Cycle Time Analysis

Contents 1 Applications 2 Procedures 3 Instructions    3.1 End-Point Measurements    3.2 Controlled Experiments    3.3 Historical Research    3.4 Scientific Analysis 4 Example    4.1 Resources

A technique that examines the total length of time an activity needs to complete its cycle. It is measured by the amount of time that an input to a business activity requires to be transformed to an output. Where a process consists of multiple activities, the cycle time for any given activity is the time between previous activity completion and current activity completion (including any time between the completion of one activity and the start of the next activity). The objective of Cycle Time Analysis (CTA) is to identify opportunities for breakthrough and the achievement of continuous process improvement, using time as a core measure. CTA is an application of "actual delta theoretical", or "A delta T" (see Gap Analysis), where the gap between actual and theoretical time-to-completion is analyzed.

Applications

• To identify non-value-adding activities in an activity work flow.
• To identify current time-to-completion measures for an activity work flow.
• To compare current to theoretical or desired measures.

Procedures

1. Determine activity to be analyzed.
2. Gather activity profile information and add time-to-completion for target activities.
3. Calculate activity cycle time by summing time-to-completion for all activities on the work flow.
4. Develop and apply criteria for distinguishing value-added activities.
5. Sum time-to-completion for value-added activities only (Theoretical Time).
6. Compute Cycle Time Performance Ratio (CTPR = Actual Time/Theoretical Time).
7. Determine corrective actions to drive CTPR toward a value of 1 by reducing/eliminating non-value-added activities during subsequent reengineering.

Instructions

Confirm the scope of the Cycle Time Analysis. The scope may encompass one key activity or a set of activities surrounding a particular business problem and/or comprising the value stream activities flow (see Work Flow Diagramming). Then gather activity profile information, pertaining to the target activities, and assign actual time-to-completion values for each activity (see Activity Profiling). An effective approach is to add the times to the work flow diagram (see following example). Where actual times are not readily available, best-guess estimates may be used, provided that the means for estimation are consistent across all activities. If actuals are not available and estimates are not practical, standard times can be used. Some ways to collect cycle times are as follows:

End-Point Measurements

In this scenario, for example, repetitive activities start with a written, dated input and finish when the output is delivered. There are two characteristics of end-point measurements: beginning and end dates can be correlated, and there are a large number of incidents. Once the information has been gathered, it is possible to calculate the average cycle time for the activity. (See following example.)

Controlled Experiments

Beginning and end dates are not always optimal solutions for determining cycle time. There may be instances when these dates are unavailable or simply do not exist. Controlled experiments allow for gathering data related to the selected sample. Use controlled experiments for small to medium-sized activity work flows. It would be too time-consuming for a project team to prototype and experiment with value streams that extend for weeks or months (see Simulation).

Historical Research

Operating manuals, procedure descriptions, corporate policies, and other business documentation may promote cycle time information (or clues to derive cycle time). Reviewing and researching these historical records may be helpful. Be sure to adjust for relevance.

Scientific Analysis

This approach involves breaking down the activity into component steps and then, for each component, estimating its cycle time. Obtain the necessary information from subject matter experts performing the work, to estimate cycle time. Estimate the amount of time currently spent on the entire process by summing the times for all activities.

Apply Brainstorming, Workshops and/or Facilitation techniques, if necessary, to determine what the criteria are for "added value " activities, and identify those activities which do not add value to the customer of the activity. Some rules of thumb for determining if an activity adds value are:

• Is the activity a compensation for earlier defects?
• Does the activity add value to the product in the eyes of the customer?
• Is the activity in the direct path to the objective/outcome?
• Is the activity redundant?

Reconstruct the work flow diagram with only the value-added activities during redesign, after all breakthrough concepts have been explained. Calculate the total time spent in value-added activities (e.g., Theoretical Time), and compute the Cycle Time Performance Ratio (CTPR), which is the ratio of actual time to theoretical time. This measurement provides a baseline for plotting continuous process improvement by continually "pushing down" on other non-value-added activities where the actual time is driven toward the Theoretical and the CTPR approaches a value of 1. Techniques such as Root Cause Analysis or Ishikawa Diagramming may also be used to develop the means to eliminate the non-value-adding activities during redesign.

Example

Resources

1. Dr. H. J. Harrington. Business Process Improvement, The Breakthrough Strategy for Total Quality, Productivity, and Competitiveness. McGraw-Hill Inc, 1991.