Today’s post is the first in a new series on how to reduce cycle times in your processes. Much of what I will present in this series of posts is taken from my second book, The Ultimate Improvement Cycle—Maximizing Profits Through the Integration of Lean, Six Sigma and the Theory of Constraints.
Four fundamental concepts to understand for reducing cycle times
One of the most important activities that any company can undertake is reducing their cycle times. But before we begin discussing how to reduce cycle time, we need to understand four very important concepts and terms:
- Cycle time (C/T) is defined as the total amount of time material spends in a production system being converted from raw material to finished product. It is measured in units of time.
- Processing time (P/T) is the time required to process product through a single work station and it too is measured in units of time.
- Throughput (T) is the rate at which material is processed through a production line and is measured in units of product per unit of time.
- Work-in-process inventory (WIP) is the amount of in-process product not yet complete, waiting for additional work to be done on it.
To illustrate the interrelationships between processing time, cycle time, throughput, and WIP, here is a simple mental exercise:
Let’s consider a simple four-step production line where the processing time (P/T) is exactly one minute for each work station. The figure below is an example of such a production process where raw material enters the process at Step A and then progresses to Steps B, C, and finally Step D. This process is set up to produce parts in batches of 10 pieces at a time. We want to arrive at how long it will take to produce all 10 pieces.
Since each piece takes one minute of processing time at the first station, a total of 10 minutes will be needed to process the entire batch through work station A. The batch of 10 is then transferred to work station B. Now 10 minutes are also required at work station B and so on until all 10 parts are finally completed in work station D.
Putting aside transport time between steps, it would take exactly 40 minutes to process the entire batch of 10 parts through the process. Each part spends 40 minutes in the system, so the cycle time (C/T) is 40 minutes. The throughput (T) is 10 parts every 40 minutes or 0.25 parts per minute, or 15 parts per hour.
Suppose the factory decides to change its batch size from 10 to 4. What is the impact on cycle time and throughput?
Coming in the next post
In the next post, I will explain what would happen if the factory were to change its batch size from 10 parts to four. As always, if you have any questions or comments about any of my posts, leave a message and I will respond.
Until next time.
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