Time-based opportunities to reduce cost

The second key element of time-based competition is to reduce cost and therefore improve productivity through the elimination of non-value-added time in processes. This means that wasted lead time and unnecessary tasks that are not actually adding any value in the customer s eyes should be identified and eliminated. Stopping unnecessary tasks and removing wasted time from those that remain lowers cost by  

Over the longer term, processes become more visible, inventory levels reduce and opportunities to minimise capital expenses become more visible. These opportunities include the removal of equipment not employed in activities that add value. Initial items to remove will include the racking and pallets formerly used to store inventory. Next will be a pirrge of unnecessary equipment in offices, stores and production, including the jigging for unnecessary operations of obsolete parts. 

In terms of what to do with superfluous items, some may be sold and capital recovered. The remaining items should just be skipped. While it may seem stupid to simply throw away equipment given how much some Items have cost, these are sunk costs. If the equipment can no longer be used to generate revenue, all it does is incur further costs, such as maintenance, and the floor space it occupies will have many better uses. 

As a company embraces time-based competition then success in the marketplace will increase demand for products and services that the customer really values. To make way for these means that space will be at a premium in the company. This is just the driver needed to replace the old with the new. 

Shortened lead times in product development are achieved in part by more effective use of development resources through elimination of rework and reduction of distracting superfluous projects. This leads to cost reductions as the time spent on a given project is less. 

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