‘TAKT’ Time Formula – What It Is and How It Is Calculated
Creating a rhythm in which you manage your time and production is essential in your small business. Whether you’re working with 100 or 10,000 orders, you need to efficiently plan your schedule to fulfill those orders in a timely manner.
Use this guide to learn the TAKT time formula and calculate the rate you can manage your time and production to enhance your business profits.
This article will cover:
- What is TAKT Time Formula?
- Why It Matters
- How to Calculate TAKT Time
- Strengthen Your Production Process
Here’s What We’ll Cover:
What is the TAKT Time Formula?
TAKT time, different from cycle time and lead time, is a key element to use in any production process.
German for ‘beat’ or ‘pulse’, TAKT time refers to the rhythm in which you need to create and complete a product in order to meet customer demand. To determine TAKT time, you need to divide your available production time by the customer demand.
|Takt Time = Total available production time/ Customer demand|
In order to keep up with customer demand, a business must strategize the amount of time they have for each order, and the amount of units they need to produce to determine how efficiently they can work on each order.
Why the TAKT Time Formula Matters
Any small business owner or entrepreneur knows the value of time management. When you're working on so many different aspects of running a business, maximizing your production rate with time availability will ensure that you’re using the right amount of resources for each incoming order.
Learning your TAKT time will help you strategize how many employees you need to have working on an order, and how long it will be before you can fulfill that order. By knowing your TAKT time, you can avoid having to pay too many employees to work on an order, and you can save money on storage costs if you’re only producing the amount of stock you need at that given time.
Benefits of TAKT Time Formula
Calculating TAKT time enhances production value. With the TAKT time formula, you can:
- Optimize your capacity to fulfill customer orders. Find out how many employees you need to work on each order and how long it will take them to complete it. You can give your customers a clear time frame of the entire process and when they should expect their finished product.
- Avoid overproduction and reduce storage costs. By knowing your takt rate, you can keep orders flowing at a constant rate and avoid overproducing units you haven’t sold yet. This will give you freedom to use less storage and save money on storage costs.
- Better manage employees. Only hire as many employees as you need to fulfill customer demand at your current rate. Learn how quickly each employee can produce a product, and how you can assist to boost efficiency.
- Predict project flow. By calculating TAKT time, you can predict the flow of your current projects and implement additional strategies to help boost your sell rate for new projects down the line.
- Plan ahead. As your business takes off, you can utilize the formula to better suit your growing demand. If your daily orders are increasing and production time is slowing down, your TAKT time will reflect that and may encourage you to seek out more employees or resources.
Calculate your business TAKT time formula to strengthen your manufacturing process, and save valuable time and overhead costs.
How to Calculate TAKT Time
Once you’ve started fulfilling custom orders, in order to stay ahead of production, you need to find a rhythm in the rate of your customer demand and the time you have available for each incoming order. An accurate TAKT time calculation is key to optimum production pace.
In order to calculate the optimum pace of production for your business, you have to know two things:
- Total available production time
- Customer demand
These two key elements of your manufacturing process will determine your TAKT time-- your most efficient pace of production.
Total Available Production Time
Total available production time refers to the amount of time you and your employees have to dedicate to your current orders. This is specific to active time on the project (lunch breaks and meetings are not included). Keep track of your current schedule and pace and use that to determine your total available production time.
Customer demand includes all daily customer demand for new orders. This can include mass production or custom orders. Assuming you have the capacity to produce consecutive units-- you should have an idea of how to fulfill your daily customer demand and keep track of the new orders coming in.
Once you have your total available production time, and your customer demand, you can calculate your TAKT time.
Takt Time = Total available production time/ Customer demand
Say your company makes wholesale coffee travel mugs. Your employee is working a daily shift. After meetings and lunch breaks, they have 450 minutes a day to work on production. The customer places an order for 50 travel mugs.
The total available production time is 450 minutes.
The customer demand is 50 units per day.
450 minutes/ 50 units = 9 minutes (TAKT time)
This example shows that each unit should take 9 minutes to make, in order to stay ahead of production.
TAKT Time Changes as Your Business Evolves
Your TAKT time will change as your business grows and evolves, so it’s important to stay current with your TAKT strategies. Revisit your TAKT time calculations whenever you have a jump in customer demand, or if you add new machinery or hire on new employees to boost your available production time.
Once you calculate your TAKT time, you can implement new strategies to stay ahead of demand, and minimize waste in your production flow.
Strengthen Your Production Process
Using TAKT time formula can boost your sales rate and strengthen your overall production process. If you’re able to keep up with the daily customer demand and capacity, you’ll have the ability to minimize costs, predict future growth, and maximize your return.
Key Strategies of TAKT Time Formula:
- Keep track of how long it takes you to produce consecutive units and what you can do to increase speed (daily machine checks, construction projects)
- Manage spending by utilizing TAKT time formula to eliminate unnecessary product storage
- Keep track of repetitive projects and use data to predict trends in production
- Manage daily customer orders to keep a constant rate-- from initial request to final product
- As customer demand increases, revisit your TAKT time strategy and recalculate to keep up with your growing demand and eliminate capacity issues
- Keep customers satisfied and in the loop by giving them an accurate prediction when they can expect a final product
Use the formula and calculate your TAKT time to save your business time and valuable resources when fulfilling orders. Implementing production strategies like these will give you key insight on how to better suit your customers and provide a continuous flow of quality production.
More Financial Resources for Businesses
- Difference Between: Takt Time vs Cycle Time Vs Lead Time