Cycle Time Optimization (CTO) is a philosophy that aims to maximize efficient value-adding activities and minimize non-value adding activities and time to improve quality, cost, and responsiveness to customers. It involves analyzing processes to reduce unnecessary steps, bottlenecks, errors and variability. The key aspects of CTO are identifying value and non-value adding activities, setting priorities, performing activities in parallel, establishing feedback systems, and continuously optimizing processes.

1. Edward C. Lai
& Associates
Introduction to
Cycle Time Optimization
(CTO)
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 1

2. Edward C. Lai
Definition & Associates
Cycle Time Optimization (CTO) is an operating
philosophy of maximizing the efficiency of
suboptimal value-added activities while
minimizing non-value-added activities and time
for the best quality, cost and responsiveness
to customer needs. Optimal Thinking® is the
core of all activities.
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 2

3. Edward C. Lai
Cycle Time Optimization Chart & Associates
Value-adding
Activities
Optimal
Non-Value-adding
Suboptimal and
Time
Activities
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 3

4. Edward C. Lai
Some Suboptimal Examples & Associates
Case (1) : Excessive SVA Activities Case (2) : Excessive Queue Time
Value-adding
Value-adding
Activities
Activities
Optimal
Optimal
Non-Value-adding
Non-Value-adding
Suboptimal and
Suboptimal and
Activities
Activities
Case (3) : Continuous Optimization Case (4) : Combination
Value-adding
Value-adding
Activities
Activities
Optimal
Optimal
Non-Value-adding
Non-Value-adding
Suboptimal and
Suboptimal and
Activities
Activities
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 4

5. Edward C. Lai
Systems Concept & Associates
Process
Input Output
Feedback
• Each system has input, output, process and feedback
• Each system has smaller systems inside
• Each system is part of a bigger system
• Systems are inter-related
If any one of the parts is suboptimal,
the whole system is suboptimal.
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 5

6. Edward C. Lai
Principles in Process Optimization Design & Associates
1. Perform activities in parallel as early as possible
2. Set up common priority system
3. Minimize variability in the system
4. Minimize queue time
5. Minimize suboptimal and non-value-adding activities
6. Optimize value-adding activities
7. Minimize errors (Do it right the first time)
8. Detect errors at the source
9. Set up feedback system for timely corrective action
10. Set up optimal process-oriented performance metrics
and measurement system
11. Perform best process failure mode and effect analysis
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 6

7. Edward C. Lai
Root Cause Analysis & Associates
Areas to consider :
• People
• Process
• Equipment
• Material
• Measurement
• Environment
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 7

8. Edward C. Lai
Optimization Types of Optimization & Associates
Continuous
Optimization
Time
Combination
Breakthrough
Optimization
Time
Time
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 8

9. Edward C. Lai
& Associates
For more information on CTO, please contact :
Ed Lai
310-365-0629
elai001@aol.com
© 2009, Edward C. Lai and Associates. OPTIMAL THINKING® is a registered trademark of The World Academy of Personal Development Inc. All Rights Reserved. Page 9