Takt Time

Takt time, also known as takt, is the production rate or the optimum production time required to keep up with the market demand. Though an important time-related parameter in supply chain management, it is different from lead time and cycle time. It is used to synchronize production with customer demand.

Takt time is an essential measure that helps plan production. It ensures the fulfillment of customer demands with utmost satisfaction. One can find it by dividing the total available time to work by the aggregate customer demand. This gives the maximum time that it takes to fulfill an order.

• Takt time can be defined as the ideal production time to fulfill customer demand satisfactorily.
• Takt is an important measure many manufacturing companies use in lean, agile, and even leagile supply chain systems.
• Exceeding takt can lead to unfulfilled customer demand, leading to stockouts or delayed delivery. This can frustrate customers and affect customer loyalty.
• On the other hand, if the actual production time is lesser than takt, it leads to overproduction. Consequently, inventory costs will increase, and more storage space will be required.

Takt time in lean or agile supply chains is one of the many parameters to look for in production. It is a standard – a benchmark that the production department should adhere to fulfill the demand. Producing each unit within this time is ideal and has many advantages too.

The term has etymological origins in Japanese, German, and even Latin. However, concepts such as these are more often related to Japanese companies and technologies. Therefore, takt is a prominent ideology used by Japanese automobile manufacturer Toyota. The German automobile company Mitsubishi introduced it to Toyota in the 1930s. The concept even played an important role in the industrial revolution.

Following takt time religiously and analyzing it often can help identify which process or component in the production pipeline takes up much of the time and why. Understanding this further helps speed up the process. But the problem is that the whole pipeline will suffer if a single machine breaks down or component malfunctions. Therefore, two different pipelines can help adhere to takt.

Absenteeism, employee demotivation, and breaks from work are some other factors that could affect fulfillment. However, takt doesn’t account for this. Instead, only for the total available time (in terms of days and the number of working hours per day) and customer demand. Despite all this, takt is essential and should be followed.

The formula for the takt time is as follows:

Production takt time = Total time available for production / Total customer demand

Here, the total time taken includes the time right from the placement of the first order or demand arises to the time it is fulfilled or delivered to all the customers. Depending on the product, this can take hours, days, or minutes. The demand can be given in numbers or units.

Online takt time calculators can be helpful in the easy and faster calculation.

Company ZX is a gift-manufacturing company that produces presents for different occasions. On October 15, 2022, the managers met to make the production plan for Christmas 2022. They estimated that demand for Christmas gifts would exist latest till December 24. Hence, they decided to start production by October 20, giving them two months and eight hours every day until December 22 to produce entirely for Christmas. They expected an approximate demand of 1000 units. Let us calculate the takt.

From October 20 to December 22, there are 45 working days.

Total time = 45 days x 8 hours = 360 hours

Demand = 1000

Takt = 360/ 1000

= 0.36 hours = 21.6 minutes

Thus, an average of 21.6 minutes per product would ensure demand fulfillment.

• One of the major benefits of takt is that it helps make production plans by considering the demand and helps reduce lead time.
• After implementation, it ensures that the production keeps up with the demand. This leads to customer satisfaction, loyalty, and retention. Further, the product doesn’t run out of stock in the market.
• It facilitates identifying those processes or points in the pipeline that take more time than planned. Thus, the management can identify and resolve bottlenecks.
• Due to the continuous nature of work, the wastage and non-value-adding processes are minimized, thereby increasing efficiency.
• Apart from this, storage and subsequent costs can be avoided by preventing overproduction.

Let’s differentiate between common time-related parameters such as takt, cycle, and lead times.

• Cycle time is the average time of production per unit.
• Lead time refers to the time from the order being placed to the order being delivered to the customer.
• Takt and cycle time are more related to production. But the former concerns customer demand and the latter with the number of units produced. Yet, this is similar, as customer demand is often defined in the number of units.
• The main difference between takt and cycle time is that the former refers to the time the product needs to be completed, while the latter denotes the actual time taken.
• The lead time differs slightly from the other two, involving packaging, distribution, delivery, etc. In addition, Takt and cycle time form a part of lead time.
• Ideally, takt should be the same as cycle time. If takt is more, demand fulfillment is not satisfactory. On the other hand, if takt is less, overproduction increases storage space and inventory costs.
• Let’s look at some examples. John should make a pizza within 15 minutes (takt). But he takes 20 minutes (cycle time). So it takes 40 minutes to deliver the pizza at a customer’s location (lead time).

This article has been a guide to what is Takt Time. Here, we explain its formula, differences with cycle time and lead time, calculation, example, and benefits. You may also find some useful articles here -

• Market Cycle
• Cash Conversion Cycle
• Life Cycle Hypothesis