What is QRM?
Quick Response Manufacturing (QRM)
is a company-wide strategy, founded by the QRM Institute Special Advisor Rajan Suri, that reduces lead times on the shop floor and in the office operations. It allows companies to grow by bringing their products to the market more rapidly. QRM further increases profitability by reducing cost, enhancing delivery performance and improving quality.
We see it happening all around us. The consumer demands more choice and desires prompt deliveries. Customization and speed are more important than ever before and this holds for all parties in the supply chain. It is of critical importance for all organizations to respond adequately to these trends. With QRM this can be done in a sustainable and integral manner.
QRM consists of four core concepts.
Core concept 1: Highlighting the power of time
Long lead times are the driver behind many hidden and underestimated costs. Companies with long lead times will typically have large inventories, excessive planning activities, expediting costs, unnecessary re-work, etc. Chances are that the salesforce will have to spend a significant amount of time dealing with customers who are complaining about the long lead times, instead of actually selling products.
By focusing on lead time reduction, QRM helps companies to re-ignite their growth and reduce the hidden costs. At the same time, the singular focus on lead time reduction eliminates conflicting and counterproductive goals.
Core concept 2: Creating the right organizational structure
The traditional focus of manufacturing companies on cost reduction has resulted in a high degree of labour specialization and cumbersome hierarchical structures. As an unintended consequence, this has caused lead times to become unnecessary long and have triggered a vicious circle of adding more steps and controls to manage the long lead times
To break the gridlock, QRM proposes a structural change to the organization. The main building block of a QRM organization is the QRM Cell. A QRM Cell is a team of dedicated, multifunctional resources, co-located in one place, so that the team can perform all the necessary steps for the products of a specific segment. The people in the QRM Cells are cross-trained and have the complete responsibility of all the operations in the cell. The primary goal of these teams is the reduction of the lead time.
Core concept 3: Exploiting system dynamics for better decisions
System dynamics provides insights in the surprising relations between lot-sizing, capacity utilization, variability and lead time. By applying these insights, managers can take better decisions and further reduce the lead time.
Most organizations will try to maximize the utilization level of their resources to lower their costs. Although this looks like a reasonable strategy at first sight, system dynamics actually shows that in a high mix/low volume environment it is economically beneficial to operate some of the key resources at a lower utilization level of 80-85%.
Core concept 4: Building a company-wide strategy
Lead time reduction should not be limited to the shop floor. The biggest benefits will arise when lead time reduction is applied to all the parts of an organization, such as the office operations, material planning, production control and new product introduction. A big leap can often be made by expanding QRM to the supply chain.
Quick Response Manufacturing (QRM) is an alternative way of working that is noticeable throughout the entire organization. Organizational change can be exciting and difficult at the same time. However, if you implement QRM step by step, keeping your final goal in mind and ever communicating clearly with your employees, it will lead to a positive change within your organization. The bottom-line results of the organization will improve and the employees will experience a higher work fulfilment.