Companies need to add a critical measure of success to their operational analysis package. They need to understand and calculate inventory turns and to use that data to drive rapid throughput from receiving to shipping. Stacks of inventory at any stage in the process represent large financial losses.

1. 1
Cycle Time
Analysis (CTA)
Dr. John M. Ryan
Reduce Inventory, Cut Costs and Save Time, Deliver Quality

2. 2
• Benefits
• Symptoms
• Forming teams
• Selecting a CTA project
• Process definition
• Process flowcharting
• Collecting CTA data
• Team Analysis & Correction
• Continuous CTA Improvement
Cycle Time Analysis

3. Too much inventory but not enough time to catch up?

4. 4
Typical Symptoms
• Low Inventory Turns
• Bottlenecks (in processes)
• Administrative redo’s (paperwork)
• Inventory Pileups
• “Not enough time”
• Takes too long!
• Late Deliveries
• “I Need more people!”
• Working long days?

5. 5
You Can Calculate Your
Company’s Inventory Turns
Income Statement
5,263,978
1,441,200
= 3.65 turns/year
Balance Sheet

6. 6
INVENTORY
0
2
4
6
8
10
12
14
16
D J-
97
F M A M J J A S O N D J-
98
F M A M J J A S O N D J-
99
F M A M J J A S O N D J-
00
F M A M J J A S O N D
M$
Raw WIP FGI Total Linear (Total)
Total Inventory
Raw Materials

7. 7
INVENTORY TURNS
0
1
2
3
4
5
6
7
J-
97
F M A M J J A S O N D J-
98
F M A M J J A S O N D J-
99
F M A M J J A S O N D J-
00
F M A M J J A S O N D
Rolling 3 Month COGS Goal

8. 8
Finished Goods

9. 9

10. 10

11. 11

12. 12

13. 13

14. 14

15. 15
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
$$$$$$$$$$ Inventory is MONEY $$$$$$$$$$$
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
When you look at incoming, WIP and outgoing
inventory, pretend you are standing in a bank vault
looking at heaps and piles of MONEY!!
Because you are!

16. 16
4.6
4.3
3.9
4.8
5.6
5.2
6.2
5.7
6.3
7.4
7.3
6.9
6.6
7
6.7
7.8
0
3
6
9
12 Nov97
Dec97
Jan98
Feb98
Mar98
Apr98
May98
Jun98
Jul98
Aug98
Sep98
Oct98
Nov98
Dec98
Jan-99
Feb-99
Driving Down Hours or Days of Inventory in WIP

17. 17
How long does it take to build your product or
complete paperwork?
Hours per Unit or HPU =
The sum of the time it takes for all production steps
.56 hours
The minimum time it takes to complete a perfect purchase order
.5 hours
Your goal in each of these examples is to meet the HPU
consistently.

18. 18
Manufacturing Example
Excess inventory at incoming
Bottlenecks in line
Inventory pile ups (excessive WIP)
Next process step is waiting
Excess Inventory in finished goods
Take a walk around your operation and look for inventory piles.
Purchase Requisition Example
Completed and submitted by engineering
Rejected by purchasing
Returned to engineering for correction
Sent back to purchasing with corrections
Re-loop
Final purchase (Delay to next process – and the blame game)
What screws you up?
Talk to the purchasing people and ask them who screws up the
paperwork.

19. 19
Cycle Time Analysis is
a Team Activity

20. 20
Every Team Can Do CTA
Corrective Action Teams (CATs)
A member from each of several departments
Functional Improvement Teams (FITs)
All members from the same group (e.g. all engineers, or all HR personnel)
Single Function: All team members work together on a daily basis.
Cross Functional: Team cuts across boundaries – works on solving interdepartmental
problems that FITs cannot handle
A. Each team meets 1 hour per week – Same time, same place
B. Outside of the weekly team meeting, each team member spends
1 hour completing the assigned activity.

21. 21
Moving to a Focus
Where Ownership is Moved
Downward
Authority and Responsibility

22. 22
Setting Up the Team(s) & Team Rules
1. Team meets 1 hour per week.
2. At the same time
3. In the same place
4. All members are equal regardless of title/position
5. 1 member = 1 vote
6. A team leader is selected (volunteers)
7. The team secretary keeps meeting minutes (see the form) and
updates all status
8. Team leader distributes updated form prior to the upcoming
weekly meeting
9. Each team member must complete assigned action items in
the expected timeframe
10. If a person does not want to be on the team, that person should
excluded.
11.Management is responsible for assuring that team meetings are
not interrupted and the team has whatever support is required.
Team Meetings are Sacred