Cycle Time Formula

Cycle Time Formula

What cycle time is, is a widely debated discussion as every manufacturer defines and measures it differently. However, accurately setting cycle time to monitor and measure the entire production process is key to success for manufacturers.

Cycle Time is a measure of how long a team spends actually working on producing an item, up until the product is ready for shipment or delivering a service. It is the time it takes to complete one task. Simply put,  cycle time is the total time needed to move a task from the moment it enters the start or working stage to the moment it is considered complete or  finished. This includes the time spent producing the item and the amount of time the task is left ‘waiting’ on the board between active work times. Businesses since the stone age have been using cycle time to measure their productivity. It’s one of the most crucial flow metrics that’ll help you run a project smoothly efficiently.

What Is The Cycle Time Formula?

The Cycle Time Formula is an essential Key Performance Indicator (KPI) in manufacturing. It is used by ERP and MES systems to schedule, make purchases, and plan budgets for production costing. It is also a critical part of calculating the Overall Equipment Effectiveness (OEE) calculation. Fortunately, the mathematical formula for cycle time is not difficult to understand and calculate 

Cycle time can be calculated with this  formula:

Cycle time (CT) =  Net Production Time (NPT) / Number of Units produced(U)

Where, net production time is the total amount of time spent on the production process or service delivery process. Which could be in seconds, minutes, hours, or days. While the number of units produced is the total number of goods produced or services delivered during a particular production process it is the delivery process.

Let’s take for example, if you work for two (2) hours everyday for six (6) days to produce ten (10) bags. Then your net production time (NPT)  is 2h × 6. If 60 mins make an hour then, NPT is 120 × 6 = 720

Cycle time (CT) = 720 / 10 = 72 mins per one piece of bag

Whether you are a chef, an engineer or a software developer, it is important for you to measure your cycle time to facilitate your production process. Calculating your cycle time helps you estimate your delivery date. To put simply, cycle time tells you how long on average it takes for your team to take issues from the start to the finish line. Hence, teams can use it in calculating their production rate in real-time and use it to give realistic delivery estimates to their customer or client.

Calculating and improving on cycle time can also help you innovate faster, outrun your competition, and improve your profitability through cost saving. For instance, decreasing your cycle time can improve productivity, reduce cost and give you a competitive advantage from products reaching the market sooner.

Cycle time can also be  used to know if there are improvements that can be made to the system in cases where changes in the environment may increase the cycle time. Monitoring your cycle times regularly can help you to identify these unexpected increases in cycle time due to unpredictable changes. Cycle time could increase as a result of a shortage of material causing delays, or a machine having unexpected downtime. This will help you verify that customer’s demand will be met, as well as to identify possible cost-savings initiatives.

Cycle time also helps in eliminating overproduction. Overproduction could be worse than not producing enough to meet demands as it is a complete waste of your time and resources. 

Difference Between Cycle Time, Takt Time, and Lead Time

Sometimes, cycle time gets confused with terms like takt time and lead time. Takt time, cycle time, and lead time are important time measurements used by managers in companies and factories to help them have a better understanding of where to make improvements in the process of product production, to help them to better understand where to make improvements in resource use and to help them to understand where to make improvements in team workflow also.

However, though cycle time, lead time, and take time are all ways to measure the efficiency and quality of products and reduce unnecessary disruptions and processes, there are clear differences in what each of these measures and how they are calculated. Understanding how each of these is used can help you optimize your workflow, resources, and work time in operations.

Takt time is the required rate at which manufacturing processes and systems need to complete the production to meet the customer’s demand. In a nutshell, takt time is the rate at which you must complete production in order to meet customer demand. 

Takt time measures the pace at which work must be done to deliver what has been promised rather than measuring the total time it takes to complete the entire production. Therefore, to calculate takt time, you would need the amount of time available until product delivery and the required number of production demanded by the customer.

 Take Time (TT) = Net Time Available for Production / Customer’s Demand.

For example, if you received an order to deliver forty (40) bags in ten (10) days and you work for 2 hours each day.  This means you would need to produce 40 bags in (2 × 10 = 20) 20 hours which is approximately 1200 mins

So your takt time (TT) is 20 /40 = 0.5 hours per bag or takt time (TT) is 1200 / 40 = 30 mins per bag

That is you 0.5 hours or 30 minutes to produce a bag.

While cycle time measures how much time it takes to produce a product or deliver a service, takt time measures how much time it should take or the pace at which work must be done to deliver a particular product or service. Both cycle time and takt time can be used to understand whether production can meet the demands of the customer, provided that extra processing times during lead time will remain constant for all Cycle Time rates.

Calculating take time is important because it can be used to improve or restructure production timelines, calculating takt time helps you avoid underproduction or overproduction, and takt Time can be compared against Cycle Time to understand the current status of production capabilities.

Lead time is the time measured from the moment the customer’s order is received (start date) to when the final delivery is made (end date). It Is the total time it takes for the client to receive the product from the moment they put in the order to the moment they receive what they ordered. 

To calculate the lead time, two variables are required, the time/date the order was received (start date) and the time/date the client received the order they requested for. It is the time from when the order was initiated to dispatch.

Lead time (LT) = Delivery date (end date) – date of receiving the customer’s order (start date)

Cycle time is different from lead time because while cycle time measures the total time it takes to complete a production or manufacturing process, lead time measures the total time it takes to complete all operational processes starting from receiving an order to delivering the order. That is, while cycle time is a part of lead time, lead time is cycle time plus the additional amount of time it takes for production to begin and the time it takes to deliver the finished product. Also, Lead Time is measured from the customer’s point of view, whereas Cycle Time is measured from the internal process point of view.

Calculating lead Time is important as it can be used to improve not only the production rate but also the additional processing rates such as production logistics and shipment.

Cycle time not only helps you to calculate how much you are producing, it can also help you ensure that you deliver high-quality products and services every time. However, it is important to remember not to confuse cycle time with all other different types of time based metrics like  takt time or lead time (especially takt time).  Also, you should never consider cycle time as a constant as certain factors such as supply chain issues, machinery downtime, personal shortages, and so on, will always keep cycle time inconsistent

Knowing your cycle time allows you to estimate your product delivery date. You can also check it against takt time to confirm if customer demand can be satisfied in an acceptable amount of time. Cycle time is also used when setting up the process for on-time delivery and is a useful metric when chasing down quality issues and assessing continuous improvement projects. Remember that every business always comes down to keeping your customers happy, and using cycle time to help guarantee an on-time delivery is an important key to achieving that goal.

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