Innovative practice helps Midwest firms leapfrog their 'lean' competitors
Throughout the world, many industrial leaders have embraced the Japanese practice of "lean manufacturing" -- the process of producing just what is needed, when it is needed with only the required materials, labor, equipment and space.
But in the Midwest, a relatively new strategy developed by a UW-Madison engineer has enabled some companies to greatly surpass their "lean" competitors' success.
Quick response manufacturing (QRM), the brainchild of industrial engineering Professor Rajan Suri, goes beyond the capabilities of lean manufacturing by incorporating everyone and every part of an organization -- from the shop floor to the office; from reorganizing production to new product introduction; from accounting to performance measures; and from purchasing to sales.
In the simplest terms, QRM calls for squeezing excess time from every system, says Suri, who directs the College of Engineering's Center for Quick Response Manufacturing.
"In the Midwest, some companies have found that in certain market segments, lean manufacturing strategies are not appropriate and QRM has a greater potential for promoting competitiveness," says Suri. "QRM develops strategies to uncover and eliminate waste and inefficiency across all functional areas."
QRM works best for companies that make highly engineered products in small batches, as well as for companies that do not engineer each product but have a large number of different product specifications with highly variable demands for each, explains Suri. "For such companies, lean manufacturing will lead to a proliferation of inventory."
The concept of squeezing time out of a system is not new, says Suri. "However, QRM goes beyond previous time-based or speed strategies in many ways. "With all the previous writings, managers were still missing the detailed 'how-tos' for implementing these concepts."
Suri's research has shown that 70 percent of policies used by U.S. managers today still work against quick response. "QRM begins by removing such misconceptions about how to implement speed," he says.
"Next," he adds, "QRM provides a comprehensive, companywide theory on implementing speed, supplemented with many practical details covering such issues as how to start, specific tools, and step-by-step methodologies. It also puts these principals together in a consistent framework in terms of management's goals, performance measurement and organizational structure."
QRM success stories abound throughout the Midwest. For example:
Ingersoll Cutting Tool Company, Rockford, Ill., reduced its order processing lead times in one market segment from several weeks to a day, and its share in that segment has grown 600 percent in three years. "When you focus your organization on lead time reduction, following the principles of QRM, you will find whole new ways of completing projects in less time and at lower costs," says Merle E. Clewett, CEO of Ingersoll International Cutting Tool Group.
Deere & Company of Moline, Ill., implemented changes that improved customer response time and allowed them to take millions of dollars of unnecessary inventory out of the supply chain.
Other companies the center has helped include ALCOA Corporation, Davenport, Iowa; Converter Concepts, Pardeeville, Wis.; ALKAR Corp., Lodi, Wis.; Beloit Corp., Beloit, Wis.; Deltrol Controls, Milwaukee; HUFCOR, Inc., Janesville, Wis.; MTS Systems Corp., Minneapolis; Micro Switch Division of Honeywell, Inc., Freeport, Ill.; Pensar Corp., Appleton, Wis.; and Trek Bicycle Corp., Waterloo, Wis.
Suri has experienced so much success with QRM that he recently published a book detailing the process. "Quick Response Manufacturing: A Companywide Approach to Lead Time Reduction" (Productivity Press, 1998), is based on more than a decade of research and consulting experiences with dozens of manufacturing companies. It includes a foreword by John Burke, president of Trek Bicycle.