Calculate process cycle efficiency from value-added time and lead time, or derive lead time from WIP and throughput with what-if analysis.

Use the same process boundary and time basis. PCE is a time share, not a quality or performance rating.

Process Cycle Efficiency Formula

The following formula is used to calculate the Process Cycle Efficiency. 

Epc = VAT / CT × 100
  • Where Epc is the Process Cycle Efficiency (%)
  • VAT is the total value added time 
  • CT is the total lead time, including waiting and other non-value-added time 

To calculate a process cycle efficiency, divide the total value added time by total lead time and multiply by 100. Use matching time units.

How to Calculate Process Cycle Efficiency?

The following two example problems outline how to calculate the Process Cycle Efficiency.

Example Problem #1:

  1. First, determine the total value added time. In this example, the total value added time is given as 50.
  2. Next, determine total lead time. For this problem, total lead time is 140 in the same units as value-added time.
  3. Finally, calculate the Process Cycle Efficiency using the equation above: 

Epc = VAT / CT*100

Inserting the values from above and solving the equation: 

Epc = 50 / 140*100 = 35.71 (%)

Example Problem #2: 

Using the same process as above, first define the variables required by the formula. In this case, these values are:

total value added time = 70

total lead time = 300, in the same units as value-added time

Entering these values yields:

Epc = 70 / 300*100 = 23.33 (%)