Cycle Time vs. Lead Time
A lot of practitioners tend to confuse Cycle Time with Lead Time. Some people say Cycle Time is the time between two successive deliveries, while others believe it is the time between initiation and delivery.
In simple terms, Cycle time is the time starting when the operation begins to the point time when the operation ends. Then what is Lead Time?
Lead time starts when a request is initiated and ends with delivery. Let’s say a customer orders a product on November 6. The company receives the order instantly and delivers the product on November 10 yet work on the product begins November 8.
Therefore, the Lead Time here is four days, while Cycle Time is two days. Lead time represents the time expended—but not the effort. You could have a Lead Time of 25 days yet spend only 2 hours working to solve the problem or create the product.
At first glance, Cycle Time may appear to represent effort, but it represents time, as well. That’s why cutting cycle time should be the most important mantra for any Continuous Improvement project.
TAKT Time
In German, TAKT stands for Takzeit, meaning Music or Rhythm of Music. TAKT is a measurement and a discipline based on known and existing production principles and practices. TAKT time is the maximum acceptable time to meet the demands of the customer. In other words, TAKT Time is the speed with which the product needs to be created to satisfy the needs of the customer.
The TAKT Time Formula = (Net Time Available for Production)/(Customer’s Daily Demand).
Let’s consider this example from the service industry: Accounting forms are read by a company’s staff and returned to the customer. The company has a 9-hour workday for its employees, of which 1 hour is the allocated lunch break.
- Available production time = 8 hours or 480 minutes
- Assume that the customer sends in 20 accounting forms to be read
- TAKT Time Formula = 480/24 = 20 minutes/form
This means that the staff would have to work at a speed of 20 minutes per form to meet the customer’s needs or demands. This calculation makes several implicit assumptions, so let’s look at these first.
- The above calculation doesn’t factor in work done in parallel, meaning that more than one person is working on the same form at the same time. To illustrate: Jane does step A of the work in 10 minutes, while Rodney does step B of the work in 5 minutes—in parallel. Then, Gigi reconciles the two pieces in 2 minutes. The TAKT Time perform in terms of delivery is 12 minutes.
- TAKT Time assumes a constant daily demand during the day; if demand fluctuates during the day, TAKT Time needs to be adjusted.
The Benefits of Calculating TAKT Time
There are many advantages to calculating TAKT Time. Among them are:
- Estimating any service delivery processes
- Standardizing your work processes
- Increasing efficiency by decreasing training times
- Maintaining a constant production workflow
- Setting realistic time targets
- Minimizing worker overtime
- Reducing errors and increasing product or service quality.
In summary, TAKT Time helps you spot when teams are getting overworked teams, which leads them to sacrifice quality so they can meet unreasonable standards. Conversely, you could discover teams that have nothing to do. After all, having workers sitting around wasting time is just as bad as overworked employees who are so stressed out that they’re making mistakes.
If you place a high priority on evenly distributing workloads, TAKT Time can be a huge help.
TAKT Time Calculator
Using the example above, we’ll assume that the accounting process adds a new step for a total of 4 steps, with actual cycle times indicated. Here’s how we’d calculate TAKT time:
- Step A = 4 minutes
- Step B = 5 minutes
- Step C = 5 minutes
- Reconciliation = 6 minutes
Add these up, and you’ll find that on average, the company staff spends 20 minutes to complete a form, meaning they’re right on target! If the staff is consistently able to maintain this rate of work, they’ll meet the customer’s needs.
TAKT Time is used to calculate a host of other parameters, too, such as Batch Size. Now, we’ll add up all the cycle times we had in the previous stage. We got a Total Cycle Time of 20 minutes; therefore, the TAKT Time is 20 minutes. Now:
Total Cycle Time/TAKT Time = 1
This calculation demonstrates that you now need one workstation to complete this order of 24 forms in a day of 480 possible minutes, working to a TAKT of 20 minutes. This is often known as Crew Size.
Understanding Manufacturing Time
Although TAKT Time and cycle times are fantastic tools, there are situations where they can’t tell the entire story. An order won’t do any good to the customer until it’s actually in their hands. Although cycle times are part of lead time, the former doesn’t consider:
- The time between the customer placing the order and the beginning of production
- The time between the order’s completion to its delivery
These times are part of the manufacturing lifecycle and must be taken into consideration. Smart managers will subtract the abovementioned times from the TAKT formula’s workable hours. This should factor in situations like maintenance, tool changes, and even allowing for unexpected or unplanned downtime.
This is what we mean by “manufacturing time.” It’s simply acknowledging the realities and pitfalls of manufacturing, and factoring in the appropriate amount of downtime to your overall production projections.
But rather than placing the burden on your staff to monitor and collect downtime data, consider investing in a machine monitoring solution that tracks downtime automatically.
Conclusion
Understanding Cycle Time, Lead Time, and TAKT Time is the first step for Project Managers and Lean practitioners to move one step closer to improving the efficiencies of their operations. Simplilearn offers complete training options for Project Management, Quality Management, and more. Experienced, certified professionals teach all our courses, and they’re designed to help you pass your exams on the first try!
Go through this Simplilearn video on “Introduction to Lean Six Sigma” delivered by our Six Sigma experts that covers the basics of Six Sigma.
