Business Builder Bob - Just-in-Time #1

Processing Time is the Common Thread...

There are several important "Process" concepts that all come back to the same root idea. Just-in-Time, Pull Systems, and Value-Added Systems have a common measure of success. That metic is Process Time or P-Time.

Process time is the number of hours, days or weeks to take raw materials and deliver the final product to the customer. The greatest value comes from inclusion of supplier P-time and downstream distribution channel P-time in your calculation.

Here's an example. Think of yourself as the 3 X 5 printed shipping label that will end up in a consumers desk drawer and follow your journey. Let's assume it took 8 weeks to get from the paper mill to the print shop. There are two weeks of raw material inventory at the print shop (that's 10 weeks total). Let's assume there are multiple steps in the manufacturing process - print the labels, cut them out of the print web, count them into small packs, put small packages into boxes and finally move them into finsished goods inventory. If in process materials sit on pallets for a week between each step, that's another 5 weeks (15 weeks total). Then you sit in finished goods inventory at the print shop for 3 weeks and finally you ship to a retailer and sit on the store shelf for another 2 weeks before being purchased. You have lived 20weeks from when you were born in the paper mill to when the consumer purchased you. The P-time is 20 weeks.

The objective of "Just-in-Time", "Pull Systems", and "Value-added Process" concepts is to reduce P-time. An efficient supply chain and manufacturing process could could reduce the 20 weeks to 3-5 weeks.

So, what if it takes 20 weeks? What's in it for me to reduce P-time? The answer is CASH in your pocket. Tune in to the next few blogs.

Bob Tetu
Business Builder Bob