Lean manufacturing or lean production – known simply as lean – is a systematic approach to the elimination of waste within manufacturing processes. KaufmanGlobal’s glossary of terms offers the following definitions:
Lead Time – The total time a customer must wait to receive a product after placing an order. When a scheduling and production system is running at or below capacity, lead time and throughput time are the same. When demand exceeds the capacity of a system, there is additional waiting time before the start of scheduling and production, and lead time exceeds throughput time.
Takt Time – The available time over the customer demand. The term Takt is German and refers to cadence, rhythm or tempo. For example, if customers demand 240 widgets and the factory operates 480 minutes per day, takt time is two minutes. If customers want two new products designed per month, takt time is two weeks. Determining takt time serves to set the pace of production to match the rate of customer demand and is at the basis of all subsequent production design calculations becoming the heartbeat of any Lean system.
Throughput Time – The elapsed time required for a product to go through a defined process, from beginning to end, including both processing time and queue time / lead time. Throughput time for a process is synonymous with average lead time and is calculated by dividing the number of items within the process (i.e., work-in-process inventory) by the throughput.