While we are implementing lean we come across three mostly used terms for calculating the Time Spent i.e, Takt Time, Lead Time and Cycle time . Often people get confused of these terms and use Takt Time, Lead Time and Cycle time interchangeably. eventhough they are distinct.
These are used to Optimize the workflow and also to calculate on the capacity to meet the customer demand. Little confusion in this will lead to confused production line.
Now let us get to the details of these.
Lead time : The most simple of these words. The clock starts when we have an order from customer and ends with the time the order is delivered to customer. Let us say we have the order on 15-Sep-2018 and and delivered to customer on 20-Sep-2018. In this case, the Lead time if 5 Days.
Cycle time : Cycle time is the time taken for Production of one Unit. In other words its the time taken from Start of Production to Shipment. Let’s Say, we are able to produce 400 units in 100 days, the Cycle time is 100 /400 = 0.25 Days per Unit.
Takt Time : This tells you how much time you can take. It is the rate at which we can Produce to meet the customer demand. In other words, this is the time available with us to produce one unit. Lets say we have a demand of 200 Units from customer and this is to be delivered in 100 Days. In this case, the Takt Time is 100/200 = 0.5 Days Per Unit.
Using these times, we can simply ensure the production is planned to optimize the resources and meeting customer demands.
We have discussed the General Ideas and Ideas from Issues earlier. Here is another trigger for you to look into ideas for Six Sigma Projects by function. If you are new in the continual Improvement Journey, these various classifications help you project identification and selection. Classifying ideas for Six Sigma Projects by function will help you to ignite those who have less time to look at general issues.
Few years back it was generally believed that the six sigma method is used for Manufacturing Industry is only. How ever, Many service and IT organizations have adopted this and saved tons of money. Even this method can be used to increase the process speed and lean out the process. You may take up the improvements in a step by step approach which can give you better clarity and improve the system.
Project Selection Ideas By Function
Six Sigma Project Ideas for Finance/Accounting function
Reduce the time taken to close the accounting books (cycle time)
Improve the forecast accuracy
Reduce balance sheet risk
Eliminate unstable customers and associated risks
Improve processing of payment to vendors/suppliers
Improve Days Sales Outstanding (DSO) — the average time taken by a company to collect payment from its customers
Reduce payroll process cycle time
Improve cash management processes
Improve payment/collection processes
Reduce electronic financial transaction costs
Reduce the cycle time of reconciliation
Reduce the procure to pay cycle
Standardize the accrual and deferral processes
Cycle time reduction in processing of Invoice generation
Reduction of cycle time in Purchase order generation
Six Sigma Project Ideas for Human Resources function
Reduce the turn around time to hire an employee
Reduce the time to process an insurance claim
Improve employee on-boarding and orientation processes
Reduce expenditures for recruiting firms
Improve hit-rate for successful hiring
Improve timeliness and the value of employee performance reviews
Improve training efficiency
Improve employee satisfaction
Identify and correct retention issues
Six Sigma Project Ideas for Sales function
Improve cross-sell opportunities
Reduce time required to enter sales orders
Reduce errors and rework associated with sales orders
Reduce customer credit worthiness cycle time
Reduce the number of “bad deals” that are processed
Improve the cycle time of the entire sales order to cash process
Increase repeat orders/customers
Six Sigma Project Ideas for Shipping/Receiving function
Improve on-time delivery of products to customers
Improve on-time delivery of goods to our facility from vendors
Improve documentation accuracy
Reduce line downtime due to shipping/receiving
Improve inventory control/rotation
Improve inspection processes
Reduce the space occupied by the inventory
Now for some of the ideas by Industry. This section can be used by linking the ideas to specific industry
Sis sigma Project Ideas for Information Technology Industry
Reduce network/server/application downtime
Improve process of logging-in to network from remote locations
Improve system reliability/uptime
Standardize computer loads for configuration and support productivity improvement
Six Sigma Project Ideas for Product/Service Design industry
Reduce time required to design a product or service
Reduce errors in design
Reduce production time
Reduce testing time
Six Sigma Project Ideas for Call Center Industry
Increase/decrease (depending on your business needs) average talk time
Reduce abandon calls
Improve employee knowledge
Reduce number of times customer is put on hold
Reduce Call drops
Improve resolution of queries
You may start resolving problems and one at a time. do not attempt a great improvement at once. In case you have to then pilot the solution and deploy horizontally.
De-bottlenecking is one of the very good lean tools focus on reducing cycle time and improving throughput. One of the important toll used is to study the bottlenecks in the system and improving throughput. A systemic approach is taken in studying, analyzing and acting on the bottlencks. A similar approach is taken in the theory of constraints also.
The place in the value stream that negatively affects throughput; as a resource capacity limitation, a bottleneck will not allow a system to meet the demand of the customer.
De-bottlenecking essentially involves studying the bottleneck in the system and Improving the throughput rate of the process by working on optimizing the utilization of the bottleneck.