Takt Time vs. Production Capability

The concept of takt time is important to understand. People use the word incorrectly all the time. Not particularly here at Genoa because it's hard to relate to takt in a project management environment so there hasn't been much talk of it, but it's used to describe everything from rate of production to cycle time to lead time. Takt will be used at Genoa eventually but first we need to determine production capability.

First it's important to realize that takt time is a measure of pace based on customer demand. In other words, at which rate is it necessary to produce in order to deliver on time to the customer.

Takt Time = Available working time / customer demand.

What we are currently seeking is the actual rate, or production capability, at which Genoa can produce. Using historical data we will know that we can model, assemble, nest and stiffen midbody's in a barge at a rate of 3.5 parts per hour (if that's the rate it turns out to be when the data is analyzed and verified). This is not sufficient if the customer needs Genoa to do this work at a faster rate.

When we first understand the production capability a customer will tell us what they want ie: A 160 ft boat that is 140 thousand cubic feet in volume has 8,600 parts. We can do this boat in 1700 hours all work included. That's roughly 5 parts per hour worked for everything. Now, if the client tells us they want all deliverables complete in 100 days we know we need to produce at a rate of 86 parts per day. We work 10 hour days so we we need two people, the second one only needs to produce at 36 parts per day in order to maintain pace and deliver on time. We can asign this second person to other work.

How can we do this and maintain visual indicators of pace? We already use MS Project to lay out the project tasks. We can calculate production rates by ship type, unit type, and volume. We can use these production rates to populate the project data in MS Project based on customer demand and the visual indicator of pace is simply whether or not we are on time using the project network diagram in MS Project. If everything is running as scheduled we are on pace if we are behind we know immediately and have to react to get back on track.

I was going to attach a file with data but I couldn't seem to attach it here.


Ken Hogan
Lean Guy at Genoa