Most manufacturers understand and know the traditional way to analyze the efficiency of a process. Typically a manufacturing line has been reviewed for how much output can be produced at any one time. Once that is established, then it is determined how much can be produced for a customer to meet its demand.
What is the problem with this equation? The problem is that you are not truly satisfying the customer demand and requirements but telling the customer what you can produce for them. What the manufacturer is working from is a “Push” rather than “Pull” theory of production. Push meaning that the production occurs through a push of materials and labor in the process to meet customer demand versus allowing the customer demand to pull produced product from production to meet customer demand while allowing production to flex with this demand.
What this article is going to focus on is how to increase efficiency in production through understanding TAKT Time. TAKT Time is used to design assembly and pacemaker processes, to assess production conditions, to calculate pitch, to develop material handling containerization and routes, to determine problem response requirements, and so on.
TAKT Time is a LEAN equation that was developed by Toyota with its LEAN process and Six Sigma management. What TAKT Time ultimately answers is “How fast should we produce.” TAKT Time synchronizes the pace of production to match the pace of sales. TAKT Time also identifies the rate needed for assembling a product based on sales rate.
The equation for TAKT Time is:
TAKT TIME = Effective Working Time per Shift/Customer Requirement per shift
Let’s take a basic example. Assuming that you have one operator handling a production process and that operator works an 8 hour day, you have total effective working time for that shift of 480 minutes (8 hours * 60 minutes in an hour) or 28,800 seconds (480 total minutes * 60 seconds in a minute). Let’s also assume that the customer demand is for 480 pieces of production a day. With this information, we can determine what the TAKT time is:
28,800 Seconds/480 pieces per day = 60 seconds per piece
What you have now determined is what it takes to meet your customer demand versus seeing the process from its current state as to only what I can do.
The difference with this equation versus traditional thinking is now the manufacturer is tailoring a process around the needs and demand of the client. Now the manufacturer is identifying how much truly needs to be produced to meet demand versus accepting the current state and building a production schedule for the customer that may not meet its true demand.
This is the start for determining how to improve efficiency into a process. Understanding your TAKT Time will lead to leaning out waste and other inefficiencies that are built into processes over time that cause drags on production. It will also help you to be a better provider of product and services as you will now be able to focus on true customer demand and less on what you can produce for the customer.
For more information on TAKT Time and LEAN management, please contact the LEAN Accountants of McKonly and Asbury, LLP.