Businesses Push the Speed Limit

Betsy Hitchcock finds she’s often too busy to shop--until she wants something in a hurry. A few weeks ago, the 48-year-old Corona nurse and grandmother of four needed a dress for a weekend social event. She ordered it by mail order Monday, and received it by Federal Express a few days later.

“Most of us are last-minute people, at least nurses are last-minute people,” she said. “We wait until it’s absolutely necessary, and then it’s ‘Oh my God, I need it.’ ”

This week’s tentative settlement in the United Parcel Service strike ended the 15-day labor protest that effectively shut down the company that delivers nearly 80% of the nation’s packages.

The walkout also showed just how dependent companies--and consumers--have become on the “just-in-time” economy, in which sophisticated delivery systems and computer networks allow manufacturers to produce on demand without large inventories.

The concept, begun in Japan as a means of dealing with a scarcity of resources, moved to the U.S. 15 years ago. Companies from retailers to auto makers use it not just to keep costs down, but to beat rivals and win customers.

The strike was “a giant test, the likes of which I don’t believe we’ve had since the movement toward just-in-time became so widespread,” said David Peyton, director of technology policy at the National Assn. of Manufacturers.

“This is just exposing one of the Achilles’ heels of the just-in-time concept,” said Greg Smith, vice president of Colography Group Inc., a transportation research and consulting firm in Marietta, Ga. “If there is a strike, there is a problem.”

But the concept of quick delivery has become so ingrained in our society, experts say, that businesses will continue to take that chance.

“There’s no going back--this is a delivery economy,” said Peyton. “At the end of the day, it’s all about somebody who wants something and doesn’t want to wait a long time.”

Many of these changes have become part of the American way of life.

Store shelves are always stocked--with the newest items. Obscure parts are easily located and cars fixed quickly. A personal computer can be ordered one day, assembled, and delivered the next.

“It’s really in tune with our society, which is really fast-paced,” said Smith. “Trends that are hot today can be gone tomorrow.”

The UPS strike exposed the major weakness of just-in-time--industry it is now so tightly wound there’s virtually no room for error.

Trucks sidle up to factory floors loaded with components ready to fit on cars just as they roll down the assembly line. Computers are assembled and shipped in a fraction of the time it took even a few years ago. As a dress is purchased at a store in the Midwest, a computer automatically reorders one from the plant in Hong Kong.

GE Information Services is a General Electric unit that runs a computer network used by companies to coordinate shipments. Through the network a supplier can learn that its customer needs exactly 25 widgets delivered to a factory at 3:25 a.m. Tuesday, and another 25 four hours later.

“Some customers tell us if the network went down, they’d have to shut down their manufacturing in one hour,” said GE spokesman John Berry.

“That’s how tight it is.”

Yet companies like Inacom Corp. in Omaha, Neb., the largest reseller of IBM computers, say there no longer is an alternative to this high-wire act.

As recently as a few years ago, personal computers had a lifetime of about two to three years. Now it’s about six months.

“It’s like produce,” said Mike Steffan, Inacom’s president of distribution and operations. “Anything that sits on a shelf will basically go bad.”

Inacom used to stock computers and wait for orders. No more. Now it does the final assembly for IBM and ships directly to the customer, knocking about a month off the total production and delivery time.

Said Steffan, “We have to be right, and we have to be right all the time.”

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UPS itself is a prime example of the in-time concept.

Founded 90 years ago, when few homes had telephones, the company originally hand-delivered personal messages and parcels. It pioneered the use of air service, mechanical package sorting and consolidating shipments. In the 1950s, two-day service to major cities was made available.

By the 1980s, overnight delivery was commonplace, with package shipments tracked by a complex web of computers, air-monitoring technology and a global communications system. In the past decade, UPS has spent billions of dollars on technology improvements to make the network faster and more efficient--changes that have made it a vital link in today’s just-in-time economy.

The once snail-like mail-order business has also boomed in recent years to a $50-billion industry, in large part because customers don’t have to wait weeks for their orders anymore.

“Americans want it and they want it pretty much now,” said David Hochberg, spokesman for Lillian Vernon, the Virginia Beach, Va.-based catalog company. Using sophisticated computers to track products and overnight delivery, “we can offer the same sense of immediacy” as traditional retailers.

Two decades ago, American car makers were viewed as arrogant, slow-footed, unresponsive corporate behemoths.

Then they got the just-in-time religion, and now they’re praised for their streamlined development and production methods, nifty designs and fast turnaround.

“Chrysler is the leader now in designing cars in record time,” said Al Philpotts of the Agility Forum, a research group in Bethlehem, Pa.

Since implementing just-in-time principles in the late 1980s, Boeing Co. says it has slashed the time it time it takes to get a commercial plane from the drawing boards to a customer from 1 1/2 years to 10 months.

American businesses are “winning huge because we can get it there quicker, and with better quality,” said Jack McDonough, a professor at UCLA’s Anderson School of Management.

He believes the speedier response times are a major factor behind the unbridled prosperity America is enjoying, from the booming stock market to low unemployment.

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Just-in-time continues to expand.

It started at large companies including the U.S. auto makers and has begun moving down to smaller and smaller firms, which can now use the Internet to access centralized computer networks and keep track of their customers.

That’s the case with Eastman Chemical Co., a Kingsport, Tenn., maker of plastic and chemical products.

Eastman is one of the many companies that is basically invisible to the consumer. One of its biggest products, for instance, is resin pellets used to make soda bottles and other packaging materials.

A big devotee of the just-in-time concept, Eastman uses a massive information system to track everything from raw materials to finished product. Its margin of error is as little as 15 minutes.

“It really means you’ve got to work on the reliability of each step in the entire chain,” said Fielding Rolston, Eastman’s vice president of customer service and materials management.

The concept is also being picked up by the auto supply chain.

The Big Three auto makers are electronically linked to their major suppliers, which allows them to get components faster. But those suppliers are just now starting to link up with their suppliers, and on down the line, said Tom Hoy, executive director of the Automotive Industry Action Group, a trade association trying to improve productivity in the auto industry.

In a recent pilot project involving an electronic data interchange used by auto suppliers, the AIAG was able to compress the time it takes to get information about car orders down to the lowliest supplier from 30 days to 11, Hoy said. That translates to savings of $1 billion a year, or $71 per vehicle, he said.

Hoy thinks the time frame can be squeezed down to five days.

Some day soon, many believe, customers will be able to order a car at the dealer lot. The order will be entered electronically, sent to the assembly plant and a customized car will be built immediately and shipped to the lot within a week.

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Not everyone is thrilled by the quicker pace.

Geoffrey Godbey, for one, remembers his 10th birthday, when his parents fulfilled his fondest desire. They ordered him a Lone Ranger outfit.

It was 1952, long before the days of fax machines, e-mail and guaranteed overnight deliveries. Little Geoffrey waited three weeks for the costume, the waiting fueling his anticipation to such an extent that it didn’t matter when he opened the box and the hat came unglued.

In hindsight, says Godbey, a professor of leisure studies at Pennsylvania State University, the waiting “made it worth it.”

Many believe the almost immediate fulfillment of our demands for products, services and information--whether it be through computers, home-shopping networks, or super-fast credit card swiping machines--have made us a highly impatient lot.

“We have become so spoiled to expect things when we want them, and not any later,” said Mark Baldassare, a professor of sociology at UC Irvine.

“There’s no room for error in our thinking about delivery times, both for information and products.”

Thus, when the system breaks down, as it did with the UPS strike, we become frustrated and anxious.

The faster-is-better mentality, many believe, will have other costs. Schedules will get overbooked. Quality compromised. Quick fixes sought. Decisions rushed.

“People feel harried, harassed, and stressed,” said futurist and “Future Shock” co-author Alvin Toffler. “But in the attempt to keep up, they end up making poorer and poorer decisions.”

Ultimately, in our rush to get where we’re going, something has been lost, some observers believe. In many cases, they say, it’s the ability to savor the journey.

Said Howard J. Rankin, a clinical psychologist: “You get on this merry-go-round, and it gets very difficult to get off.”

Times librarian Sheila Kern contributed to this story.