Here is a quick look at some Lean Measures that can be used to understand the ‘lean performance’ of a process:
Process Cycle Efficiency (PCE) is the primary lean measure. It represents the amount of time that a product or service spends actually having value added to it, as a proportion of the total process lead time.
Total Value Add Time
PCE (%) = —————————————————— * 100%
Total Lead Time
Lead Time and Work in Process (WIP) are important measures of a process. Lead time reflects the total time that it takes to deliver a product or service, and WIP is a measure of how many products/services are ‘in process’ (i.e: they’ve been started, but not yet finished). Lead Time and WIP are inextricably linked, because the more WIP that you have, the longer a new product/service will have to wait to go through the process. This relationship is know as Little’s Law, and is written mathematically as follows:
Average Lead Time = ———————————— * 100%
Finally, Takt Time is also an important Lean measure. It represents the drumbeat of a process and is calculated by dividing the available work time (e.g. a day or shift), by the number of products required by the customer in the same time period.
Available Work Time
Takt Time = —————————————— * 100%