October 13, 2005
Cycle Times and Bottlenecks
In order to figure out how much inventory you need, you should really know your capacity. This post is going to go step by step and cover in detail the difference between throughput, cycle times, and bottlenecks. The example we'll look at is going to be a handbag manufacturer.
The following steps, with their corresponding times, are required to produce a handbag:
Process Process Time
Leather cutting 120 seconds
Zipper attachement 70 seconds
Sewing 30 seconds
Throughput time
The times that are shown are the processing times. They represent how long it takes an individual bag to physically pass through each step.
The throughput time is the total time it takes for a bag to physically pass through all steps. It is the sum of all the times and it is 220 seconds.
Cycle time
There are two cycle times. There is the cycle time for each station and there is the cycle time for the entire handbag manufacturing process. To determine this, you will need the capacity which can be determined from the following table which shows how many workstations there are for each process.
Process Stations available Cycle Time
Leather Cutting 6 20 seconds
Zipper Attachment 2 35 seconds
Sewing 1 30 seconds
The cycle time for each station is the average amount of time it will take each bag to be completed. Assuming each station can process 1 bag at a time, cycle time is the process time divided by the number of workstations. Leather cutting for example takes 120 seconds per bag, but since there are 6 of them being worked on at a time, it is as if one bag is being completed every 20 seconds. Now to analyze the cycle times to determine the bottleneck.
Bottleneck
The bottleneck is the slowest cycle time in the process and it determines the rate at which the entire system can produce handbags. In other words, the bottleneck, which is the zipper attachment process, determines the capacity for the entire handbag manufacturing plant in our example.
Here's how this works:
Imagine you're standing at the end of the assembly line. You know it takes an individual bag 220 seconds to be processed from start to finish, but how long is the wait for individual bags at the end of the line. In other words, if you're standing at the end of the line, how much time elapses between finished bags? I'll give you a hint, it's a lot less than 220 seconds. Remember, during that 220 seconds, there are multiple bags being processed at any given point in time by the multiple work stations.
The answer is once every 35 seconds. This is the time it takes on average per bag at the bottleneck and is therefore the time that elapses between each complete bag.
At station 1, there is an average of 1 cut piece of leather transferred to station 2 every 20 seconds.
Station 2, however, can only process 1 bag every 35 seconds. This means that station three only gets a new a bag to work on every 35 seconds.
So, station 3 completes a bag in 30 seconds. But then it waits 5 more seconds until station 2 can finish its work and send over another bag.
Therefore, station three sends one finished bag to the end of the production every 35 seconds.
No matter how fast station 1 works, station two cannot handle anymore inventory than it's already getting. Also, no matter how fast station 3 works, the system will not produce bags at a faster rate. If station 3 could sew the bags together at a rate of 1 bag every 10 seconds, it wouldn't make a difference because station 3 would still have to wait for station two to supply it with more work in process.
Only if the bottleneck is improved will the rest of the system improve.
That said, take a look at leather cutting. Is it really necessary to have six workstations. I can't see what's good about it. Even with only four workstations, it still operates faster than the bottleneck and therefore would be sufficient capacity.
Currently, station one is over-producing. If station 1 were to produce non-stop, there would be no way station 2 could keep up and huge work in process inventory would be the result. A post in the near future will cover this topic in greater detail.
In the mean time, if you can't wait, I highly suggest reading Eliyahu Goldratt's The Goal. This book is an essential (and easy, enjoyable) read for anyone who wishes to have a greater understanding of the effects of bottlenecks on inventory control and plant capacity.
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Comments
This is an absolutely fabulous article which is clear, concise and flows smoothly through the explanations of cycle time, process times and bottlenecks.
The transition from one concept to another flows very smoothly and the example makes this an easy to understand article.
I will be referring my students to this article and this website for their reference and learning.
Phyllis McGinnis
Faculty
Boston University, School of Management
Posted by: Phyllis McGinnis | Oct 14, 2005 7:15:41 AM
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