Process Cycle Efficiency
Process Cycle Efficiency is a metric useful for prioritizing improvement opportunities. Process Cycle Efficiency is calculated by dividing the value-added time associated with a process by the total lead time of the process.
Process Cycle Efficiency = Value-Added Time / Lead Time
If the process consists of only value-added activities, then the Process Cycle Efficiency would reach a theoretical maximum of 100%. In practice, Process Cycle Efficiencies will exceed 25% for processes that have been improved through the use of Lean methods. The next slide shows some typical Process Cycle Efficiencies for various processes.
The key to improving Process Cycle Efficiency is to reduce the Lead Time, the denominator of the equation. The process Lead Time is calculated using Littles Law.
Typical Cycle Efficiencies (ref: Lean Six Sigma, by M. George, 2002, McGraw Hill)
|
Process Type |
Typical Efficiency |
World Class Efficiency |
|
Machining |
1% |
20% |
|
Fabrication |
10% |
25% |
|
Assembly |
15% |
35% |
|
Continuous |
30% |
80% |
|
Transactional |
10% |
50% |
|
Creative |
5 % |
25% |