Lack of measurements to guide the accomplishment of their mission objectives held them back.
The Challenge. Zytec, a manufacturer of power supplies, embarked on a program to transform the company into a world class manufacturer. It’s mission statement identified several objectives needed to accomplish this capability. These included improving total quality, increasing manufacturing flexibility, improving customer service and reducing cost. The challenge was the lack of measurements to guide the accomplishment of these objectives.
The Solution. Zytec used cost analytics to reduce the elapsed time from the time orders were placed for components to the time the finished product was shipped to the customer. Order lead time for components was used as a cost driver to trace the cost of procurement activities to the product. Manufacturing cycle time was used to trace manufacturing overhead to the product. This focus on elapsed time was consistent with a manufacturing strategy that emphasized cost, quality, and flexibility-all three of which the company believed were a function of time.