Time Talks: Are You Listening to Your Process?
Time as it relates to processes isn’t just something you track so you can add another chart to your report.
Hi friends,
Two weeks ago, I wrote about the “Cost of ignoring time” in financial improvement projects. I didn’t expect it to resonate so widely, but the feedback, both online and offline was loud and clear. Many of you shared similar frustrations and said the post helped you connect the dots on things you’ve felt for a long time but couldn’t quite articulate. So today, I want to take that conversation a step further.
Let’s talk about time again, but this time, in the context of the value stream.
Lean and Six Sigma have lots of terms that can be confusing. So, in true Lean Leverage Hub fashion, I’m breaking it all down with clear definitions and relatable examples. Let’s go.
1. Capacity
Definition: The maximum amount of work that can be completed by a system or process in a given period.
Example: If a hospital's phlebotomist can take blood samples from 6 patients per hour, that’s their capacity. Not 10. Not 15. Just 6. Shikena!
2. Capacity Constraint
Definition: The step within a process that limits overall flow because it can’t keep up with demand. It’s often called a “bottleneck”—the narrowest part of the system that slows everything else down.
Example: In a hospital discharge process, patients are medically and therapy fit to go home by 10 a.m., but transport requests can only be fulfilled once porters are available after noon. Everything is set, but the delay in transport becomes a process bottleneck. Nobody’s slacking, it’s just how the system is built.
“A system is only as fast as its bottleneck process.” - Eliyahu Goldratt (Theory of Constraints).
3. Work in Process (WIP)
Definition: Items or tasks that are currently being worked on but are not yet complete.
Example: 10 patients are in various stages of a radiology exam, one waiting for a scan, another mid-scan, and others are waiting for results. That’s WIP. And the higher the WIP, the more chaotic things get.
4. Throughput (or Exit Rate)
Definition: The rate at which items or tasks are completed and exit the system.
Example: If the pharmacy can fill and dispense 50 prescriptions per hour, then the throughput is 50 prescriptions/hour. So, no matter how many prescriptions come in, only 50 can come out per hour, unless something changes in the process or a miracle happens.
5. Process Lead Time
Definition: The total time it takes from when a process begins to when it ends—including both active and waiting times.
It can be described as Little’s Law:
PLT = Work in Process ÷ Exit Rate
Example: Let’s say a lab currently has 20 test samples waiting to be processed (that’s your Work in Process), and the team can complete 5 samples per hour (Exit Rate).
PLT = 20 ÷ 5 = 4 hours
Basically, it will take about 4 hours for any single test sample to go from arrival to completion.
6. Value-Added Time
Definition: Time spent doing activities that directly contribute to what the customer (or patient) values or cares about.
Example: The actual scan done by the CT machine. That’s what the patient came for. Everything else, like the waiting, walking, and explaining, might be needed, but they don’t count as value.
7. Process Cycle Efficiency (PCE)
Definition: The ratio of value-added time to total lead time.
Formula:
PCE = (Value-Added Time ÷ Lead Time) × 100
Example: If a CT scan takes 10 minutes (value-add), but the whole process (PLT) took 5 hours,
PCE = (10 ÷ 300) × 100 = 3.3%. That means 96.7% of the process time was not adding value. Perhaps, we could consider minimising the business-value-adds and eliminating waste.
8. Non-Value-Add Cost
Definition: The cost associated with activities that do not add value but still consume resources.
Example: If a team spends 1 hour daily locating missing forms, that’s time, effort, and potentially money wasted.
9. Takt Time
Definition: The rate at which a product or service must be completed to meet customer demand.
Formula:
Takt Time = Available Time ÷ Customer Demand
Example: If your lab operates 480 minutes a day and must serve 120 patients, your takt time is 4 minutes per patient. Anything longer? You’re falling behind demand.
Final Thoughts
Time as it relates to processes isn’t just something you track so you can add another chart to your report. It’s a strategic lever. When you understand time, you understand flow. You understand pain points. You understand value.
Next week, we’ll build on this post and walk through a real example with actual numbers and simple maths.
Until then, track time—and treat it like money.
Tomiwa
Great analysis & explanations - and I agree, time is such a valuable resource. I remember a meeting where someone said a project was cost-neutral and they meant it wouldn't cost money, but clearly it was taking a ton of time -- which means it's not cost-neutral, it's just cash-neutral.