Calculating Manufacturing Lead Time

General Information

The manufacturing lead time calculation can be done for the current and future revisions and for all routing alternates for a part. The calculation considers setup, move, operation times, efficiency factor and overlap entered for the operations. The system also considers the information about queue time and shifts such as the number of work hours per day from the work center where the operation is performed. You can run the calculation for one part at a time or for all parts in a specific site. Optionally the inventory part can be updated with the lead time calculated for the default routing alternate (*) and the current revision.

The lot size on which the lead time calculation is based, is normally the standard lot size specified on the inventory part. It is possible to simulate lead time for other lot sizes using the Calculate Lead Time right-click option in the Routing Alternates window.

Manufacturing lead time calculations can be based on machine time, labor time or the maximum of machine and labor time. The work center capacity used in the calculation can be either the demonstrated capacity or the average capacity as specified on the work center. The average capacity represents the projected usage based on the current work center parameters. The demonstrated capacity represents the past actual usage.

Manufacturing lead time is used in several places like in IFS/Material Requisitions Planning (MRP) and IFS/Master Scheduling (MS) when creating supply.

Fixed and Variable Lead Times

The fixed lead time is the time that does not vary based on the lot size. For a routing alternate having no parallel or overlapping operations, the fixed lead time is the sum of setup time, transport time and queue time for all operations.

The variable lead time is the time that is needed for each unit produced. For a routing alternate having no parallel or overlapping operations, the variable lead time is the sum of machine or labor time for all operations.

For parallel operations only the operation that takes the longest to complete will be considered when calculating the fixed and variable lead time. For an operation that overlaps with the previous operation the contribution depends on the overlap and the difference in run time between the operations.

Formula for Manufacturing Lead Time calculation

The formula below is used when calculating manufacturing lead time. The formula does not cover calculations for operations with overlap. For parallel operations only the operation with the longest lead time will be considered.

Where

Setup time = Time entered on each operation of the routing.
Run time = Time entered on each operation of the routing.
Lot Size = Default value is the standard lot size, can also be entered manually in the Calculate Manufacturing Lead Time dialog box.
Operation efficiency = Time entered on each operation of the routing.
Work Center Capacity = The average or demonstrated capacity entered on the work centers.
Transportation time = Time entered on each operation in the routing.
Site Manufacturing Calendar Hour = Average number of working hours on a work day for the site manufacturing calendar.
Queue time = Time entered on the work centers
Work Center Calendar Hour = The number of working hours on the work center on the day the calculation is performed.

Sample Scenarios

The routings in the below examples only include machine time. Unit for run time is in hours/unit and the overlap is defined in units. The lot sizes for all examples are five (5) pieces.

Work Center

Work Center	Work Center Description	Queue Time	Average/Demonstrated Capacity
A1	Assembly	0	8
P1	Painting	0	8
T1	Testing	0	8

Routing - Without Overlap

Op No	WC No	Setup	Run Time	Efficiency	Transport Time	Parallel Operation	Overlap	Setup Inside Overlap
10	A1	2	1	100	1	No	0	No
20	P1	1	2	100	0	No	0	No
30	T1	1	1	100	2	No	0	No

Fixed Lead Time: 7h, Variable Lead Time: 4h, Total Lead Time: 7h + (4h *5 pcs) = 27h

Routing - With Overlap (Overlap Units= Units)

Op No	WC No	Setup	Run Time	Efficiency	Transport Time	Parallel Operation	Overlap	Overlap Units	Setup Inside Overlap
10	A1	2	1	100	1	No	0	Units	No
20	P1	1	2	100	0	No	1	Units	No
30	T1	1	1	100	2	No	1	Units	No

Fixed Lead Time: 7h, Variable Lead Time: 2h, Total Lead Time: 7h + (2h *5 pcs) = 17h

Comment:

• Operation 10 - This operation will contribute with all its fixed and variable lead time components: 2 hours setup, 1 hour runtime, 1 hour transportation which gives 3 hours fixed lead time and 1 hour variable lead time allocation.
• Operation 20 - This operation has 2 hours run time compared to the 1 hour runtime in the previous operation. This will give a contribution of 1 hour to the total variable lead time. When the last piece from operation 10 gets completed, still there are 6 hours left from operation 20. Five of those have already accounted for the addition of the variable lead time, but the sixth will result in a contribution of 1 hour to the total fixed lead time.
• Operation 30 - This operation has 1 hour run time compared to 2 hours from the previous. Therefore it will not give any contribution to the total variable lead time. However, some time will be needed to complete this operation and then do the transportation of the last piece after finishing the previous operation. This time will be fixed and will not dependent on the lot size, so that this operation will add 3 hours to the fixed lead time.

Routing - With Overlap (Overlap Unit = Percent)

Op No	WC No	Setup	Run Time	Efficiency	Transport Time	Parallel Operation	Overlap	Overlap Unit	Setup Inside Overlap
10	A1	2	1	100	1	No	0	Percent	No
20	P1	1	2	100	0	No	20	Percent	No
30	T1	1	1	100	2	No	20	Percent	No

Fixed Lead Time: 5h, Variable Lead Time: 2.4h, Total Lead Time: 5h + (2.4h *5 pcs) = 17h

Comment:

• Operation 10 - This operation will contribute with all its fixed and variable lead time components: 2 hours setup, 1 hour runtime, 1 hour transportation which gives 3 hours fixed lead time and 1 hour variable lead time allocation.
• Operation 20 - This operation has 2 hours run time compared to the 1 hour runtime in the previous operation and executes slower than the previous operation. Therefore, this will give a contribution of 1 hour to the total variable lead time. Overlapping period varies with lot size as the total manufacturing lead time of the previous operation changes with lot (Gap "a" will grow with lot size). Therefore, 20% of run time for 1 piece for previous operation (Op 10) will be added to the variable lead time. The transport time is also included in the overlap period (Gap "b").
• Operation 30 - This operation has 1 hour run time compared to 2 hours from the previous. Since this operation executes faster, there will be no contribution to the variable lead time. It will not be possible to finish the succeeding operation before the preceding operations scheduled end time + transportation time + time it takes the succeeding operation to manufacture the last delivered overlap quantity from its preceding operation. This time will depend on the lot size and therefore, there will be a contribution of 20% of runtime for 1 pcs for current operation (Op 30) to the variable lead time.

Routing - With Overlap and Setup Inside Overlap

Op No	WC No	Setup	Run Time	Efficiency	Transport Time	Parallel Operation	Overlap	Setup Inside Overlap
10	A1	2	1	100	1	No	0	No
20	P1	1	2	100	0	No	1	Yes
30	T1	1	1	100	2	No	1	No

Fixed Lead Time: 8h, Variable Lead Time: 2h, Total Lead Time: 7h + (2h *5 pcs) = 18h

Comment:

• Operation 20 - When setup inside overlap is selected, the setup will not be started before the first piece from operation which is transported from operation 10. When the last piece is transported from operation 10, there are 7 hours left from operation 20, five of those are the variable lead time, and the two last hours will be fixed.

In the examples above the work centers are assumed to have no queue time. If queue time would have been defined, that time will be added as a fixed lead time.