What is Quick Response

Manufacturing (QRM)?
I. It is a companywide strategy to cut lead times in all

phases of manufacturing and office operations.

II. It can bring your products to the market more quickly

and help you compete in a rapidly changing

manufacturing arena.

III. It will increase profitability by Reducing Cost,

Enhance Delivery Performance and Improve Quality.

Quick Responce manufacturing, by Dr. Guteta K. 1

 Cont’
QRM's overarching focus on time as the guiding
management strategy is ideally suited for companies
offering high-mix, low-volume and custom-engineered
products.
In fact, many companies making highly customized
products and/or a high variability in their product mix
have used QRM as an addition to existing Lean, Six
Sigma, and other improvement efforts.

Quick Responce manufacturing, by Dr. Guteta K. 2

QRM can be defined as :-
QRM is a companywide strategy that pursues the
reduction of lead time in all aspects of a company’s
operations, both internally and externally.
 Specifically, from a customer’s point of view, the external
aspect, QRM means responding to that customer’s needs by
rapidly designing and manufacturing products customized
to those needs.
 Also, in terms of a company’s own operations, Internal
aspect, QRM focuses on reducing the lead times for all tasks
across the whole enterprise. This resulting in improved
quality, lower cost, and of course, quick response.
Quick Responce manufacturing, by Dr. Guteta K. 3
 The four core concepts of QRM
1. Realizing
2. Rethinking
the Power
Organizational
of Time.
Structure.

3. Understanding 4. Implementing a
and Exploiting Unified Strategy
System Enterprise-wide.
Dynamics.
QRM strategy comprises four core concepts:
Quick Responce manufacturing, by Dr. Guteta K. 4
 Variability
Lean and Six Sigma approaches provide many tools to identify and eliminate
variability in operations and create better flow. These approaches have been
shown to work well in high-volume production environments. In contrast,
high-mix, low-volume and customization environments pose significant
challenges due to the presence of two different types of variability.
Dysfunctional variability: Errors, ineffective
systems and poor organization that cause
rework, constantly changing priorities and
"lumpy" demand.
Strategic variability: This form of variability
is introduced to enterprises in order to
compete in the market. The ability to cope
with unexpected changes in demand, a large
selection of options for customers and offering
custom-engineered products are all examples
for strategic variability. Quick Responce manufacturing, by Dr. Guteta K. 5
QRM's impact on the bottom line
% MCT % Cost
Commodity MCT (in days) % On-Time Delivery As-Delivered PPM
Reduction Reduction

Before After Before After Before After

Blades 15 2 87 74 97 4,500 300 11

Knives 104 15 86 40 88 12,000 1,500 22

Hydraulic
Valves
141 10 93 40 98 50,000 1,500 14

Hydraulic
Motors
42 18 57 40 97 15,000 500 13

Wiring
Harnesses
32 2 94 43 99 3,000 500 20

Seat Assemblies 25 5 80 40 95 50,000 500 16

Machined Parts 22 10 56 99 99 300 300 12

Circuit Boards 25 16 36 99 100 3,164 14 17

Quick Responce manufacturing, by Dr. Guteta K. 6
 The new materials Control and
Replenishment System for QRM - POLCA
What is need of new materials control?
 The 21st century market changing its market scenario, executives in
manufacturing corporations have been seeking new competitive strategies.
 While today’s world abounds with new acronyms and business strategies,
one strategy that has become popular recently is Lean Manufacturing.
 Actually, Lean is based on the Japanese just-in-time (JIT) manufacturing
techniques, which have now been described and popularized under the
name of “Lean Manufacturing”.
 Although Lean has produced impressive results in many companies and is
certainly an effective strategy, but to serve 21st century markets effectively,
Lean would have several shortcomings.
 In fact, the JIT strategy on which Lean is based was designed for situations
with relatively stable demand and largely for replacement products
nevertheless, the Lean principles of flow, takt time, level scheduling and pull
(Kanban) all break down when attempting to serve 21st century markets.
Quick Responce manufacturing, by Dr. Guteta K. 7
Contrasting QRM With Lean:
The driver for all the principles and strategies in QRM is reduction
of lead time. In contrast the driver in JIT/Lean is waste reduction.
Below we will see examples of where the QRM mindset can be
more effective in 21st century markets.
Most companies still lack the knowledge and the tools to
effectively reduce their lead times. Worse still, policies are in place
that are lengthening, rather than shortening, lead times. QRM
devotes a substantial amount of effort in educating management
and workers on why these traditional policies result in long lead
times, and in showing them the QRM principles that must be put
in place instead.
QRM is a company-wide strategy with implications far beyond the
shop floor – principles for other company areas such as office
operations are clearly presented as part of the QRM philosophy.
Quick Responce manufacturing, by Dr. Guteta K. 8
Cont’
QRM provides rational principles and tools for lead time
reduction. It uses an understanding of system dynamics,
and exploits this understanding to define the best
structures and policies that will reduce lead times.
For serving 21st century markets, the Lean strategy of “pull”
(Kanban) is either wasteful or breaks down altogether. For
such companies, QRM provides an alternative strategy
called POLCA, which combines the best features of “push”
(MRP) and “pull” without their drawbacks.
The QRM approach extends to supply management as well,
and is called time-based supply management. Companies
such as John Deere are finding that this can produce
dramatic reductions in both supplier lead time and cost

Quick Responce manufacturing, by Dr. Guteta K. 9

 How QRM Goes Beyond Lean – A Ten-Point Summary
Factor Lean Approach QRM Approach
1. Origin Derived from the Toyota Production Designed from the ground up for low-volume
System. Works best for high-volume, and custom-engineered products. (Also enables
repetitive production. you to compete with low-wage countries.)

2. Dealing Tools such as Takt Time, Standard Work Eliminate dysfunctional variability.
with and Level Scheduling target the Strategic variability provides competitive
Variability elimination of all variability. advantage: exploit it using QRM tools.
3. Driver Driver is elimination of waste. Metrics Driver is elimination of lead time,
and Metrics based on seven types of waste; these identified by the Manufacturing Critical-
measure the ―micro‖ impact in seven path Time (MCT) metric. Encourages global
areas, but may not give insight into view of waste throughout the extended
―macro‖ system-wide waste. Hard to enterprise. MCT provides a unified measure
evaluate success of projects when seven of system-wide waste and a single metric for
measurements are involved. improvement projects.

4. Cell Cell structure is rigid, based on QRM cells are flexible and allow multiple
Design Standard Work, Takt Time and linear flows for higher variety. Emphasis is on
flow. Highly effective for repetitive teamwork, ownership and cross-training.
production.
5. Material Use Kanban for material control. Use POLCA for material control. Builds on
Control Simple, visual system and works well for cellular structure and your MRP system.
high-volume parts, but creates excess Slightly more complex than Kanban, but
inventory for low-volume parts, and works equally well for high-volume, low-
cannot be used for custom-engineered volume and custom parts.
parts.
Quick Responce manufacturing, by Dr. Guteta K. 10
Factor Lean Approach QRM Approach
6. Material Replace Material Requirements Planning Build on your existing MRP system, but simplify it to
Planning (MRP) with Kanban. Again, not practical a ―high-level‖ MRP system and supplement it with
for low-volume or custom parts. POLCA for material control.
7. Capacity Use Takt Time for planning capacity at Strategically plan for spare capacity. Include job
Planning operations. Takt Time is calculated solely variability and lead time targets to decide amount of
from production targets. Simple and easy spare capacity needed (e.g. more spare capacity in
to understand, but not applicable to high- higher variability operations).
variability environments.
8. Supply Emphasis on waste reduction tends to Focus on lead time reduction results in a global
Management be local and inward focused. Not clear outlook through time-based supply management
how to extend to supply chain. Takt – for example, revising goals of supplier
time and Kanban may not be the right improvement programs and rethinking sourcing
tools for extended and global supply decisions.
chains.
9.Company- Message not clear to nonmanufacturing Being responsive to customers provides unifying
wide areas; seven lean wastes may not apply goal for the whole enterprise. QRM approach can
application in other areas. Key tools such as Takt be used in all areas. Specific tools for office
Time and Kanban also stem from shop operations, including Focused Target Market
floor operations. Not clear how to apply Segments (FTMS) and Quick Response Office
them to nonmanufacturing operations. Cells (Q-ROCs).
10. Decision- Ongoing struggle to convince Teaches executives about huge financial impact
Making and executives to change policies. Local of time; encourages time-based decision-making
Justification waste elimination focus may not and financial justification. Small adjustments to
provide sufficient justification. May existing accounting system are sufficient.
require new accounting methods
(―Lean Accounting‖).

Quick Responce manufacturing, by Dr. Guteta K. 11

Overview of QRM Principles
 Traditional Belief #1: Everyone will have to work faster, harder and longer
hours, in order to get jobs done in less time.
 QRM Principle #1: Find whole new ways of completing a job, with the focus
on lead time minimization.
Traditional Belief #2. To get jobs out fast, we must keep our machines and
people busy all the time.
QRM Principle #2: Strategically plan for spare capacity – plan to operate
at 80% or even 70% capacity on critical resources.
Traditional Belief #3: In order to reduce our lead times, we have to improve our
efficiencies.
 QRM Principle #3: Measure the reduction of lead times and make this the main
performance measure. Eliminate traditional measures of utilization and efficiency.

Traditional Belief #4: We must place great importance on “on-time”

delivery performance by each of our departments and our suppliers.
QRM Principle #4: Stick to measuring and rewarding reduction of lead
times. Quick Responce manufacturing, by Dr. Guteta K. 12
 Cont’
 Traditional Belief #5: Installing a material requirements planning
(MRP) system will help in reducing lead times.
 QRM Principle #5. Use MRP for high level planning and coordination
of materials. Restructure the manufacturing organization into simpler
product oriented cells. Complement this with POLCA, a new material
control method that combines the best of push and pull strategies.
 Traditional Belief #6. Since long lead time items need to be ordered
in large quantities, we should negotiate quantity discounts with
suppliers.
 QRM Principle #6: Motivate suppliers to implement QRM, resulting in
small lot deliveries at lower cost, better quality, and short lead times.
Traditional Belief #7: We should encourage our customers to buy our
products in large quantities by offering price breaks and quantity
discounts.
QRM Principle #7: Educate customers on your QRM program, and
negotiate a schedule of moving to smaller lot deliveries at reasonable
prices. Quick Responce manufacturing, by Dr. Guteta K. 13
 Cont’
 Traditional Belief #8: We can implement QRM by forming teams in each
department.
 QRM principle #8: Cut through functional boundaries by forming a Quick
Response Office Cell (Q-ROC), which is a closed-loop, collocated,
multifunctional, cross-trained team responsible for a family of products
aimed at a focused target market segment, and empower the Q-ROC to make
necessary decisions.
 Traditional Belief #9: The reason for implementing QRM is so that we can
charge our customers more for rush jobs.
QRM Principle #9: The reason for embarking on the QRM journey is that it
leads to a truly productive company with a more secure future. Also, lower
cost/price, higher quality and shorter lead times result in highly satisfied
customers.
Traditional Belief #10: Implementing QRM will require large investments in technology.
QRM Principle #10: The biggest obstacle to QRM is not technology, but “mindset.”
Management must recognize this and combat it through training. Next, companies
should engage in “low-cost” or “no-cost” lead time reductions, leaving expensive
technological solutions for a later stage.
Quick Responce manufacturing, by Dr. Guteta K. 14
 POLCA: The Material Control System
for QRM
As just discussed, pull systems (which usually involve
some sort of material control mechanism such as kanban)
are not appropriate for companies that are trying to serve
21st century markets.
At the same time, push systems using MRP have their own
drawbacks in terms of exacerbating the Response Time
Spiral and promoting ever-longer lead times.
In order to support the overall QRM approach for
companies serving 21st century markets, there was a need
to develop a whole new material control method. We have
devised such a method called Paired-cell Overlapping
Loops of Cards with Authorization, or POLCA.
Quick Responce manufacturing, by Dr. Guteta K. 15
Cont’
To understand the basis for POLCA, let us review the types of
companies serving 21st century markets. These are:
(i) companies that make custom-engineered products in small
batches (or even one-of-a-kind), and
(ii) companies that don’t custom engineer each product, but still
have such a wide variety of options and combinations of
specifications that they cannot afford to store inventory for all
these options at various stages of their manufacturing system.
QRM strategy organizes these companies as follows: first the
company creates cells focusing on subsets of the production
process for similar parts, and then it processes a given customer
order through differing cells depending on the needs of that
order. HL/MRP, is used to provide high level planning and
coordination of materials from external suppliers and across
these internal cells, but not micromanage work centers in the
cells.
Quick Responce manufacturing, by Dr. Guteta K. 16
 Cont’
To proceed from this
high-level structure to the
next level, which involves
shop floor material
movement and POLCA,
we will consider an
example of a company Figure 1. Organization
of Cells at CFP
called customized Corporation
faceplates, Corp.

In order to serve its market niche for customized plates, CFP Corp. thus has three
key requirements for its materials management system:
(1) The ability to route products through different combinations of cells, as
needed by a given order;
(2) Within a cell, the ability for products to use machines in different sequences;
and
(3) A good deal of flexibility in terms of capacity requirements for each operation
in a cell. Quick Responce manufacturing, by Dr. Guteta K. 17
 Cont’
It should note that the original intent of MRP systems was to
enable a company such as CFP to achieve these requirements.
Also, as we just discussed, a pull system will not work for this
organization.
Instead, the material control system that we have devised for
use in a QRM company is called POLCA (Paired-cell
Overlapping Loops of Cards with Authorization – each of
these terms will be explained below).
This system operates in the context of a High Level material
requirements planning system (HL/MRP) and a cellular
organization, in other words these are prerequisites for
POLCA.
Quick Responce manufacturing, by Dr. Guteta K. 18
The key features on which POLCA is based
First, for each order, Release Authorization times are
created via HL/MRP. Similar to start dates in an MRP
system, the HL/MRP system generates times when
each cell may begin work on a particular order as
explained above.
POLCA simply authorizes the beginning of the work, but
the cell cannot start without other conditions being
satisfied,
Production control cards, which we call POLCA cards,
are used to communicate and control the material
movement between cells. While this may seem
similar to kanban, there are several differences.
Quick Responce manufacturing, by Dr. Guteta K. 19
Differences between Kanban and POLCA
First, the cards are only used to control movement between
cells, not within cells. (For material control between
workstations within a cell, cells have the freedom to use
various other procedures.)
Second, the POLCA cards, are not specific to a product, as
in a pull system, but are assigned to pairs of cells, and
apply to all products going from the first cell to the second
cell in the pair.
Figure 2 shows the POLCA card flows for a particular order at
CFP Corp. This order’s routing takes it from P1 to F2, then to
A4 for assembly, and finally to S1 to be shipped. This order
will therefore proceed through the POLCA card loops with
the pairs P1/F2, F2/A4 and A4/S1, as shown in the figure.

Quick Responce manufacturing, by Dr. Guteta K. 20

 Cont’
Third, and this is a key difference, whereas
a Kanban card is an inventory replenishment signal, a POLCA card
is a capacity signal.
Specifically, a POLCA card returning from a downstream cell
signals that the cell has available capacity to process more work.
The fourth difference from kanban is that the POLCA cards for
each pair of cells stay with a job during its journey through both
cells in the pair before they loop back to the first cell in the pair.
For example, a P1/F2 card above would be attached to a job as the
job entered cell P1, it would stay with this job through cell P1 and
as it goes to cell F2, continue to stay with the job until cell F2 has
completed it, and while the job moves on to its next cell (A4), this
P1/ F2 card would be returned to cell P1. Since most cells will
belong to more than one pair of cells, there will be multiple loops
of cards that overlap in each cell, as seen in Figure 2.
Quick Responce manufacturing, by Dr. Guteta K. 21
 Figure 2 POLCA Card Flows for a Particular Order at CFP Corp.
The characteristics of this custom-engineered order require it to be processed
in cells P1, F2, A4 and S1. Thus, this order will flow through the company by
using the POLCA loops P1/F2, F2/A4 and A4/S1 as shown above.
Quick Responce manufacturing, by Dr. Guteta K. 22
 Advantages of POLCA Over Both Push (MRP) and Pull
(Kanban) Systems
POLCA builds on the cellular structure in an organization,
and provides a simple mechanism to enable the cells to work
together effectively.
In a sense, POLCA combines the best of push and pull
systems, while at the same time avoiding their
disadvantages. These are :-
1. First, POLCA helps in managing short-term fluctuations in
capacity and also assists in reducing congestion on the
shop floor.
 Essentially, the use of POLCA cards assures that each cell
only works on jobs that are destined for downstream cells
that will also be able to work on these jobs in the near future.
Quick Responce manufacturing, by Dr. Guteta K. 23
 Cont’
Second, the use of HL/MRP as a driver in POLCA has two
benefits: first, it allows a make to-order environment
through flexible routings that use cells as needed, and
second, the use of authorization times generated by
HL/MRP prevents build-up of unnecessary inventory.
Third, POLCA cards are not linked to part numbers. This
ensures that there is no proliferation of inventory for
companies that make a large variety of products or
components. Since pull is essentially a replenishment
system, it requires a base stock level of each component,
which is replenished when it is used.
Fourth, unlike a pull system where workstations are tightly
coupled via kanban cards, the POLCA cards flow in longer
loops. There is coupling of cells, but it is more flexible.
Quick Responce manufacturing, by Dr. Guteta K. 24