Flow Time to Touch Time is a Great Measure of WIP Inventory

Flow Time to Touch Time is a Great Measure of WIP Inventory

Organizations unlock tremendous waste by focusing on the flow of value in delivering their product or service. Velocity in the flow of your product or service to the customer is a key ingredient to reducing cost. Great companies seek to have the Flow Time of their product between 2 and 4 times the actual Touch Time of the product.

Flow Time

Flow Time is the amount of time a unit spends in a process from beginning to end, including waiting in line to be run. It is also called total process time.

For example, suppose a part requires being sawed into two pieces and then both pieces have the edges deburred. The Flow Time would start when the part is delivered to the saw. It would include the time the part sits in the rack waiting while other parts are sawed. It would include the time it is walked to the saw, the time it is cut, the time the two pieces are walked to the deburr station, etc.

The Flow Time for this example is the total time from delivery to the saw rack to when the part is finally deburred and sent to the next process.

Flow Time is not Lead Time! It is important to understand the difference. Lead Time is the length of time an organization tells a customer it will take to deliver the order. Flow Time has to be less then Lead Time. A restaurant cannot tell its customers the wait time is one hour when it knows it will be two.

Touch Time

Touch Time is the actual time spent creating value in the process. So in the example above, it would include loading the part in the saw, cutting the part, and unloading the part. It would include loading the part to be deburred, deburring the part, and unloading the part.

Touch Time is the actual time processing the part. Flow Time is the total time the part spends at the process waiting and being processed.

Flow Time 2 to 4 Times Touch Time

The goal of great organizations is maximizing the portion of time a product is having value added compared to the time it is waiting or traveling between processes. A very good measure of this is Flow Time to Touch Time and a good target to set is Flow Time 2 to 4 times Touch Time.

The realization from this measure is that less Flow Time actually translates into less inventory. It only stands to reason that if a part waits less at a process there will be less parts at each process and therefore less WIP inventory.

Help your organization learn to measure Flow Time and Touch Time. The greatest impact will come from measuring it for the first time….You will be shocked!!

Learn more in Patrick’s book, “Facilitating Effective Change,” available online through Amazon and Barnes & Noble.