Value Stream Mapping Understand Measures of Cycle Time to Maximize Capacity Improvements

Value Stream Mapping, Takt timeValue Stream Mapping requires measures of each process step cycle time. It is a key measure as it is an indicator of the process step bottleneck. The identification of the process bottleneck will determine the capacity of the complete and concerned value stream.

To be clear, Cycle Time is not Lead Time. Unfortunately, they are used interchangeably causing confusion and poor decisions, even within a focused Value Stream Mapping session. Here are the definitions of Cycle Time and Lead Time:

  1. Cycle Time is the length of time, on average, that it takes to complete a step or set of steps within an operation (process step). Summing these individual process step cycle times provides the total value add time.
  2. Lead Time is the average length of time it will take a new set of inputs to move all the way through the process. It is the total time a unit stays within the complete process.

Most cycle time is measured as a time per part (or service task) but does not include the process losses incurred to transform the materials or service task. However, these losses use up valuable scheduled operational time, significantly reducing capacity.

It is important the Current State map states two cycle times, one without losses which is called Potential Cycle Time and one with losses which is called Actual Cycle Time.

The Potential Cycle Time can be defined as the time between the completion of one part until the completion of the next part for multiple parts without interruption (no losses).

The Actual Cycle Time can be defined as the actual operating time divided by the number of good parts produced, includes losses.

The Potential Cycle Time is measured with a stop watch, recording the time it takes for each output. Ideally there should be 30 measures taken without interruption and then averaged. If it is the output of a machine the Practitioner conducting the measures must review the maintenance condition of the machine and ensure the machine has not had the speed altered, prior to taking the measures.

The Actual Cycle Time is measured by taking the actual work time over at least 2 days and divided by the number of good parts produced within those two days.

Let's take a case study. A district organization was struggling with an objective of improving capacity by 10% for a key customer. They presented to me Chart 1, measured (potential) cycle times for a value stream they were analyzing and concerned with. They had already provided improvements for the cycle time of Step 2 (identified as the bottleneck) to 95% of the Takt Time. Cycle Time now at 1.16 minutes and prior to improvements the cycle time was 1.32 minutes. Converting Cycle Time to Throughput this equaled a 13.2% increase in capacity. However, the value stream output was not realizing this increase in capacity. What have they missed? What is this presented data not providing?

Chart 1
Cycle times, Process analysis

These are two great questions to ask because the process analysis has obviously not provided needed data. My questions back to the team was related to how they obtained the measures presented on Chart 1. Their description of the cycle time measuring process was correct for Potential Cycle Time. What about Actual Cycle Time?

Chart 2

The missing information was a measure of the Actual Cycle Time, the actual operating time divided by the number of good parts produced, includes losses. The next step then was to collect this data and plot along with the Potential Cycle Time and Takt Time. Chart 2 depicts this added data.

With Actual Cycle Time added to Chart 1, they could now see Step 7 is the capacity bottleneck. Because the Value Stream Mapping Team did not originally provide the Actual Cycle Time they did not include improvement efforts for Step 7. It is not the bottleneck by some definitions but because of the losses being incurred, Step 7 was mitigating the throughput of previous processes.

The Team now understands where they must focus their improvement efforts and resources.

We have provided a free Excel workbook for you to use to establish project information and required process data in creating the Current State. There are two worksheets 1) VSM Charter 2) Process Data. Once completed the Lean Teams USA Chart is provided.

 Instruction – Just below, enter name and email, then click Present Download Link, and the link to the free VSM Process Analysis document appears. Please complete, send it back to us, and we can get to work with and support your team in target achievement. We provide Value Stream Mapping Training

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