When drawing value stream maps there is often lots of confusion regarding the different “times” that are measured and in some cases calculated. I recently came up against this myself and thus want to share some tips with you all.
First, let’s talk about cycle time (CT). You can think of cycle time as the time it takes a worker to go through all the work elements before repeating them again on another part. In most situations this will be the point where the product is being changed closer to the way the customer wants it. You measure cycle time with a stopwatch.
Production Lead Time
Next, let’s talk about Production Lead Time (PLT). This is the one that causes the most confusion, especially from IE’s not sold on this whole VSM thing (you know who you are!). The basic premise behind PLT is simple. PLT is the ESTIMATED time it might take for one piece to move from the receiving docks to the shipping docks. You can also think of it as how long it takes to return your investment for purchased raw material.
Let’s use an example. Note: Day’s Supply = WIP (pieces) / Daily Demand
If after examining the inventory stacked up around your plant in a particular value stream you determine there are 32 days’ supply of inventory (i.e. 8 days’ supply before process A, 12 days’ supply before process B, and 12 days’ supply before process C) you should expect a new piece to take around 32 days to make it through all that inventory. This assumes a serial process; meaning we must go through A first, then B, and then C.
Just an Estimate
Remember, PLT is just an estimate and when things like expediting take place (and they do all the time) things might move through the value stream at a different pace. A cool trick to test this whole theory is to go out and mark your initials on some raw material at the start of the process and track how long it takes to pop out at end of your process. Just mark it in a spot the customer won’t see and that won’t get painted or machined off!