What Is Cycle Time in Manufacturing?

In manufacturing, a cycle refers to the series of steps that make up the production process. Manufacturing cycle time, then, is the time it takes to complete a process or produce an item. Cycles include everything from procuring raw materials to shipping finished products to customers.

• Lean Management Principles and Cycle Time
  To optimize production time and minimize waste, companies often implement lean manufacturing principles, which reduce both work-in-process and lead times. Lean manufacturing principles focus on producing only the products customers need, when they need them, and the exact quantity they need. To achieve these goals, companies combine just-in-time production, kanban systems, and continuous improvement.To calculate manufacturing cycle time, companies must consider lead times, processing times, and scheduling. It measures the time it takes to produce one unit of a product from the moment the manufacturer receives raw materials to the moment teams ship it to their customers.Calculating manufacturing cycle time allows manufacturers to identify bottlenecks in the production process and implement measures to reduce them. Reducing manufacturing cycle times is crucial for improving profitability, enhancing customer satisfaction, and optimizing order fulfillment.

  Reducing cycle time also helps manufacturers respond more quickly to customer demand and reduces the need for excess inventory. Companies can reduce the time it takes to make a product by using continuous-flow processes. These processes enable manufacturers to complete each step without interruption, minimizing the time employees spend on non-value-added activities.

• Value Stream Mapping and Cycle TimeManufacturers can also use value stream mapping to identify waste, improve production planning and control, and optimize the supply chain. Value stream mapping involves documenting the flow of materials and information throughout the manufacturing process,  identifying areas for improvement, and optimizing the workflow.
  
• Six Sigma Methodologies and Cycle Time
  Additionally, using Six Sigma methodologies can further enhance quality, reduce variability, and increase throughput. These methodologies involve statistical analyses of manufacturing processes to identify and eliminate sources of defective products and waste.Overall, a well-designed and efficient manufacturing cycle is crucial for maintaining a competitive advantage in the market. By optimizing production processes, manufacturers can reduce costs, improve quality, and respond more effectively to customer demand.

What Is Manufacturing Cycle Time?

To review, manufacturing cycle time refers to the time it takes to complete a process or make a product. For products, it refers to the timed observation that measures how often a team completes a product or a part. For processes, it refers to the time it takes for an employee to perform all the tasks in the process before repeating them.

Differences Between Cycle Time, Lead Time, and Takt Time

Lead time differs from cycle time in that it measures the manufacturing process from the customer’s perspective. Lead time begins with a customer or stakeholder request and ends when the customer receives the product, whereas cycle time only measures the time it takes the manufacturer to make the product.

Since lead time includes how long it takes to process customer requests and shipping times, it is a critical metric for manufacturers to track. Streamlining these processes might, for example, include improving outdated order processing procedures or replacing a slow shipper with one who could deliver materials faster.

In contrast to cycle time, takt time measures the time a manufacturer needs to meet customer demand. To calculate takt time, manufacturers divide the available daily production time by the daily customer demand.

Measuring takt time against cycle time enables manufacturers to synchronize production with demand, streamlining production and reducing delays and waste. For example, if the cycle time exceeds the takt time, manufacturers can explore ways to streamline productive processes. Until that happens, though, manufacturers should inform customers to adjust their expectations accordingly.

Types of Cycle Time

Manufacturers also find value in measuring the cycle time of various components of the total cycle or throughput time. These metrics include the following:

• Machine (equipment) cycle time: Machine cycle time measures how long a machine takes to complete a specific operation on a part or a piece of material.
• Manual cycle time: Manual cycle time measures how long an employee spends completing a non-automated task.

Effective cycle time: Effective cycle time measures all the steps that support the manufacturing process, such as unloading or loading materials, preparing the equipment, and so on. It includes all the time a single workstation spends from the beginning of its process until the cycle begins again.

Why Is Manufacturing Cycle Time So Critical?

Cycle time is a critical metric in manufacturing. Understanding its importance can provide a significant advantage to manufacturers looking to optimize their production process. Here are five reasons why manufacturing cycle time is so important:

• Improving efficiency: Manufacturers can identify bottlenecks and eliminate waste by measuring and tracking cycle time, leading to increased throughput and higher productivity levels. This process results in lower production costs and higher profitability. Manufacturers use this information to continually improve their production process, reducing the cycle time and increasing efficiency.
• Making capacity planning more effective: Understanding cycle time allows manufacturers to plan for capacity more effectively. When they know how long it takes to complete a process or task, manufacturers can adjust staffing levels and allocate resources more efficiently, thereby avoiding underutilization or overloading of resources. Better capacity planning helps manufacturers prevent overproduction, which leads to waste, and underproduction, which results in lost revenue.
• Refining quality control processes: Manufacturing cycle time plays a crucial role in quality control because it can identify defects and quality issues. Monitoring cycle time also helps manufacturers identify processes or tasks that take longer than expected and investigate any quality issues that could cause the delay. Addressing quality issues during production can save significant rework, waste, and recall costs.
• Assuring continuous improvement: Cycle time measurement and analysis are critical elements of a culture of constant improvement. Manufacturers develop and implement improvements that increase efficiency and productivity by identifying areas of inefficiency in the production process. Identifying those bottlenecks helps drive down costs and improve the bottom line. Continuous improvement in cycle time leads to the adoption of lean manufacturing principles, further optimizing the production process.

Gaining competitive advantage: Manufacturing is a highly competitive industry. Any improvements in efficiency and productivity can provide companies with a distinct advantage. Manufacturers reduce costs, improve quality, and deliver products to market faster by optimizing cycle time. It gives them a competitive edge in the marketplace, leading to increased market share, higher revenues, and increased profitability.

Factors That Influence Manufacturing Cycle Time

Several factors can influence cycle time. These factors include both internal and external issues that can affect a manufacturer’s ability to ship out products on schedule. These factors include:

• Malfunctioning equipment: Machines that don’t perform up to par or completely break down can cause a significant loss of productivity. Without the ability to use equipment essential to the manufacturing process, production comes to a dead stop.
• Inefficient raw material receiving and manufacturing processes: Inefficient workflows in receiving and transporting raw materials to the shop floor, as well as unoptimized manufacturing practices, can cause bottlenecks at various steps in the manufacturing process.
• Raw material and parts shortages or poor quality: Waiting on the parts and materials needed to manufacture products can also cause cycle time increases. Finding a more dependable source can significantly shorten cycle time. Poor quality materials or parts, too, can cause a slowdown if they result in a defective product.
• Varying employee abilities and attitudes: New employees will naturally require more time to learn how to perform job-related tasks. Mistakes and slow task performance are likely to occur. Established employees can usually perform tasks relatively mistake-free at speed. Unmotivated or unhappy employees, too, will often express their dissatisfaction through slow or error-prone performance, leading to increased cycle times.
• Incompetent workflow designs: Clunky production routings and inefficient shop floor layouts can cause slowdowns by causing employees to take extra steps to get to the next step in the process.

How to Improve Manufacturing Cycle Time

A variety of tools and strategies can help manufacturers improve their cycle time. With today’s competitive market, companies must take advantage of every edge they can gain. Using these lean manufacturing strategies and tools can give them that edge:

Just-in-Time (JIT)

The just-in-time (JIT) lean management strategy aligns orders for raw materials with production schedules. By ordering materials as they need them, manufacturers can reduce inventory and storage costs, thereby decreasing waste and boosting efficiency.

Kaizen

Introduced by Japanese car manufacturers, the Kaizen method drives continuous improvements through a process of making small improvements and identifying and resolving issues as they arise. It involves all a company’s employees, who suggest changes to the manufacturing process that could result in greater efficiency. The method, now adopted by manufacturers worldwide, has enjoyed great success in eliminating roadblocks and wasteful practices while boosting quality.

Automation

Today’s automation goes well beyond machines handling repetitive or hazardous tasks — although that’s a significant part of it. With machines handling the more tedious aspects of manufacturing, employees can get more done in less time. Add to those machines a manufacturing software solution that can leverage AI to uncover hidden logjams or recommend more efficient processes, and a company can take advantage of the full benefits of automation:

• Lower costs of operation
• Reduced lead and cycle times
• A more efficient, more competitive operation
• Improved product quality
• More efficient planning

Manufacturing Execution Systems (MES)

Manufacturing execution systems (MES) are sophisticated software solutions designed specifically for manufacturing operations. With real-time data and complete traceability, manufacturers can ensure compliance and correct inefficiencies to create higher-quality products. These solutions’ capability to deliver real-time alerts allows managers to respond quickly to issues and streamline processes to avoid those issues in the future.

What Benefits Does Measuring Manufacturing Cycle Time Provide?

Manufacturers use cycle time to measure efficiency, identify bottlenecks, and optimize operations. Here are some common ways that this metric can help improve production:

• Measuring production efficiency: Manufacturing cycle time measures the time it takes to produce a finished product from start to finish. This metric calculates a manufacturing process’s overall production efficiency and identifies areas for improvement.
• Identifying bottlenecks: Analyzing cycle time data pinpoints where the production process is slowing down or where there are delays in the supply chain. This process assists in identifying bottlenecks and inefficiencies within the process.
• Improving quality: Manufacturers can also use cycle time to measure the quality of their products. By tracking the time it takes to complete each task in the process, they can identify which tasks take longer than they should. If the cause is an employee error or a faulty part, managers can take steps to correct the problem, thereby improving the product’s quality.
• Optimizing operations: Reducing cycle time increases production capacity and lessens time spent on non-value-added activities. It optimizes operations and improves overall efficiency.
• Monitoring supplier performance: Manufacturing companies can also use cycle time to monitor and improve supplier performance by tracking the time it takes for raw materials and other inputs to arrive at the factory. This process helps identify which suppliers deliver products on time and which ones cause delays in the production process.
• Boosting customer satisfaction: By reducing cycle time, manufacturers can improve customer satisfaction by providing products more quickly and efficiently. It helps meet customer demand more effectively and enhances reputation in the marketplace.

How Does Manufacturing Cycle Time Help Improve Efficiency and Reduce Costs?

Cycle time is a powerful tool that manufacturers use to optimize their operations and drive efficiencies. By understanding and monitoring cycle time, manufacturers can identify areas of their production process that may be causing delays or inefficiencies and take action to improve them. Here are some unique ways that cycle time can help manufacturers improve their operations:

• Pinpointing bottlenecks and inefficiencies: Cycle time enables manufacturers to identify bottlenecks and inefficiencies in their production processes that slow down their operations. By analyzing cycle time data, they can determine which tasks or processes are taking longer than expected and investigate the cause of the delay. This process enables them to make targeted improvements to their operations and increase efficiency.
• Streamlining production scheduling: By using cycle time data, manufacturers can optimize their production schedules to minimize downtime and improve resource utilization. For example, they may identify that certain tasks take longer to complete during specific times of the day or week, allowing them to adjust their production schedules accordingly. As such, it helps them reduce wait times and improve efficiency.
• Improving quality control processes: Cycle time can also help manufacturers improve their quality control processes by identifying defects and issues that may be causing delays in the production process. Monitoring cycle time allows manufacturers to identify tasks or processes that take longer than expected and investigate whether quality issues are the root cause. Monitoring will also enable manufacturers to address quality issues during production, saving significant costs associated with rework or recalls.
• Enhancing equipment maintenance: Manufacturers can use cycle time data to optimize their equipment maintenance schedules, ensuring that equipment is maintained when it is operating at peak efficiency. Analyzing cycle time data helps to identify when equipment is running most efficiently and schedule maintenance activities accordingly. It also helps to minimize downtime and improve overall equipment effectiveness.
• Driving continuous improvement: Manufacturing cycle time is a crucial driver of continuous improvement initiatives, as it provides manufacturers with a benchmark for measuring each improvement’s impact. Tracking cycle time helps identify areas of inefficiency, enabling management to develop and implement improvements. They can then use cycle time data to measure the impact of these improvements and adjust their production processes to drive ongoing efficiency gains and cost reductions.

Calculating Manufacturing Cycle Time

The total production time calculates the time it takes for a product to move through the entire manufacturing process, including any setup or downtime. The total number of products completed during the production run is the number of units produced. To calculate manufacturing cycle time, you need to determine the time it takes to complete each step in the production process and add them together.

Here’s the formula for calculating cycle time:

Manufacturing Cycle Time = Total Production Time / Number of Units Produced

To use this formula, you need to know the total production time and the number of units produced during that time.

For example, let’s say that a manufacturer produces 100 units in 8 hours. The total production time is 8 hours or 480 minutes.

Assuming each unit takes the same amount of time to produce, the cycle time would be:

Cycle Time = 480 minutes / 100 units

Cycle Time = 4.8 minutes per unit

It takes 4.8 minutes to complete a single production cycle for each unit.

It’s important to note that cycle time can vary depending on the complexity of the production process, the type of product, and the equipment used to make the product. By regularly measuring cycle time, manufacturers can identify areas for improvement and optimize their production processes to increase efficiency and reduce costs.

How to Calculate Period

Calculating the period is crucial for manufacturers because it enables them to determine the average time it takes to sell and replenish their inventory. Companies can use this metric to optimize inventory management and ensure that they maintain the right inventory level to meet customer demand without incurring unnecessary holding costs.

Here’s the formula for calculating the average inventory period:

Average Inventory Period = (Beginning Inventory + Ending Inventory) / 2 / Cost of Goods Sold x 365 days

To use this formula, you need to know the beginning and ending inventory levels for a specific period and the cost of goods sold during that period. Include the 365-day factor to convert the result into days.

For example, let’s say that a manufacturer has a beginning inventory of $50,000 and an ending inventory of $60,000 during a fiscal year. The cost of goods sold for that period is $500,000.

Average Inventory Period = ($50,000 + $60,000) / 2 / $500,000 x 365

Average Inventory Period = $55,000 / $500,000 x 365

Average Inventory Period = 40.15 days

This result indicates that, on average, the manufacturer’s inventory takes about 40 days to be sold and replaced. By monitoring this metric regularly, manufacturers can adjust their inventory levels to optimize cash flow and reduce holding costs while ensuring they have the proper inventory to meet customer demand.

Cycle Time in Diverse Manufacturing Environments

Manufacturers measure cycle time in ways that align with their specific environments and processes.

Discrete Manufacturing Environments

For example, discrete manufacturing processes, such as those automakers use, produce various parts of the end product simultaneously. In a discrete environment, manufacturers typically measure cycle times based on the number of parts they make during a specified period — usually per hour.

Process Manufacturing Environments

On the other hand, companies that use process manufacturing methods produce items that require blending ingredients to create the end products. Bakeries, chemical companies, and paint manufacturers, for instance, usually employ the process method.

For these manufacturers, it makes better sense to measure cycle time by the number or volume of the products they make over a specific period. Bakers, for instance, would likely measure the number of cakes, rolls, or pies they make per hour. Paint manufacturers, however, typically measure the number of gallons they produce per hour.

Cycle Times in High-Mix vs. Low-Mix Production Settings

• High-mix low-volume (HMLV) settings: HMLV production settings’ flexibility and adaptability allow them to produce a diverse range of products in various quantities to meet varying customer demands. However, with the variety of quantities they must produce, techniques and equipment they use, and products they make, the tendency for mistakes goes up. Taking the time to calculate cycle time can help identify the points in the process where most errors occur.
• Low-mix high-volume (LMHV) settings: These companies make a smaller range of products in greater quantities. For that reason, manufacturing operations follow a standard procedure. With shorter lead times, cycle times usually follow suit. However, since these processes can prove tedious, cycle times might increase if employees find it challenging to focus on their work.

Real-World Examples of Cycle Time in Diverse Manufacturing Environments

Here’s how some manufacturers tailor their cycle time to their specific needs:

• Cycle time in the electronics industry: Electronics products, such as semiconductors, go through a large number of steps before the finished product emerges in the shipping room. For example, semiconductor manufacturers measure cycle time as how long it takes to process a wafer lot from the beginning of the process until it is ready to ship. In this industry, each step in the assembly process is critical. If the throughput time increases, managers need to dig down into the cycle time for each step to determine at which point the process typically stalls.
• Cycle time in the food industry: The food industry manufactures its products in batches. However, there are distinctive phases products must undergo before they are ready to ship to customers. For instance, bakers calculate the cycle time for the mixing phase, the proofing phase, and the baking phase of the process in addition to the cycle time from start to finish.
• Cycle time in the pharmaceutical industry: Since pharmaceutical products have life-or-death consequences for errors in the manufacturing process, the scrap and rework rate tends to be high — around 11.4% — according to an Association for Supply Chain Management study. Despite this fact, cycle time has shortened over the years. As the paper notes, adopting lean management strategies is a major component in facilitating that improvement.

Final Thoughts on Cycle Time

Cycle time and period are critical metrics for manufacturers to measure and monitor to optimize their production processes and inventory management. By regularly calculating cycle time, manufacturers can identify areas for improvement, increase efficiency, and reduce costs. Similarly, by monitoring the average inventory period, manufacturers can ensure they have the right inventory level to meet customer demand without incurring unnecessary holding costs. By leveraging these metrics, manufacturers can improve their operations, enhance customer satisfaction, and drive sustainable growth in today’s competitive marketplace.