Monday, July 9, 2012

Takt Time Calculator for Demanding Customers

Fine-toothed comb?
After two posts on cycle time analysis, a cycle time element chart and a cycle time tracking chart, it's time to figure out what the customer wants. It's nice to sit down and look at our own process with a fine toothed comb, but what are we measuring against? We need to know the takt time!

And since I seem to be on an Excel kick the last few posts, I've decided to find an Excel-based takt time calculator to join the team!

I've posted links to an online takt time calculator before, but the calculator below is downloadable if you want to add it to your Excel arsenal.

What's the difference between takt time and cycle time?

customer demand
A demanding customer!
Quite simply, cycle time is how fast our process is currently running and the takt time is how often the customer wants parts. In an optimized factory, the takt time and cycle time are very close.

Here's a handy video that explains takt time if you haven't had your morning coffee yet.

If Darth Vader is ordering 10,000 tie fighters per year and your space ship company is contracted for the job, how fast are you going to make them?

If you build them all year, then deliver them at the end of the year, two bad things will happen:

First, you'll have invested all your money in tie fighter raw material and you won't get paid until you deliver them. This money will be tied up and you'll be paying a tremendous amount of interest on it.

Secondly, Darth Vader will be wanting these tie fighters ASAP and will not wait for the end of the year when you'll give him 10,000 all at once. He wants the deliveries spread out, so he can start using them to replace those destroyed by the rebel alliance.

Your goal as a manufacturer is to make what the customer wants, when the customer wants it. No more, no less. Now we just enter the critical information into our Excel takt time calculator:

excel takt time calculator

If you need to make 10,000 per year, this works out to about 41.7 tie fighters per week, based on a 5 day work week and a few weeks of holidays. At three 8-hour shifts, you'll need to  pump out a tie fighter every 1899 seconds!

Now that you know the customer requirements, you can match your own process cycle time to the customer takt time and minimize inventories. If you build faster, you'll have to hold extra tie fighters in inventory and you won't get paid for them. If you build slower. . . well. . . would you want to miss a shipment to the Sith lord?

Check out the handy excel takt time calculator at 

Of course, there's always the non-evil option. You could build X-wing fighters for the rebel alliance, since we know how this story ends. I imagine you would want your business to survive the impending fall of the empire! 

I've added this post to my list of handy lean tools and downloads.


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