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These days, speed and flexibility are everything for keeping ahead of rivals. A major metric companies rely on for measuring and refining performance is throughput time.

Also called lead time or cycle time, it’s the full duration needed to complete a process or deliver a product/service to a client — from request received to final output shipped.

Understanding and well-managing throughput time matters for a few big reasons.

First, it provides valuable insight into an overall process or system’s efficiency, allowing identification of problem areas, wasted efforts, and areas for upgrading.

Second, cutting throughput time can result in happier customers getting their stuff more quickly.

Third, shorter times can lower expenses from inventory, work-in-progress, and other factors, boosting profits and competitiveness in the end.

Effectively shedding light on and refining throughput time unlocks the potential for smoother, faster operations customers love — and long-term business success sustained by constant improvement.

Key Highlights

• Throughput time is a major metric measuring the total duration needed for any process or delivering a product/service.
• It’s key for understanding and refining workflows, spotting bottlenecks, and generally boosting efficiency.
• Throughput time covers the whole value chain, from customer requests received through final delivery shipped out.
• Slashing throughput time can breed happier customers, lower costs, and strengthen competitiveness as a result.
• Factors like complexity, resource availability, quality issues, and fluctuating demand all impact throughput time.
• Methods for upgrading throughput involve mapping processes, following lean principles, analyzing bottlenecks, and relentlessly improving.
• Throughput time means a lot across industries like manufacturing, healthcare, software creation, and service organizations. Any business interested in productivity watches it closely.
• The goal remains to deliver to customers as quickly as possible while continuously enhancing operations – and throughput time offers the intel helping get there.

What is Throughput Time?

Throughput time plays a big role in manufacturing, supply chain, and process upgrade efforts.

It measures the total duration needed to finish one process from start to end. In other words, it’s the cycle time tracking an item’s journey through an entire value chain or workflow.

Throughput time includes all periods like queue time, set-up time, processing time, checks, move time, and any other delays/waits.

It starts clocking when a job hits the production floor and stops when shipping a completed product to the client or storage.  

Monitoring throughput time provides visibility into efficiencies and flags problem areas primed for improvements.

It’s a core lean metric supporting continuous upgrades targeting wasted efforts, optimized flow, and higher productivity. Shrinking times lets businesses respond faster to demand, lower inventory costs, and maximize profits.

Related terms include:

• Lead time: Time from customer order to delivery
• Cycle time: Time to complete one operation  
• Takt time: Customer pace setting production speed

Calculating throughput time and leveraging the data to refine processes builds a major competitive advantage. The next sections cover tracking it, influencing factors, speed-ups, and perks.

Calculating Throughput Time

Throughput time, also known as lead time or cycle time, measures the total time it takes to complete a process from start to finish. Calculating throughput time accurately is crucial for identifying bottlenecks, optimizing workflow, and improving overall efficiency. 

The basic formula for calculating throughput time is:

Throughput Time = Exit Time – Entry Time

Where:

• Exit Time is the time when the final operation or step in the process is completed.
• Entry Time is the time when the initial operation or triggering event for the process occurs.

For example, in a manufacturing setting, the entry time could be when raw materials are received, and the exit time is when the finished product is shipped to the customer.

However, this simple calculation may not capture the full complexity of real-world processes. More comprehensive methods, like value stream mapping or process mapping, can provide a detailed breakdown of each step’s cycle time, wait times, and queue times contributing to the overall throughput time.

Once you have mapped out the entire process flow, you can calculate throughput time by summing up the cycle times of each process step, plus any wait times or queue times between steps.

Factors Affecting Throughput Time

Throughput time can be influenced by a variety of factors within a manufacturing or production process. Understanding these factors is crucial for identifying bottlenecks and opportunities for improvement. Some key factors that can impact throughput time include:

Process Complexity: The more complex a process is, with multiple steps, handoffs, and dependencies, the longer the throughput time is likely to be. Simple, streamlined processes tend to have shorter cycle times.

Equipment Reliability: If equipment frequently breaks down or requires maintenance, it can create delays and increase throughput time. Having reliable, well-maintained equipment is essential.

Worker Skills: Highly trained and skilled workers can perform tasks more efficiently, reducing cycle times. A lack of proper training can lead to errors, rework, and longer throughput times.

Inventory Management: Inadequate inventory levels of raw materials or components can cause production delays waiting for replenishment. Effective inventory management helps ensure a smooth flow.

Batch Sizes: Running larger batches generally increases throughput time compared to smaller batch sizes or single-piece flow. Smaller transfer batches allow for faster feedback and adjustment.

Changeovers: The time required to change over equipment for different products or batches directly adds to throughput time. Reducing changeover times is beneficial.

Material Handling: Excessive material movement, poor layout, and inefficient handling can increase non-value-added time within the total throughput time.

Quality Issues: Defects, rework, and inspection activities add considerable time to the throughput cycle that could be avoided through better quality practices.

Bottlenecks: Any bottleneck operation with insufficient capacity will increase queuing time and extend the overall throughput time for the entire process.

Improving Throughput Time

Reducing throughput time is a major focus area for manufacturers and service providers looking to increase productivity and efficiency. Several strategies can be employed to improve throughput time:

Lean Manufacturing Techniques

Implementing lean manufacturing principles like value stream mapping, 5S, kanban systems, and just-in-time production can streamline processes and eliminate non-value-added activities that increase lead times. Techniques like continuous flow manufacturing and single-piece flow prevent work-in-progress buildup.

Bottleneck Analysis 

Identifying and addressing bottlenecks in the process is critical. Bottlenecks create queues that increase cycle times. Using techniques like the theory of constraints, little’s law, and calculating takt times can pinpoint bottlenecks. Capacity can then be balanced through process improvements.

Reducing Waste

Actively reducing different forms of waste (defects, overproduction, waiting, transportation, inventory, motion, over-processing) directly impacts throughput time. Tools like value stream mapping highlight waste sources.

Optimizing Scheduling 

Efficient production scheduling prevents delays from starving processes of materials/parts. Leveling production volumes, reducing batch sizes, minimizing changeovers, and backflushing completed jobs quickly improves flow.

Automating Processes

Automated processes reduce manual handling times and are less prone to delays and variability. Investing in technologies like robotics, AGVs, and manufacturing execution systems accelerates throughput.

Improving OEE

Overall equipment effectiveness (OEE) accounts for availability, performance, and quality. Maximizing OEE by improving equipment reliability, optimizing maintenance, and increasing first-pass yield raises throughput capability.

Benefits of Reducing Throughput Time

Reducing throughput time can provide significant benefits for businesses across various industries. Here are some key advantages:

1. Improved Customer Satisfaction: Shorter throughput times mean faster delivery of products or services to customers. This enhances customer satisfaction by meeting or exceeding their expectations for timely fulfillment.
2. Increased Competitiveness: In today’s fast-paced business environment, companies that can deliver quickly often have a competitive edge. Reducing throughput time allows businesses to respond rapidly to customer demands and market changes, staying ahead of the competition.
3. Better Cash Flow: Shorter cycle times result in faster conversion of raw materials and work-in-progress (WIP) into finished goods and sales revenue. This improved cash flow can provide businesses with greater financial flexibility and liquidity.
4. Lower Inventory Costs: Reducing throughput time often goes hand-in-hand with lean manufacturing principles, such as just-in-time (JIT) production and continuous flow. By minimizing work-in-progress and finished goods inventory, businesses can lower inventory carrying costs and free up valuable space and resources.
5. Enhanced Productivity: When throughput time is reduced, bottlenecks and non-value-added activities become more apparent, allowing businesses to eliminate waste and improve overall efficiency and productivity.
6. Increased Capacity: Shorter throughput times can effectively increase a business’s capacity without the need for additional resources or capital investment. This enables companies to take on more orders or projects without compromising delivery times.
7. Improved Quality: Reducing throughput time often involves streamlining processes and minimizing work-in-progress inventory, which can lead to fewer defects and higher-quality products or services.

Throughput Time in Different Industries

Throughput time is an important metric across many industries, although the specifics of how it is measured and optimized can vary. Here are some examples of throughput time in different sectors:

Manufacturing

In manufacturing, throughput time refers to the total time from when a raw material or component enters the production process until the finished product is completed.

Reducing throughput time is crucial for lean manufacturing principles like just-in-time production. Factors like equipment efficiency, worker productivity, inventory levels, and process cycle times all impact manufacturing throughput time.

Healthcare 

In healthcare settings like hospitals, throughput time measures the total time a patient spends receiving care – from admission to discharge.

Optimizing patient throughput reduces overcrowding and wait times. This involves analyzing processes like triage, testing, room availability, staffing levels, discharge procedures, and more.

Call Centers

For call centers, throughput time tracks how long it takes from when a customer initiates contact (phone call, chat, email, etc.) until their issue is resolved. minimizing throughput boosts efficiency and customer satisfaction.

Factors like call volumes, staffing, training, script optimization, and system integrations all influence throughput.

Software Development

In software and IT operations, throughput time refers to the full cycle from when work on a project, feature, or issue begins until it is fully tested, approved, and deployed into production.

Agile frameworks like Scrum and Kanban emphasize optimizing throughput by removing bottlenecks and handoffs.

Conclusion

Shrinking throughput time is huge for any company wanting higher efficiency, lower expenses and a happier customer base.

By understanding what influences times and tackling bottlenecks and sluggish processes, businesses gain a serious competitive advantage.

It’s important to remember improving times is constant work needing ongoing monitoring, analysis and adjustments.

As conditions evolve, new constraints can pop up or customer needs may shift, necessitating re-examining workflows.

Following lean manufacturing principles, value stream mapping and other process upgrade methods offer structure spotting and removing wasted efforts and optimizing material/info flows.

Technology solutions like scheduling software, inventory trackers and real-time analytics also offer valuable insight enabling smarter choices.

Ultimately though, it’s not just increasing volume or shortening lead times — it’s cultivating a culture of relentless refinement and emphasizing waste reduction and added-value across the board.

Consistently measuring, analyzing throughput time, identifying bottlenecks and systematically enhancing unlocks major perks like higher productivity, lower expenses, more delighted clients and competitive separation in markets.