A discussion of numbers may seem an odd topic to include in a series about Theory L leaders and the people side of Lean, but I think that there are numbers that all team leaders and team members must understand and know how to calculate. Understanding these numbers and their value lets everyone know that numbers are tools to predict outcomes, not clubs to ensure outcomes. These numbers are Takt Time, Cycle Time, and Units per FTE.
Takt time is simply the scheduled amount of output units divided by the available time (days, hours, minutes, or seconds). This number can be used to establish the corresponding capacity needed to accommodate the customers’ schedule. Teams can compare this with current Cycle Time and demonstrated Units per FTE to determine if can meet the schedule for the day.
FTE (Full Time Equivalent Employee) is a measure of available capacity in terms of equivalent full time employees required to run a line or supporting a warehouse pull function. Using FTE instead of hours worked allows comparisons over time for that part of the process or between the parts of a chain of processes to ensure smoothly operating system with production flows that eliminate W-I-P accumulation between the operations. When this measure is properly explained, team members understand that its purpose is to allow them and their supervisors to plan staffing more accurately with customer demand. Typically, team members calculate their daily Units per FTE at the end of their shift, and supervisors tally and report the numbers weekly for them. Over time, the day-to-day variations average out and all employees understand how many people are needed to ensure the required output.
Tracking and posting the weekly number of Units/FTE provides an immediate signal to the team of the impact of their changes and solved problems on their productivity, offering a chance for celebration or course correction. They can manage their own efforts and outcomes.
I have also seen work teams take FTE to another level, measuring Units per FTE hourly to see how they are doing against expectations. In addition to displaying their engagement in the process, they set a visible mark for new people coming to the line. For a company with highly seasonal demand that counts on quick assimilation of temporary employees, this level of engagement by the cadre is a huge benefit.
There are other very practical ways to manage using the data.
When Takt time output is greater than units per FTE, the team can reduce the number of people applied that day or take some 5S time at the start of the shift or take time when work is completed before the end of the shift to have a team meeting, problem solve or review and update their 5 S efforts.
When Takt time is less than cycle time, there are other options to consider. Add people if this can be done without reducing your unit/FTE. Rebalance the line or move product to another line. Determine if you can make subassemblies off-line. Or the usual last resort – can the line work overtime? Again, calculate, do not guess, how much time will be needed, using your current unit/FTE.
Theory L leaders must still be good managers. Knowing how to use these tools to best advantage helps accomplish that.