On the Value of Time in Manufacturing—Cyclic Work

Time is money. One goal in lean is to reduce the time needed to do the work by eliminating waste (muda, which is the better-known part of reducing time) and fluctuations (mura, which many people skip over because it is more difficult, but also more powerful). However, not all time is equal. Reducing the time needed to do the work saves labor cost, but depending on where you save the time, you may have many more additional benefits. Let’s have a look.

Reducing Cyclic Work

Often, in industry, a large part of the time used is for cyclic work. Frontline workers work at assembly lines, cutting machines, or other stations directly producing parts, or at least loading and unloading them into the machine. Reducing the duration of this cyclic work is often an important part of lean improvements.

Labor Cost

Clearly, reducing the duration of cyclic work reduces labor cost. If the operator needs less time to do the work, you can make more parts in the same time, or the same number of parts in less time, overall reducing the labor cost. Do keep in mind the caveat that the time you save needs to be utilized otherwise or completely eliminated for the benefit to work. If you reduce cyclic work time only for the operator to wait more instead, it brings no benefit (yet). For example, if you reduce the duration of the work for one operator on an assembly line, it only brings a benefit if this process is the bottleneck. If the process is not the bottleneck, the worker now simply has to wait more for other (bottleneck) processes.

On the other hand, if you improve the bottleneck process, then all operators and processes tied to or influenced by that bottleneck improve. Assume you have an assembly line with 100 stations, one of which is the bottleneck. If you improve the bottleneck process, then you can potentially save time at all 100 stations on the line. Albeit, with a well-balanced line, very soon another process will become the bottleneck…

Efficiency and Quality

An added benefit of reducing the work time is that the operator becomes more efficient. Shorter cycles are faster to learn and easier to master. While the effect is not linear, for shorter cycle times of less than 2 minutes, every 5 seconds of reduced time brings one percentage point efficiency improvement. Read my post Effects on Efficiency—Takt Time for more. Faster cycle times also have better quality.

Capital Invest

It also makes a better use of the machines and tools (i.e., it improves the utilization of the capital invest). If you spent one million for a machine that can make 1000 parts per day, you will use this investment better if the machine can now make 1100 parts per day. Similar to the labor cost, however, this applies only if we have improved the bottleneck process!

Lead Time

A much smaller effect is on the lead time. If the cycle is faster, the product is completed faster. However, as per Little’s law, this effect is minimal. If you reduce the bottleneck time by 10%, the total lead time goes also down 10%. Usually, if lead time is your goal, reducing inventory is much easier. While a 10% reduction in inventory also reduces the lead time by 10%, it is usually much easier to reduce the inventory by 10% than the bottleneck cycle times by 10%. Plus, reducing inventory has many additional benefits. See my post The Hidden and Not-So-Hidden Costs of Inventory for more.

In my next post I will continue this discussion by looking at the value of time when reducing fluctuations. Now, go out, make the work easier so it goes faster, and organize your industry!