LEAN Basic Tools Concepts - Part 2

Time Efficiency Metrics: Used to Identify the Sources and Impact of Inefficiency

PROCESS CYCLE EFFICIENCY (PCE)
•Best measure of overall process health
•Percentage of VA time in the process: PCE = VA Time/Total Lead Time
•Total Lead Time can either be measured by measuring the total time it takes “things in process” to transit the process or use Little's Law (next slide) to determine the average PCE.
•PCE tells how efficiently the process is converting work-in-process into exits/completions
•Low PCE processes have large NVA work and costs and therefore great opportunities for improvement. Crate a Value Stream Map to indicate these opportunities. PCE values of 10% or so are common pre-improvement.
•The only way to improve PCE is to reduce NVA work and costs.

Little’s LAW
•On prior slide, defined PCE = VA Time/Total Lead Time
•Little's Law is: Total Lead Time = # Things in Process/Av. Completion Rate
Number of things in process = TIP or WIP
• Little's Law shows the relationship between TIP or WIP and the completion (exit) rate of the process.
•To improve Total Lead Time and, in turn, PCE, either increase capacity (average completion rate) and/or reduce TIP or WIP.

WORKSTATION TURNOVER TIME (WTT):
•WTT highlights which process step (time trap) to work on first.
•WTT for any process step is the amount of time needed to set up and finish one complete cycle of work for all the different “things” at that step.

Calculating WTT for a Process Step

WTT = S {(Setup time) + (Process Time x Batch Size)} for each “thing” worked on at that process step
•Select high WTT’s to improve first.

To reduce Lead Time and Non-Value Add Costs
•For the total process:
- Calculate TOTAL LEAD TIME (also known as Process Cycle Time)
- Determine desired AVERAGE COMPLETION RATE (also known as customer demand
rate or takt time)
- Calculate the PROCESS CYCLE EFFICIENCY (PCE)

•For each step in the process:
- Identify process steps as VALUE ADD or NON-VALUE ADD
- Locate and quantify TIME TRAPS and CAPACITY CONSTRAINTS
- Compute WORKSTATION TURNOVER TIMES (WTT’s)