Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 3-1 © 1998 by Prentice Hall, Inc.

A Simon & Schuster CompanyUpper Saddle River, N.J. 07458

Operations Operations ManagementManagement

ProductivityProductivity

Measurement ProblemsMeasurement Problems

¨ Quality may change while the quantity of inputs and outputs remains constant.

¨ External elements may cause an increase or decrease in productivity.

¨ Precise units of measure may be lacking

Productivity:

“production per unit of effort” effectiveness of productive effort

Work organisation:quantitative techniques to optimise

productivity

ProductivityProductivity

Efficiency = Output / Unit Input

Efficiency is “doing the thing right”

Effectiveness is “doing the right thing”

Productivity is an efficiency measure usually quoted as:

Productivity = Output / Worker hours

Machine productivity = output / machine hoursor = output / capital invested

Energy productivity = output / kilowatt-hours

ProductivityProductivity

Productivity VariablesProductivity Variables

¨ Labor - contributes about 1/6 of the annual increase

¨ Capital - contributes about 1/6 of the annual increase

¨ Management - contributes about 2/3 of the annual increase

Service ProductivityService Productivity

¨ Typically labor intensive

¨ Frequently individually processed

¨ Often an intellectual task performed by professionals

¨ Often difficult to mechanize

¨ Often difficult to evaluate for quality

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

© 1998 by Prentice Hall, Inc.A Simon & Schuster Company

Upper Saddle River, N.J. 07458

Productivity Growth 1971- 1992Productivity Growth 1971- 1992

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

United StatesWest GermanyJapan

Whole Economy Manufacturing

% p

er y

ear

Transparency Masters to accompany Operations Management, 5E (Heizer & Render)

© 1998 by Prentice Hall, Inc.A Simon & Schuster Company

Upper Saddle River, N.J. 07458

WhirlpoolWhirlpool

Parts per man hour

95

100

105

110

115

1989 1990 1991

Cost per unit of a spin pinion

$1.50

$1.75

$2.00

$2.25

1989 1990 1991

Average worker's annual cash compensation

24000

25000

26000

27000

1989 1990 1991

Productivity improved Costs were pared Wages increased

Multi-Factor ProductivityMulti-Factor Productivity

Multi-Factor Productivity: which facility has the best productivity?

Stator Pty Ltd Rotor Pty Ltd

Workers 500 100

Labour costs $20,000/yr/worker $20,000/yr/worker

Equipment $1m $5m

Output 1500 1200

Stator Pty Ltd Rotor Pty Ltd

Normal (labour) productivity = 1500 / 500= 3 machines / worker

= 1200 / 100= 12 machines / worker

Capital productivity = 1500 / $1m= 15 machines / $100k

= 1200 / $5m= 2.4 machines / $100k

Labour/capital multi-factor productivity

= 1500 / (500x(20k) + 1000k)= 136 machines / $1m

= 1200 / (100x(2k) + 5000k)= 171 machines / $1m

Multi-Factor ProductivityMulti-Factor Productivity

Productivity SummaryProductivity Summary

• When analysing productivity the measures must be appropriate

• These measures must be quantitative so that changes can be monitored

• Quality should not be traded for productivity

Work StudyWork Study

Work StudyWork Study

Work study

Method study Work measurement

Method StudyMethod Study

Method study is the systematic examination of the way work is carried out currently. There are a number of stages through which the study must progress:

1. Selection process

2. Data recording

3. Analysis and development of New Method

4. Brainstorming

Selection ProcessSelection Process

The selection may be prompted by any of a number of factors:

• Management directive

• Consultant report

• Quality circle

• Perceived bottleneck

• Under-utilised equipment

• Poor quality

• Frequent failure

Data RecordingData Recording

Process charts – five basic symbols are generally used

Transport

Permanent storage

O Operation

D Delay or temporary storage

□ Inspection

ExampleExample

ExampleExample

ExampleExample

ExampleExample

Layout ExampleLayout Example

Layout ExampleLayout Example

Layout ExampleLayout Example

Travel ChartTravel Chart

Analysis of new methodAnalysis of new method

•Have an open mind•Employ a systematic approach

One technique used to force a systematic investigation of the data is a set list of questions

What is being done?Why is it being done?What else could be done?What else should be done?

When is it done?Why then?When else could it be done?When should it be done?

Where is it being done?Why there?Where else could it be done?Where should it be done?

Who does it?Why that person?Who else might do it?Who should do it?

How is it done?Why that way?How else can it be done?How else should it be done?

Brain StormingBrain Storming

Brainstorming may help in the development of new ideas and methods

Installation of new methodInstallation of new method

The new method will need to be:

• Sold to all those concerned

• Implemented efficiently

• Supported with training

• Monitored to ascertain the level of improvement

Work MeasurementWork Measurement(Time and Motion Study(Time and Motion Study

Reasons why work rates may need to be measured

• Scheduling and loading

• Line balancing and manning levels

• Method comparison

• Budget and cost control systems

• Estimation costs and loads

• Financial incentives

Time StudyTime Study

The rating for a qualified worker is 100

basic time = observed time (% rating)for work element 1 = 1.7 x (135/100) = 2.3 minutes

Work element Observed time Rating

1 1.7 135

2 3.1 90

3 1.2 80

Time and Motion StudyTime and Motion Study

The observed time only covers actual work done. Other factors

• Relaxation allowance• Contingency allowance for extra work• Contingency allowance for delay• Unoccupied time allowance• Interference allowance

Time and Motion StudyTime and Motion Study

Work content = Basic + Relax’n allowance + Contingency allowance (extra work)

(% of basic time) (% of basic time)

Standard time = Work content + Contingency allowance + Unoccupied allowance

(% of work content) (% of work content)

+ Interference allowance + ……... (% of work content)

TMSTMS

Observed time element (min)

Rating Basic time (min)

1.3 90 1.17

4.2 110 4.62

8.6 115 9.89

9.3 85 7.9

5.2 125 6.5

• Relaxation 12%• Extra work 3%• Delay 4%• Unoccupied time 3%• Interference 2%

TMSTMS

Work content = 30.08 + 3.61 + 0.9 = 34.59

Standard time = 34.59 + 1.38 + 1.04 + 0.69 = 37.7 minutes

Activity Based SamplingActivity Based Sampling

1. Explain with the operators the reason for the study

2. Examine the process and identify activities

3. Carry lut a preliminary study of the activities to establish the number of observation required for a full study (100 – 200 random observations)

4. Determine the number of observations required to establish a given degree of accuracy in the amount of down time observed

ABSABS

Number of observations required: N = 4P(100 – P) / (L2)where P = percentage occurrence of desired activity

L = required percentage activity

If a preliminary study indicated that the machine was productive for 35% of the time, and a full study was required to give an answer of 2% accuracy on this figure.

Then N = 4 x 35(100 – 35)(2 x 2) = 2275 observations

Pre Determined Motion and Time Pre Determined Motion and Time StudyStudy

Human movement is broken down and classified

For each movement there is an associated time, usually expressed as a Time Management Unit (TMU) where:

1 TMU = 0.00001 hours = 0.036 seconds

Nine Categories of MTM-XNine Categories of MTM-X

Category Description Code

1 Get Reach to and grasp an object GE (easy)GD

(difficult)

2 Put Move and position an object PE (easy)PD (difficult

3 Regrasp Shift the grasp on an object R

4 Handle weight Apply force to move an object HW

5 Apply pressure Apply force where no movement is involved A

6 Eye action Eye focus and eye travel E

7 Step A pace in walking S

8 Bend down Bend the trunk BD

9 Arise from bend Straighten the trunk AB

MTM-XGE GD PE PD

N 8 17 5 19F 16 25 14 28X 13 20 9 22

In addition to the initial classification, some may be qualified by the distance of reach or weight:

F = far N = near X = variable