Manufacturing cycle time is the interval needed to convert raw materials into finished goods. A detailed analysis of this time period can result in a significant reduction in the amount of time needed to convert a customer order into a finished product, which can represent a significant competitive advantage. Manufacturing cycle time is comprised of the following four types of elapsed time:
- Process time. This is the time required to actually work on the conversion of raw materials into finished goods. Products can be redesigned to shrink process time.
- Move time. This is the time required to move an order from one workstation to the next. It can be compressed by moving workstations closer together and moving goods continuously with conveyors.
- Inspection time. This is the time required to examine a product to ensure that it is free of defects. Inspections can be built into the production process, so that no separate inspection function is needed.
- Queue time. This is the time required for a job to wait in front of work stations before being processed. It can be reduced by shrinking the total amount of inventory in work-in-process.
The formula for manufacturing cycle time is:
Process time + Move time + Inspection time + Queue time = Manufacturing cycle time
For example, the cycle time for an order is tracked, with the following results:
+ 10 minutes process time
+ 2 minutes move time
+ 2 minutes inspection time
+ 80 minutes queue time
= 94 minutes manufacturing cycle time
As the example shows, queue time usually makes up the bulk of all time spent in the manufacturing process, and so is an excellent area in which to focus time-reduction activities.