Why I Don’t Always Do Takt Time

Leaving aside the usual arguments about trying to produce to the rate of customer demand through takt time pacing in some environments (i.e., mixed model production, non-repetitive manufacturing, etc.), the most compelling reason (and one I never see mentioned in the Lean press) for not moving directly to takt pacing is that producing at takt time may not be profit maximizing.

Simply put, a firm’s customer demand may result in an output level that is either above or below the output level required to maximize profit, given the firm’s cost structure and other relevant constraints. Synchronizing to this level of customer demand through takt time would keep a firm in either of these situations from maximizing profit.

Blindly applying takt time can become an end in itself and obscure the pathway to profit maximization. It is better to start with basic firm economics and establish how a firm can produce the optimal level of output with fewer inputs, or produce more output with the same inputs. What I’m really trying to do is help the firm develop a superior production technology that is either neutral, capital-using, or labour-using, depending upon whether the marginal product of capital is increased in the same proportion (neutral), greater proportion (capital-using or capital deepening), or lesser proportion (labour-using or labour deepening) than the marginal product of labour.

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