Posted in Operations and Supply Chain Terms, Total Reads: 243
Definition: Cumulative Source/Make Cycle Time
It is the sum of the internal and external time to make a finished product such that it can be shipped, with the assumption that we start from scratch (no inventory). It is measured by a stop watch and its unit is time/unit and so we can’t just add or subtract two times. It’s a good measure to assess efficiency.
It’s actually is a measure of thoroughness in output and is related to lead time with WIP (Work in progress) as the factor.
Internal Lead time is the time taken between raising the materials requisition request and placing the order. External Lead time is the time taken between placements of an order to actual receipt of the item.