The cycle time of a process is the time required by the process to procure, convert & deliver a customer’s requested product or service. Cycle time is a measure of the degree of synchronization between what the customer requires and what the process supplies. When evaluating cycle time, there are two times that matter. The first is the customer’s desired replenishment time, which defines how quickly a customer wants the product or service. The second is the process supply time, which defines the time to procure, convert, and deliver the product or service desired by the customer. The greater the difference in these two times, the greater disconnect between customer demand and process supply.
Start by studying the process
1. Develop a Process Map.
The process map should include elements such as inputs, outputs, activities, distances, organizations crossed, responsibilities, value added and non-value added time and activities. Most importantly, the map should identify the primary customer of the process.
2. Understand the Customer’s Time Bucket.
The cycle time opportunity should begin by defining the time bucket that sets the customer demand rhythm. How frequently does the customer request the products or services provided by the process? Does the customer want products hourly, daily, weekly, monthly, or even annually? This time bucket question is ESSENTIAL because the answer sets the cadence for the ongoing supply-demand relationship.
3. Study the Customer Demand Profile.
It is essential to know the source of demand and the response time necessary to satisfy that need. Identify the pattern of customer demand that the process must meet within the customer’s established time bucket. This pattern includes these dimensions: Volume, Variety, Visibility, Variation, and Velocity.
How much total Volume of products does the customer want?
How much Variety does the customer want in terms of size, type, model, color, or configuration?
When does the process get Visibility of what the customer wants, such as when the customer shows up to purchase, or with some advance notice?
Does the volume Variation of the required products or services increase the difficulty of providing what the customer wants when they want it?
What is the Velocity required for the process to deliver a product once the customer communicates a need?
4. Study the Supply Profile
The process is challenged to match its Supply Profile with the Customer Demand Profile, providing customers what they want, when they want it. When process supply does not sync-up with customer demand, only three things can happen:
The process requires inventory (or work-in-process) to compensate for the lack of alignment,
The process takes extended time to deliver the demand request, or
The process misses a requirement and disappoints the customer.
5. Calculate current process task and cycle times.
Calculating process task times and the cycle time provides an understanding of not only how long the process takes to produce its product but also the volume capacity of each task in the process.
6. Assess process capacity
Long cycle times occur when a process does not have sufficient capacity to produce the customer demand profile. This is one of the most misunderstood drivers of extended cycle time. Assessing process capacity involves comparing the customer demand profile to the process supply profile on a task-by-task basis, looking for tasks where supply is significantly out of sync with the demand requirement.
7. Identify waste that can be eliminated
Causes of extended cycle time come from process wastes that can include:
- Transportation or movement
- Overproduction resulting in unneeded inventory
- Unnecessary review or approval
- Waiting or pausing in the process
- Production of defective products
- Rework of incomplete, inadequate or defective products
- Work to accomplish something not required by the customer
Choose from these strategies to reduce cycle time.
While there are universal principles that apply to cycle time reduction, the choice of specific strategies depends upon the relationship between the customer demand profile, the supply profile, and the synchronization between the two. Having said that, the strategies outlined below, when used appropriately, will yield substantial and sustainable cycle time reduction.
Reduce Customer Demand Variation.
High customer variation is often driven by conditions set by the process itself. By fully understanding the causes and costs of high variation, a Process Owner can take steps to reduce variation and increase the ease of providing products in a shorter cycle time.
Match Supply Capacity to Demand Profile.
The first step to any cycle time reduction effort is to know that a process has adequate capacity to deliver the customer demand profile. Without capacity balance, other cycle time reduction opportunities will have no real impact.
Synchronize Volume and Variety.
Once adequate capacity is been established, the next challenge is to match the volume and variety produced by the process within the customer’s time bucket to the customer demand profile.
Shorten Processing Distance.
Shortening the distance products and services travel through a process can be a very effective method of reducing cycle time. This is highly dependent, of course, on the type of product being produced and space required to produce it.
Eliminate NVA Time and Activities.
Eliminating non-value added time and activities is one of the more traditional and effective strategies for reducing cycle time. Eliminating waste is always a good strategy for improving the performance of any process.
Remove Organization Boundaries.
An often overlooked cycle time reduction strategy is to realign the organization according to workflow versus the more traditional job function responsibilities based upon organization structure.
Cycle Time Reduction
For many years, companies could deliver products on their own timeline. Now competition drives supply time compression and contemporary customers demand products to be developed and delivered faster, with quicker turnaround. Cycle time reduction can provide the key that unlocks process performance to deliver what customers want when they want it.
Further Reading: THE PERIGON METHOD