Order Cycle Time
What is Order Cycle Time?
Order cycle time is a master scheduling function measures the period between the order placement by the customer and the receipt of the finished product to the stock or its immediate sale.
This definition can also be varied insofar as the time span between the completion of one product and the completion of the next product can be met. It is the amount of time it takes to manufacture a single part. In production planning and control, the cycle time is when an entire production program of a production plant has run through once.
In the case of a one-product company, the cycle time and lead time should ideally match; in the case of multi-product companies, there are at least two parallel cycle times. Some productions are characterized by the fact that similar products with different properties are manufactured on the same equipment. When changing from one product to the next, the systems usually have to be converted. Often a certain order sequence is optimal.
Importance of Order Cycle Time
The cycle time only plays a role if several jobs or orders are present at the same time and are waiting to be processed. This means that the cycle time is identical to the longest processing time for an order. The cycle time influences the amount of capital tied up in the company, so it is important to minimize the cycle time.
If, for example, one considers an optimal order sequence with a minimum cycle time and the resulting waiting time, it can happen that when the order sequence is changed, the waiting time is lower without the cycle time being extended. By minimizing the cycle times, not only the throughput time is minimized, but also the downtimes of the machines while at the same time maximizing the processed orders, which in turn improves the capacity utilization of a multi-level production plant.
Order Cycle Time Formula
The order cycle time is the amount of time in which all orders take to process or complete. For example, if you ship 1000 orders in 9 hours, the order cycle time is (9 hours * 60 minutes * 60 seconds) / 1000 = 32.4 secs per order. The order cycle time for shipping orders is 32.4 seconds.
Order Cycle Time vs. Lead Time
The cycle time is a key figure from production (process) planning. In the case of order-oriented production for an order backlog, it specifies the time span that elapses from the beginning of the first processing of the first released or processed order to the completion of the last processing step of the last processed order of the order backlog. It can therefore also be viewed as the total lead time of the order backlog.
Cycle time is meant to assess the speed of production of a manufacturing process, while lead time encompasses the entire process of manufacturing. Cycle time is measured from the internal process point of view, while Lead Time is measured from the customer’s perspective.
The production cycle is complete when the entire production program has been processed once. The time required for this is the cycle time.
