Approximating the Process Cycle Efficiency of Non-physical Production Systems

The Process Cycle Efficiency (PCE), an important Lean Production metric, is the ratio of value-added time to total time required for producers to deliver goods or services to the customers and explains how quickly systems can respond to customer demands. The larger the PCE value, the leaner the system because the system has less nonvalue-added time. However, calculating the PCE of a non-physical production system, such as a transaction or service (e.g., RFI review and submittal processes), is problematic because measuring the value-added time requires process owners to record their pure execution times, that is, only the time used for value creation, and people tend to be fearful of the possibility that such data will be used for individual performance evaluation. However, we can approximate the PCE using the number of jobs processed quickly versus the total number of jobs processed for a given time period. Our hypothesis is that the approximation of PCE using this process is accurate. The research uses the RFI review process to demonstrate how to approximate the PCE using statistical concepts and methods and tests the hypothesis by comparing the actual PCE with the approximated PCE of engineers‘ RFI review process. The proposed method of PCE approximation provides a good performance indicator with which to evaluate process efficiency without imposing psychological discomfort on process owners and with which to set targets for improvement.