Takt Time: Produce at Customer-Defined Pace

 

Takt Time: Produce at Customer-Defined Pace

Takt Time is a concept used in production that refers to the manufacturing pace that we must maintain to meet customer demands. This production strategy is especially useful when we have limited production time and constant customer demand.

In this article, we explain what exactly is Takt Time, how to calculate it, and what are the benefits of using this measure, both in logistics and in the supply chain.

Takt Time: What is it?

The word takt comes from German and means speed, rhythm or beat. When we refer to the concept of takt time, we are referring to the speed that the production process must follow to meet the customer's needs. It is a concept often associated with lean logistics, lean manufacturing or just-in-time methods.

Therefore, we define takt time as the average time between the start of manufacture of one unit of product and the start of manufacture of the next unit. This time should be adjusted according to the company's previous order level. Takt Time must be calculated in advance based on our production capacity and demand forecast. In layman's terms, if a customer buys a loaf of bread every minute at a bakery, it means that the bakery's Takt Time must be less than one minute. In other words, you must produce a loaf of bread every 60 seconds or less to meet demand.

Difference between Takt Time and Lead Time:

It is important not to fall into the common misconception: confusing Takt Time with Lead Time, as they have different purposes.

On the other hand, lead time, or cycle time, delivery time or supply time, refers to the total time required from the generation of an order to delivery to the customer (or receipt from the supplier), including in this period all logistical activities involved.

On the other hand, Takt Time is limited to the production phase and is the maximum time a product must be produced to satisfy demand. Unlike lead time, it is an estimated and theoretical time that serves as an indicator to determine whether we are manufacturing above or below expectations.

Calculating Takt Time: Example:

Takt Time is calculated by dividing the time we have by the number of units that were ordered by the customer.

For example, a company received an order for 500 cases of garlic that must be produced in an 8-hour period. How do we calculate Takt Time? Taking into account that the company produces 8 hours a day uninterruptedly, and that 8 hours is 28,800 seconds, we calculate:

Takt Time tells us that to meet customer demand, production speed must be equivalent to one box every 57.6 seconds. From that moment on, the company sets a production rate equal to or lower. If order volume fluctuates, the product's Takt Time must be adjusted to synchronize production with demand. In this way, an excess of inventory due to overproduction (or a break in inventory due to not meeting demand) is avoided.

How does Takt Time affect logistics?

Logistics and production are two steps directly connected in the supply chain. Therefore, making the most of Takt Time has a positive impact on the company's logistics.

Takt Time is conducive to effective inventory management of the designated production line, aiming to maintain the specified level of productivity without disruption to inventory. In other words, it is much easier to carry out an efficient supply logistics at a certain manufacturing speed, being responsible for the following operations: purchase of goods, storage and stock management.

Furthermore, by employing Takt Time, we implicitly adopt a just-in-time strategy, dramatically reducing storage costs. Instead of overproducing or storing more raw material than necessary, it is manufactured on demand. What does this translate to? In this sense, the logistical expense is limited, because we need the right storage space, the stock is not obsolete, we have the necessary personnel at all times, etc.

Benefits of Takt Time?

Takt Time and just-in-time are two interrelated concepts. For this reason, the advantages of using a Takt Time are equivalent to those of adopting a just-in-time strategy:

• Eliminate Overproduction: Once Takt Time is calculated, the production rate is determined by the demand volume. In this way, we prevent it from occurring above needs.

• Decrease in costs: An excess of inventory leads to significant warehousing cost overruns, forcing companies to cut prices or scrap products to reduce inventory levels. When producing on the basis of Takt Time, these practices do not need to be used and therefore profit margins are maintained and storage costs are reduced.

• Resource optimization: If our work rate is below the required rate, we will have to invest more resources to achieve the required production. Takt Time helps to define work shifts, calculate the periodicity of supply or adjust manufacturing to the productive capacity of a machine.

• Decrease in errors: Producing quickly and unexpectedly increases the risk of making mistakes. On the other hand, when the work rate is more constant, the percentage of errors decreases drastically.

In short, the main advantage of Takt Time is a notable increase in efficiency in all operations related to the supply chain.

The customer sets the times

For a company to meet your demand, it must produce in accordance with its Takt Time, which is none other than what the customer dictates. In addition to being able to offer a better service and save on operating costs, Takt Time has a positive impact on the logistics of any manufacturer, essential if you want to achieve an efficient supply chain.

The perfect supply chain is one where all the departments involved work in sync.

If you think the time has come to boost your supply chain and you need to manage and optimize your production processes, don't hesitate to contact Avilla Consulting. We have extensive experience in improving processes and production methods.