Lean Measures

9 Lean measures for improving efficiency

Efficiency improvement is something that many of our clients are interested in and we’re often asked for our ‘top tips’ for improving efficiency.

Of course, there are many other lean tools and techniques to remove waste and improve quality, but for specifically measuring efficiency, here are our top 9 measures for improving efficiency in your organisation:

1. Process cycle time

This is a measure from the time when an item enters the process until it exits the process. By measuring Process Cycle Time, you can evaluate opportunities to reduce the time it takes to complete a process and improve consistency amongst staff performance.

2. Work-in-process (WIP)

This is the amount of work that is officially in the process and is not completed. Too much WIP leads to backlogs and poor service levels, not enough WIP and your process may not be exploiting the maximum process efficiency.

3. Takt time

This is the customer demand rate, often called the heartbeat of the process. It boils down to this – The time needed to complete work on each station has to be less than the Takt time in order for the product or service to be completed within the allotted time.

4. Capacity

This is the maximum amount of output a process can deliver over a continuous period of time. It is the resources required to meet a certain level of demand. Overcapacity is waste, under capacity can result in lost business.

5. Time traps

Any process step or activity that creates a time delay in the process. This is also known as ‘Waiting’ waste. These should always be evaluated to determine the opportunity for removal.

6. Productivity

This is the time it should have taken to complete processes divided by the time actually taken to complete processes. 100% productive is when the time taken matches the time is should take.

7. Average completion rate (Throughput)

The average output of the process over a defined period of time. This helps inform what your capacity is and you want this to be as consistent as possible between different colleagues completing the same work. In a call centre, this could be Average Handle Time.

8. Process cycle efficiency (PCE)

PCE measures how efficiently the process is converting WIP into completed work. You measure the time it takes WIP to go through the process.

9. Shrinkage

This is the time lost to everything other than the work they are here to complete. It’s a measure of time lost to holidays, training, meetings, sickness, breaks, system downtime etc. This is the percentage of increased staffing you require over and above your core demand needs. Effective Shrinkage management can deliver one of the greatest efficiency benefits.

It’s not an exhaustive list by any means, but a good starting place if you are tasking with improving efficiency in your organisation.