Lead Time

To start this module off we’re going to talk about time. You see, lean practitioners like to talk
about time… a lot! So, to bring some clarity to the situation we’re going to take some time
to discuss the different types of time all lean practitioners should understand.

Takt Time
First, takt time sets the pace or rhythm of the process. It’s simply the ratio of net available
time over the average daily demand. For a more thorough review of takt time please check
out the takt time video in our Transforming your Value Streams course.

Cycle Time(s)
Next, when we use the term cycle time
we're describing how often a part is
completed by a particular process.

And when talking about cycle time we can

break it down even further. Whenever a
person is needed to do a job, for example to
load a part or operate a machine, we're
dealing with manual cycle time.

And once the start button is pressed and the machine takes over we're dealing with
automatic cycle time. This is to say that an operator is technically no longer needed at this
process until the automatic cycle stops and the part needs to be unloaded.

Production Lead Time

Next, during the Gemba Academy
Transforming your Value Streams course
we introduced Production Lead Time,
or PLT, sometimes called throughput time.

With PLT we're actually referring to the

time it takes one piece to travel all the
way through the entire value stream.

An easy way to remember this is to imagine stamping your initials on a piece of raw material
at the start of the process and then watching to see how long it takes to come out the other
end.

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I also like to refer to this as the return on investment time. In other words, if you started a
business out of your garage and spent your life savings on raw materials to start things up…
you’d want to know how quickly you could convert that raw material into cash. Or if you
weren’t, I think it’s safe to say your significant other would.

Lead Time
Now, the last type of time we’d like to discuss in this module is lead time as it relates to an
organization fully immersed in Standard Work.

In other words, when an organization has calculated takt time, measured and balanced cycle
times, calculated optimal crew sizes, and calculated Standard WIP they’re ready to calculate
what’s often called Standard Work Lead Lime.

To do this we simply multiply the number of pieces of Standard Work in Process by the Takt
Time. If you’ve determined the number of Standard WIP pieces correctly, and the process is
flowing at Takt Time, this is an excellent method of determining lead time.

Same as PLT?
Now, many ask if this lead time based on Standard Work and the Production Lead Time
calculated during value stream mapping are the same thing. And, to be sure, this is an
excellent question.

You see, the lead time calculated based on Standard Work is actually a subset of PLT since not
all processes within a value stream have SW. Of course, if a value stream operated strictly via
Standard Work from start to finish Production Lead Time and Standard Work Lead Time
would be nearly identical.

Calculating SW Lead Time

Now, if we take the results from our
example in the last module we can
easily calculate SW Lead Time.

If you remember, the Standard WIP of

that process was 228 pieces and the
takt time was 245 seconds per piece.

So, when we take 228 pieces x 245

seconds per piece we arrive at a lead
time of 55,958 seconds which
converts to 15.5 hours. Again, this only applies when an organization is running their business
based on Standard Work so don’t abandon Production Lead Time as this may be a more
accurate lead time calculation as you transition to Standard Work.

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