Manufacturing throughput time is the amount of time required for a product to pass through a manufacturing process, thereby being converted from raw materials into finished goods. The concept also applies to the processing of raw materials into a component or sub-assembly. The time required for something to pass through a manufacturing process covers the entire period from when it first enters manufacturing until it exits manufacturing - which includes the following time intervals:
- Processing time. This is the time spent transforming raw materials into finished goods.
- Inspection time. This is the time spent inspecting raw materials, work-in-process, and finished goods, possibly at multiple stages of the production process.
- Move time. This is the time required to move items into and out of the manufacturing area, as well as between workstations within the production area.
- Queue time. This is the time spent waiting prior to the processing, inspection, and move activities.
The concept of manufacturing throughput time is primarily oriented toward the reduction of time required by the manufacturing process, so that you can increase the amount of throughput flowing through your system and thereby increase profitability. Throughput is net sales minus totally variable expenses. The bulk of the time spent in manufacturing tends not to be in processing, but rather in the inspection, move, and queue times noted above. Thus, it is easiest to reduce manufacturing throughput time by eliminating as much inspection, move, and queue time as possible.
Example of Manufacturing Throughput Time
The production manager of ABC International wants to calculate the manufacturing throughput time for its blue one-armed widget. He accumulates the following information:
- Processing time = 3 hours
- Inspection time = 0.5 hours
- Move time = 1 hour
- Queue time = 12 hours
Thus, the total manufacturing throughput time for the blue one-armed widget product is 16.5 hours. Further, the production manager has a golden opportunity to reduce the throughput time, since the amount of queue time is nearly three-quarters of the total throughput time, and can probably be reduced without too much trouble.
Manufacturing throughput time is also known as production throughput time or throughput time.