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The Physics
The following is true for any business...
Time = Money
That's easy, going deeper...
Cycle Time = Inventory/Throughput
The time it takes to get something done -- e.g. complete a project, service a customer, make an item, see a patient, develop a new product -- (cycle time) depends on how much we have to do (inventory) and how fast we can do it (throughput). That's interesting, but more importantly, cycle time also equals...
Cycle Time = Variation * Utilization * Raw Process Time
Hmmmm, that's complicated. Just notice that "variation" effects how long it takes to get something done, and "utilization" -- or how busy I am -- also plays an important role. We want to utilize our assets more and spend less time doing it -- this maximizes our profitability. In the graph below, we want to operate in the lower right corner, but variation keeps us from getting there.
To simplify, we'll put these words into a glyph called The Operating Curve, and ask the question: Where are you?
So where are you?
More importantly, do you know what you need to do to improve?
Factory physics, TOC, six-sigma and lean training helps you find your current operating curve and improve it.
Continue to "The Psychology" tab
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