FRIDAY, JULY 25, 2014
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Methodology Lead Time vs. Cycle Time

Lead Time vs. Cycle Time

Lead Time and Cycle Time are two important metrics in Lean and process improvement in general. However, many people do not seem to understand the difference and their relationship. In fact, many use them interchangeably. This can lead to confusion in understanding the true problems in a process, and worse, poor decisions in process improvement.

I often observe such confusion on internet discussions as well as in organizations I support in Lean Six Sigma training and deployment. Here is an example:

http://leanandkanban.wordpress.com/2009/04/18/lead-time-vs-cycle-time/

http://stefanroock.wordpress.com/2010/03/02/kanban-definition-of-lead-time-and-cycle-time/

Another example on the iSixSigma forum:

http://www.isixsigma.com/index.php?option=com_kunena&Itemid=151&func=view&catid=5&id=183809#184000

Before I refer to a good source to help understand the definitions and application of these terms, let’s consider a simple process doing laundry.

There are 3 steps: wash, dry, fold. If we assume the time to do each load is 30, 45 and 30 minutes, respectively, what are the Lead Time and Cycle Time of the process?

I encourage you to answer this question before going to the following link, which used this simple process to illustrate these terms exactly 10 years ago (04/18/2000).

http://hbswk.hbs.edu/archive/1460.html

You may notice that this link is not on Lean or Six Sigma but general business (operations) management. These terms and concepts are not developed by, or limited to, Lean or Six Sigma.

In summary, here are what I use to help understand the difference and their relationship.

1. Lead Time and Cycle Time don’t have the same unit although their names are both “Time.” Lead Time is measured by elapsed time (minutes, hours, etc.), whereas Cycle Time is measured by the amount of time per unit (minutes/customer, hours/part, etc.). It does not make any sense to add one to, or subtract one from, another.

2. Cycle Time is actually a measure of Throughput (units per period of time), which is the reciprocal of Cycle Time. This relationship is analogous to Takt Time (amount of time per unit), which is the reciprocal of customer demand rate (units per period of time). Note that by definition, Cycle Time (or Takt Time) is an average value.

3. Lead Time and Cycle Time are related by Work-in-progress (WIP) in the entire process, in a relationship described by the Little’s Law:

Lead Time = Cycle Time * WIP

Or,

Lead Time = WIP/Throughput

4. The Cycle Time above must be the process cycle time, which is determined by the bottleneck. Cycle Times of individual steps cannot be used alone to calculate the process Lead Time without knowing the WIP.

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Comments

Sue Kozlowski 19-04-2010, 03:30

Thanks for clearing up a general misconception. I myself used the term incorrectly for a while, then realized the difference – as you put it so clearly – and now I make sure to stress the distinction so others will not have the same confusion I did. In manufacturing, it may be self-evident, but in a service industry without automated / regulated flow, the terms are similar enough that it’s easy to be confused if you don’t start with a good definition. Thanks for giving us that and a good example as well,
Sue K.

Reply
icra ihaleleri 19-04-2010, 08:50

thanks for sharing. To help me

Reply
Compare ISAs 29-04-2010, 07:18

Lead time clock starts when the request is made and ends at delivery. Cycle time clock starts when work begins on the request and ends when the item is ready for delivery. Cycle time is a more mechanical measure of process capability. Lead time is what the customer sees

Reply
Fang Zhou 02-05-2010, 10:07

The above Cycle Time defintion is common but can be confusing as a measure of process capability (capability=probability of meeting specific customer requirements). It’s really an internal lead time, a part of the customer lead time. I would simply call it "internal production lead time" to distinguish it from the real customer delivery lead time.

In addition, work pieces are rarely tracked individually because parts are often produced in advance and stored in the buffers at various process stages ready to be pulled based on customer demand (or Kanban). What is the cycle time of your process (as a capability measure) if some or all work is already done before the request?

One still needs the REAL cycle time (a throughput or capacity measure). Without it, it’s hard to determine if the process has sufficent capacity to meet customer demand (takt time). When the throughput is less than the demand, the cycle time as defined above no longer measures the process capability to meet customer Lead time requirements.

In a Pull system, we need to achieve the desired Lead time by controling the WIP. But we need to know the process throughput or the REAL cycle time (Little’s law: Lead Time = WIP * Cycle Time).

To measure the process capacity, one needs to know HOW OFTEN the process can start or generate a new piece, which is the definition of the REAL cycle time.

Reply
DFDFD 28-08-2010, 02:09

good

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Kevin 24-09-2010, 10:25

We have a story which analysis has been completed, so we moved it from ’Analysis Pipeline’ to next state ’Development Buffer’.

Then the Product Owner realized that some definitions were missed, so.. should the story be moved back to ’Analysis Pipeline’?

We have a property which is ’Analysis Completed On’ (that we use for metrics.. to calculate the time stories spend ’In Analysis’), that would be reset. Is that ok? Or should we not move the story back to ’Analysis Pipeline’ and complete those pending definitions leaving the story where it is.. in ’Development Buffer’ state?

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Lead answer 22-11-2010, 04:45

If that is the difference between these two than what we called the recycle time and activity time cause they play a significant role in getting the full section of science

Reply
lead answer @ leading way 21-04-2011, 04:45

Hi, thanks for the information here. I came to realize that lead time and lead cycle are two different things but you are co-relating these. Why can’t we say it recycle time cause your definition is sending this message otherwise all things are good and you help me to overcome the misconception about the leading time.

Reply
Dung Huynh 17-05-2011, 08:05

Dear Sir/Madam.
1 sheet ceramic have diced into 9 pieces Each machine dices 1 sheet per 1 time on 20 min. If i have 1 operator who control 3 machine to dice ceramics at the same time. How can i count cycle time of this step.
Thanks and regards!

Reply
fzhou 19-06-2011, 18:43

Hi Dung,

If I understand your question correctly, the calculation is as below.

output = 9 pieces/machine x 3 machines = 27 pieces
time = 20 minutes

therefore,
cycle time = time/output = 20 minutes/27 pieces = 0.74 minutes/piece

Reply
SOURABH JOSHI 18-10-2012, 03:43

Thanks for clarification of confusion which i was having…now i will use that correctly in plant process engineering ..

Reply
Avatar of Nandakumar Pachikide
Nandakumar Pachikide 19-10-2012, 08:45

This is really an eye opener. It clarifies a lot about lead time and cycle time, which otherwise seem to be the same.

Reply
MR Marti 24-10-2012, 22:46

Then, the cycle time per machine to produce 9 units is different from the total cycle time to produce 27 units?

Reply
Adinora 01-10-2013, 19:45

Hi, just want to clarify.. is that
change over time = lead time
please advise

Reply
Jack Whoopy 30-03-2014, 23:41

Good, clear explain and easy to understand.

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