I had a client that was trying to eliminate the backlog in their supply chain. They were unable to meet delivery dates and their customers were getting more dissatisfied every day. I was brought in to review their processes and make some recommendations to their approach.
Before we got started, I was asked “Do you think we should fix process throughput or cycle times first to help meet demand?”
My response surprised them. I said neither one should be addressed first. The first problem to address is variation in the process. If a process is unpredictable (throughput or cycle time) you will not be able to properly manage the flow of product through the supply chain. You will see areas of the supply chain that are empty and others that have massive amounts of Work In Process (WIP) waiting to be processed. It is more important to get the process steps under control so the operate consistently.
When you have consistent processes, you can balance the entire process and reliably predict delivery times. Now you can address the question of “throughput or cycle time”.
The answer depends on what kind of operation you are running. If you have a high mix, low volume process you should focus on cycle time. This will allow you to get small batches of product through the process faster. Time to market in this environment is critical. Conversely, if you have a low mix, high volume process you should focus on throughput. You goal for this type of environment is to get as much product out the door as fast as you can.
