Time-Based Management (TBM) is a strategic approach that focuses on reducing the time it takes to complete certain key business processes, with the understanding that shorter cycle times can lead to competitive advantage. The idea is that by speeding up processes, companies can respond faster to customer needs, adapt more quickly to changes in the market, reduce costs, and improve overall productivity and quality.
The main principles and components of Time-Based Management include:
- Customer Focus: Understand the value of time to the customer. This could relate to product delivery times, response times to inquiries, or the speed of service delivery.
- Process Analysis: Identify the processes that directly impact time performance and dissect them to understand where delays or inefficiencies occur.
- Continuous Improvement: Constantly look for ways to reduce cycle times in different processes. This often involves iterative testing and refinement.
- Elimination of Waste: This is inspired by lean management principles. In TBM, any activity that doesn’t add value from the customer’s perspective (and thereby extends the cycle time) is considered waste and is a target for elimination or reduction.
- Synchronization and Parallel Processing: Instead of performing activities sequentially, look for opportunities where tasks can be done in parallel to reduce overall process time.
- Decentralization of Decision-Making: Empower front-line employees to make decisions. This can reduce delays that occur when waiting for approvals from higher up in the organizational hierarchy.
- Use of Technology: Implement technology solutions that can automate tasks, improve communication speed, or otherwise reduce time taken in processes.
- Performance Measurement: Regularly measure and analyze time-related performance metrics to monitor progress and identify areas for further improvement.
Example of Time-Based Management
Let’s illustrate Time-Based Management (TBM) using a hypothetical example involving an online retailer:
QuickShop is an online retailer that has traditionally prided itself on offering a wide variety of products. However, in recent market analyses, they’ve identified that their shipping times are considerably longer than their main competitors, leading to customer dissatisfaction and lost sales.
QuickShop wants to reduce its average shipping time from 5 days to 2 days within one year using Time-Based Management principles.
1. Customer Focus:
Through customer surveys, QuickShop identifies that timely delivery is one of the top three factors affecting customer satisfaction and repeat purchases. They set a clear target based on this feedback: achieving a 2-day average shipping time.
2. Process Analysis:
The company maps out the entire order processing and shipping workflow. They identify several bottlenecks, such as manual order verifications, slow inventory picking, and a delay in handing over packages to the shipping partner.
3. Continuous Improvement:
QuickShop holds monthly brainstorming sessions with different teams (order processing, warehouse, logistics) to identify potential improvements.
4. Elimination of Waste:
They eliminate the manual order verification step for orders below a certain value, trusting their automated system to handle these smaller transactions. This shaves off several hours from the processing time.
5. Synchronization and Parallel Processing:
QuickShop restructures its warehouse processes. Instead of processing one order at a time, they group orders by product type and location, allowing workers to pick products for multiple orders simultaneously.
6. Decentralization of Decision-Making:
Warehouse supervisors are given the authority to make on-the-spot decisions regarding order prioritization, especially during peak sale seasons.
7. Use of Technology:
QuickShop invests in advanced order tracking and warehouse management software. This software automatically allocates orders to specific workers based on their current location in the warehouse, reducing walking and search time.
8. Performance Measurement:
They introduce new performance metrics to monitor order processing and shipping speed. Any delay beyond the 2-day shipping target is analyzed for root causes.
After implementing these changes over the span of 8 months, QuickShop manages to achieve an average shipping time of 2.2 days. Customer satisfaction scores related to shipping time see a significant improvement, and there’s a noticeable uptick in repeat purchases.
This example showcases how Time-Based Management can be applied in a practical scenario, leading to tangible benefits and competitive advantage.