Calculating Cycle Time with Numerical and Solutions
Cycle time is a key performance metric in operations management that measures the total time it takes to complete one process cycle, from the beginning to the end. It is crucial for understanding process efficiency and identifying areas for improvement.
How does Cycle Time affect production?
Having a lower cycle time affects your production because it provides higher efficiency, lower cost, and lower time spent on production. This increases your overall return on investment, along with your profitability. Low cycle times also correlate to higher customer satisfaction.
How do you reduce cycle time?
Reducing your cycle time can also reduce your lead time, improving productivity and customer satisfaction. Here are some tips for reducing cycle time:
-
Operate parallel tasks. Identify which tasks can run simultaneously and implement a system by which they finish concurrently. By doing this, you can eliminate the occurrence of delay time and reduce the overall time you spend in
production.
-
Eliminate unnecessary steps. Removing such steps or combining them with existing larger steps may reduce overall cycle time.
- Reduce delay time. You can do this by streamlining hand-offs and avoiding bottlenecks by adding resources or automating some processes.
Who calculates cycle time?
Cycle time can be used by businesses in various industries to help improve efficiency.
Businesses can use the cycle time formula to calculate the average time to produce a good or service.
Manufacturing organizations commonly use cycle time as a key performance metric to assess the time required to make a particular part or how long a machine takes to complete a cycle.
Teams in various industries may also use the cycle time formula to determine the start and finishing times of a project.
Project managers can use cycle time to provide clients and stakeholders with an accurate estimate of when they can expect their completed item or service.
Example of Calculating Cycle Time
Example 1:
An online clothing company wants to measure the amount of time it takes to process a customer order.
First, they calculate their net production time. To do this, they look at how often each team member spends away from work, which is a total of one hour per day. Then, they determine the average number of each team member's shift, which is a total of 8 hours per day, and calculate their net production time:
8 hours - 1 hour = 7 hours total net production time
Next, they calculate the total number of orders processed during each shift. They find that the total number of orders per shift is 50. Then, they divide the net production time, which is 7 hours, by their total number of goods:
7 / 50 = 0.14
To find their cycle time, they convert the decimal into units of time by multiplying the value by 60 minutes:
0.14 x 60 = 8.4 minutes
This means that their total cycle time is 8.4 minutes per order. Once they have completed their calculations, the company may decide whether they are spending too much or too little time on each order.
Example 2:
Let’s say you have five content writers. Each content writer averages approximately two and a half hours of production time for a 1,500-word blog post. You want to understand the cycle time to generate 20 blog posts in total because you’d like to publish 20 blogs per month. Using these numbers, we can calculate the cycle time for the entire team as follows:
Cycle Time = 2.5 hours / 1 blog post totalling 1,500 words
The cycle time is 2.5 hours, and if we multiply this by the total number of blog posts we want to generate, we can see that it will take 50 hours for the team to complete 20 blog posts.
2.5 hours x 20 blog posts = 50 hours
Using this information, you can now build in the total number of hours needed to generate blog content into your team’s schedule and do a more effective job building out your content strategy.
Example 3:
Let’s walk through how cycle time applies in terms of a service delivery task. Suppose you work for the postal service and run the regular mail delivery routes. You run the same route every week, so you’re relatively quick at navigating the neighbourhood.
You’re working a 12-hour shift with a one-hour lunch break and an additional 30-minute break. In this example, we want to eliminate the breaks, otherwise known as downtime, to ensure we are strictly calculating the production time only. So your net production time is 12 - 1.5 = 10.5 hours.
You manage to deliver bundles of mail to 300 addresses during your 10.5-hour production time.
Cycle Time = 10.5 hours / 300 bundles of mail
In this scenario, it takes approximately 0.035 hours, or 2.1 minutes to deliver one bundle of mail. That’s a speedy delivery!
Example 4:
We can also calculate cycle time in a production line setting to determine how much to price an individual item. Let’s say you’re starting a small business and will be selling handmade t-shirts. You need to know how many t-shirts you can produce in a certain period to know how much you should charge. In your pricing model, you want to cover labour and materials and make a profit.
You’re working a 10-hour shift with a 30-minute break.
So your net production time is 10 - 0.5 = 9.5 hours.
You produced 50 handmade t-shirts today.
Cycle Time = 9.5 hours / 50 handmade t-shirts
It takes you just over 11 minutes (0.19 hours) to produce one t-shirt, so you can use this calculation to account for labour costs and add them to your material costs. Be sure to throw in a little extra to make sure you’re profiting off your small business and monitor your cycle time as you progress to adjust your rates as needed.
Example 5:
Let’s take the doll factory example once again, and look at the Cycle Time for Doll# 1 (Jessica). We’ll take the same Net Production Time, and assume that 45 dolls are really made during this time:
Net Production Time = 550 minutes
Number of units made = 45 dolls
(Daily Customer Demand = 55 dolls)
Cycle Time = Net Production Time/Number of units made
Cycle Time = 550 minutes/ 45 dolls = 12,22 minutes/doll
Further observations about this Cycle Time example
Currently, with a Cycle Time of 12,22 minutes, you’re running 2,22 minutes behind for each doll — considering that your Cycle Time is longer than your Takt Time.
In the end, that builds up to 672,1 minutes you’d need to meet customer demand, making you about 2 hours and 2 minutes short in total each day ((672,1 – 550) / 60). In other words, you’re currently falling short of your customer demand by 10 Jessica dolls.
However, having a shorter Cycle Time than your Takt Time is also a problem. If this is the case, you may be producing more dolls than you need to meet customer demand.
For example, say that your Cycle Time is 7,34 minutes for each doll, and you maintain this cycle for the expected 550 minutes.
By the time only 403,7 minutes have elapsed (7,34 X 55) you will have met your daily customer demand. If you continue at this pace, you’ll eventually assemble about 75 dolls (550 / 7,34), surpassing your daily customer demand by 20. So, if you continue working at this pace, you’ll get stuck with 20 more Jessica dolls in your storage space every day.
In conclusion, it would be ideal if your Takt Time and Cycle Time were equal.
Example 6:
Let’s say you manage a restaurant, and you need fresh exotic fruit delivered regularly. Now, you can only make reorders for exotic fruits from your supplier on the 1st of each month.
Each new shipment of fruits takes 5 days to arrive — this is your supply delay.
Each new order you make needs to last for 30 or 31 days. Let’s say that it’s January and that you’re looking at 31 days before the next reordering — 31 days is your reordering delay.Supply delay = 5 days
Reordering day = 31 days
Lead Time (supply chain management) = Supply Delay + Reordering Delay
Lead Time (supply chain management) = 5 days + 31 days = 36 days
That’s 36 days of Lead Time that make sure you have available fresh exotic fruits for your restaurant at all times.
Example 7:
Let’s say that you want to do the electrical work (Task 1, expected to last for 5 days) and paint the walls (Task 2, expected to last for 2 days) for the two bedrooms in your house.
You carry out the electrical work in one bedroom and finish it in 2 days.
As you move to the second bedroom to carry out the electrical work, you start painting the walls in the first room.
The time you spend carrying out electrical work in the second room and painting the walls in the first room represents the overlap between the two activities and is your Lead Time.
Task 1 = 5 days
Task 2 = 2 days
Lead Time (project management) = Time for Task 1 – Time for Task 2
Lead Time (project management) = 5 days – 2 days = 3 days
Depending on the general time you need to carry out the tasks in your projects, you may also count time for your tasks in minutes or hours.
Example 8:
For example, let’s say a manufacturing process took 10 hours to produce 100 units. The cycle time for this process would be:
Cycle Time = 10 hours / 100 units
Cycle Time = 0.1 hours per unit or 6 minutes per unit
Example 9:
Suppose a manufacturer produces 1,000 widgets daily, and the production process takes 8 hours. The cycle time for each widget can be calculated as follows:
Production Time / Number of Units = Cycle Time
8 hours / 1,000 widgets = 0.008 hours or 28.8 seconds
This means that each widget takes an average of 28.8 seconds to produce.
Example 10:
A software developer logs 3 hours to fix a bug. The average time taken for all their bug fixes is their individual bug fixing cycle time.
As a team, you complete and launch eight features in a month with 22 working days. Your cycle time is:
Cycle time = 22 days/8 features = 2.75 days per feature
Example 11:
A car assembly plant produces 300 cars in a month. If the total production time from the start of assembling the first car to the completion of the 300th car is 9,000 hours:
Cycle time = 9000 hours/300 cars = 30 hours per car
Example 12:
An e-commerce platform processes and ships 1000 orders in a week, working 24×7. Then, the cycle time is:
Cycle time = 7 days x 24 hours/1000 orders = 0.168 hours per order, i.e., about 10 minutes.
