More than ever the element of time is critical to businesses today. Businesses need to compete on the basis of speed to achieve a competitive edge in the marketplace. Being responsive to customers needs as they occur and reducing the time between conception and delivery to the customer are central to Lean . Stalk and Hout in their book, Competing Against Time , identified 4 rules of response:
- The 0.05 to 5 rule : Value is being added between 0.05% and 5% of the total time.
- The 3/3 rule : The wait time, during which no value is added is split 3 ways, each accounting for approximately one third of the time:
- The 1/4-2-20 rule : For every quartering of the total completion time, productivity will double and cost will be reduced by 20%.
- The 3 x 2 rule : Companies competing on the basis of speed enjoy growth rates of three times the average, and twice the profit margin.