CyCYCLE-TIME MANAGEMENTcle time

• Cycle time is the integrator of all improvements taking place in the organization.

  Cycle time is the integrator of all improvements taking place in the organization.

  
  
• As quality of processes improve, cycle time to perform processes reduce.
  
• The shorter the cycle time, the lower is the probability of errors in the operations, leading to higher customer satisfaction.
  
• There should be a focus in improving cycle times of key business processes in the organization.
  
• For example - cycle time of new product development, cycle time of changeover of tools, cycle time of order processing, etc.
  
• Inventory is one important area where reduction of cycle time is vital to the business results.
  
• Inventory has two elements of cycle time - horizontal cycle tim
  e and vertical cycle time.

Horizontal cycle time
These are the cycle times of key processes that are influencing the inventory build up. Examples, internal approval cycle time, internal order processing cycle time, suppliers' lead time, goods movement cycle time, inspection cycle time, etc.

Vertical cycle time
These are the value of goods in different stock points, expressed in number of days of consumption.

• For example, if stock in stores is held for 7 days, vertical ct is 7 days.
  
• Stock in transit is for 5 days, then vertical ct is 5 days.
  
• Vertical ct is influenced by horizontal ct.
  

Total cycle timeThis is the sum of the two:

• That is - sum of horizontal and vertical cycle times.
  
• Together, the total cycle time reflects a true picture of the efficiency within the organization - how good it is with respect to managing its commitment to suppliers and customers.
  
  Benefits of ct reduction

• Ct reduction is possible by 50-100%, every two years.
  
• Customer satisfaction improves manifold; customers see that they are being served.
  
• Working capital reduction is a direct result of improving.
  
• Competition is held back - benefits from copying have least effect