Key Points

• Flow time is used for measuring the total time spent on a project.
• Understanding how to improve flow time is a key tenet of Lean methodology.
• Cycle time measures the time taken for each step of a process.
• Cycle time is short-term by nature, rather than focusing on a whole process.

There never seems to be enough time on a project, especially when considering flow time vs. cycle time. These measurements are great ways of tracking time throughout a project. However, when to use these respective measurements comes down to the stage of the project. Don’t fret, we’ll get you up to speed in no time.

What is Flow Time?

Flow time describes the full interval between the beginning and end of a particular process. The most common context is manufacturing where flow time would begin with the first stage of the assembly line and conclude with packaging or transit. However, the term can be used in any business context to discuss the time required to “make something from scratch.”

The Benefits of Flow Time

It’s an essential metric in lean manufacturing strategy and is usually one of the first things that companies should audit and improve. Leaders need to understand and appreciate flow time if they want to leverage the right strategy for their business. Careful study of individual processes is recommended before making specific cuts or changes.

How to Calculate Flow Time

Flow time is directly related to two other variables: works in progress (WIP) and average completion rate (ACR). WIP describes the number of units that are “in the pipeline” at any given time, which includes units in any incomplete stage of production. ACR describes the rate of unit completion, which is usually represented in a number per day.

The equation can be represented in several ways, including:

Flow Time = WIP / ACR

Example: If a company completes an average of 50 units a day and has an average of 200 units currently in progress, then their flow time would be 200 divided by 50 equaling 4 days.

What is Cycle Time?

When businesses talk about cycle time, they are referring to the average time it takes to produce units. This metric is often more relevant in an immediate or short-term context, particularly in environments with high throughput or turnover.

The Benefits of Cycle Time

Knowing cycle time lets you answer a crucial question: “When will the next one be ready?” Companies examine cycle time when they are considering scaling volume upwards or cutting down individual service times. Shaving even a few seconds off of the average cycle time can mean a big difference in capacity and productivity over a year.

How to Calculate Cycle Time

Cycle time is directly related to flow time and is also dependent on the average completion rate (ACR) variable. Mathematically, cycle time is the result of inverting the ACR, which is achieved by dividing 1 by the ACR.

Cycle Time = 1 / ACR

Example: If a company produces an average of 50 units a day, then the cycle time is 1 divided by 50, which equals 0.02 days.

What’s the Difference?

Flow time and cycle time are two sides of the same coin, so the only difference is in perspective. Both concepts revolve around the time it takes to complete a particular process. Flow time focuses on the path an individual unit takes through the production process. Cycle time describes the total capacity and capability of the process as a whole.

They can be represented together in an equation to clarify their relationship. In this representation, flow time is equal to cycle time multiplied by total works in progress (WIP).

Flow Time = WIP x Cycle Time

Example: A company produces 50 units a day and has 200 works in progress throughout all stages of development. This means the ACR is 50 and the WIP is 200. Cycle time is 1 divided by 50 or 0.02. Multiplying 0.02 by 200 yields a flow time of 4 days.

Flow Time vs. Cycle Time: Who would use Flow Time and Cycle Time?

Any company engaging in a lean management strategy should be using these terms to discuss and understand their internal processes. These two concepts both revolve around the examination of fundamental value-adding workplace policies, activities, and processes. These metrics can be a solid baseline benchmark to gauge production efficiency as well as a way to identify areas with the most potential for improvement.

Why Are These Measurements Important?

To the average person, this can seem a bit much. However, learning where your processes are getting bogged down and wasting time can save money in the long run. Modern production of deliverables is all about efficiency and quality. As such, it isn’t a matter of flow time vs. cycle time, but rather understanding how to improve both to benefit your organization.

Choosing Between Flow Time and Cycle Time: Real-World Scenarios

The differences between all these terms can be confusing, especially in situations outside of conventional manufacturing. When in doubt, you can simply plug the numbers into the equation and use both metrics in the analysis. Just make sure you know the difference between flow, cycle, lead, and process times.

Whether a company should focus on flow time or cycle time depends on their angle. Cycle time is more customer-oriented. It’s about meeting demand, improving capacity, or reaching the next goalpost. Flow time is more unit and process-oriented, which means it’s a great perspective when looking for non-value-added (NVA) delays in development stages.

More Tools for Managing Your Time

So, we’ve covered the core concepts behind time in production. However, we haven’t touched on how these measurements affect overall efficiency. If you’re looking to reduce defects, you’ll want to learn all about Sigma Levels. Our handy guide comparing it with capability indices is a must-read.

Further, it helps to learn how repeatability and precision matter in the production process. Our guide covers the ins and outs of accuracy in processes. Understanding these core concepts will have you making the most of your time, especially in your production line.

Time for Efficiency

Lean management is all about efficiency and efficiency is all about timing. Flow and cycle times are core concepts in Six Sigma programs for a good reason. Every business leader who is serious about fostering growth through sound management practices should get familiar with these terms and understand how to leverage them when making key decisions.