QuickStudy: Cycle Time

Whatever it is your business sells, you need to deliver it better, faster, cheaper. Or else. Cycle-time reduction is a vital tool in doing so. And these days, information technology goes hand-in-hand with cycle-time reduction.

Cycle time is the amount of time it takes to complete a process. Any process: developing a subassembly, collecting accounts receivable or delivering a product to market. The latter, time to market, is perhaps the best-known. According to a report published by the FedEx Center for Cycle Time Research at the University of Memphis, "All too often in organizations, less than 3% of the elapsed time performing a process has anything to do with real work." The rest is spent "scheduling, waiting, needless repetition, getting lost (and) getting found." You reduce cycle time by trimming the fat and focusing on the real work.

IT Reductions

IT has enabled dramatic reductions in cycle times. New cars go from concept to showroom in as few as 24 months, a 50% reduction over typical 1990 time to market. Computer-aided design (CAD) tools are a major factor; design processes that once required time-consuming clay models are now done online. Global collaboration shortens cycle times, too. For instance, engineers at Detroit-based General Motors Corp.'s power-train division use an intranet to exchange complex documents -- CAD drawings, electrical diagrams and software source code -- with colleagues all over the world.

Naturally, the Internet is helping shrink cycle time, especially critical time to market. Traditional consumer clinics and focus groups are giving way to Internet-based feedback systems, in which consumers study and critique virtual prototypes. Stuttgart, Germany-based DaimlerChrysler's PT Cruiser will use this tool.

This online response gathering is "so much faster and cheaper" than traditional focus groups, says Scott Elliott, a principal at Product Development Consulting Inc.'s Santa Rosa, Calif., office. Using the Web, he says, "you can survey 1,000 people . . . and get a 60% response. Takes two weeks. It used to take months." Boston-based Product Development has helped Lucent Technologies Inc. in Murray Hill, N.J.; Cisco Systems Inc. in San Jose; Eastman Kodak Co. in Rochester, N.Y.; and others define product specifications.

Ford Motor Co. in Dearborn, Mich., and GM are battling to use the Internet to reduce cycle times. Both companies hope recently announced e-commerce plans will reduce costs throughout their supply chains (News, Nov. 8). As Brian Kelley, president of Ford's global e-commerce unit, told Computerworld, "If we don't see a significant reduction in (manufacturing) cycle times, we won't have done our job." The automakers say that in four years or less, they'll be delivering built-to-order vehicles in three days.