Webinar On Cycle Time Analysis By John Ryan

1. Cycle Time Analysis (CTA) Reduce Inventory, Cut Costs and Save Time, Deliver Quality Dr. John M. Ryan 1

2. Cycle Time Analysis • Benefits • Symptoms • Forming teams • Selecting a CTA project • Process definition • Process flowcharting • Collecting CTA data • Team Analysis & Correction • Continuous CTA Improvement 2

3. Too much inventory but not enough time to catch up?

4. Typical Symptoms • Low Inventory Turns • Bottlenecks (in processes) • Administrative redo’s (paperwork) • Inventory Pileups • “Not enough time” • Takes too long! • Late Deliveries • “I Need more people!” • Working long days? 4

5. You Can Calculate Your Company’s Inventory Turns Income Statement Balance Sheet 5,263,978 1,441,200 = 3.65 turns/year 5

6. INVENTORY 16 14 Total Inventory 12 10 M$ 8 Raw Materials 6 4 2 0 D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D 97 98 99 00 Raw WIP FGI Total Linear (Total) 6

7. INVENTORY TURNS 7 6 5 4 3 2 1 0 J- 97 F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D J- F M A M J J A S O N D 7 98 99 00 Rolling 3 Month COGS Goal

8. Finished Goods 8

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15. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$$$$$$$$$ Inventory is MONEY $$$$$$$$$$$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ When you look at incoming, WIP and outgoing inventory, pretend you are standing in a bank vault looking at heaps and piles of MONEY!! Because you are! 15

16. Driving Down Hours or Days of Inventory in WIP 12 9 7.8 6.9 7 7.4 6.3 6.2 7.3 5.6 6 6.7 4.3 6.6 5.7 5.2 4.8 4.6 3.9 3 0 Apr 98 Aug 98 Sep 98 Nov 97 Oct 98 Nov 98 Dec 97 Dec 98 Jul 98 Feb-99 Feb 98 Mar 98 May 98 Jan-99 Jan 98 Jun 98 16

17. How long does it take to build your product or complete paperwork? Hours per Unit or HPU = The sum of the time it takes for all production steps .56 hours The minimum time it takes to complete a perfect purchase order .5 hours Your goal in each of these examples is to meet the HPU consistently. 17

18. What screws you up? Manufacturing Example Excess inventory at incoming Bottlenecks in line Inventory pile ups (excessive WIP) Next process step is waiting Excess Inventory in finished goods Take a walk around your operation and look for inventory piles. Purchase Requisition Example Completed and submitted by engineering Rejected by purchasing Returned to engineering for correction Sent back to purchasing with corrections Re-loop Final purchase (Delay to next process – and the blame game) Talk to the purchasing people and ask them who screws up the paperwork. 18

19. Cycle Time Analysis is a Team Activity 19

20. Every Team Can Do CTA Corrective Action Teams (CATs) A member from each of several departments Cross Functional: Team cuts across boundaries – works on solving interdepartmental problems that FITs cannot handle Functional Improvement Teams (FITs) All members from the same group (e.g. all engineers, or all HR personnel) Single Function: All team members work together on a daily basis. A. Each team meets 1 hour per week – Same time, same place B. Outside of the weekly team meeting, each team member spends 1 hour completing the assigned activity. 20

21. Moving to a Focus Where Ownership is Moved Downward Authority and Responsibility 21

22. Setting Up the Team(s) & Team Rules Team Meetings are Sacred 1. 2. At the same time 3. In the same place 4. All members are equal regardless of title/position 5. 1 member = 1 vote 6. A team leader is selected (volunteers) 7. The team secretary keeps meeting minutes (see the form) and updates all status 8. Team leader distributes updated form prior to the upcoming weekly meeting 9. Each team member must complete assigned action items in the expected timeframe 10. If a person does not want to be on the team, that person should excluded. 11.Management is responsible for assuring that team meetings are not interrupted and the team has whatever support is required. Team meets 1 hour per week. 22