Takt time: theory and practice

Takt time. Google it, and you will be amazed at the definitions you will come across. But besides the ones that mix up takt time with cycle time, and the ones that speak of takt time as a rate, most of them will give you something along the lines of the time interval at which production needs to complete products in order to satisfy customer demand. In general, takt time is conceptually calculated as the available time divided by a quantity, given a certain period. Not too difficult is it. Still, I come across quite a few unclarities related to the concept of takt time, viz. (1) what do we take as available time, (2) what quantity do we use, and – hardly ever discussed – (3) what period to consider? In this post, I will try to cover a few of these unclarities.

The purpose of takt time

Before we go into the details of determining takt times for a production system and its elements, it is important to first understand why we need it in the first place. Simply put, takt time is the average interval with which customers of a certain value stream need parts. Takt time, therefore, is an indication of the required production capacity, without considering any problems. And it plays (or should play) a crucial role in a company’s capacity planning process.

In capacity planning, takt time is contrasted with an operation’s cycle time. A cycle time that is larger than the takt time for that operation indicates a capacity shortage; a cycle time smaller than takt time indicates that in principle capacity is available, and the production plan is attainable. The gap between takt and cycle time, in this case, is indicative of the operation’s absorption possibilities for problems. For some more considerations in planning, I also refer to my earlier post on Kingman.

For now, let’s look at the two elements in determining takt time, i.e., available time, and the required quantity.

Takt time: available time

Let’s start with the numerator in the takt time calculation: available time, or to be more precise, net available time as it is referred to most commonly in Western texts on the topic. In other, more Toyota oriented texts, you see the concept back as operable time, or (be)kidoritsu (可動率). Operable time is the time that a machine is available and in operable condition.

Operable time is typically is defined as the opening time of the producing operation minus any planned stoppage (like meal and coffee breaks, planned meetings, daily checks, scheduled maintenance, or end of shift cleaning for instance).

Hall (1986) provided a detailed example — manifestly based upon a Toyota calculation — that shows that operable time is taken as the opening time per shift (8 hours) minus time for lunch and breaks (120 minutes) and so-called jidoka-time. Hall describes jidoka-time as an allowance for downtime to make corrections or improve the process — about ten minutes per shift — and it is expected to be taken. Otherwise, people are not paying attention to the process. In his example, about 27 percent of a shift is not operable.

Any time allowed for other than these planned times should not be part of the net available time. As when you do, the problem intensity at a certain operation becomes implicitly hidden in the takt time, and no conscious discussion can take place on the amount of absorption included in the capacity plan. I have always wanted to explicitly see the planned gap between takt and cycle time in the capacity plan, and make this gap an explicit part of the improvement plans in production.

Takt time: required quantity

There is a reason I do not use the word market demand here. And hopefully, it will be clear why at the end of this section.

To get to takt time, the operable time should be divided by a quantity. Ohno speaks of the ‘required numbers’, and Shingo of ‘the required production quantity’. Ohno, and also Toyota in its documents, does state, that the required numbers are based upon market-related elements, such as dealer orders for vehicles, but Toyota adds that this demand is smoothed before it is used in takt time calculations.

Now, I do want to dwell upon this for a moment, as contrary to the numerator of net available time, the denominator of takt time, i.e., the required numbers, gets far less attention in discussions. It is quickly dismissed as ‘demand’, but without discussing exactly what is meant with this. To clarify the issue with demand, just consider the demand of a brick-and-mortar retailer: there are no orders in the system before delivery, so putting a number on ‘demand’ already becomes somewhat less obvious.

To generalize the point, ‘demand’ is a number we need to decide upon. And this number could consist of several elements, summarized in the table below:

Let’s touch upon these categories for a moment.

Demand is typically seen as the specification of the needs of the market in terms of the number of products that it will require over a specified period of time. The most obvious part of the demand is the actually expressed and confirmed demand, visible through the current open call-offs, order book, or backlog (i.e., uncompleted work).

It is important to note that next to future demand, a part of expressed and confirmed demand could be consisting of open orders that are past due (referred to as back orders or arrears). Don’t shut your eyes to these quantities. They need to be part of the takt time consideration over the next period.

Secondly, a part of demand could be expressed by customers, but not yet confirmed. Examples of such expressed but unconfirmed demand are customer forecasts or customer schedules that are shared with suppliers.

Next, what about potential, identified demand that may develop out of currently outstanding quotes and proposals, or even in an earlier stage, like identified opportunities or maybe only the identification of prospects or even just leads? Particularly when the order book does not extend very far into the future, potential demand will be of more importance in defining the required numbers. In determining the potential demand based upon these sources, the “probability of success” for each element is typically used to create an estimate of demand.

And finally, what about possible demand that is maybe not even concretely visible through either the order book or the sales funnel. Possible demand beyond expressed (confirmed and unconfirmed) demand and potential, identified demand will have to be forecast by the organization to complete the required numbers over the horizon based upon which takt time will be determined.

The presence and relative importance of each of the above elements depends on the horizon on which takt time is determined. A short horizon will mostly be covered by expressed, and possible even confirmed demand. A long horizon, however, will typically include more potential and forecast demand, and will therefore be less certain. This brings us, therefore, to the third, and often neglected aspect of the definition of takt time: the takt time horizon.

Takt time: takt time horizon

The takt time horizon is typically related to the flexibility a producer has in adapting to a new takt time. Changing over to a new and different takt time may involve significant changes. Takt time changes typically also require adjustment of the workforce and possibly opening times and shift patterns. And it may also involve activities such as repositioning tools, materials, and even equipment and changing complete layouts.

This, of course, may take considerable time and effort as well as that its impact might be significant. When this is the case, it may be clear that takt time changes are therefore not done very frequently or decided lightly. When the takt time horizon is relatively short, takt time may vary significantly, depending upon the period-to-period variability of demand.

Taking relatively long periods to determine the required numbers is therefore advised. This also why Toyota speaks of taking smoothed customer demand in determining takt time. Taking a longer period in demand planning will iron out any abnormal variability and will provide a “normalized” demand over the horizon.

On the other side, smoothing demand over a longer period will concurrently also lead to more difficulties in detecting trends or shifts in the demand pattern, and it will mean that takt times are based upon less firm numbers. At the same time, overcoming variability during the takt time horizon may require a producer to produce ahead of time or delay production and therefore either to create an inventory or quote longer lead times to its customers. Considering the foreseen volume stability in planning the takt time horizon is therefore advised.

In general, the takt time horizon is implicitly set at a month, in sync with the monthly planning cycle operated by most manufacturers. This leads to monthly recalculated takt times, for a planning horizon that may extend from three months up to a year or a year and a half.

Takt time: additional considerations

We started the discussion on the required numbers with a discussion of market demand. But demand can also be seen in a broader sense, i.e., the requirement of work in general. As takt time provides an image of the required rhythm or capacity, defining demand as the requirement of work is more appropriate, as there can be more needs than only market needs. The required number of units must include everything that is required of the process — samples, test runs, spares, and so on, besides the regular requirements of customers.

Another source of demand may be related to the quality in the process. Customers may be confronted with poor quality of parts or experience their own quality problems. This may very well result in requests for replacement parts, additional parts to cover defects or scrap at the customer, or for rework of parts that are returned to the supplier. Internal rework, or replacement parts for internally found defects at the operation, however, should not be part of the ‘required numbers’.

Yet another source of requirements may be a targeted inventory build-up or reduction over the takt time horizon. Inventory build-up may be considered as part of securing the customer, contractual requirements, changes in supply chain strategy, adapting to a higher demand rate, as preparation for a seasonal demand peak, or a significant period that is planned for maintenance, repair, or overhaul activities. A reduction of inventory levels may be the consequence of lower demand rates, changes in the supply chain strategy, or significantly improved reliability in supply, for instance.

So, in determining takt time, we should consider more than just the current market and customer demands. It should also involve these additional requirements. Because of the foregoing, I prefer to go with the term required production quantity in a specified period (instead of just required numbers, orders, or customer demand as proposed in other texts) so that takt time becomes operable time divided by the required production quantity in a period.

Summarized, the required production quantity should consider the following elements:

Takt time: different takt time per operation

Takt time carries backward through a value stream. And as takt time is operable time divided by the required production quantity, it is clear that each operation may very well have a different takt time — a different required rhythm — due to differing operable times as well as possible differences in required production quantities.

Differences in the required production quantity may be the result of differences in the quantities of parts that go into a subassembly or assembly further downstream. When, for example, the quantity-per for a specific component is four and the takt time of its assembly is twelve minutes, the takt time for the operation that produces the component will need to be three minutes (assuming the same operable time across both operations).

Other, less obvious reasons that may lead to differing quantities is that there could be specific inventory targets at different stages in the value stream, a need for spares that are only part of the final product (so that only need to go through a part of our value stream), test runs on a specific work center only, and so on. The earlier overview of what requirements are all part of the required production quantity provides clear cues as to why quantities might differ along the value stream.

Operable time may also differ due to differences in opening times across the various work centers. Although this typically is more of a consequence of the synchronization of cycle times to takt time. For instance, sometimes we cannot split the required production quantity over multiple machines with a cycle time longer than takt. The output capability of one machine will then fall short of the required capacity indicated by takt time. We now might need to increase the operable time from one to two shifts. This does, however, leave us with two departments that are asynchronous in terms of opening time. The result will be the cyclic build-up and subsequent destocking of components between the two departments. Clearly, the focus should be on tuning cycle times with the overall system takt time, as playing with different operable times across a value stream leads to waste.

Takt time: summary

Takt time is a key element in planning capacity. It is based upon the operable time divided by the required production quantity over the takt time horizon. And although this looks quite simple, there are quite some considerations before this powerful idea can be effectively put into practice. It requires far more than just a superficial understanding of the concept.

This post has hopefully provided you with some practical elements to consider when discussing and determining takt time in your organization. And to put takt time to use in your flow!