Cycle Time

Analysis (CTA)
Reduce Inventory, Cut Costs and Save Time, Deliver Quality

Dr. John M. Ryan

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 Cycle Time Analysis

• Benefits
• Symptoms
• Forming teams
• Selecting a CTA project
• Process definition
• Process flowcharting
• Collecting CTA data
• Team Analysis & Correction
• Continuous CTA Improvement
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Too much inventory but not enough time to catch up?
 Typical Symptoms

• Low Inventory Turns

• Bottlenecks (in processes)
• Administrative redo’s (paperwork)
• Inventory Pileups
• “Not enough time”
• Takes too long!
• Late Deliveries
• “I Need more people!”
• Working long days?
4
 You Can Calculate Your
Company’s Inventory Turns
Income Statement

Balance Sheet

5,263,978 = 3.65 turns/year

1,441,200
5
 INVENTORY
16

14
Total Inventory
12

10
M$

8
Raw Materials
6

0
D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D
97 98 99 00
Raw WIP FGI Total Linear (Total)

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 INVENTORY TURNS

0
J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D

7
97 98 99 00

Rolling 3 Month COGS Goal

Finished Goods

8
9
10
11
12
13
14
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
$$$$$$$$$$ Inventory is MONEY $$$$$$$$$$$
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

When you look at incoming, WIP and outgoing

inventory, pretend you are standing in a bank vault
looking at heaps and piles of MONEY!!

Because you are!

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 Driving Down Hours or Days of Inventory in WIP

12

9
7.8 6.9
7 7.4
6.3 6.2
6 7.3 5.6
6.7 6.6 4.3
5.7 5.2
4.8 4.6
3 3.9

0
Apr 98
Nov 97

Aug 98

Sep 98

Oct 98
Dec 97

Nov 98

Dec 98
Jan 98

Feb 98

Mar 98

May 98

Jul 98

Jan-99

Feb-99
Jun 98

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 How long does it take to build your product or
complete paperwork?

Hours per Unit or HPU =

The sum of the time it takes for all production steps

.56 hours

The minimum time it takes to complete a perfect purchase order

.5 hours

Your goal in each of these examples is to meet the HPU

consistently.

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 What screws you up?

Manufacturing Example
Excess inventory at incoming
Bottlenecks in line
Inventory pile ups (excessive WIP)
Next process step is waiting
Excess Inventory in finished goods

Take a walk around your operation and look for inventory piles.

Purchase Requisition Example

Completed and submitted by engineering
Rejected by purchasing
Returned to engineering for correction
Sent back to purchasing with corrections
Re-loop
Final purchase (Delay to next process – and the blame game)
Talk to the purchasing people and ask them who screws up the
paperwork.
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Cycle Time Analysis is
a Team Activity

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 Every Team Can Do CTA

Corrective Action Teams (CATs)

A member from each of several departments
Cross Functional: Team cuts across boundaries – works on solving interdepartmental
problems that FITs cannot handle

Functional Improvement Teams (FITs)

All members from the same group (e.g. all engineers, or all HR personnel)

Single Function: All team members work together on a daily basis.

A. Each team meets 1 hour per week – Same time, same place
B. Outside of the weekly team meeting, each team member spends
1 hour completing the assigned activity.
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 Moving to a Focus
Where Ownership is Moved
Downward

Authority and Responsibility

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 Setting Up the Team(s) & Team Rules
Team Meetings are Sacred

1. Team meets 1 hour per week.

2. At the same time
3. In the same place
4. All members are equal regardless of title/position
5. 1 member = 1 vote
6. A team leader is selected (volunteers)
7. The team secretary keeps meeting minutes (see the form) and
updates all status
8. Team leader distributes updated form prior to the upcoming
weekly meeting
9. Each team member must complete assigned action items in
the expected timeframe
10. If a person does not want to be on the team, that person should
excluded.
11. Management is responsible for assuring that team meetings are
not interrupted and the team has whatever support is required.

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