Manufacturing cycle time is the total time taken to convert raw materials into finished goods. This includes loading time, machining and assembly time, inspection time, material movement, idle waiting time, and the time taken for all other actions during the manufacture of finished goods. In short, it is the time between receiving the purchase order and/or “Start Work” notification from the customer and rolling the product out of the manufacturing line.
Manufacturing cycle time = process time + material movement time + inspection time + idle waiting time
Value added hours = The process time + inspection time
Non-value-added hours = movement time + queue time constitute
Tracking all the time constituents accurately is not possible. Hence, cycle time is calculated by dividing the number of parts by the run time required to produce them.
Cycle Time = Total Parts Produced / Run Time
Prioritizing actions while optimizing the manufacturing cycle time is important. Starting with non-value-adding activities like waiting time and material movement time will minimize intervention in value-adding activities. Acting on value-adding activities can tend to have an impact on quality or continuity and hence should only be optimized after exhausting actions in the non-value adding activities.
Reducing Manufacturing cycle time plays a vital role in enhancing customer satisfaction and increasing the revenue of an organization.