What is OEE?

OEE is an abbreviation of Overall Equipment Effectiveness. It is a measure of the effectiveness of a machine or a line. Here, effectiveness means ‘efficiency + quality’. OEE is one of the key driving metrics of Total Productive Maintenance. Why is OEE important? Imagine that an organisation has invested ‘x’ amount of money in its infrastructure and facility – out of which a significant portion say ‘y’ would be consumed by the machinery and equipment. If the equipment is maintained...

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Cash to Cash Cycle Time

What is Cash to Cash Cycle? Cash to cash cycle time is the time lapse between payment to suppliers and getting payment from the customers. Every business exists to provide a tangible or intangible product to the people in need and make money out of those provisions in the form of profit. A company has to invest money in the business. There are 2 types of investments - Asset Capital and Working Capital. When a company spends money on creating...

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Lead Time

What is Lead Time? Lead time is the time required to complete the set of processes - from start to finish. There are 3 types of such measures in Business Process. Order LT The time required to complete the order - from order receipt to product/service delivery to the consumer. Processing LT The time required to convert the Raw Material into Finished Product (or Production LT) or The time required to convert input information into output information (Service Production LT)...

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What is Muda?

Muda Muda is a Japanese word meaning Waste. So, any activity that consumes time and effort and fails to produce the desired outcome is termed as Waste. In a production plant, people transport materials from one place to another for storage of for next processing. The activity of transporting consumes their time and effort. But the material does not get any value addition because of the mere transportation. Hence, transportation is termed as waste. Origin Muda is one of the fundamental...

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Takt Time

Takt Time - Conductors Wand

What is Takt Time? Takt time is the time given by the client to the manufacturer to pull out one piece of finished material from the plant. In other words, it is the time (frequency) at which the manufacturing plant to complete one unit of its product. We can also describe it as the demanded exit rate of a plant. How to Calculate Takt time? Calculate monthly average demand for the product/product family (we can calculate takt time for a...

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Cycle Time

What is Cycle Time

What is Cycle Time? Cycle Time is the time required by an operation or by a machine to complete the processing of one component. How to calculate Cycle Time? Start your stopwatch when a completed component comes out of a machine (or a person completes working on a component). Stop your timer when the next (consecutive) piece comes out of the machine (or a person completes working on the next component) Repeat this for 5 or more times and calculate...

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