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Process Cycle Efficiency
Process Cycle Efficiency is a Lean Six Sigma metric useful for prioritizing improvement opportunities. Process Cycle Efficiency is calculated by dividing the value-added time associated with a process by the total lead time of the process.
Process Cycle Efficiency = Value-Added Time / Lead Time
If the process consists of only value-added activities, then the Process Cycle Efficiency would reach a theoretical maximum of 100%. In practice, Process Cycle Efficiencies will exceed 25% for processes that have been improved through the use of Lean methods. Typical Process Cycle Efficiencies are shown below for various processes.
The key to improving Process Cycle Efficiency is to reduce the Lead Time , the denominator of the equation, such as through level loading (i.e. balancing the process takt times).
Typical Cycle Efficiencies (ref: Lean Six Sigma, by M. George, 2002, McGraw Hill)
|
Process Type |
Typical Efficiency |
World Class Efficiency |
|
Machining |
1% |
20% |
|
Fabrication |
10% |
25% |
|
Assembly |
15% |
35% |
|
Continuous |
30% |
80% |
|
Transactional |
10% |
50% |
|
Creative |
5 % |
25% |
Learn more about the Lean Six Sigma principles and tools for process excellence in Six Sigma Demystified (2011, McGraw-Hill) by Paul Keller, in his online Lean Six Sigma DMAIC short course ($249), or his online Green Belt certification course ($499).
