What are the most important lean performance metrics for measuring lead time?

Here are some of the most important lean performance metrics for measuring lead time: 1. Total Lead Time (TLT): Overall time from process start to final product or service delivery. 2. Processing Time: Time for actual work, excluding delays. 3. Cycle Time: Time between start and completion of one unit. 4. On-Time Delivery: Percentage of deliveries within promised lead time. 5. Lead Time Variability: Degree of variation in lead time. 6. Wait Time: Time spent waiting for the next step or resource. 7. Work in Progress (WIP): Amount of work in the system but not yet completed. 8. Touch Time: Time actively spent working on a product or service. Regularly assessing and optimizing these indicators can enhance operational performance.

Cycle Time (CT) is a key piece in understanding each step in the process that cumulatively impacts overall Lead Time (LT). Other crucial items are Waiting Time (which is often hidden within the Process or Cycle Time), Process Time (PT) and Inventory. We can measure impact to processes with CT once we understand demand or Takt Time (TT). The visual representation is typically in a Line Bar Chart.

In my opinion, imagine cycle time as the clock ticking while you finish one task or step in a process. It's like the speedometer for how fast your work is getting done. The shorter the cycle time, the quicker things move, making your overall process more efficient. If it takes a long time, your customers end up waiting longer, which isn't great. To speed things up, you've got to make sure the flow of tasks is smooth, remove any obstacles, balance the workload, and stick to standard ways of doing things. It's like fine-tuning to get things done faster and keep customers happy.

Cycle time is the time required to complete one task or operation or a process depending on what we are discussing about. It is generally measured in minutes or hours or in days depending on the situation. Cycle time includes all Value added time and Non-value added time within the process. In order to be more productive, in Lean Manufacturing we always look to minimize the Cycle time, particularly for the critical processes or the bottleneck processes. Reduction in Cycle time can be achieved either by reducing the VA time or NVA time or by reducing both. Process optimization, right sequencing, automation, eliminating waste (or NVA), time study and standardized Work, Training of the operators are some of the ways to reduce Cycle time.

Para medir o lead time de forma eficaz em um ambiente lean, concentro-me em três métricas principais: lead time total, lead time de processamento e lead time de espera. O lead time total representa o tempo decorrido desde a entrada de um pedido até a entrega ao cliente. O lead time de processamento é o período necessário para concluir efetivamente o trabalho em um processo ou etapa específica, enquanto o lead time de espera refere-se ao tempo em que o trabalho fica inativo, aguardando para ser processado. Ao analisar essas métricas, posso identificar oportunidades de redução de desperdícios, como espera, movimentação excessiva e processamento ineficiente.

Técnicas p/ medir o lead time: Lead Time de Processamento: O tempo que um item gasta efetivamente sendo processado, excluindo os tempos de espera. Lead Time de Fluxo: O tempo que um item leva para atravessar todo o sistema, incluindo tempos de espera. Tempo de Ciclo: Similar ao lead time, onde é o tempo necessário para concluir uma iteração de trabalho. Eficiência de Processo:A proporção do lead time total que é dedicada ao valor agregado, em oposição aos tempos de espera e atrasos. Taxa de Entrega: A percentagem de itens entregues no prazo. Ao focar nessas métricas, é possível identificar áreas de oportunidade para reduzir desperdícios, melhorar eficiência e otimizar o fluxo de trabalho, promovendo uma abordagem mais enxuta e eficaz.

The cycle time is crucial for creating meaningful production planning. The cycle time can be shortened primarily through targeted optimization and distribution of activities.

O tempo de ciclo em empresas é um conceito crucial, especialmente no contexto de operações, produção e gestão da cadeia de suprimentos. A importância do tempo de ciclo nas empresas inclui vários aspectos-chave, como a Eficiência Operacional. Reduzir o tempo de ciclo geralmente significa aumentar a eficiência operacional. Menos tempo gasto em cada ciclo significa que mais ciclos podem ser completados em um dado período, aumentando a produtividade.

Total Lead Time (TLT) is estimated based on Cycle Times (CT) + Inventory Times (IT) * Cycle times (CT) is the actual time it takes to complete a process step for one unit of work. * Inventory time (IT) is the actual time it takes to complete unfinished goods as services at a given process step. This inventories are not usually considered in typical CI analysis causing a non-accurate Total Lead Time estimation.

Cycle time is a key performance metric in Lean manufacturing, as it aligns with the principles of efficiency, waste reduction, continuous improvement and customer responsiveness. It signifies the total duration required to complete a single cycle of a specific process, commencing from the initiation of work on a unit to its ultimate completion. Cycle time involves streamlining processes, eliminating bottlenecks, and optimizing workflows. Facilitate this by collaborating with stakeholders, using Kanban principles, adopting 5S as a way of life and promoting a culture of continuous improvement through Kaizen. Close monitoring and optimization of cycle times play a substantial role in the establishment of a lean and agile production system.

Takt time is the time available to produce one unit of product to meet the customer demand. This is calculated by dividing the available production time by customer demand. Analogically this provides heartbeat of a Lean Production System. Often Takt time is used interchangably with Cycle time. But they are not the same. Takt time is more of an independent variable, whereas Cycle is a dependent variable. Cycle depends on the work content, process sequence, efficiencies of macines,operators & overall processes. Whereas Takt time is dictated by the customer demand. We shall strive to synchronize Cycle time to Takt time by Process optimization and Lean intervention to avoid Overproduction or underproduction.

Takt time is one of the more misused or misunderstood concepts in manufacturing. It is common to hear people use "Takt Time" and "Cycle Time" interchangeably. "We made this improvement and decreased our takt time by X percent". No, you improved your ability to perform against the required Takt time, the Takt time itself cannot be changed within your 4 walls.

On its merit, what is written as the description of TT is correct. However, I agree with a previous contributor that it is so mis-understood and practiced. TT is about understanding your capability to meet demand. When the demand changes, your TT and the supporting efforts (system) should also change. You should have a playbook for Normal, High and Low demands. When you know your Takt Capability, Takt Capacity and the Flexible Systems that support demand changes, you are able to create dynamic Just-In-Time cell structures and methods. Obviously I've used this in Manufacturing but also in Healthcare, Casinos, Restaurants, Hotels, Kitchens, etc. Learn more about Takt Time so you can be a real asset to any organization.

Essa métrica ajuda a sincronizar a velocidade de produção com a demanda do mercado, evitando superprodução ou falta de estoque. Na prática, o Takt Time é crucial para a eficiência operacional, pois permite um fluxo de trabalho contínuo e equilibrado, minimizando desperdícios e maximizando a satisfação do cliente. Além disso, ajuda a identificar gargalos e a necessidade de ajustes nos processos para manter o alinhamento com as necessidades do mercado.

Like LEAN management, cycle time comes from the automotive sector. It specifies the cycle (time from finished part to next finished part) in which products are completed. In this way, it can be clearly determined whether a customer request can be met or whether the quantities are not possible with the current state of the art. This can be used in the plastics sector, especially in injection molding. Here you can say exactly after what time X a new part is finished. In extrusion technology, this is much more difficult, as semi-finished products are produced.

The importance of Takt time is so often mis understood and underated as one of the most important values to utilise for capacity requirements, headcount, throughput and investment opportunities in aligning cycle time with customer expectations.

Takt time plays a crucial role in synchronizing production with customer demand and optimizing workflow. The alignment provided by Takt helps in reducing lead time by promoting efficiency, minimizing waiting time, and improving overall responsiveness to market demands. When production is aligned with Takt time, resources are utilized optimally, contributing to a more streamlined process. Takt time creates a rhythm for production that allows for quick responses to changes in demand. This responsiveness contributes to the ability to adjust production levels promptly, influencing lead time in terms of adaptability and agility.

Takt time is one of the most undervalued tools in the apply lean methodology. It's not capacity utilization - it's demand units per unit of time. Takt times vary and you are looking for a way to balance and synchronize your operations - of course you never starve a bottleneck so inventory is not a bad thing!

Takt time is a crucial metric in Lean production that helps synchronize the pace of production with customer demand. Takt time is a fundamental metric in Lean production, guiding organizations to produce at the rate required by customer demand. Implementing pull systems, optimizing layout and material flow, adopting just-in-time (JIT) inventory practices, and employing visual management practices can collectively contribute to improving Takt time in a Lean manufacturing environment It supports the principles of waste reduction, just-in-time production, and continuous improvement, contributing to a more efficient and customer-focused production system.

Each industry requires different KPIs. In Pharma, for example, where batches are still a key productivity driver, that is, far from one piece flow concept, takt time is too theoretical. As shelf-life is a critical factor for Commercial, Throughput time helps understand how lengthy your end-to-end process is and has a direct impact on costly safety stocks as you improve your replenishment time.

Reducing throughput time is main goal in Lean and other process improvement activities... throughput time = total processing time (incoming to dispatch ) the total amount of time it takes for a task, product, or service to move through an entire process or system, from initial stage to final stage . Throughput time is a comprehensive metric that provides insights into the efficiency and effectiveness of a process. Reducing throughput time ensures faster delivery, increased reliability, and quicker response to customer needs, enhancing overall satisfaction. Shorter waiting times and improved quality contribute to a positive customer experience, showcasing a commitment to meeting their expectations....💡

Based on my sensei's, this is "Western Thinking" and I'm not a fan. LT is included in Throughput Time (TPT), and because of that we are taught to focus on eliminating waste specifically that of Stagnation, Transportation and Motion. These truly are what impacts TPT, i.e. waiting and inventory turns. Enough said...

O tempo de throughput, também conhecido como tempo de resposta ou lead time de produção, é uma métrica essencial no contexto Lean e em consultorias de processos. Ele mede o tempo total necessário para mover um produto ou serviço desde o início até a sua conclusão. Esta métrica é vital para entender a eficiência dos processos e identificar áreas onde podem ser realizadas melhorias.

Little’s Law helps us understand Throughput and its relationship with Lead Time. Imagine manufacturing widgets. Each batch of 400 units (our WIP) takes four hours to complete, which is our Lead Time. Applying Little’s Law, our Throughput is 400 units divided by 4 hours, resulting in 100 Units Per Hour (UPH). If we focus on improving Throughput, our Lead Time is automatically reduced. Best practices for enhancing Throughput include streamlining processes to reduce waste, incorporating automation for efficiency, and continuously refining workflows. Little's Law isn't just a principle; it's a roadmap for operational excellence.

On time delivery, more popularly known by its famous abbreviation 'OTD', is the percentage of delivery which met the agreed timeline between the supplier and the customer. It is one of most important KPIs in Delivery section as it represents the agility and capability of the supplier to meet the customer demand timely, and is a major source of confidence and satisfaction of the customer. In most of the Lean Organisations, OTD is one most high weightage KPIs and these Organisations look to achieve 100% OTD. To achieve 100% OTD, the Lean Organisations must invest in building robust Internal Processes, QMS, Project/Program Management and Review System, Information System, Training and Supply Chain.

No customer likes to wait for their goods. A promised delivery date should therefore be adhered to. In addition to quality and costs, customer satisfaction is a key aspect of customer benefit. Ideally, the goods should not arrive too early, as space and storage capacity are regarded as "dead capital" in LEAN. This means trying to keep this type of hall utilization as low as possible. Unplanned deliveries that arrive too early can quickly cause chaos. In the field of rail transportation technology, I can say that customers consistently return goods that are sent too early.

In my experience, on-time delivery can be one of the most important factors with customer satisfaction. Depending on the product/industry, they may be making plans for the future that are dependent on your ability to deliver on time. Maybe your product needs to land at a job site on a specific date to kick off the next step and outside vendors/contractors/inspections need to be scheduled accordingly. They would be (potentially) happier with a lead time that was 5 days longer, but you delivered on time, versus the promised date you gave them but missed by a day.

Erweiterung des Begriffs Lieferpünktlichkeit: Pünktlich ist eine Lieferung, wenn sie innerhalb eines definierten Zeitfensters geliefert wird, d.h. nicht zu spät UND nicht zu früh. Zu frühe Lieferungen können den Empfänger überlasten und Ressourcen (z.B. Stellflächen, Logistikzentren) blockieren und sind nicht nur ein Anhalt für Verbesserungsmöglichkeiten beim Empfänger, sondern auch beim Zulieferer (z.B. Energieeinsparung).

Esse indicador não só reflete a eficiência e a eficácia dos processos internos, mas também a percepção do cliente sobre a confiabilidade da empresa. Cumprir prazos estabelecidos é fundamental para construir e manter a confiança do cliente. Na visão Lean, a entrega no prazo está intrinsecamente ligada à minimização de desperdícios e à melhoria contínua dos processos, assegurando que cada etapa contribua efetivamente para o resultado final desejado.

As part of regular performance tracking, On-time delivery performance is, of course, important. However, for your lean performance and continuous improvement goals, the main focus should be on reducing lead time. Monitor and analyze improvement and Kaizen activities as key metrics for assessing lean performance.

It is important to note that no matter how optimal and waste-free the lead time may be, if the interfaces to purchasing, production planning and customer service do not function properly, long lead and waiting times can occur. If these are disproportionately high compared to the production time, I believe that the LEAN production concept should be expanded to LEAN management. This includes the entire supporting production processes.

Lead time is the time interval between the Delivery of an order and the receipt of the subject order. Surely, the longer the lead time, longer it takes to realize the revenue. So, in order to improve the Revenue and Profit, the lead times have to be shortened. Lead time reduction can be achieved by analyzing the constituents of the Lead times- VA time, NVA time, Waiting time, Queuing time, interface time between different processes etc. & finding ways to shorten these times; particularly the NVA times, Waiting times and Queuing times. Lean Methodologies like Values Stream Mapping, Process Flow diagram help viewing the value Streams and where the wastes lie & tools like PFMEA, RCA, CAPA can help us finding ways to shorten the Lead times.

Ein weiterer Effekt der Durchlaufzeitverkürzung ist die Reduzierung von Beständen / Bestandskosten, z.B. durch das Reduzieren und Managen von Engpässen und durch die Verkleinerung von Losgrößen.

redução do lead time, comparando os estados "as is" (como é) e "to be" (como deveria ser), é uma estratégia crucial na gestão Lean. O "as is" representa a situação atual dos processos, enquanto o "to be" ilustra o estado desejado após as melhorias. Focar na redução do lead time implica em analisar cuidadosamente cada etapa do processo atual, identificando gargalos, ineficiências e oportunidades de melhoria. O objetivo é tornar os processos mais enxutos e eficientes, minimizando o tempo total desde o início até a entrega do produto ou serviço.

O Lead time um controle absoluto dos procedimentos de produção, considerando a capacidade produtiva e a demanda a ser atingida, o que compõe um ciclo com diferencial competitivo, duradouro e controlável. A medição precisa, abre caminho para o controle e diagnóstico dos pontos chaves para redução dos tempos de processo.

One of the most effective metrics used to reduce Lead Time is Work-in-Process (WIP) levels. Little’s Law offers valuable insights into managing Work-in-Process (WIP) and its impact on Lead Time and Throughput. Consider a widget manufacturing scenario. If our system processes at a Throughput of 100 Units Per Hour and we have 400 units in WIP, it takes four hours to complete a batch, defining our Lead Time. If we reduce our WIP to 200 units while maintaining the same Throughput, our Lead Time is halved to two hours. Strategically reducing WIP can effectively decrease Lead Time. Tactics such as optimizing inventory levels, enhancing process efficiency, and implementing just-in-time production are key to achieving this.

In my experience, when you look at the Lead Time Ladder in a VSM, roughly 3% of the lead time is VA and 97% is NVA (generally speaking). To reduce lead time, spend your time figuring out how to reduce the 97% of the VSM that is NVA, and you can achieve transformational results. You can then focus your daily management for improvement efforts on the 3% of the VSM that is VA, and achieve a balanced approach to the lead time reduction activities.

The previous comments on VSM are very interesting. One talks about NVA, the other OTC and the last one A-runners. Allow me to shed some light on these 3 points. NVA is mostly about people doing work (their way of working). We can see the 7 Wastes in their efforts. Systematically we can also eliminate some methods to provide better quality deliverables. NVA is also part of BNVA (Business NVA) which are rules, regulations and laws. We should be mindful of this. Now onto OTC...this is a Value Stream. We do the same thing on a larger scale to give the business "oxygen" (Cash Flow) and yes, the finance people love it! Finally, the very 1st step in VS Mapping is identifying the runners (PQPR Analysis) based on Volume and Revenue/Cost. Smile!

The other important point to be considered is Operational definition for Lead time. Customer order to despatch, Customer order to delivery at Customer location, production order to Packing, cut to pack in apparel industry . Other times will become sub elements of lead time

If you are only considering the impact you can have within the 4 walls of your manufacturing facility, Throughput Lead Time may be a great metric to track the overall effectiveness of your efforts to improve lead time. But what the customer (and your finance team!) really cares about is the time from Order to Cash. This will include all the process steps and lead times in your entire business that are required to deliver the product to the customer. We often celebrate "big wins" in a manufacturing setting by taking minutes or even seconds off of a cycle time. Meanwhile the order sits in customer service waiting to be processed for 1-2 weeks. The customer doesn't care about the internal steps - they want their product...NOW.

Transitioning from a "Make to Order" (MTO) to an "Assemble to Order" (ATO) strategy can often help reduce lead time. Both manufacturing strategies have their advantages and are suitable for different scenarios, but ATO is generally associated with shorter lead times and increased efficiency. While the shift to ATO has clear advantages in terms of lead time reduction, it's essential to assess the specific needs of the business, product complexity, and customer expectations. The choice between MTO, ATO, or other manufacturing strategies depends on factors such as product variability, market demand, and the level of customization required by customers.

In my opinion, before starting a value stream analysis, you should check whether the product group or product belongs to the A-runners or only serves a niche. It is often easier to extend optimizations and adjustments from A-runners to other product groups than with C-runners, which have several special features.

NVA%. This sums up pretty much every potential metric that Lean strives to improve upon. In a manufacturing environment, the inventory and WIP are the ample opportunity areas. The waiting waste is more of a bigger concern in the services sector. But in both cases, mapping our measurable NVA% for various operations and processes is the single most important metric to measure progressive success of Lean.

Most important lean performance metrics required for reducing lead time are • Improving productivity and reducing process lead time without reprocessing of produced units. • Reducing machine downtime. • Improving production planning process. • Improving material requirements planning. • Improving scheduling process. • Improving process product quality by delivering with first time quality product. • Targeting higher rate of equipment availability, performance efficiency, and value added quality products. • Improving process by standardized work. • Increasing value-added process steps. • Improving process efficiency and machine reliability.

We can bring about substantial improvement in the production lead time by monitoring and improving the following: Overall Equipment Efficiency (OEE): A metric that combines availability, performance, and quality to assess the effectiveness of equipment Waiting Time: The time a product or task spends waiting in between different processing steps. Setup Time/ Change-Over Time: The time required to change over equipment or machines for different products or processes. First Time Right Rate: The percentage of products or services that are completed without the need for rework or correction.