Calculating TAT

This topic has 2 replies, 3 voices, and was last updated 2 months, 3 weeks ago by Jim Ha.

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March 1, 2021 at 6:49 am #252627

sramji
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Hi All,

If any one can help on how to calculate savings in case of a TAT improvement.

My effort remains the same, volumes remains the same, but through organizing the work, my TAT has improved lets say from 14 days to 7 days

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March 1, 2021 at 7:38 pm #252643

Strayer
★ 10 Years ★
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There are several ways to do it provided that you have the right before and after data. You might need to look outside your area of responsibility to see the benefit of your improvement.

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July 27, 2021 at 8:43 pm #254861

Jim Ha
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Hi @sramji
One of methods I can suggest is to quantify the reduction in inventory value . In your example , the TAT reduction from 14 days to 7 days (after stabilization period) , may have resulted in lower number of parts that are kept in stock, or lower finished good inventory. Inventory is not cost savings. It is working capital reduction. You need to get information from Finance on value of stock per day and seek Finance’s advise on quantifying the inventory impact.

Best Regards.

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