What does it take to meet your customers’ demand? How do the measures of Takt Time, Cycle Time, and Lead Time help us in meeting that demand? How can we use them to improve our processes?

In this excellent video, Karl Petersen defines Takt Time, Cycle Time, and Lead Time, discusses how they are related and how they differ, shows how to measure them in order to meet your customers’ demand, and determine ways using those measures in order to improve processes. Then he demonstrates how to use them through a simple simulation that includes redefining the process to better meet demand.

Here are the measures as defined in the video:

• Takt Time: Calculated value that describes the theoretical demand of your customer
• How fast do we need to produce products to meet their demand?
• Takt Time = Available Production Time/Number of Units Customer Needs
• Cycle Time: The rate at which your operation is actually producing a unit
• Frequency of units produced
• Time it takes from the output of one unit to the output of the next unit
• Lead Time: Time it takes one unit to make it through your operation front to end

You can view the video here.