Tuesday, May 3, 2016

What Is This Takt Time You Speak About?

When I first started learning about Lean, one of the terms I seemed to have difficulty wrapping my brain around was "takt time."

Or, maybe it was getting straight the difference between takt time, cycle time, lead time, process time, value creating time, non-value creating time and all of the other “times.”

At any rate, if you read much about Lean, you will come across the term. So, I thought I would explain.

According to Lean Lexicon-5th Ed by the Lean Enterprise Institute:
Takt Time is the available production time divided by customer demand. For example, if a widget factory operates 480 minutes per day and customers demand 240 widgets per day, takt time is two minutes. Similarly, if customers want two new products per month, takt time is two weeks. The purpose of takt time is to precisely match production with demand. It provides the heartbeat of a lean production system. Takt time first was used as a production management tool in the German aircraft industry in the 1930s. (Takt is German for a precise interval of time such as a musical meter.) It was the interval at which aircraft were moved ahead to the next production station. The concept was widely utilized within Toyota in the 1950s and was in widespread use throughout the Toyota supply base by the late 1960s. Toyota typically reviews the takt time for a process every month, with a tweaking review every 10 days.
Cycle Time is the time required to produce a part or complete a process, as timed by actual measurement.
For example, if you have 90 clients wanting routine annual exams and vaccinations performed on their pets each week and you have 30 planned hours available Monday through Saturday (40 hours/week/doctor, less surgery time, less in-patient treatment time, less new sick pet time), then your takt time is 30 hours/90 visits or or 1800 minutes/90 visits or 20 minutes per appointment.

Takt time is a time that represents the pace at which you need to work in order to meet current demand. To meet demand within the allotted time, a routine annual exam would need to be completed, on average, every 20 minutes.

In order to find the cycle time, an actual measured time, you would measure several appointments and calculate the the average time required to actually complete them. If you have a lot of variation, you might measure ten appointments, which is a good Industrial Engineering guideline (thanks to Mark Graban for that tip).

If the actual cycle time is less than or equal to takt time (meaning you can work faster than the demand rate), then you can meet demand within the available time restraints and everything should be good.

But, if cycle time is greater than takt time, then you definitely have a problem, because you cann not meet demand as performed within the time requirements. This scenario will necessitate a kaizen project and/or A3 thinking to work out some countermeasures. These might include finding more time for these exams sometime during the week (expanding your working hours), or eliminating waste and improving flow so the cycle time falls within takt time. We'd want to reduce the time it takes to complete the appointment, but without rushing or impacting quality or client satisfaction.

In manufacturing, it is sometimes a little less complicated because product is often moving through the production line at a much more precise interval and the time for each step has very little or no variation. So, cycle times in manufacturing are much more consistent. Manufacturers also have the opportunity to level their production rate by using inventory as a buffer against variation in demand. In a vet clinic, we might be able to somewhat level our workload through appointment schedule, but if we're taking walk ins, we have to be able to react and adjust to that variation in demand.

But, again in veterinary medicine, we have more variation. There is variability in how long an annual exam actually requires. Are there issues that need to be addressed? Will a fecal exam be required? How about a heartworm test? How many vaccinations are due? Do medicines needed to be filled and dispensed? In addition, there is variability in the arrival times of clients, even with appointments. This results in variance squared (variance X variance), and that = chaos.

There are two points that should be made here. The first is that variability is a form of waste and should be reduced as much as possible using the Lean mindset and methodologies. Meeting takt time is a first goal. The second point is that this is the reason you probably should not schedule more than 85% of your available appointment times. This allows you some "wiggle"room. I have heard some advocate high density scheduling, i.e. close to or at 100% booked.  But, even with a highly trained staff in a Lean environment, you just can't escape variation. The first time an appointment goes long or a client shows up late, you are behind schedule which means each subsequent appointment will have to wait. Waiting is muda. High density appointments are not value for the client, from the client's point of view.

In a later blog, I hope to write about queueing theory, exponential statistical distribution, and Poisson distributions. These concepts produce more realistic models that take into account the variabilities of arrivals and cycle times.