The Business Book

326

TIME IS

MONEY

TIME-BASED MANAGEMENT

T

ime has a monetary value.

For example, if employees

spend an afternoon in an

unproductive meeting, their time

costs the company money. There is

also an “opportunity cost,” since the

meeting prevents them from doing

other tasks that are potentially more

productive. This is a typical concern

of time-based management, which

appraises the use of time in the same

Traditionally, new products

have been developed in a linear

sequence, moving from one stage

of design to the next.

This reduces

design costs.

This allows for

faster development.

By forming multidisciplinary

teams, all elements of product design

can be completed simultaneously.

IN CONTEXT

FOCUS

Product development

KEY DATES

5th century BCE The ancient

Greeks use discounted cash

flow to take into account the

amount that money devalues

during lengthy investment

appraisal decisions.

1764 English inventor James

Hargreaves invents the

“spinning jenny”—a device

that enables textile workers to

spin eight spools of cotton at

once, rather than just one.

1994 Nissan executive

Chris Baylis claims that

“simultaneous engineering”

is the quickest and most

effective way of achieving

“optimum design solution.”

2001 Software developers

in Utah, US, produce a

manifesto for the agile

software development

approach.

way that other models focus on raw

materials and overheads. A time-

based approach allows companies to

manage labor effectively across the

company, to gather true-cost data,

and to cut costs by reducing the

amount of time to develop and

launch new products.

One way to reduce time costs on

a project is to use a process called

“simultaneous engineering.” This