Page 141 - How To Implement Lean Manufacturing

120 Cha pte r Se v e n

Sunday you still can’t meet their demand changes. However, had the model mix been
leveled, you could just switch to D and E, and since you already have some on hand,
you could work on the weekend and have everything the customer wanted for pickup
on Monday.
The fact is, if model mix leveling is properly employed, the business is just more
flexible and more responsive. These are two huge business advantages that are hard to
come by and serve you well in the competitive battle to survive and prosper—and lev-
eling augments both.

How Does Cycle Time Relate to Takt Time?
Cycle time has many meanings, but generally people mean one of two things, one relating
to the product, one to the process. Production cycle time is the time interval between two
consecutive production units at the end of the production process. Process cycle time is the
amount of time the unit is being worked on at any given production step. If the process
cycle time in each processing step is the same, we say the process is balanced: it is synchro-
nized internally. However, this cycle time must not only be synchronized, it must be syn-
chronized to takt to stay in compliance with strategy number one: synchronize externally.
This has practical limitations since sometimes the line is not available to produce
because of machine failures, stock outs, cycle-time problems, or defective parts. If the
production process would be designed to operate at takt, then each problem mentioned
earlier would result in a customer supply shortage and necessitate overtime or some
other countermeasure. Since, it is practically impossible to avoid all these problems, we
normally calculate the desired cycle time to be:
Cycle time = takt time × OEE or in this case if OEE = 0.88 (OEE is Overall Equipment
Effectiveness, defined in Chap. 4), Cycle time = 34.3 seconds × 0.88 = 30.18 seconds

Hence we would design the production system to be synchronized to 30 seconds
cycle time. We would design all stations to perform to 30 seconds, or stated another
way: For a one person work station, we would balance the work so each work station
has 30 seconds of work. Now when we have the normal problems of production, mani-
fest by our OEE = 0.88, we will still end up producing the equivalent of one good unit
each 34.3 seconds. When we calculate the cycle time thusly, we now are compliant to
both strategy number one and two.
OEE is a manifestation of the reality that all problems can’t be fixed right now, but
we still have to supply the customer. A measure of a Lean system is the difference
between takt time and cycle time. Among other things, this extra time is the waste of
manpower that we must pay for because our system has losses. To improve systems, a
first pass is always focused on OEE and the three losses of quality losses, cycle-time
losses, and availability losses. When we are able to reduce the losses of OEE, we are
now able to produce more using less:

• Less space
• Less manpower
• Less capital
• Less raw materials
OEE is a very descriptive and powerful metric.