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Today, time is the cutting edge. In fact,
as a strategic weapon, contend George Stalk, Jr., and Thomas
M. Hout, time is the equivalent of money, productivity,
quality, even innovation. In this path-breaking book based
upon ten years of research, the authors argue that the ways
leading companies manage time -- in production, in new product
development, and in sales and distribution -- represent
the most powerful new sources of competitive advantage.
With many detailed examples from companies
that have put time-based strategies in place, such as Federal
Express, Ford, Milliken, Honda, Deere, Toyota, Sun Microsystems,
Wal-Mart, Citicorp, Harley-Davidson, and Mitsubishi, the
authors describe exactly how reducing elapsed time can make
the critical difference between success and failure. Give
customers what they want when they want it, or the competition
will. Time-based companies are offering greater varieties
of products and services, at lower costs, and will quicker
delivery times than their more pedestrian competitors. Moreover,
the authors show that by refocusing their organizations
on responsiveness, companies are discovering that long-held
assumptions about the behavior of costs and customers are
not true: Costs do not increase when lead times are reduced;
they decline. Costs do not increase with greater investment
in quality; they decrease. Costs do not go up when product
variety is increased and response time is decreased; they
go down. And contrary to a commonly held belief that customer
demand would be only marginally improved by expanded product
choice and better responsiveness, the authors show that
the actual results have been an explosion in the demand
for the product or service of a time-sensitive competitor,
in most cases catapulting it into the most profitable segments
of its markets.
With persuasive evidence, Stalk and Hout
document that time consumption, like cost, is quantifiable
and therefore manageable. Today's new-generation companies
recognize time as the fourth dimension of competitiveness
and, as a result, operate with flexible manufacturing and
rapid-response systems, and place extraordinary emphasis
on R&D and innovation. Factories are close to the customers
they serve. Organizations are structured to produce fast
responses rather than low costs and control. Companies concentrate
on reducing if not eliminating delays and using their response
advantage to attract the most profitable customers.
Stalk and Hout conclude that virtually all
businesses can use time as a competitive weapon. In industry
after industry, they illustrate the processes involved in
becoming a time-based competitor and the ways managers can
open and sustain a significant advantage over the competition.
George Stalk, Jr., is vice-president
and director of The Boston Consulting Group in Chicago,
Illinois, coauthor of Kaisha: The Japanese Corporation,
and author of "Time -- The Next Source of Competitive
Advantage," which won the 1989 McKinsey Award for the
best Harvard Business Review article of the year.
Thomas M. Hout is vice-president and
director of The Boston Consulting Group in Boston, Massachusetts,
and coauthor of Japanese Industrial
Policy.
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