When managing your reusable containers, the most important values you can track are the reusable cycle times. These reusable cycle times are the periods of time between two events or points of reference, such as the time between an order and a delivery.
Measuring a reusable cycle should include more than simply defining the beginning and end points. Each individual process between start and finish must also be measured, timed down to the day, hour, and minute. While this does mean additional work, the data accrued from the added visibility makes the investment of time and effort worthwhile.
Here are just a few of the reusable cycle times you should keep track of:
• “Promised” versus “Actual” Customer Order Cycle Time – The period of time between the creation of an order and its delivery date makes up the Customer Order Cycle Time. Optimization efforts should be made to ensure there is not a significant difference between the Promised and Actual values.
• “Cash to Cash” Cycle Time – The period of time between the payment for resources and payment for the product or products produced with those resources is the Cash to Cash Cycle Time, sometimes called the Cash Conversion Cycle. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables, and the length of time a company is allowed to pay its bills without incurring penalties.
• “Supply Chain,” “Manufacturing,” and “Inventory Replenishment” Cycle Times – These three cycle times deal with performance in manufacturing and fulfillment. The period of time it would take to satisfy a customer’s demands if a supplier’s inventory levels were at zero is the Supply Chain Cycle Time. The time between the planned order and final production of the product is the Manufacturing Cycle Time. Finally, the sum of the manufacturing cycle time and the time it takes to send the product to the correct distribution center is the Inventory Replenishment Cycle Time.
Reusable cycles are an integral part of reusable container management. The speed of an inventory cycle, and how quickly cycles move on to other cycles, often reveals a great deal about a company’s overall supply chain efficiency. Tracking reusable cycle times can give your business an advantage in recognizing and correcting issues quickly, and the data collected opens up visibility and broadens planning options.