The term "throughput time" comes from the measurement of throughput - or the throughput of the business process. Throughput is the measurement of inputs and outputs within a process and is an important aspect of business process management.
In manufacturing, production time follows a basic formula:
Stock = flow rate x flow time
Here, inventory is the total number of units in a business process. Flow time is the time the unit spends in the business process from start to finish. Throughput is the number of units that pass through the process in a given unit of time, for example units/hour.
Why is the passing time important?
Production time is a crucial metric for analyzing night clubs and bars email list processes and assessing the efficiency of business operations against strategic objectives. Throughput time is important in operations management because it helps organizations understand their production cycle, identify areas for improvement, and manage resources more efficiently. Additionally, processing time helps organizations understand their customer service levels and identify potential bottlenecks and delays. By understanding average processing time, organizations can better plan their production and customer service processes.
Passage time vs execution time
Lead time is the time it takes to complete a process for a customer. The term "lead time" comes from lean manufacturing management principles, where it is defined as the time between when a customer places an order and when they receive the ordered product. While processing time and lead time measure performance in very similar ways, they can be thought of as two sides of the same coin. Lead time takes the customer's perspective on how long the process takes, while production lead time measures the perspective of the company's resources.
Throughput time vs cycle time
Throughput time and cycle time are related but distinct measures of process performance. Cycle time measures the actual work time required to complete a task, excluding any downtime. Conversely, throughput time encompasses the total time a unit spends within a process, including delays such as queuing. One of the main differences, therefore, is that throughput time takes delays into account, whereas cycle time does not.