How Much Does Cycle Time Reduction Cost?

One way to ensure good cycle time is to reserve a large amount of slack capacity. It's an expensive way to plan, however (see How Much Slack Capacity Should be Reserved?). An alternative is to start with a minimum cost toolset that has a small amount of slack capacity, and then add tools only where they are needed for cycle time reduction. Cycle time reduction results can then be summarized as shown below (representative data ö actual customer data is proprietary). These results are based on both capacity analysis and simulation.

cycle time vs. additional capital cost chart
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Cycle Time vs. Additional Capital $ Chart, representative data. Each bar represents a cycle time estimate for a specific factory toolset. The goal of this analysis is to add tools so as to make the reduction in cycle time as steep as possible when measured against capital equipment expenditures. Factory Explorer® does not generate this chart automatically, but it makes it easy to do the underlying analysis.

The Factory Explorer® Advantage

This analysis is an example of iterative factory optimization. Using Factory Explorer®'s capacity analysis engine, you first generate a minimum cost toolset with a small amount of slack capacity. Next, use Factory Explorer®'s simulation engine to estimate the cycle time contribution of each tool in the factory (See What are the Top Cycle Time Contributors?). Using data from Factory Explorer®'s cycle time contribution chart, it's straightforward to add tools so as to maximize the cycle time reduction per dollar of tool fixed cost. Each bar in the chart above represents one iteration in this optimization process. The potential financial benefits are huge - it's the difference between buying a few targeted tools and buying slack capacity on every tool in the factory. Factory Explorer® makes it possible.

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