What Is Cycle Time? (Ultimate Guide)
Curious about what is cycle time?
Cycle time is one of the most crucial Agile metrics for any business.
It provides in-depth insights into how you can improve your production process.
You’ll also be able to:
Optimize any internal process or workflows, efficiently manage resources, and avoid declaring bankruptcy like Michael Scott from The Office TV series!
So how exactly does tracking cycle time help?
And more importantly, what is cycle time?
In this article, we’ll cover what is cycle time, its benefits, and how to calculate it easily. We’ll also highlight a tool that can make the whole process a piece of cake.
Let’s get started.
What Is Cycle Time?
Cycle time is the amount of time it takes for a team to complete one production cycle, right from the start date until the product is ready to be shipped.
But what is one production cycle?
A single production cycle includes two things:
- Time spent on the production of an item (known as active work time)
- The wait time between two sequential active work times
If you’re working with Jim, ‘time spent putting Dwight’s stuff in Jello’ should also be on your list!
Cycle time is an important KPI that businesses track to balance the scale between demand and supply.
How Do You Calculate Cycle Time?
Cycle Time (CT) = Net Production Time (NPT) / Units Produced (UP)
- Net Production Time is the total time taken to produce a single batch order
- Units Produced is the total number of units produced in the batch order
Let’s understand this with a simple example from The Office sitcom.
If a team at Dunder Mifflin produced 400 units of paper inventory in 30 hours, then:
- Net Production Time: 30 hours
- Units Of Inventory Produced: 400 units
So cycle time = 30/400 = 0.075 hours.
And that would mean it takes 4.5 minutes to produce one unit of paper at Dunder Mifflin.
That’s good enough to impress the HQ, right?
What Are the Benefits of Tracking Cycle Time?
Here are the four key benefits of tracking cycle time:
1. Helps you set the production rate to meet customer demand
How do you keep your customers happy?
By meeting their demands on time!
But let’s face it: it’s not possible to meet all customer demands.
What if the demand is too much for your current setup to deliver?
How will your team manage a production line bottleneck then?
That’s what calculating cycle time helps you do!
As you’ll be aware of your current cycle times, you can optimize your production process to reduce the overall cycle time.
- Which process to cut down
- What process step to add
- How to optimize the flow
From sourcing raw material to human resource management at the distribution center, everything can fall in line to suit your expected cycle time.
And with shorter cycle times, you’ll easily meet the customer order expectations, helping you achieve a higher customer satisfaction rate.
All of this will lead to a better production process with greater benefits but in less time.
2. Helps you estimate the actual order delivery time
Whether you’re in real estate or a fast food restaurant chef, timely order delivery is everything.
But the road to delivery is not without its hurdles, right?
Too much demand, a supply chain shortage, supplier issues; life will never fail to surprise you!
If you keep track of the cycle times over a period, you’ll know the average time it takes to produce one item, give or take these special conditions.
You can accurately estimate the extra time needed for production activity. This, in turn, will help you decide the actual order delivery time.
So no matter what surprises life holds for you, your deliveries will always be on time!
3. Helps you maintain quality of production
A higher rate of production can mean two things:
- Low production process cost
- Shorter project completion time
But if things don’t go as planned, it could also lead to lower quality products.
So how does understanding the actual rate of production help?
By having an idea of the production rate, you can focus on what matters the most.
So if the demand goes up suddenly, you’ll know exactly which process step to tweak in order to bring down the cycle time while maintaining the quality of customer order.
Additionally, with one particular goal in focus, say optimizing the value stream, you’ll follow the correct direction for production.
4. You can set a baseline for continuous improvement
A business’s growth depends on continuous improvement.
And to measure the effectiveness of such continuous change, you need to establish a baseline measure.
The baseline describes the manufacturing process, business functions, and roles that are standard in your typical project management process.
As you proceed, your cycle time metric helps you compare your progress against this baseline.
What’s the Best Way to Track Cycle Time?
It’s simple: use professional Agile tools!
I mean, you can’t track the cycle time by manually clocking each process step, right?
Especially if your production process requires visiting the Schrute beet farm.
We all know how that’ll go!
Luckily, a modern Agile project management tool like ClickUp is all you need!
How does ClickUp help you track Cycle time?
Here’s how you can build a Sprint Widget in ClickUp:
- Select your desired source among Sprints, Lists, or create Custom Fields
- Set the time range for a rolling window or within a fixed date range
- Base your workload type upon time estimated, tasks or use Custom Fields to create user story points
- Add filters to further customize the Widgets according to your needs
Now that you know how to add a Sprint Widget to your Dashboard, you can also add various Agile charts like Velocity, Burnup, Burndown, Cumulative Flow Diagram, and most importantly, a Cycle Time chart!
ClickUp gives you two options to calculate cycle time:
- Cycle time can be calculated from the moment a task enters any status in the Active status group
- ClickUp can assume the first status in Active as “Not Started” and any other work item in the Active status group is counted as the start of cycle time
You can customize the cycle time graph with:
- Time range: select the desired time range you want to look at and set the frequency of the cycle time graph
- Sample time: choose the number of days you want to include as the average for each data point on the graph
- Status group counted as completion: when calculating cycle time, you have complete freedom to choose the status group that counts towards completion. For example, “Done,” “Client Review,” or “Closed,” it’s up to you!
With ClickUp’s Chrome extension for Native Time Tracking, you can track the time spent on each task accurately. Additionally, as each task is stored in a separate batch, you can also view who else has worked on that particular task and for how long.
But wait… that’s not all of ClickUp’s features!
This project management tool offers a wide variety of amazing features, such as:
- Goals: easily set and measure any professional development KPI or project goals efficiently
- Workflow Automation: automate repetitive tasks with 50+ pre-built automation commands. You can even create your own automations to suit your needs
- Profiles: view which task your team members are currently working on, should work on next, and the task they’ve completed recently
- Multiple Views: view your work from any angle with various flexible views like List, Board (Kanban Board), Calendar, Box view, and more
- Docs: easily create, share, and store organization or project-related documents like a purchase order right inside ClickUp
- Pulse: view your remote Scrum team’s live activity during the day
- Workload View: visualize and track your team’s work capacity for efficient resource management
- Gantt Chart: ClickUp’s intuitive Gantt Chart helps monitor your project timeline easily
- Custom Statuses: create task statuses according to your project needs
- Feature-rich Mobile Apps: manage your work on the move with ClickUp’s powerful mobile app for Android and iOS devices
FAQs about Cycle Time
Terms like ‘takt time’ and ‘lead times’ are often used along with cycle time.
So if you’re confused about them, don’t worry!
We’re here to clear everything up for you:
1. Is takt time the same as cycle time?
No, takt time measures customer demand value whereas cycle time measures work.
What’s takt time?
A German word for pulse or beat, ‘takt’ time is the rate required to complete the production process of an item in order to meet the customer demand.
You don’t need Dwight’s fluency in the German language to understand this!
The takt time formula is:
Takt Time = Net Production Time Available/Required Number Of Units
By calculating takt time, you can:
- Estimate the completion rate for one unit of a production order
- Optimize your value stream for a set batch size
- Increase or decrease the throughput based on demand
- Keep the quality of the production order in check
A steady production flow that helps ensure that the customers receive quality products within the set time frame.
2. Is cycle time the same as manufacturing lead time?
Manufacturing lead time is the total time spent from the moment a customer puts in a production order to the time when the finished product is delivered.
Manufacturing Lead time = Product Order Delivery Date – Product Order Request Date
- Product Order Delivery Date: the end date on which the customer order was delivered to the customer
- Product Order Request Date: the date on which the request was raised for the customer order
To explain it in terms of cycle time, manufacturing lead time is cycle time plus the time taken for the production process to begin and the time taken to deliver the finished product.
Check out our comprehensive take on cycle time vs. lead time here.
Analyzing cycle time is one of the easiest ways to stay on top of your business.
It not only helps you optimize your production process and maintain a steady flow but also lets you meet customer demand with quality products.
As for tracking the metric, what better way than to use professional time tracking tools like ClickUp?
It’s got everything you need to stay on top of your production process and keep your Agile or Scrum team productive. From project planning and process automation to capacity planning and resource allocation… the list goes on!
So why not get ClickUp for free and start on your way to winning the Dundies Award For The Best Cycle Time?