Mapping the Current State Value Stream Pt.

2: Cycle, Queue, and LeadTimes

Week 6: Assignment

1. Cycle Time

Cycle time is the actual time spent working on producing an item or providing a service,
measured from the start of the first task to the end of the last task. Cycle time includes both
value-added time as well as non-value-added time. The key word in the definition is actual, as
many companies will use cycle time to describe the expected time spent working on producing
the item, and these two times are often not the same.

Cycle Time = (Finish Time – Start Time) / Units Produced

Benefits Of Cycle Time

Improve timeliness

The primary benefit of understanding the cycle times of product or service is to determine if
you can provide them in a timely manner that meets your customer’s needs. Takt time and
cycle time are often discussed together — and often confused for one another. Unlike cycle
time, takt time is the time that a single product must be produced to make your customer goals
on time. Therefore, helps to provide on-time delivery, your system must be set up so that your
cycle time is less than your takt time.

Set up your system in an ideal way

Knowing your cycle times allows for the proper setup of your processes. In a manufacturing
setting, it allows for the proper setup of the production floor. It is important for understanding
how many machines, tools, and personnel are needed. If you find out cycle time is currently
larger than your takt time, you can make modifications to the line. Adding the right personnel,
machinery, and additional tools can decrease the cycle time, eventually getting it under your
takt time.

Identify possible system improvements

Cycle time is also used to help identify if there are improvements that can be made to the
system. Even if cycle time is less than takt time, changes in the environment may increase the
cycle time. Regularly monitoring your cycle times will allow you to identify unexpected cycle
time increased due to previously unpredicted changes. Perhaps a shortage of material causes
delays, or a machine has unexpected downtime, causing an increase in cycle time. It is key to
monitor cycle times to verify that customer demand will be met, as well as to identify possible
cost-savings initiatives. In many cases, a process that takes less time may be a less expensive
process to manage.

Takt time

Takt time is the amount of time an item or service needs to be completed if a customer’s on-
time delivery deadline will be met. The amount of time between one part being completed and
the next part being completed must be the same or less than the takt time, or we can assume
that the parts will not be produced per the customer’s schedule.

Takt time is the time you need to complete a product in order to meet customer demand. Using
takt time can allow businesses to establish a continuous workflow by understanding capacity,
reducing waste of process, and avoiding overproduction.

Teams can visualize their success and observe disruptions quickly to react appropriately. When
takt time is incorporated by manufacturer, they are better able to serve their customers in a
timely, more efficient way.

The benefits of takt time

 It is important for reducing the waste of your process. Takt time can help you maintain a
continuous flow of work and reduce Mura (unevenness) in your workflow.

 Establish a continuous flow of work.

 Optimize your capacity to meet customer demand.

 Reduce storage costs by avoiding overproduction

 Efficiency

 Increase visibility

What is a queue

A queue is the duration of time when something is ready to be worked on, but is waiting for
someone to work on it, is called wait time or queue time. The accumulated time a part sits and
waits to be processed.

Queue visibility is the important of seeing the queues, not only on a task basis, but also in the
amount of work in the tasks.

Queue visibility is enhanced by granulizing the work well. Rather than one big, multi-week task
with a lot of hidden subtasks and benefit by granulizing and showing the subtasks.

Queue time = Lead Time-Total Cycle time

What Is Lead Time

Lead Time is the amount of time between process initiation and completion. For a customer’s
Lead Time is the time between a confirmed customer order and its scheduled pick up or
delivery based on our terms and conditions. This varies based on the customer and the product.

Lead time is a crucial metric for any business. It assists the company in predicting sales, making
operations efficient, and improves customer satisfaction. However, it would be tough to
improve lead times in the absence of a proper inventory management system, efficient
production process and right suppliers.

importance of lead times

 Comparing lead times against the set standards could help a business identify inefficiencies if
any.
 Shortening lead times can help businesses boost productivity and restructure operations It
also gives a company a competitive edge over rivals.
 A quick turnaround helps to boost customer satisfaction.
 A quick turnaround also saves financial costs in terms of the blockage of lesser working
capital.
Lead time is a crucial metric for any business. It assists the company in predicting sales, making
operations efficient, and improves customer satisfaction. However, it would be tough to
improve lead times in the absence of a proper inventory management system, efficient
production process and right suppliers.

Lead time = Cycle time + Queue time

2. For this week project we choose to do a manufacturing ERP System: VSM, is crucial in
selecting and successfully implementing any Enterprise System. A VSM allows businesses
to create a detailed visualization of all the steps in the work process, displaying the entire
process flow from prospect to cash (including purchase to pay).

By performing a VSM event, teams understand what happens throughout the business in
areas they do not usually pay attention to regularly. Team members typically find ways to
help each other, eliminate non-value-added steps, and improve the current processes. The
VSM exercise not only produces a more efficient future state, but it also helps the
organization define what makes them successful, aka their secret sauce.

Cycle Time, Lead Time, and Takt Time are all approaches to lean manufacturing, a way to
measure the efficiency and quality of products and reducing unnecessary disruptions and
processes of ERP System development.

ERP systems use cycle time to schedule, purchase, and budget production.
A manufacturing ERP system allows you to set cycle times for your operations. It uses that
information to accurately schedule production operations, so you would have a concise
overview of your production calendar.
This means that these cycle times should be realistic, not theoretical.

As such, the meaning of “cycle time” in a manufacturing ERP may be much looser and more
simplistic than what the theory says.

It should be measured, e.g. with a stopwatch on the shop floor – the clock is started when the
first operation activity (or a production stage comprising of several operations) is started, and
stopped at the end of the last activity.

For a manufacturing ERP, cycle times may even include several operations, inspection, waiting,
and move times, which in theory are all different concepts. But keep in mind that it is required
for accurate scheduling purposes only, and all such details should not (and often cannot) be
micromanaged in the ERP system.

A bonus is that when shop floor workers report their activities, the ERP can provide statistics on
how the actual cycle times differ from what is defined in the system.

That will give you the chance to detect trends, identify inefficiencies and shortcomings related
to your production equipment, materials, or your shop floor workers.

Thanks to its massive data collection and analysis capabilities, a manufacturing ERP software is
a much more efficient way to keep up with cycle times than spreadsheets or pen-and-paper
methods.

ERP solutions can significantly reduce manufacturing lead times when properly implemented.
ERP provides manufacturers with a way to support their infrastructure, while still enabling them
to take a larger view of their entire manufacturing process. It also reduces lead times by
streamlining the quoting and engineering process, allowing manufacturers to base their
production schedule on real numbers instead of guesses. Implementing ERP also lets them
confidently quote shorter lead times, leading to sales increases.

 Cycle time (C/T) represents the amount of time needed to complete a task.
  Setup Time (S/T) is the necessary preparation time for an operation or process.

 Uptime (%) is the percentage of time a process or system is active.

 Lead Time sets the completion time for the entire operation/process.

References
https://harness.io/blog/value-stream-mapping-guide/
https://www.sensrtrx.com/cycle-time-formula-2/
https://www.workwisellc.com/blog/using-value-stream-mapping-vsm-to-optimize-your-erp-
system/
https://www.lucidchart.com/pages/value-stream-mapping#section_5
https://blog.planview.com/value-stream-mapping-for-software-development/

Excellent Good Fair

(A 8.9-10) (B 7.8-8.8) (C 6.8-7.7)

Knowledge of X
Lean Six Sigma Concepts
(40%) X

Critical Analysis in Applying Lean X

Six Sigma Concepts
(40%) X

X
Use of Language &
Formatting (20%)
X