Cutting Cycle Time: What Good Looks Like Versus What Bad Looks Like

Cycle time is the elapsed time from the start of work on an item to its completion. Reducing cycle time is desirable for almost every organisation: shorter cycle times mean faster delivery to customers, lower inventory costs, and faster feedback when something goes wrong. In 2022, with supply chain disruptions affecting delivery timelines and with customers expecting faster response, cycle time reduction is a high-priority operational improvement for many organisations.

But cycle time reduction is frequently attempted and frequently misimplemented. Here is a direct comparison of what good and bad practice looks like.

What Bad Cycle Time Reduction Looks Like

• Bad: Focusing cycle time reduction on value-adding steps only. In most processes, the majority of elapsed time is not spent in value-adding steps -- it is spent waiting. A product that takes two hours to manufacture but sits in a queue for three days before it is started, and another two days in a finished-goods store before it is shipped, has a five-day cycle time despite only two hours of value-adding work. Attacking the two hours of production time while ignoring the five days of waiting achieves almost nothing.

• Bad: Using averages to measure cycle time. An average cycle time of four days might look acceptable, but if the distribution is highly variable -- some orders complete in one day and some take 12 -- the average is misleading. Customers care about the cycle time of their specific order, not the average. High cycle time variability is often a more significant problem than high average cycle time.

• Bad: Reducing cycle time at one step without considering the impact on the whole system. Speeding up one step in a process can create a larger queue at the next step if the next step cannot absorb the increased throughput. System-level cycle time is determined by the bottleneck, not by the fastest step. Speeding up non-bottleneck steps wastes resources and does not reduce overall cycle time.

What Good Cycle Time Reduction Looks Like

• Good: Map the full cycle time, including all waiting time. Value stream mapping identifies every step in the process and quantifies both processing time and wait time at each step. This makes it immediately visible that waiting time dominates cycle time and directs improvement effort toward queue reduction rather than processing acceleration.

• Good: Identify and address the bottleneck first. The Theory of Constraints approach to cycle time reduction focuses every improvement effort on the single step that limits the throughput of the entire system. Improving the bottleneck improves total system throughput; improving any other step does not.

• Good: Reduce cycle time variability as well as average cycle time. Making a process more predictable -- reducing the variance around the average -- is as valuable as reducing the average itself. A process that reliably completes in four days is more useful to most customers than a process that sometimes completes in two days and sometimes in eight.

XNM applies Lean process improvement and cycle time reduction methodology to public-sector and capital-project environments. Reach out to XNM's strategic advisory team to discuss cycle time reduction and process flow improvement for your organisation.