What is cycle time to you? A process that your inventory manager makes happen on occasion? Some arbitrary notion of a period between output from workcenter to workcenter? A concept only loosely connected to scheduling, performance, and supplier relations? If your idea of cycle time is that of a business procedure that’s only marginally important when compared to the myriad other tasks involved in manufacturing—then, you may want to rethink that thought.

Vital to positive bottomlines, cycle time reduction also reduces costs, lowers inventory levels, improves production scheduling and throughput predictability, improves customer satisfaction, and can even result in a better quality product. Indeed, if there were one operational issue you had to focus on to improve overall profits, in a world concerned with speed of manufacture that issue would be (and is) the compression of time across the entire operation. Time compression in production is both integral to, and a product of, efficiency. It concentrates attentions on making better goods and quality services, and in turn eliminates waste than drags down profits. Oh, and it makes your customers happy, too.

Of course, your customers are always going to ask for better pricing—it’s the nature of what we do in manufacturing. However, this is not to say that customers would prefer better prices for inferior products. Maintain this philosophy and in short order you’ll have no products to sell because you will have no orders to fill. Thus, cost-cutting at the expense of value is something to certainly avoid. In other words, the secret is compressing time while also maintaining your value equation of quick, on-time delivery coupled with excellence in product quality and competitive pricing.

This is where the reductions in cycle times can lead to increases in profit, for cycle time is an operational function very much under your control. The markers are nearly always there in front of you to let you know when your order-to-delivery cycle times are too long: low throughput, idle inventory, falling sales, increased in-direct (non-value added) costs, low on-time delivery rates, and dissatisfied customers. Identifying and correcting long cycle times means taking a look at bottlenecks, poor supplier relations, inaccurate performance metrics, and less-than-stellar production scheduling.

In order to fix your cycle time problems, there must be cross-operational agreement of what needs to be done. Every stage of the order/production cycle must be considered in terms of efficiency—what’s not working needs to be reengineered to throw out the waste, while maintaining the best practices. When a manufacturer is operating in an efficient balance and flow, the results are often obvious if not entirely more profitable. Proper balance and flow means that you can answer questions that inform the critical considerations of most efficient job sequencing, machine operation efficiency, and on-time delivery.

This entry was posted on Monday, October 13th, 2008 at 9:00 am and is filed under CRM, Inventory, Purchasing, Scheduling. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.