Takt time vs Cycle time – Differences, Relation and More

Several business concepts help a company to optimize its operations. Two such concepts are takt time and cycle time. However, people often use both these terms interchangeably to refer to the same thing. But, in reality, the two are very different and convey different concepts. Moreover, along with being different, the two are related to each other as well. Together, they help a company to optimize its production. Thus, to better understand the two concepts and their usage, we need to understand the difference and relationship between takt time vs. cycle time.

Takt Time

Takt is a German word and a popular term in music. In music, it refers to a beat or a pulse. In the business, the term takt refers to the rate at which a company should produce or manufacture a product or service to satisfy the total demand.

Formula to calculate takt time is = Available Time For Production/Number of Units Required.

For example, the total consumer demand is 160 units a day, while the total manufacturing hours a day is 8 hours. Thus, the company will have to produce 20 units per hour to satisfy the demand.

Takt time helps a company to find the time it has to produce one unit, as well as avoid overproduction. Further, a company can use this to decide on the delivery time, streamline production rate, manage overtime calculations, and more.

You can also use Takt Time Calculator

Cycle Time

Cycle Time is the time a company takes to complete the production from the start to the end. The formula to calculate the Cycle Time is == Net Production Time/Number of Units made.

We can also relate the cycle time to Throughput Time for a better understanding. The Throughput Time is the number of units a company produces during a specific time. On the other hand, cycle time is the average amount of time a company needs to produce one unit.

For example, it takes a company 100 minutes to produce ten units. In this case, the throughput time of ten units per 100 minutes. Now, the cycle time, in this case, will be 10 minutes (100/10), or it takes a company 10 minutes to produce one unit.

Takt Time vs. Cycle Time – Relationship and Difference

Following are the points that will help you understand the differences and relationships between Takt Time vs. Cycle Time:

  • Cycle time tells when a company completes the production process. Takt time, on the other hand, recognizes when a company must finish a production process to fulfill the demand.
  • We can say that cycle time is the actual time a company takes to finish production. Takt time tells whether or not the company is producing fast enough to keep up with customer demand.
  • To meet the total consumer demand, a company would have to make adjustments to the operations and also tweak the cycle time to be in line with the ideal takt time.
  • An ideal scenario for a company is when the takt time and the cycle time are the same. If the two are unequal, it could create issues for the company.
  • If the cycle time exceeds the takt time or is more than the takt time, then it means the company will not be able to meet the total demand. It may result in lower sales, loss of customers, backlog, and more.
  • If takt time is more than the cycle time, it would mean that the company can meet all the demand. However, it could also mean that staffing may be more in the company, demand is less, and the risk of overproducing.
Takt time vs Cycle Time

Takt Time vs. Cycle Time – Ideal Scenario

As said above, an ideal scenario for a company is a match between takt time and cycle time. In the real world, however, this isn’t easy to achieve. A manufacturing company often faces issues, such as machine breakdowns, absent employees, quality issues, and more that make it challenging to have a match between the cycle and takt time.

Thus, a company should always strive to narrow the gap between the two. It is preferable to have a cycle time below the takt time. It would at least ensure that the company can meet customer demand. Even in such a case, the gap shouldn’t be too big. Instead, a slight buffer is preferable. This buffer would mean that a company can meet the demand even if there are some minor hiccups in the production process.

A company can use time management and productivity techniques to align the cycle time and takt time. A company can hire more workers and use new machines to speed up the production process. Another method is cutting time from another project and allocating it to the current project.

Also, read Lead Time and Cycle Time for more.

Quiz on Takt time vs Cycle time

This quiz will help you to take a quick test of what you have read here.

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

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