The terms Cycle Time, Lead Time, and Takt Time are often interchangeably used in manufacturing.
However, there are clear differences in what each of these measures and how they are calculated. Understanding how each of these is used can optimize the workflow, resources, and work time in operations.
Cycle Time, Lead Time, and Takt Time are all approaches to lean manufacturing, a way to measure the efficiency and quality of products and reducing unnecessary disruptions and processes.
Cycle time (also known as ‘process cycle time’) is the time from the start to the end of the process STEP. Use: Cycle time is generally value-added time, but not necessarily. There can be some waste within cycle time which needs to be eliminated, or at least reduced. What the lean practitioner will do is add up all of the cycle times found on the value stream map and that sum is compared with the sum of the overall lead time. The ratio between the two tells you how efficient you are and most processes are less than 10 percent efficient. Many processes are even less than one percent efficient. That is not said backwards. Less than 10% of the time most processes are actually adding value.
Cycle Time is the amount of time a team spends actually working on producing an item, up until the product is ready for shipment. It is the time it takes to complete one task. This includes time spent producing the item and the wait stages (amount of time the task is left ‘waiting’ on the board) between active work times.
Cycle time is what most people conventionally think of when they mistakenly use “lead time” and “takt time” interchangeably.
Cycle Time is one of the key KPIs in manufacturing. ERP and MES systems use cycle time to schedule, purchase, and budget production.
Cycle Time is also an important part of calculating the OEE (Overall Equipment Effectiveness). Therefore, understanding Cycle Time is the first step to accurately measuring how well a manufacturing operation is utilized.
You need two numbers to calculate Cycle Time. The total 𝑥 number of goods produced, and the total time it took to produce the 𝑥 number of goods.
Lead time is the time measured from the moment a client puts in an order to when the final product gets delivered.
This can be easily understood by thinking of the total time it takes for the client to receive the product from the moment they put in the order to the moment they receive the shipment.
Lead Time is Cycle Time plus the additional amount of time it takes for production to begin and the time it takes to deliver the finished product.