabrication or assembly). The remaining 93% comes from how the enterprise is organized, including the supply chain, planning, scheduling, manufacturing, warehousing, material handling, order processing, engineering, R&D, administration, marketing, sales, and distribution.
“Mechanical engineers are focused on the ‘hard’ technologies, like finding ways to speed up a machine or an operation,” says Suri. “Yet, for most manufacturing enterprises, ‘touch time’—the time that a person or a machine is actually working on a product—accounts for less than 5% of the total lead time for that product. So speeding up the touch time has little impact on lead time, considering how much lead time impacts cost. Engineers are often overly concerned with the hardware/controls and are not aware of the huge impact of these other factors. Being aware of this can help them look at the ‘bigger picture’ and rethink their focus when needed.”
Traditional (cost‐based) management methods rely on economies of scale that result in long lead times in the supply chain and factory. This adds costs to planning, forecasting, re–scheduling, expediting, warehousing, work‐in‐process, and other cost centers. Using QRM to reduce lead times can cut costs by up to 25%, outweighing the labor cost differential with China.
“In addition, by using time‐based thinking instead of cost-based thinking, companies can make low‐volume, customized products in shorter lead times,” says Suri. “This enables U.S. companies to compete effectively against low-wage countries in domestic and global markets and will be the key to success for American manufacturing in the future.”
Mark Crawford is an independent writer.
Using quick-response manufacturing, companies with high-variety and custom products have reduced lead times by up to 90 percent.
Dr. Rajan Suri