Important Tools and Definitions To Understand Lean & Six Sigma Important Tools and Definitions To Understand Lean & Six Sigma

Important Tools and Definitions To Understand Lean & Six Sigma

  Six SigmaTools[Updated on:Sep-23-2021]      |  Reading Time: About 7 minutes

In a competitive universe of market, every company strives to perceive it's quality and continuous improvement. To fulfill this purpose, two continuous improvement methodologies were locked together to form lean six sigma. Lean excellences six sigma by delivering exceptional results. To understand the concepts and methodologies of Lean and Six sigma there are some important terms should learn. 

Before you start learning your lean and six sigma course, you need to work on the below definitions for better understanding.

What is Throughput?

Simple definition: 

The amount of material or items passing through a system or process.

Explanation: In general terms, throughput is the rate of production or the rate at which something is processed. When used in the context of communication networks, such as Ethernet or packet radio, throughput or network throughput is the rate of successful message delivery over a communication channel.

What is Yield?

Traditionally, the yield is the proportion of correct items (conforming to specifications) you get out of a process compared to the number of raw items you put into it. The traditional calculation of the yield is often employed on the final inspection step of a process to measure the effectiveness of the overall process.

What is Rolled Throughput Yield?

It is the probability of the entire process producing zero defects. This metric is increasingly relevant when a process has excessive rework. Rework has considered the hidden factory costs. A RTY measurement has the advantage of showing the losses related to high defect and/or rework cases.


The Six Sigma perspective: First time yield (FTY):

The results of calculating yield the traditional way are misleading because they don’t account for the intricacies of the process. The calculation known as first time yield (FTY) is often much different than traditional yield. That’s because, unlike traditional yield, it captures the harsh reality of the effectiveness of the process.


Value Stream Mapping:

The process of value stream mapping visually links the flow of materials and information from customers at the beginning of the process, which includes processes within the walls or your company and beyond.

What is Takt time?

Takt time is the rate at which you need to complete a product in order to meet customer demand. It comes from the German word “Takt,” meaning beat or pulse in music. Within manufacturing, takt is an important measure of output against demand.

Origins of the ‘Takt Time’ Concept

Takt time was first used by German engineers during the 1930s when the country was experiencing a boom in manufacturing due to the ongoing war. The concept started to be used in Japan soon after, when Toyota applied it within its (Toyota Production System), before gaining popularity around the world as part of the lean principles.

How to Calculate Takt Time

Unlike lead time, inventory turns, and cycle time, takt cannot be measured with a stopwatch. Rather, it must be calculated.

Takt time is calculated by dividing the available production time on customer demand. Available production time can be defined as the time needed to build a product from start to finish. Workers’ breaks, scheduled maintenance, and shift changeovers are excluded when computing available production time.

For example, if an organization has a takt time of five minutes, then it needs to complete a product every five minutes in order to meet customer demand.

Let’s go deeper with another example. Organization G operates 1,000 minutes per day. Its customer demand is 500 widgets per day. To calculate takt time, we divide production time on customer demand:

1,000/500 = 2 minutes

In order for Organization G to meet demand, it needs to produce a widget every two minutes.

Benefits of Takt Time

Organizations who implement takt time into their production operations stand to benefit in a number of ways:

Limitations of Takt Time (and ways to get past them)

Digital technologies can be deployed in anticipation of takt’s limitations. Production visibility tools could be implemented to gain real-time visibility of factory operations and digital shop floor dashboards could be used to check whether takt time is being observed, and which operators are falling behind or getting ahead of takt.

T = product assembly time required to meed demand
T_a = net time available to work
D = customer demand


Takt time is an important metric for manufacturers. As factories become more digital, takt is becoming easier to measure and track. More than ever before, organizations can leverage takt time to improve their operations.

A few more definitions and formulae to understand the difference between Cycle Time, Takt time and Lead Time.

Lead Time:

A lead time is the latency between the initiation and completion of a process. For example, the lead time between the placement of an order and delivery of new cars by a given manufacturer might be between 2 weeks and 6 months, depending on various particularities.

Lead time is the amount of time that passes from the start of a process until its conclusion. Companies review lead time in manufacturing, supply chain management, and project management during pre-processing, processing, and post-processing stages.

Cycle Time:


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Comments 1.

Social Tech
3 years ago

Great tools and exceptionally presented. These tools are helpful in a daily based business to a billion dollar project. Product development is important everywhere and these tools will rule the industry for the decades.!!!