TIME - AN IRREVERSIBLE RESOURCE
Most of us are never conscious of time until one is faced with some deadline. By the time we reach it we find the deadline has passed and some start regretting the passing of the deadline with out any tangible outcome. This is because we are not conscious of the fact that TIME is an Irreversible Resource unlike all the other resource and once it is spent you cannot recover it back.
Most of the early days management thinking was focused on the concept of Time from the point of view of use of resources directly contributing to goods or services and there was the development of Time and Motion studies involving labour and machines. The subject of Industrial Engineering was an early recognition of this issue of Time as an important dimension when productivity was measured in terms of output per unit of time.
However as the business organisations grew bigger and bigger this importance of time was replaced by other esoteric subjects which were fashionable from time to time most of which concerned the use of behavioural sciences concepts to improve productivity and some where along the way the notion of Time as an important resource was lost sight of till Information Technology and the onslaught of Japanese Management concepts and Goldratts Theory of Constraints brought back this focus on time when the globalisation of economies after 1990s started affecting all businesses.
My own experience working with organisations on change and growth management gave me a ring side of view of how this focus on TIME can lead to dramatic performance improvements. I will share this with some examples of mine over the years which bring out different dimensions of TIME as an Irreversible Resource.
The earliest case was when we were working with a corporate hospital to implement Business Process reengineering in 1993. The management of the hospital was keen to adopt this concept in 1993 when Hammer and Champy's book on Reengineering the corporation hit the stands and it was fashionable for every one to climb on board. Since the first engagement was supposed to be a proof of concept of adaptability of the idea by the hospital they asked us to help implement the same in an offsite diagnostic centre.
When we started working with a cross functional team they all came to the conclusion that while the value adding time for most of the routine diagnostic tests was anywhere between 3 minutes to 20 minutes, due to other procedures as currently followed, they cannot deliever the report in less than 8 hours. So we challenged the team to come up with a re-engineered process using the concepts we taught them to deliver the report in 30 minutes for these routine tests. Surprisingly when they did a rethink they could simplify and re-engineer a 20 steps current process to 4 steps rengineered process and deliver the report in less than 30 minutes. Ofcourse the implementation took some time in making suitable IT modifications and setting up a little bit of mechanisation in sample handling and a re-layout of the centre. But the outcome of this project was it put pressure on all the competing labs in the neighbourhood to match this center for faster report. And a new standard for delivering diagnostic report was set.
The next example is an engineering company in power electronics which used to get orders for supplying custom built equipment for supply to large engineering projects. Over the previous 7 years of its existence the company had found that though on paper they had a gross margin of 60% they used to lose money on every order they executed. The management had asked me to take a relook at that business and recommend changes so that they can make that business unit profitable. The idea of adopting BPR was one of the approach they were open to.
When we sat with the cross functional team we analysed a sample of 100 orders over the last 7 years and looked at the time taken for each milestone from getting en enquiry to final payment collection. Two interesting observations were made by the team. Since the enquiry handling group in marketing was dealing with close to 1500 enquiries a year and they had to get inputs from all the departments concerned before making a final offer for each enquiry they were pressed for time for meeting the due date and made assumptions about the specs and made the offer knowing well that not more than 10% of these quotations would lead to an order. But when these orders landed up in the hands of the execution group they found errors in the tech and commercial specs as accepted by the marketing group and they went back to customer for amendments. Thus they lost time before they could take up these orders for execution waiting for amendments. Thus even after quoting a delivery time of 16- 20 weeks they could never deliver any order in less than 32 weeks and thus they ended up losing money in terms of liquidated damages etc.
When we sat with the team for redesigning the process we challenged them to come up with a process where we can deliver every order in 4 weeks time. Looked impossible till Wilfredo Pareto helped them to see that 80% of the enquiries were similar and required 20% of the 15 standard designs to be used and thus they could save on time to quote and also the accuracy of the quotations which was the root cause of all delays and losses. Needless to say they did come up with a redesigned process which helped them to execute orders in less than 4 weeks. But the most interesting revelation was that they now found they had excess capapcity than what they imagined before with out adding additional physical resources and they also had capability to take on export enquiries which they thought earlier was impossible to handle due to long delivery they quoted earlier. After about a year later I met the Marketing head at an airport and he told me that the manufacturing guys have put a lot of pressure on him to get more orders since the BPR helped them deliver faster than the rate at which marketing could fill the plant with new orders.
I have many more examples of focusing on time across different industries and services where the focus on TIME as a measurable goal to deliver value to customer had dramatic performance improvements. I shall give some of those cases in other contexts too since each case had a learning experience unique to that business and they are also very interesting lessons. But in every case we found that the focus on TIME as an irreversible resource was a powerful approach to make dramatic changes and get equally dramatic performance improvement.
Our favourite quote on TIME was god created only day and night but man created the concept of week and month and year. So if you want to focus on time focus on this day and night and what you do with it rather than week and month and year. The leading indicators of how time is used on a daily basis would give you lagging indicator financial performance you aspire for.
