Definition: Turnaround time is a period of time required for completing a particular process or task since the moment it is formally demanded. Turnaround time commonly refers to the amount of time measured from the submission of a request to the conclusion and delivery to the requester.
What Does Turnaround Time Mean?
This term can be used in several situations because task completion is a frequent event in everyday’s routines. In business, most companies want to know their turnaround time for several activities and sub-activities. Minimizing turnaround time for key processes is a common managerial goal because it increases efficiency and customer satisfaction.
Usually, this is a kind of performance metric. For example, a company might monitor how the length of time since a customer places an order to its completion and delivery evolves on a monthly basis.
The company therefore calculates an average of all orders submitted in each month and analyzes how this time can be reduced. Considering high rivalry and competition in today’s markets, firms commonly aim to complete the most important processes in the lowest time possible.
Example
Jillson Transportation is a company that provides road transportation services to several clients located in certain U.S. city. It operates 25 trucks that carry merchandise from twelve regular customers to deliver it to other companies. Jillson’s top clients frequently asked for lower turnaround time. This was measured from the moment they placed a transportation request to the moment when the merchandise is successfully received at its destination.
The company realized at first glance that the turnaround time varied from client to client because the loading process was sometimes difficult and long at the client’s warehouses. Jillson Transportation then developed a project along with some customers with the purpose of reducing the loading time thus improving the turnaround time. The project successfully reduced 25% of the loading time and as a whole it reduced transit periods by 10%.
