Research Paper
on
Fast-Cycle Capability For
Competitive Power
Introduction
Fast-cycle capability improves the competitive performance of a company in its
entirety. A company is able to improve on almost all other functions if it
captures time efficiency. It is able to reduce production costs because of
reduced overheads on production materials, information, and work-in-progress
inventory. Such fast-cycle companies are able to serve customers much faster
than their competitors. Product quality and availability is also achieved
through smooth, error-free, and speedy operation of production as well as
distribution cycle.
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Summary Of The Article
Bowen & Hout (1988) has concentrated on the significance and importance of time
in the production cycle calling it a competitive power. Time, apart from other
factors is the most important source of competitive advantage for today’s modern
business world. Strategic outsourcing for better quality and timely delivery,
improved distribution channels, faster decision making, technological indulgence
in almost every stage of a product’s development and high-tech involvement in
the marketing concepts have all changed the outlook and bases of competition.
The article places a unique emphasis on the reduced time involved in the
delivery as well as the product development and its life cycle as a source of
competitive edge. It argues that all other factors eventually merge at this
junction of time saving. Time-based competition belongs to a new generation of
competition where those who can manage and compete in timely ways, can survive.
They are able to achieve better results by focusing their organizations on
flexibility and responsiveness.
A core objective of modern businesses engaged in severe competition is the
reduction of process cycle time to achieve a faster pace of business process
operations. One can also call it the time compression management. What happens
is that a company redesigns more and more of its business processes through a
set of interrelated processes achieving time compression gradually. The
redesigned organization thus acquires fast-cycle capabilities in its decisions
and actions, methods and operations. It is characterized by a systematic change
in the way it manages time, accomplishes work, and provides value to customers.
A fast-cycle capability enterprise performs its functions smoothly. The faster
flow of information, decisions, materials, and work, in such a company, enables
it to respond faster to customer demands, and changes in the market, and
competitive conditions.
The article summarizes the main characteristics of fast-cycle capabilities for
companies stating that they are able to:
1) Organize as much work as possible around small, self-managing,
multifunctional teams;
2) Track cycle times for individual activities and for the delivery system as a
whole; and
3) Build learning loops to inform everyone about customers, competitors, and the
company’s operations.
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Critique
Although it is true that a fast-cycle capability organization manages its
functions smoothly but one needs to keep in mind that an organization in the
modern world has more links and dependence with outside world than ever before.
World is rapidly becoming a global village. Therefore, faster delivery is not
only dependent on the company itself but also on the various suppliers and
backward linkages as well as forward linkages and their efficiency in time
management. Fast-cycle capability needs rethinking periodically the different
product lines, delivery and distribution, service to customers, and the unique
value it provides. Time management competition has a shorter life as others can
also come up quickly with the time efficiency but things like discoveries and
innovation are much harder to copy.
The article emphasizes more on the flexibility through reduced time but slightly
ignores the costs of reengineering effort for itself as well as for the
improvement of its suppliers. A company also needs to encompass all aspects of
product development from finding out the consumer perception of its products to
actually making sure the consumer receives the desired product. There is a need
to pay more emphasis on adoption of modern technologies for the sustenance of
fast-cycle capability. It is the ability of engineers to design products that
are quicker and easier to make, and are therefore cheaper and of superior
quality. We should not ignore the role of engineers in the appraisal of
managers.
An interconnected and interlinked topic is that of supply chain management,
whereby managers make sure that others are falling exactly in line with their
expectations and demands of timely deliveries and other requirements. Two basic
supply chain management tools are a) Building long-term, mutually beneficial
supplier relationships, and b) Using Internet or electronic data interchange
(EDI), and schedule sharing, to cut administrative reaction time to demand
variations. These factors or tools cannot be ignored by a company if it desires
to reap advantages of fast-cycle capability. Similarly, fast-cycle companies are
also characterized by a distinctive set of organizational support systems, for
sustaining their time-compression management. These have not been discussed in
depth by the article. The support systems are based on the view that an
enterprise is an integrated system comprising of various interrelated factors,
which support each other for attaining the overall goals of the organization.
Other important factors that should also be considered in building fast-cycle
capabilities are the vision and concept development. These should be very
clearly perceived by those engaged in the development of fast-cycle
capabilities. The article also lacks in its emphasis on the fact that the
competitive edges of the future businesses will be based on the assembling of
publicly available components. The role of management will then be to achieve
efficiency in arranging of timely delivery of parts.
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Comments
Companies which focus on other factors for competitive advantage such as cheaper
labor often find themselves entrapped due to external factors whereby they are
nor able to sustain their advantage. Such factors can be a wage rate rise or
political embargoes etc. But for those companies, which base themselves on time
factor can achieve flexibility in their decisions and actions and are better
able to cope with external factors while maintaining and sustaining their
competitive advantage. Modern companies compete with flexible manufacturing and
quick responses. They engage into diversification and increasing innovation,
which are time-based rather than cost reducing strategies. Such a logistic
strategy basing on time is more powerful than the traditional strategies based
on cost reduction, low wages, scale or focus.
Stalk, G (1988) has discussed the very nature of time in the business
efficiency. Modern companies have emerged out of their very own environment and
stepped into the global markets. This world-over and globalized activity of
companies provides a threat as well as an opportunity to the global as well as
the local companies in the shape of time importance. Those who have been
successful in the management of time have captured this opportunity to make gold
out of hay, others who lagged behind have or are on the edge of dropping out of
the business arena.
The article provides valuable insights into the usage of modern techniques of
time management for today’s business. Traditional strategies involve lengthy
time delays, which can downturn the view of the market, leading to disruption,
waste and inefficiency. Fast cycle capability have three main characteristics
viz. shorter length of production runs, process based organization of components
and central complexity of scheduling procedures. Companies that are churning out
innovative products and methods faster than their competitors are enjoying huge
competitive advantages.
References
Bowen, Joseph L. and Thomas M. Hout (1988), “Fast-Cycle Capability for
Competitive Power”, Harvard Business Review Vol.66, 110-118
Stalk, G (1988), “Time - the next source of competitive advantage”, Harvard
Business Review, 66, July-August 41-51
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