Throughput (Manufacturing Cycle) Time
A Measure of Internal
Business Process Performance:
Throughput time or manufacturing
cycle time is an important measure of internal
business process performance.
Performance measures are found on the
balanced scorecards of the companies. Examples of the some
performance measures can be found on
characteristics of balanced scorecard page. Most
of the performance measures are self explanatory.
However, three are not -
delivery cycle time,
throughput time, and manufacturing cycle efficiency
(MCE). On this page, Throughput time or
manufacturing cycle time is defined,
explained and calculated.
Definition and Explanation:
The
amount of time required to turn raw materials into
completed product is called throughput time, or
Manufacturing cycle time. The relation between the
delivery cycle time and the throughput time is
illustrated below:
Exhibit 1-1:
Delivery Cycle Time and Throughput (Manufacturing
Cycle) Time
The throughput time
or manufacturing cycle time is made up of process
time, inspection time, move time, and queue time.
Process time is the amount of time work is actually
done on the product. Inspection time is he amount of
time spent ensuring that the product is not
defective. Move time is the time required to move
materials or partially completed products from
workstation to workstation. Queue time is the amount
of time a product spends waiting to be worked on, to
be moved, to be inspected or to be shipped.
As shown at the
bottom of exhibit 1-1, only one of these four
activities adds value to the product - process time.
The other three activities - inspecting, moving, and
queuing - add no value to the product and should be
eliminated as much as possible.
Formula:
|
Throughput
time = Process time + Inspection time + move time +
Queue time |
Example
Calculation of
Throughput Time or Manufacturing Cycle Time:
Novex Company keeps
careful track of the time relating to orders and
their production. During the most recent quarter,
the following average times were recorded for each
unit or order:
| Wait
time |
17.0 |
|
Inspection time |
0.4 |
|
Process time |
2.0 |
| Move
time |
0.6 |
| Queue
time |
5.0 |
Goods are shipped as soon as production is
completed.
Required:
Calculate the
throughput time or manufacturing cycle time.
Solution:
*Throughput
time = Process time + Inspection time + move time +
Queue time
2.0
days + 0.4 days + 0.6 days + 5.0 days
= 8.0
days
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