What is Activity Ratio?
The activity ratio is a measure of how quickly work moves through a process. It is simply the sum of the process times divided by the total lead time.
For example, if the processing time was 30 minutes and the lead time was 2 hours, the activity ratio would be .25 or 25%.
The activity ratio is a good gauge of how much time work is sitting idle in a value stream. As a result, it is a solid measure of flow. The higher the ratio, the better the flow.
The drawbacks of using the activity ratio as an indicator are that there is no measure of value—the process step may not be adding to the finished product. There also might be a lot of waste in the process.
Still, despite these drawbacks, work sitting idle is often an indicator of broader problems. The steps you’d take to speed up the flow of that work are often the same steps you would take to pull waste out of a process. For that reason, I recommend considering using the activity ratio as an improvement metric in processes with a lot of piles of work between steps.
Source: Velaction
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