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CMA Intermediate · Operations Management and Strategic Management · Lean Operations and JIT

A Coimbatore pump maker's process steps and their times are: machining 20 min (value-adding), waiting for inspection 30 min, inspection 10 min (non-value-adding but necessary), assembly 25 min (value-adding), and waiting for dispatch 15 min. Total lead time is 100 minutes. What is the process cycle efficiency (value-added time as a percentage of lead time)?

Process cycle efficiency is 45%. Value-adding time is machining 20 plus assembly 25, equal to 45 minutes, divided by the total lead time of 100 minutes. The remaining 55 minutes is waiting and inspection, which is non-value-adding.

  1. A45%Correct
  2. B55%
  3. C20%
  4. D25%

Explanation

Value-adding time = 20 + 25 = 45 minutes. Lead time = 20+30+10+25+15 = 100 minutes. Efficiency = 45/100 = 45%. The 55% option wrongly treats all non-waiting time as value-adding, i.e. it takes 100 minus 45 as the answer by mistake; 55% is the waste share, not the efficiency.

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