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Lean Six Sigma: Takt Time – To Meet Customer Demand

// 2020 Aug 14

takt timeBy Regu Regupathy, Master Black Belt, Rutgers University

What is Takt Time and why should we care about it?

No one likes waiting at the  motor vehicle bureau. Depending on when you go, there is either an impossibly long wait, or a very short wait, if you’re lucky. Wouldn’t it be great if just about any time you went to renew your license, etc., there were just a reasonable wait? It is possible, if the will is there, to smooth out customer demand and available staff. A useful concept can help managers smooth out these waiting times in a scientific way: Takt Time.

Takt time is the required amount of time in which a product or service needs to be delivered to satisfy customer demand. The term comes from the German word “takt,” which means “pulse or rhythm”. To maintain perfect rhythm with customer demand, each process step must be capable of meeting the Takt time.

If the production rate for each process step equals the customer demand, then it would represent a perfect lean operation. If one or more steps has the capacity to deliver at a rate faster than the Takt time, then these process steps have excess capacity implying waste of resources. On the other hand, if a process step delivery time is larger than the Takt time, that process step is not capable of meeting customer demand. Thus, Takt time helps to balance the resources across all process steps to create a lean process.

So: Why do we care about Takt Time when managing or improving a process?

We said earlier that if the production rate equals the customer demand, that would represent a perfect, Lean operation.

In the driver’s license example, the rate of customer demand is 1.5 minutes (the calculated Takt Time).  This means that one customer arrives every 1.5 minutes. Let’s assume that the “touch time” needed to process a driver’s license is 15 minutes. If you have 10 clerks processing applications, then the production rate is 15 minutes/10 clerks = 1.5 minutes. This means one customer will be leaving the driver license bureau every 1.5 minutes with a license issued.

In most service businesses, such as emergency rooms, banks, and restaurants, customer demand varies with time of day and day of week. Therefore, it is useful to calculate the Takt time for specific time periods such as peak hours in order to ensure the right amount of staffing.

Let’s look at an example: You arrived at JFK airport 8:30 PM after a long international trip. There are 30 lanes for processing immigration and 3 lanes at Customs. On average, it takes 2 minutes (120 Seconds) to process a passenger through immigration and 30 seconds for customs. Between 8 PM and 9 PM, 720 passengers arrive per hour.

Takt time = 1hourx60x60/720 = 5 Seconds

Production rate at Immigration = 120 secs/30 = 4 Seconds, which is < Takt time.  Conclusion: Immigration is overstaffed.

Production rate at Customs = 30 secs/3 = 10 seconds, which is > Takt time. Conclusion: Customs is Understaffed.

Immigration officers will be waiting a bit for the next customer to arrive and there will be a queue at the customs area.

Now that you have a better understanding of Takt time, here are a few things to remember:

  • In a lean operation, the production rate in each process step will be equal to the Takt time. If one or more steps has the capacity to deliver at a rate faster than the Takt time, then these process steps have excess capacity implying waste of resources. On the other hand, if a process step delivery time is larger than the Takt time, that process step is not capable of meeting customer demand. So, Takt time helps to balance the resources across all process steps to create a lean process
  • If production time is less than the Takt time, you have more production capacity than the customer demand. In a manufacturing unit, you will accumulate inventory. In a service unit, you will be idly waiting for the next customer to arrive.
  • If production time is greater than Takt time, you have less production capacity than the customer demand. In a manufacturing unit, your shipment will be delayed. In a service unit, your customer will be left waiting.
  • Customer demand will have seasonal fluctuations and even daily fluctuations such as at lunch time. Therefore, you need to calculate Takt times to accommodate such variations.

Next time, we’ll drill down a little further into matching demand with capacity – good for your customers, good for your bottom line.

 

Have questions? Want more information about upcoming Lean Six Sigma training programs? Contact Rutgers Executive Education