P
CE
assesses value-added time ratio to total lead time, quantifying time spent on activities directly contributing value to products or services.
What is Process Cycle Efficiency?
PCE
is calculated by dividing value-added time by total lead time, yielding a percentage.
A higher PCE signals greater efficiency in tasks adding value.
Cutting waste boosts profits, elevating competitiveness through cost-effective measures.
Importance of Process Cycle Efficiency
Cost Savings -
Streamlining boosts productivity, achieving more with fewer resources through efficiency.
Increased Productivity -
Customers seek quality products/services delivered promptly.
Improved Customer Satisfaction -
Shortened lead times, fewer defects, superior value foster loyalty, growth.
By Optimizing PCE -
PCE analysis promotes data-driven, improvement-focused culture within organizations.
Continous Improvement Culture -
Key Metrics
Value-added time -
Metric gauges time on customer-value activities, enhancing product/service.
Lead Time -
Lead time, also cycle or throughput time, is total process duration. Includes value and non-value tasks.
Cycle Time -
Cycle time: task duration within process, excludes non-value-added time. Identifies bottlenecks.
Calculating PCE (Process Cycle Efficiency)
Cycle time: task duration within process, excludes non-value-added time. Identifies bottlenecks.
Value-added time enhances product value. Lead time is total process duration.
By rearranging the terms in Little’s Law, we can calculate the lead time as
Lead Time = Work-in-Process (WIP) / Throughput Rate
PCE = (Value-Added Time / Lead Time) x 100.
Read the full article ←