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Topic Title: Process cycle efficiency
Topic Summary: Calculation of the PCE and measurement?
Created On: 10/30/2017 07:22 PM
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10/31/2017 12:20 PM
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Stanlyens
osman vanegas



I am very confused, some people use the formula Value added / Value not added and others Value added / (value added + value not added)

Also some say that a company above 4% is Lean and other people say it is above 25%. Please, could someone help me?
11/02/2017 10:44 AM
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MarkRosenthal
Mark Rosenthal



First, there is no "value added ration" that says "you are lean." As you point out, different people say different things. It really doesn't matter, and depends so much on the nature of the individual process there is no way you could make such a sweeping statement. "Lean" is about your culture, your thinking - a *continuous* (meaning every single day) drive to always improve your flow of value to your customers.

As for the math, in general, when you care calculating a percentage, you take your value / the total.
But I wouldn't worry about it too much. The question really is, how much of your work-in-process is just sitting there having nothing done to it, and what you can do to reduce that idle material and keep things moving.
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