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The “time” issues in process analysis
Time is an important attribute and performance measure in a process. However, a lot of
students are confused with the different terms of time in the process. This note attempts
to clarify some of those confusions.
Operation (Operating) time, Setup time and Run time
First consider the operation time, setup time and run time. Consider a piece of equipment
(a machine) which requires setup before processing a batch of items. Let’s use the
following graph to represent the condition of the equipment:
During Setup time, the equipment is not adding value to the product (Not producing).
However from accounting perspective, it is extremely important since the cost of the
equipment in the duration of the setup time should be allocate to the batch of product
produced following this setup. Thus the cost of the equipment should be the total cost of
the
operation time
(
setup time + run time
) for this batch of product. Same is true for
the labor cost too if a worker or a team of workers are required to operate this equipment.
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- Fall '11
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- Cycle Time
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