{"id":364,"date":"2007-03-14T22:26:07","date_gmt":"2007-03-15T05:26:07","guid":{"rendered":"https:\/\/staging.opexlearning.com\/resources\/364\/takt-time-in-service-operations"},"modified":"2016-07-21T00:51:58","modified_gmt":"2016-07-21T05:51:58","slug":"takt-time-in-service-operations","status":"publish","type":"post","link":"https:\/\/staging.opexlearning.com\/resources\/takt-time-in-service-operations\/364\/","title":{"rendered":"Takt Time in Service Operations: An IRS Tax Operation Example"},"content":{"rendered":"<div class=\"a296a24fa2fc69ef5487857f02f111e8\" data-index=\"9\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- Single Post readerboard -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:728px;height:90px\"\r\n     data-ad-client=\"ca-pub-8207522353004717\"\r\n     data-ad-slot=\"1144967431\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>Takt Time is the maximum allowable time in order to meet demand; Takt Time is the pace by which product is produced and must fall within the Takt Time or set equal to the Takt time; if not, then there will be customer demand that might go unfulfilled.\u00a0 In this post, I&#8217;ll provide an example of how Takt Time can be used in a service-type operation and elaborate on how else it might be used outside of manufacturing (PS: Go here to\u00a0<a title=\"takt time calculator download\" href=\"https:\/\/staging.opexlearning.com\/resources\/takt-time-calculator-download\/13212\/\">Get a Free Takt Time Calculator Here<\/a>).<\/p>\n<p>Takt Time is defined as the following:<\/p>\n<blockquote><p>Takt Time = (Net Available Production Time \/ Required Output Rate)<\/p><\/blockquote>\n<p>In service operations, we often deal with intangibles &#8212; not pieces, necessarily, but non-hard-good items, such as patents that need to be reviewed, items in an inbox, applications that need to be approved or denied, or calls that come into a helpdesk.\u00a0 Another such example that we&#8217;ll examine is the dreaded Tax Return.\u00a0 Before online tax preparation, the paper Tax Return process probably looked like this:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-14832\" src=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/takt-time-irs-tax-operation.jpg\" alt=\"tax operation takt time example\" width=\"876\" height=\"779\" srcset=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/takt-time-irs-tax-operation.jpg 945w, https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/takt-time-irs-tax-operation-600x533.jpg 600w, https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/takt-time-irs-tax-operation-300x266.jpg 300w\" sizes=\"(max-width: 876px) 100vw, 876px\" \/><\/p>\n<div style=\"text-align: center;\"><\/div>\n<p>Suppose the process above required that 150 Tax Returns are processes per 8 hour day.\u00a0 Given the data above and the customer demand, we can calculate the Takt Time like the following:<\/p>\n<blockquote><p>Takt Time = [(8 hours * 60 minutes) \/ (150 Tax Returns)]<\/p>\n<p>Takt Time = <strong>3.2 Minutes<\/strong><\/p><\/blockquote>\n<p>In other words, to complete the Tax review process in accordance with the customer demand of 150 applications per 8 hour day, at most that a tax reviewer can review a single Tax Return is 3.2 minutes.\u00a0 When the reviewer exceeds the Takt Time, then the 150 application goal could be at risk.<\/p>\n<h2><strong>Number of Workstations<\/strong><\/h2>\n<p>Typical service operations have lines that mimick production lines.\u00a0 Each line might consists of people with a computer and other necessary tools to do work.\u00a0 We can consider these as &#8220;workstations.&#8221;\u00a0 Given the Takt Time above, we can also determine what the theoretical number of workstations a single line might need in order to complete 150 applications per 8 hour day:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-14833\" src=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/takt-time-calculation-service-operations.jpg\" alt=\"service operations takt time calculation\" width=\"175\" height=\"97\" \/><\/p>\n<div><\/div>\n<p>In other words, we take the sum of the cycle times of each step and divide that by the Takt time.\u00a0 In this case, we get an answer of the following:<\/p>\n<blockquote><p>(8.3 minutes \/ 3.2 minutes) = <strong>2.59 or 3 workstations per line<\/strong><\/p><\/blockquote>\n<p>In other words, we would need at least 3 workstations in order to satisfy the demand of 150 applications per 8 hour day.\u00a0 This simple calculation alone can help with staff planning and productivity planning.\u00a0 Indeed, simple calculations can have powerful impact on the firm.<\/p>\n<h2>Idle Time<\/h2>\n<p>Not every workstation produces at capacity &#8212; that is, there will be times when workstations aren&#8217;t working.\u00a0 For services, this might mean a computer is down, a worker takes breaks, etc.\u00a0 To account for these times, we have a metric that we call Idle Time:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-14834\" src=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/idle-time-calculation.jpg\" alt=\"idle time example in service operations\" width=\"182\" height=\"87\" \/><\/p>\n<div><\/div>\n<p>In other words, we take process above and form precedence relationships first.\u00a0 Let&#8217;s assume the following:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-14835\" src=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/predecessor-steps-irs-tax-operation.jpg\" alt=\"predecessor steps in service operation\" width=\"640\" height=\"449\" srcset=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/predecessor-steps-irs-tax-operation.jpg 640w, https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/predecessor-steps-irs-tax-operation-600x421.jpg 600w, https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/predecessor-steps-irs-tax-operation-300x210.jpg 300w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>&nbsp;<\/p>\n<div><\/div>\n<p>The table above simply shows the steps and precedence relationships that the process map above does not show.\u00a0 Given the table, we can determine which steps go to which workstations and calculate the longest cycle time:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-14836\" src=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/workstations-tax-operation.jpg\" alt=\"workstations operations calculation\" width=\"294\" height=\"414\" srcset=\"https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/workstations-tax-operation.jpg 294w, https:\/\/staging.opexlearning.com\/resources\/wp-content\/uploads\/2007\/03\/workstations-tax-operation-213x300.jpg 213w\" sizes=\"(max-width: 294px) 100vw, 294px\" \/><\/p>\n<div><\/div>\n<p>So, we get 3 minutes as the longest eligible task.\u00a0 And, we break down the steps by workstations, giving us 4 workstations. \u00a0The total cycle time is 8.3 minutes, based on the total time for each workstation (2.0 + 3.0 + 3.0 + 0.3).<\/p>\n<p>Now, we can identify the Idle Time:<\/p>\n<blockquote><p>Idle Time = (4 * 3 minutes) &#8211; 8.3 minutes<\/p>\n<p><strong>Idle Time = 3.7 minutes<\/strong><\/p><\/blockquote>\n<p>An Idle Time of 3.7 minutes is neither good nor bad, but is just fact given the current state of the system.\u00a0 To improve Takt Time, we would want to reduce Idle Time as well as some other things.<\/p>\n<h2><strong>Improving Takt Time<\/strong><\/h2>\n<p>We don&#8217;t really improve Takt Time, per se.\u00a0 We can reduce the Cycle Time and the content of the work involved in that Cycle, such as reducing or eliminating waste and non-value added steps, thereby influencing the Takt Time, or overall beat of the line.\u00a0 Specifically, we can do the following:<\/p>\n<ul>\n<li>Reduce <a href=\"https:\/\/staging.opexlearning.com\/resources\/variation-for-dummies\/289\/\">Variation<\/a><\/li>\n<li>Reduce Idle Time<\/li>\n<li>Reduce set-up time<\/li>\n<li>Reduce or <a href=\"https:\/\/staging.opexlearning.com\/resources\/what-is-waste\/223\/\">eliminate waste<\/a><\/li>\n<li>Better <a href=\"https:\/\/staging.opexlearning.com\/resources\/shmula-eats-a-donut-lean-at-krispy-kreme\/143\/\">manage constraints<\/a><\/li>\n<\/ul>\n<h2>Other Applications<\/h2>\n<p>There are many non-manufacturing applications of Takt Time and Theoretical Number of Workstations.\u00a0 Below are some examples:<\/p>\n<ul>\n<li>Loan applications<\/li>\n<li>Patent filings<\/li>\n<li>Prescription Drug fulfillment at pharmacy<\/li>\n<li>Bidding process<\/li>\n<li>Phone Calls or emails into a HelpDesk system<\/li>\n<li>Chat Instant Messaging into a HelpChat system<\/li>\n<li>etc&#8230;<\/li>\n<\/ul>\n<p>Takt Time and Theoretical Number of Workstations and Idle Time can be applied to almost any process.\u00a0 They are simple and helpful calculations that can help a firm delight the customer by providing timely and predictable service.<\/p>\n<!--CusAds0-->\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>Takt Time is the maximum allowable time in order to meet demand; Takt Time is the pace by which product is produced and must fall within the Takt Time or set equal to the Takt time; if not, then there will be customer demand that might go unfulfilled.\u00a0 In this post, I&#8217;ll provide an example [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":9593,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[16],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lean Service Operations: An IRS Tax Example<\/title>\n<meta name=\"description\" content=\"Can takt time be applied in a service operation? how? 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