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Question of the Week: How do we reduce our Manufacturing Cycle Time?

Manufacturing cycle time in MikesBikes Advanced is the time from when an order is received to the factory to when it leaves the factory (to go to the warehouse). It is often measured in weeks and indicates the responsiveness of the production process.

While simply holding finished goods stocks allow rapid fulfillment of a customer’s order, it requires financing (money tied up in stock). Long manufacturing cycle times mean less responsiveness to changes in demand patterns – e.g. if a new competitive product takes the market share. Hence, reducing manufacturing cycle time is desirable where possible. This will usually mean manufacturing with small batch sizes. However, small batch sizes mean frequent setups. Setup times must be reduced to avoid most of the capacity of the machine being taken up on non-product setup time, rather than working on the product.

To get the best trade-off between responsiveness  and capacity utilization in a fast changing market, investments in just-in-time systems and computer integrated machinery are required.

Other contributors to the length of the cycle times are:

  • Number of products
  • Complexity of products being produced by the firm and;
  • The firm’s factory capacity

A rough rule of thumb is that production cycle time will increase in proportion to increases in batch size, number of products or product complexity. On the other hand, it will decrease in proportion to any increases in factory capacity.

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