What is Time-Based Management?

Time-based management focuses on reducing the amount of time required to complete a process. The concept is most commonly employed in the production area, where time reduction eliminates labor and inventory holding costs, thereby making a company's products more cost-competitive. A business that continually focuses on time-based management should build up a substantial advantage over its rivals over an extended period of time. This approach has multiple benefits for an organization. For example, it can result in faster customer response times, lower labor costs, and a reduced investment in inventory. It can also reduce levels of production waste, and result in shorter production development cycles.

Time-based management works most effectively when a company is not burdened by restrictive work rules, and where there is a high level of trust between management and employees regarding ongoing changes to processes.

Since time-based management seeks to shrink the time invested in a business, it can be considered a tool of the lean management philosophy.

Advantages of Time-Based Management

There are multiple advantages to the time-based management concept. They are as follows:

Reduced labor costs. Reducing the time required to complete a task inherently reduces the associated amount of labor, so labor costs decline.
Reduced inventory holding costs. Reducing the duration of the production process also reduces the amount of time that a business holds inventory, so it can more quickly push it out to customers and be paid for it.
Quicker order fulfillment. When it takes less time to produce a product, the seller can promise faster fulfillment times to its customers, which can increase customer loyalty.
Reduced production waste. By shrinking the amount of inventory in process, it is easier to spot instances of waste and fix them. The result is an overall reduction in the amount of waste produced.

All of these improvements sum to a clear competitive advantage, since a business using time-based management will likely earn more profits than its competitors and attract more customers.