Lean Measures: A quick refresher

A quick look at some Lean Measures that can be used to understand the ‘lean performance’ of a process:

Process Cycle Efficiency (PCE) is the primary lean measure. It represents the amount of time that a product or service spends actually having value added to it, as a proportion of the total process lead time.

                      Total Value Add Time
PCE (%) = —————————————— * 100%
                        Total Lead Time

Lead Time and Work in Process (WIP) are important measures of a process. Lead time reflects the total time that it takes to deliver a product or service, and WIP is a measure of how many products/services are ‘in process’ (i.e: they’ve been started, but not yet finished). Lead Time and WIP are inextricably linked, because the more WIP that you have, the longer a new product/service will have to wait to go through the process. This relationship is know as Little’s Law, and is written mathematically as follows:

                                          WIP
Average Lead Time = ——————————* 100%
                                      Completion Rate

Finally, Takt Time is also an important Lean measure. It represents the drumbeat of a process and is calculated by dividing the available work time (e.g. a day or shift), by the number of products required by the customer in the same time period.

                      Available Work Time
Takt Time = —————————————- * 100%
                        Customer Demand

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