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Chapter 11Work SystemDesign

Operations Management

by

R. Dan Reid & Nada R. Sanders

4th Edition Wiley 2010

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Learning Objectives Describe the elements of work system

design and the objectives of each element

Describe relevant job design issues

Describe methods analysis

Understand the importance of workmeasurement

Describe how to do a time study

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Learning Objectivescont Describe how to do work sampling

Develop standard times

Show how to use work standards

Describe compensation plans

Describe learning curves

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Designing a Work SystemDesigning a work systemis part of developing an

operations strategy

Effective operations strategy provides structure forcompany productivity

The work system includes:

Job design

Work measurements

Worker compensation

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Design a Job Job Design specifies work activities of an

individual or group

Jobs are designed by answering questionslike: What is the jobs description?

What is the purpose of the job?

Where is the job done? Who does the job?

What background, training, or skills are required to dothe job?

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Additional Job Design Factors Technical feasibility:

The job must be physically and mentally doable

Economic feasibility:

Cost of performing the job is less than thevalue it adds

Behavioral feasibility: Degree to which the job is intrinsically

satisfying to the employee

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Machines or People - Should

the Job Be Automated? Safety & risk of injury to workers

Repetitive nature of the task

(monotonous?) Degree of precision required

Complexity of the task

Need for empathy, compassion, or otheremotional elements

Need for personal customer relationships

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Levels of Labor Specialization Level of labor specialization can:

Reduce the employees scope of expertise (higher

levels of specialization) Increase the employees scope of expertise (lower

levels of specialization)

Work satisfaction helps define level of

specialization Specialization can result in employee boredom

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Specialization: Managements ViewAdvantages:

Readily available labor

Minimal training

required

Reasonable wages

costs High productivity

Disadvantages:

High absenteeism

High turnover rates

High scrap rates

Grievances filed

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Specialization: Employees ViewAdvantages:

Minimal credentials

required Minimal

responsibilities

Minimal mental effortneeded

Reasonable wages

Disadvantages:

Boredom

Little growthopportunity

Little control over work

Little room for initiative Little intrinsic

satisfaction

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Eliminating Employee Boredom Job enlargement

Horizontal expansion of the job through increasing thescope of the work assigned.

Job enrichment Vertical expansion of the job through increased worker

responsibility

Adding work planning or inspection to a routineassembly task

Job rotation Shifting of cross trained workers to other tasks

Broadens understanding and can reduce fatigue

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Team Approach to Job Design Problem-solving teams:

Small groups, trained in problem-solving techniques.

Used to identify, analyze, & propose solutions toworkplace problems

Special-purpose task forces: Highly-focused, short-term teams with a focused

agenda (often cross-functional) Self-directed or self-managed teams:

Team members work through consensus to plan,manage, & control their assigned work flow

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The Alternative Workplace An alternative workplace brings work to the worker rather

than the worker to the workplace

Alternative workplaces are made possible by

technologies like email, e-networks, cell phones, &videoconferencing. Current situation: More than 30 million employees work in alternative workspaces

A survey at IBM reveals that 87% of alternative workplace

employees believe their effectiveness has increased significantly Sun Microsystems gives many of its designers the option to work

at home

AT&T provides flexible workstations so workers can rotate in andout as needed

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Methods AnalysisA detailed step-by-step analysis of how a given job

is performed

Can distinguish between value-added & non-value-added steps

Analysis can revise the procedure to improveproductivity

After improvement, must revise the newstandard operating procedure

Follow-up to insure that changes actuallyimprove the operation

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Methods AnalysisMethod analysis consists of:

1. Identify the operation to be analyzed

2. Gather all relevant information3. Talk with employees who use the operation

4. Chart the operation

5. Evaluate each step

6. Revise the existing or new operation as needed

7. Put the revised or new operation into effect, thenfollow up on the changes or new operation

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Methods Analysis at FEAT Company:The methods analyst hasbeen asked to review the transformer wiring operation because ofpast quality problems from poor solder joints. The solder operationsequence and the workstation layout are shown below.

1. Picks up wire in left hand andmoves it to the terminal

2. Simultaneously picks upsolder iron in right hand andmoves to the terminal

3. Solders wire to terminal andreplaces solder iron in holder

4. Solders terminal #1, then

#2 - #6, going right to left

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Analysts Recommendations: A. Maize reviews the workplacelayout and the present flow chart (below), and recommendsreversing the solder sequence from #6-#1, which is lessproblematic for the right handed operator. He schedules a followup to insure that the new method has fixed the quality problem.

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The Work Environment

Working conditions can effect worker productivity,product quality, and worker safety

Temperature, ventilation, noise, and lighting are allfactors in work system design

Congress passed OSHA in 1970 to mandate specificsafety conditions that must be met

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Work Measurement

Work Measurement helps determine howlong it should take to do a job

Involves determining Standard Time

Standard time: the length of time a qualifiedworker, using appropriate processes and tools

to complete a specific job, allowing time forpersonal fatigue, and unavoidable delays

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Work Measurement

Standard timeis used in:

Costing the labor component of products

Tracking employee performance

Scheduling & planning required resources

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Setting Standard Times

Step 1: Choose the specific job to be studied

Step 2: Tell the worker whose job you will be studying

Step 3: Break the job into easily recognizable unitsStep 4: Calculate the number of cycles you must observe

Step 5: Time each element, record data & rate the

workers performance

Step 6: Compute the normal time

Step 7: Compute the standard time

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How to do a Time Study

When making a time study several decisionsare made to assure desired results:

# of observations to make Desired level of accuracy

Desired level of confidence for the estimatedstandard time

Desired accuracy level is typically expressedas a % of the mean observed times

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Doing a Time Study

Need to determine how many observations are required

Involves determining the level of accuracy required and confidencelevel desired

n: number of observations of an element that are needed

z: the number of normal standard deviations needed for desired

confidence s: the standard deviation of the sample

a: desired accuracy orprecision

x-bar: the mean of the sample observations

2

x

s

a

z

n

P t Pi Pl P t hi l t t d t i t d d

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Pats Pizza Place: Pat hires an analyst to determine a standardtime to prepare a large pepperoni and cheese pizza. He takes 10observations of the 7 elements and calculates the mean time andthe standard deviation per element. He must then calculate the #of observations to be within 5% of the true mean 95% of the time.

The analyst must calculate the observations for each element todetermine how many additional observations must be taken. Themaximum number of 25 (in this case) for element #7 means that anadditional 15 observations must be made and then the observedtimes are revised.

nsobservatio25

0.24

0.03

0.05

1.96

x

s

a

zn

22

7

1

2

3

4

5

6

7

8

9

10

A B C D E

Example 11.3 Pat's Pizza Place

Standard Deviation Mean Observed Revised Observed

Work Element (minutes) Time (minutes) Time (minutes) # Observations

1. Get ball of dough 0.010 0.12 0.15 11

2. Flatten dough 0.030 0.25 0.25 23

3. Spin and toss dough 0.040 0.50 0.60 10

4. Place dough on counter 0.005 0.12 0.15 3

5. Pour sauce on formed dough 0.035 0.30 0.30 21

6. Place grated cheese on top 0.025 0.25 0.28 16

7. Place pepperoni on sauce 0.030 0.24 0.28 25

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Other Time Factors Used inCalculating Standard Time

The normal time(NT) is the mean observedtimemultiplied by the performance rating

factor(PRF) The PRFis a subjective estimate of a workers

pace relative to a normal work pace

The frequency of occurrence (F)is howoften the element must be done each cycle.

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Other Time Factors Used inCalculating Standard Time

The allowance factor (AF)is the amount of timeallowed for personal, fatigue, and unavoidable delays

Standard Time=normal time x allowance factor,where:

(NT)(AF)ST

117.6%1.1760.151

1

PFD1

1AF WorkedTme

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Calculating Normal Time andStandard Time at Pats Pizza

The standard time for preparing a large, hand-tossed pepperonipizza is 2.312 minutes. This means that a worker can prepare 207pizzas in an 8-hour shift (480 minutes divided by 2.312 minutes)

12

13

14

1516

17

18

19

20

2122

A B C D E F

Example 11.4 Calculating Standard Time for a Hand-Tossed Cheese and Pepperoni Pizza

Revised Observed Performance Rating Frequency Normal Time Standard Time

Work Element Time (minutes) Factor (minutes) (minutes)

1. Get ball of dough 0.15 0.90 1 0.135 0.1592. Flatten dough 0.25 1.00 1 0.250 0.294

3. Spin and toss dough 0.60 0.85 1 0.510 0.600

4. Place dough on counter 0.15 1.10 1 0.165 0.194

5. Pour sauce on formed dough 0.30 1.20 1 0.360 0.423

6. Place grated cheese on top 0.28 1.00 1 0.280 0.329

7. Place pepperoni on sauce 0.28 0.95 1 0.266 0.313Total Time 1.966 2.312

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Other Time Study Methods

Elemental time dataestablishes standards basedon previously completed time studies, stored in an

organizations database. Predetermined time data(e.g. MTM and MTS) is a

published database element time data used forestablishing standard times

Reach, grasp, move, engage, insert, turn, etc.

Work Samplingis a technique for estimating theproportion of time a worker spends on an activity

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Work Sampling Procedures

1. Identify the worker or machine to be sampled

2. Define the activities to be observed

3. Estimate the sample size based on level of accuracy andconfidence level

4. Develop the random observation schedule. Makeobservations over a time period that is representative ofnormal work conditions

5. Make you observations and record the data. Check to seewhether the estimated sample size remains valid

6. Estimate the proportion of the time spent on the givenactivity

Work Sampling Example: We are interested in estimating the

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Work Sampling Example:We are interested in estimating theproportion of time spent by secretaries arranging and schedulingtravel. We are considering the possibility of bringing an on sitetravel agency to free up secretaries from this time consuming task.We estimate that the proportion might be as high as .50.

Step 1We need to estimate the number of observations needed to providean estimate with 97% confidence (z=2.17), and the resulting estimate will bewithin 5% of its true value. We use

Step 2Based on the first 30 observations the secretary was making travelreservations 6 times (6 out of 30 observations = 0.2). With this new estimate,recalculate the sample size needed .

Final StepAfter making the 302 observations, the secretary was makingreservations 60 times or 19.9%. This estimate can now be used to make thedecision on savings that might result by consolidating this task with an in

house travel agency

nsobservatio470.890.510.50.05

2.17p1p

e

zn

22

))

0.5p

nsobservatio3020.210.20.052.17

n

2

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Compensation

Compensation is the third part of work system design

Time-based plans (pay based on the number of

hours worked) vs. output-based systems (pay basedon the number of units completed)

Group incentive plans: profit sharing & gain sharing

Plans put part of a workers salary at risk Does the compensation system undermine teamwork?

Does plan prevent free-riders not doing their fair share?

Does the incentive plan encourage workers to support thelong-term health of the organization?

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Worker Compensation Systemscont

Group incentive plans reward employees when

company achieves certain performance objectives

Profit sharinga employee bonus pool based on

sharing of companys profits

Gain sharingemphasizes cost reduction rather than

profits Plans put part of a workers salary at risk

Compensation system may undermine teamwork

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Learning Curves

When the number of times the task is

repeated doubles, the time per task

reduces as shown in the graph

With an 85% learning curve rate, the

2nd time a task is done will take 85%

of the 1st time.

The 4thtime will take 85% of the 2nd

If an employee took 12 hours to

complete an initial task, how long will

the 16thtime take (4thdoubling)?

T x Ln= time required to

perform a task the nth timeT = the time required to

perform the task the firsttime

L = the rate of learning

n = the number of times thetask has doubled

hours6.26(.85)x12task16thforHours4

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Work System Design withinOM: How it all fits together

Work system design includes job design, methodsanalysis, and work measurement. Manufacturing orindustrial engineers often do these activities. Job designdetermines exactly how the product or service will be

done and is linked directly to product and process design.Based on the type of product (standard or custom) and itsproposed process (mass-producing or producing one at atime), a company determines the skills set needed by itsemployees as well as the necessary equipment.

Method analysis provides a means for evaluating differentprocesses and materials, thus allowing a company to focuson continuous improvement. This ties in directly with acompanys total quality management (TQM) focus.

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WSD: How it all fits togethercont

Work measurement techniques allow a company to developstandards to use as a basis for evaluating the cost and effectivenessof different methods and materials for building a product orproviding a service. These time standards provide a time estimate to

use as a basis for establishing detailed work schedules and fordetermining long-term staffing levels. These time estimates can beused as a basis for making delivery or completion-time promises tocustomers. Standard times are used to develop lead-time estimates,which are inputs for the MRP (material requirement planning)system as well as the MPS (master production schedule) process.

Work system design provides the means for setting standards

against which to compare new methods, new materials, and newdesigns, assures that employees know how to do their job, andprovides the information needed by the company to calculate itscosts.

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Work System Design Acrossthe Organization

Work system design affections functionalareas throughout the organization

Accounting calculates the cost of productsmanufactured, variances between planned andactual costs as well as operational efficiency

Marketing uses work system design as thebases for determining led time

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Work System Design Acrossthe Organizationcont

Information systems uses estimates of jobduration and resources in the software for

scheduling and tracking operations Human resources uses work sampling to

establishes and validate hiring criteria

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Chapter 11 Highlights

Work system design involves job design, methods or processanalysis and work measurement. Job design specifies thework activities of an individual or group in support of

organizational objectives

Relevant job design issues include design feasibility, thechoice of human or machine, the use of teams, and thelocation where the work is to be done. Technical feasibility is

the degree to which an individual or group of individuals isphysically and mentally able to do the job. Economicfeasibility is the degree to which the value of a job adds andthe cost of have the job done are profitable for the company.

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Chapter 11 Highlightscont

Methods or process analysis is concerned with how the employeedoes the job. Methods analysis can also be used to improve theefficiency of an operation.

Work measurement is used to determine standard times. Astandard time is how long it should take a qualified operator, usingthe appropriate process, material, and equipment, and working at asustained pace, to do a particular job. Standard times are used forproduct costing, process and material evaluations, and for planning

workloads and staffing. Standard times are usually based on timestudies. Work sampling is used to estimate the proportion of timethat should be spent on an activity.

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Chapter 11 Highlightscont

To do a time study, first identify the job then break the job into workelements. Finally, determine the number of observations needed andperform the observation.

Work sampling involves random observations of a worker. Each time

you observe the worker, you note what activity the worker is doing.After numerous observations, you can project the expected proportion oftime the worker should spend on different activities.

Standard times are developed with either time studies, elemental timedata, or predetermined time data. You learned how to develop standardtimes using time studies. After conducting the time study, you computethe mean observed time for each work element. You compute thenormal time for the work element by multiplying the mean observedtime by the performance rating factor. You find the standard time foreach work element by multiplying the normal time by the allowancefactor.

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Chapter 11 Highlightscont

Standard times are used to compare alternative processes, evaluate newmaterials or components, and evaluate individual worker performance.Standards also allow you to determine when a job should be completedor how many units can be done in a period of time.

Worker compensation systems are either time-based or out-put based.Time-based systems pay the employee for the number of hours worked.Output-based systems pay the employee for the number of unitscompleted. Compensation schemes can be based on either individual orgroup performance. and can be based on individual or groupperformance.

Learning curves show the rate of learning that occurs when an employeerepeats the same task. Using learning curves, you can estimate howlong a particular task will take. It allows the company to schedule betterand calculate cost more accurately.

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Chapter 11 Homework Hints 11.5: calculate normal time (NT) 11.6: use NT from 11.5 and allowance factorjob time

[AFJOB] to calculate standard time (ST) 11.7: use the total ST from 11.6 to calculate the number of

units. 11.8: use NT from 11.5 and allowance factortime worked

[AFTIME WORKED] to calculate ST 11.9: use the total ST from 11.8 to calculate the number of

units. 11.10: check the book for help in finding other factors to

choose between the two models calculated above. 11.19: refer to example 11.6 and use table 11-9 for data to

calculate the time based on the learning curve. Note that problems 5-10 are worth 5 points; 19 is worth 10