Actually, this would be faster (provided takano is not updated inside the scan)

SET ORDER TO Takano
SEEK SPACE(1)
SCAN WHILE EMPTY(takano)
  * update code here
ENDSCAN

>>

>*- updtakastk.prg
>****
>Local lcmasterid, lnavgrec1, lnavgrec2, lnavgrec3, lnpackno, lntakano, lntotrec, lntrnno
>USEFILE('cuttm')
>USEFILE('cuttct')
>USEFILE('packtc')
>lntakano = 0
>Select cuttm
>Set Order To takano
>Select cuttct
>Set Order To takano 
>Select packtm
>Set Order To MASTERID
>Select packtc
>Set Order To takano
>Select cuttct
>
>Wait Window 'Working... Please Wait...' At Srows() / 2, Scols() / 2  Nowait
>
>Select cuttct
>Scan for not empty(takano)  && might build a binary index on empty(takano) depending on data size and distribution
>
>   lntakano = takano
>   &&If Not Empty(m.lntakano)
>      **    Below code taking Maximum time in Coverage result
>      && Replace packed With ' ', packno With 0, recuttno With 0 In cuttct
>      If Seek(m.lntakano, 'packtc', 'takano')
>         &&lcmasterid	= packtc.MASTERID
>         lnpackno	= Iif(Seek(packtc.MASTERID, 'packtm', 'masterid'), packtm.packno, 0)
>         **    Below code taking Maximum time in Coverage result
>         Replace packed With Iif(m.lnpackno <> 0, 'Y', ' '), packno With m.lnpackno, recuttno with 0 && In cuttct
>      Else
>         && on first glance always overwritten ??? 
>         && lntrnno =	Iif(Seek(m.lntakano, 'cuttm', 'takano'), cuttm.trnno, 0)
>         && Replace packed With Iif(m.lntrnno <> 0, 'Y', ' '), recuttno With m.lntrnno In cuttct
>
>         lntrnno =	Iif(Seek(m.lntakano, 'cuttm', 'takano1'), cuttm.trnno, 0)
>         Replace packed With Iif(m.lntrnno <> 0, 'Y', ' '), recuttno With m.lntrnno, packno with 0 && In cuttct
>      Endif
>   &&Endif
>Endscan
>Wait Clear
>

>
>setting up relations in advance might not much/more help in this case, as only 1 seek is needed fo each record.
>do NOT use brute force to clean a record first. unrolling the 2 iif into separate branches of replace might be still better
>if you can be ****certain**** that cuttm/packno are always #0- test.