Article from: kanbanize
Written by: kanbanize Team
Edited by: Mehak Sarwar (Management Coach)
Need a solution on how to keep up with customer demands. This article gives an in-depth analysis of what Takt Time is and how it helps companies when problems, in regards to production and customer demands, arise. It explains how essential Takt Time is when trying to run a sufficient and sustainable business.
What is Takt Time?
Takt time is the rate at which you need to complete a product in order to meet customer demand. For example, if you receive a new product order every 4 hours, to meet demand, your team needs to finish a product in 4 hours or less.
Takt time is your sell rate and can easily be categorized as the heartbeat of your work process. It allows you to optimize your capacity in the most appropriate way to meet demand without keeping too much inventory in reserve.
The term originates from the German word “takt”, which means a beat or a pulse. Takt time was first used as a metric in the 1930s in Germany for airplane manufacturing. Twenty years later, it contributed significantly to the rise of Toyota from a small Japanese carmaker to the largest automobile company in the world.
How to Define Takt Time?
To define takt time, you need to divide the production time available by customer demand.
In order to receive an accurate result using this takt time formula, you should put both the production time available and the customer demand into frames.
We advise you to include only the time your team will be actively working on creating value for your customers. This means that you should exclude breaks, scheduled maintenance, and shift changeovers (if there are any).
When defining takt time, you should include a relatively short time frame for the average customer demand (e.g. a week or a month).
In order to visualize this, let’s calculate the takt time for an imaginary company developing 3D printing machinery. The workweek is five-days long and the company operates in a single nine-hour shift that includes a lunch hour break that lasts 60 minutes and two 15 minute breaks in the morning and the afternoon. The company receives orders for 10 machines per week on average.
To define the takt time that the team needs to maintain, we simply apply the above-mentioned formula.
The total available work time is 7 hours 30 minutes per day. Breaking it down into minutes gives us exactly 450 minutes per day, which is 2250 minutes per week.
By dividing 2250 by 10 (average number of orders), we get a takt time of 225 minutes to complete a single 3D printing machine. Dividing 225 by 60 (minutes in an hour) gets us to a maximum takt time of 3 hours 45 minutes per order.
2250 / 10 = 225 minutes Takt time
As you can see, defining the takt time required to meet customer’s demand is not rocket science. With this data available, you can make well-informed choices for managing your team’s capacity according to customer demand.
Takt Time vs Cycle Time vs Lead Time
In the beginning, people tend to confuse takt time with lead time and cycle time, which are Lean metrics of no lesser importance. We’ve already covered in detail the difference between lead time and cycle time so let’s focus on the essentials of each of the 3 metrics.
- Lead time is the time frame between an order being received and the client getting their value.
- Cycle time is the time your team spends actively working on a customer order.
- Takt time is the maximum amount of time you need to comply with in order to meet customer demand.
As a Lean manager, you should consider all three metrics as key performance indicators of your workflow.
Why is Takt Time Important?
Defining takt time is crucial for optimizing your team’s capacity. It is important for reducing the waste of your process. Takt time can help you maintain a continuous flow of work and reduce Mura (unevenness) in your workflow.
Nonetheless, takt time is valuable for optimizing storage costs as it will help you avoid overproduction.