Measuring & Reducing Process Cycle Time

Posted by on Oct 11, 2012 in Lean, Lean Six Sigma | 0 comments

Cycle time is defined as the actual time it takes to transform inputs into outputs and is composed of two components: processing time and non-processing time.  Processing time can further be divided into the three categories of real value-added, business value-added, and non-value-added.

Real value-added includes essential processes that transform the inputs into outputs that are necessary to meet customer’s requirements and that the customer is willing to pay for.  Examples include:

Product development                   Fabrication                 Packaging
Materials procurement                 Assembly                   Delivery
Design                                         Finishing                    After-sales service

Business value-added includes processes that are deemed necessary to support, control, and monitor internal business functions but have no perceived value to the customer.  Examples include:

Scheduling                       Career planning          Recruiting
Invoicing                          Filing                          Auditing
Marketing                        Selling                         Record keeping

Non-value-added includes nonessential processes that contribute to neither customer satisfaction nor business operations (7 forms of waste).  Non-value-added activities increase cycle time and add costs rather than value.  In addition to nonessential processes, the component of non processing time fits into this category.  Examples of non-value-added time include:

Redundant inspections              Rework                           Waiting
Filling in forms                         Excessive transit              Storage

Eliminating all activities except for those that add real value improves the cycle time.  Further improvements are gained by streamlining the remaining essential tasks.

The process of reducing process cycle time usually starts by developing a current state value stream map, identifying all the process steps and associated cycle times for those steps.  Wastes are then identified and shown as opportunities for improvement.  Further gains can be made by streamlining the real value-added activities and putting together a future state value stream map.

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