Operation Research course

4. STANDARD DATA Many operations in a given system have several common elements. The element ‘‘walking,’’ for example, is a component of many different jobs. When these jobs are timed, the same common element is timed again and again. The function of the analyst would therefore be made much easier if the analyst had a set of data from which he or she could readily derive standard times for these common work elements without necessarily going into the process of timing each one. If, for instance, a standard time would be derived for the particular element ‘‘walking’’ and could be read directly from a table, this would not only reduce effort and cost but also lead to greater consistency in time estimations. It is however, difficult to visualize a situation where all the possible elements making up a job could be timed and stored for future retrieval. We may therefore conclude that in practice it is better to restrict the number of jobs for which standard data are derived. The

3. ADJUSTMENTS TO TIME: LEARNING 3.1. Learning Failure to adjust standard time for learning is the primary cause of incorrect times. Learning occurs both in the individual and in the organization. 3.1.1. Individual Learning Individual learning is improvement in time / unit even though neither the product design nor the tools and equipment change. The improvement is due to better eye–hand coordination, fewer mistakes, and reduced decision time. 3.1.2. Organization Learning (Manufacturing Progress) This is improvement with changing product design, changing tools and equipment, and changing work methods; it also includes individual learning. Often it is called manufacturing progress. Consider the server Maureen serving breakfast. During the individual learning period, she learned where the coffeepot and cups were, the prices of each product, and so on. The amount of time she took declined to a plateau. Then management set a policy to serve coffee in cups without saucers and

3. ADJUSTMENTS TO TIME: ALLOWANCES 3.1. Three Levels of Time Time is reported at three levels: 1. Observed time: The raw (unadjusted) time taken by the worker. It does not have any rating, allowance or learning adjustment. 2. Normal time: Normal time = (observed time)(rating) The observer estimates the pace of the worker in relation to normal pace. Normal time is the time an experienced operator takes when working at a 100% pace. See Chapter 54 for more details. 3. Standard time: For allowances expressed as a percent of shift time: Standard time = normal time / (1 - allowances) For allowances expressed as a percent of work time: Standard time = normal time (1 + allowances) It is a policy decision by the firm whether to give allowances as a percent of shift or work time. Normal time needs to be increased from standard time by personal, fatigue, and delay allowances. 3.2. Personal Allowances Personal allowances are given for such things as blowing your nose, going

DOCUMENTING, USING, AND MAINTAINING STANDARDS 3.1. Documenting Standards Standards are part of a goal-setting system, and control is essential to any goal-setting system. The more detailed the data, the more detailed the possible analysis; you can always consolidate data after they is gathered, but you can’t break the data down if they are consolidated before they are gathered. Computerization permits detailed recording and thus analysis of downtime, machine breakdown, setup time, and so on. With bar coding of parts and computer terminals at workstations, it is feasible to record times for each individual part. For example, for product Y, operator 24 com pleted operation 7 on part 1 at 10:05, part 2 at 10.08, and so on. More commonly, however, you would just record that for product Y, operator 24 started operation 7 at 10:00 and completed the 25 units at 11:50. Least useful would be recording, for product Y, that all operations on 25 units were completed on Tuesday. Companies ten

1. WORK MEASUREMENT: AN OVERVIEW Work measurement, as the name suggests, provides management with a means of measuring the time taken in the performance of an operation or series of operations. Work measurement is the application of techniques designed to establish standard times for a qualified worker to carry out a specified job at a defined level of performance. With today’s increasing global competition among producers of products or providers of service, there has been an increasing effort to establish standards based on facts and scientific methods rather than the use of estimates based on judgment or experience (Niebel and Freivalds 1999). Sound standards have many applications that can mean the difference between the success or failure of a business. Accurately established time standards make it possible to produce more within a given plant, thus increasing the efficiency of the equipment and the optimal utilization of personnel. Poorly established standards, although better than

Between-Operations Analysis This section will discuss flow diagrams, multiactivity charts, arrangement (layout) of equipment, and balancing flow lines. 3.4.1. Flow Diagrams Flow diagrams and their associated process charts are a technique for visually organizing and struc- turing an overview (‘‘mountaintop’’ view) of a between-workstations problem. There are three types: single object, assembly / disassembly, and action–decision. 3.4.1.1. Single Object Figure 8 shows a single-object process chart following a housing in a machine shop; the single object also can be a person. Some examples of following a person are vacuuming an office and unloading a semitrailer. Figure 9 shows the five standard symbols for process charts. Some people put a number inside each symbol (identifying operation 1, 2, 3) and some don’t. Some people emphasize ‘‘do’’ operations by darkening those circles (but not get-ready and put-away operations) and some don’t. Since a process chart is primarily a communi

2. ESTABLISHING TIME STANDARDS There are two basic strategies: nonengineered (subjective) standards (‘‘did take’’ times) and engi- neered (objective) standards (‘‘should take’’ times). The techniques to use depend upon the cost of obtaining the information and the benefits of using the information. 2.1. Nonengineered (Type 2) Estimates ‘‘Quick and dirty’’ information can be obtained at low cost. But using ‘‘dirty’’ information increases the risk of errors in decisions. Since nonengineered standards are not preceded by methods or quality analysis, they are ‘‘did take’’ times, not ‘‘should take’’ times. There are four approaches: historical records, ask expert, time logs, and work (occurrence) sam- pling. 2.1.1. Historical Records Standards from historical records tend to be very ‘‘dirty’’ (although cheap). For example, in the warehouse, how many cases can be picked per hour? From shipping records, determine the number of cases shipped in January, February, and March. From pe

1. WHY DETERMINE TIME / JOB? It is useful to know the direct labor cost / unit, especially when the job is repetitive. Five typical applications are: 1. Cost allocation 2. Production and inventory control 3. Evaluation of alternatives 4. Acceptable day’s work 5. Incentive pay 1.1. Cost Allocation To determine cost / unit, you need the direct material cost, the direct labor cost, and various miscel- laneous costs (called overhead or burden). Direct labor cost is (direct labor time)(wage cost / hr). So you need to determine how long the job takes. But, in addition, overhead costs usually are allocated as a percentage of direct labor (e.g., overhead is 300% of direct labor cost). So again you need direct labor time. Without good estimates of the cost of production to compare vs. selling price, you don’t know your profit / unit (it may even be negative!). The goal is to improve and control costs through better information. 1.2. Production and Inventory Control