Work Measurement and Operational Effectiveness

Linmar Systems, Inc.Proprietary and Confidential Information

Work Measurement for Operational Effectiveness

Section 1 Timing Basics

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Work Measurement is Nothing New

• Scientific Management and time study (late 1800’s)

• Motion study (early 1900’s) Taylor Gilbreths

• Predetermined time systems (mid-1900’s)

• Computer aided work measurement and design (late 1900’s through today)

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Traditional Applications

• Documenting work methods

• Improving productivity

• Developing work standards

• Improving quality and reducing variation

• Developing training aids

• Usually applied to human related work activities where actions are easily observed

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Recent Activities With A Fundamental Link To Work Measurement

• Understanding the Reality of Current State Processes Who is actually performing work How is work being performed Why are workers doing specific tasks What is the resulting effectiveness

• Ergonomics and UI Screen Design

• Lean Methods Analysis & Continuous Improvement

• Produce Cost Estimating (Cost and Benefit Relations)

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Recent Activities With A Fundamental Link To Work Measurement

• Equitable Work Standards (Times, Instructions, Materials)

• Input to Process Models for Simulation

• 6 Sigma Quality Assurance & Engineering (Cost, Type, & Root Cause)

• Predetermined Standards for New Process Designs

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Impact

Training

Process Design

Methods

InformationTechnology

EmployeeRelations

Operations

Finance

Sales

Quality

Work Measurement

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Impact of Work Measurement

• Sales: Customer perception of service quality is often what separates you from competitors

• Finance:Finance: Standard Times are the basis for accurate unit cost measurements and cost allocation

• Operations: Methods, standards, and work design provide how the work is to be done and how long it takes. Standards also provide the basis for measuring the performance of CLS departments.

• Information Technology: Provides the basis for project priorities and functional requirements.

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Impact of Work Measurement

• Employee Relations: Good employee relations are maintained with equitable standards and a well designed work environment

• Process Design: Methods, standards, and work design strongly influence future process designs (e.g. Automated workflow process design best practices)

• Training: Standard work best practices provide the basis for effective and realistic training

• Quality: Standards enforce quality

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Importance of Time Standards

• Increase productivity No time standards - operation: 60% effective Time standards - operation: 85% effective Incentives often increase productivity to 120%

effectivenessDo 9.5 hours work in a 8 hour day

• Provide valuable information

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Time Studies Answer…

• How many people should we hire? Example: The booking specialists should book

250 loans per 8 hour day. Assuming 60% performance, how many people are required to book 1750 loans in 8 hours?(250x.6)=150/hr, 1750/150 = 12 people

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• How much does it cost to process a loan from origination to servicing? Activity Based Cost

Resource cost Indirect costDirect cost

• What is the anticipated process cycle time? Time standards combined with load, schedule

and resource allocation provide excellent predictions of cycle time.

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• What type of productivity gains are required to cost justify a potential IT project? Cost benefit ratio or ROI What features and functions deliver the best ROI

• When should we schedule work hours, and how much work can we handle with the systems and people we have? What is the system loading? What is the efficiency and utilization numbers of

a particular area?

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• How do we measure productivity? Productivity is the measure of output divided by input.

Example:Productivity = output = 1,000/day input= 50 people@ 8hrs./ day

• = 2.5 units/ man-hour

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• How can we pay our people for outstanding performance? Stage 1. Operations with no standards operate at 60%

performance. Stage 2. Operations with standards and

performance control operate at 85% performance. Stage 3. Operations with incentive systems operate at

120% performance

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Performance Improvement

• Goal setting (setting time standards)

• Comparison of actual performance to the goals

• Tracking results via KPI (executive dashboards and graphing)

• Reporting variances larger then acceptable limits

• Taking root cause corrective action to eliminate poor performance (time and quality) How do you know what poor performance is when

you are not sure what is good performance?

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Eliminate Don’t Automate

• Time studies are a great time to discover procedures, activities or processes that can be eliminated

• Use common sense and question why something is being done What is the value add? Ask and observe

• Does this activity change the input and output deliverable in a substantial and meaningful way?

• Think about deliverables!

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Vocabulary

• Procedure - An established (correct or incorrect) method of doing something at a low level of detail Example – looking in CIS for a branch location and

officer ID• Activity – A collection of procedures that are

combined to perform some measurable unit of work A subdivision of a process that can be assigned to a

particular actor (organization, market, system or role) or place (location facility or equipment) for performance

Example – QA a loan for compliance• Sub-activities are used for clarity when

diagramming a process for communicating a complex activity

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Vocabulary

• Process – A series of activities directed toward a particular aim Example – book a loan

• Deliverable - A work product produced by a business domain business process, or activity for use in a subsequent business domain, process, or activity. Deliverables are ultimately provided to customers outside of the boundaries of the business domain, and are therefore the reasons a business domain exists Example – a direct loan contract

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Think Deliverable!

ActivityInbound Deliverable

What happened to the deliverable?

Outbound Deliverable

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First Exercise

• Randomly pick 2-3 CLS or CLO operations supervisors and ask them what they consider acceptable productivity standards for specific jobs Are there standards in place? How were they derived? Do they use any methods or tools to measure

productivity? Do the workers know what these standards are?

Is it reported to them in a timely manner?

• Be tactful in how you ask these questions!

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Work Measurement Defined

• Work measurement is a systematic procedure that is employed to determine the time required to perform work tasks.

This time is called Standard Time

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Work Measurement Defined

• Work Measurement is a core Industrial Engineering Function involving data collection and analysis.

• Data provides objective documentation in support of the development of Work Standards (Predictors)

• Work Measurement involves the use of standards to predict the time required to perform Elemental Task, an Operation (group of tasks

• Methods Analysis and Work Design, use this data to detect and standardize efficient methods, to minimize resources, and determine requirements for work

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Methods of Measuring Work

•Estimation BasicHistorical Data SWAG

•Direct MeasurementTime StudyWork Sampling

•SynthesisFuture state analysisStandard dataPredetermined times

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Purpose of Standard Practices

• To reduce variation and produce predictable output

• To provide “know - how” for workers and managers on the job

• To provide a basis for tracing problems

• To provide a trail for tracing problems

• To provide a means to capture and retain knowledge

• To give direction in the case of unusual conditions

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Time Study Method

• Direct observation of a task as it should be performed at the job site

• Job is observed for a continuous period of time and for a specified number of observations called cycles.

• As the time data is recorded the analyst applies a rating or leveling factor to translate the observed time into the standard

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Overview of Time Study

1. Secure and record information about the operation and operator being studied.

2. Orient the supervisor and the workers.

3. Improve work methods.

4. Break the task into elements and record.

5. Observe and record the time taken by the operator.

6. Determine the number of cycles to be timed.

7. Rate the worker’s performance.

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Overview of Time Study

8. Check to make certain that a sufficient number of cycles have been recorded.

9. Determine the allowances.

10.Determine the time standard for the operation.

11.Check and debug the standards with audits.

12.Implement with recall review once a month.

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Work Analysis

• A systematic approach to identify and document the best method for performing a task.

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Documentation of Best Method

• Kipling’s six honest men who taught him all he knew Why What When Where How Who

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Question Followed by Action Expected

1. What is the purpose?

Why? Eliminate unnecessary activity

2. Where should this be done?

Why? Combine or change place

3. When should this be done?

Why? Combine or change time or sequence

4. Who should do this?

Why? Combine or change person

5. How should this be done?

Why? Simplify or improve method

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Process Analysis

• Study of an operation or series of operations involving people, equipment, and the processes for the purpose of investigating the effectiveness of specific operations or groups of operations so that improvements can be developed which will raise productivity, reduce costs, improve quality, and attain other objectives.

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Work Simplification

It is an attitudinal thing-

The belief that with sufficient study any method can be improved, that waste can be eliminated, and that productivity can be increased.

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Process Modeling

• Process modeling is fundamental to effective and quantifiable process improvements

• Our goal is to build a set of models from the data we collect during our work measurement studies

What is the difference between a process diagram and a model?

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Modeling Definition

• A Workflow model is a representation of a Business Process in terms of its component Activities, and the flow of work among these Activities. A Workflow model concentrates on the flow of work through the business for a single output (i.e. product or service), or a single input (e.g. handling of an order). Once created, a Workflow model can be simulated to analyze process performance in terms of cost, timing and resource constraints.

• Since Processes often cross organizational boundaries, the Workflow model depicts the organizational components performing each Activity and the Workflow (Deliverables and/or Events) between the Activities. The Workflow model serves as the basis for redesigning the Process, or redesigning the organizational structure to better support the Process.

Copyright © 1995 - 2006 Proforma Corporation

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Types of Models

• Process Models

• Organization Models

• Workflow Models

• Location Models

• Activity Based Cost Models

• UML Use Case Models

• Class Diagrams and Object Models

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Standard Time

• The standard time is the time required by the average worker, working at a normal pace, to complete a specific activity or sub-activity, using a prescribed method, with allowances for personal, fatigue, and delay

Work Measurement and Methods Improvement,

Lawrence S. Aft, Wiley, 2000Typically 15% for most clerical jobs

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Average Worker

• Trained

• Experienced

• Competent

How is the average worker identified?

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Normal Pace

• Not too fast

• Not too slow

• Pace that can be maintained the entire day without undue fatigue

• Pace of the average worker

• Anything you want it to be

• Consistent for all tasks within the organization

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Allowance

• The Personal, Fatigue, and Delay (PFD) allowance is expressed as a percentage of the standard time allowed to complete an activity and is added to the observed and rated time

• Ideally it is based upon observation and of all personal factors over an extended period of production

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Types of Allowances

• System downtime and response

• Retrieving work form another area Mailroom

• Job preparation and cleanup Scanner maintenance between batches

• Reviewing work for quality Post doc prep review for cover sheets

• Personal time Breaks

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Calculating Allowances (1)

• Allowances are typically divided into three categories: Personal time Fatigue or rest Unavoidable delays

• There is no “pat answer” to what is appropriate

• Generally the first two factors are combined into a single factor

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• Allowances are adjustments to the normal time required to account for nonproductive portions of the working day, such as time required for rest and personal needs.

• According to the generally accepted Industrial Engineering methods “the common practice is to express allowances as a percentage of the normal time.”

This is based on the assumption that the allowance is expressed as percentage of normal time.

Smith, Work Measurement, Grid Publishing, Columbus Ohio, 1978, page 53.

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• “However, most allowances are estimated as a percentage of the total day, that is a 15 percent allowance should provide .15x480 minutes, or 72.0 minutes of nonproductive time per day. In order to apply 72.0 nonproductive minutes to 480 minute day, the percentage of normal is expressed:

or 17.65% and Not 15%. The standard should then be adjusted 17.65%.”

Smith, Work Measurement, Grid Publishing, Columbus Ohio, 1978, page 53.

72.0 nonproductive minutes(480.-72.0) nonproductive minutes

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NCC Allowances

• Lets run thorough some examples

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Delays

• Job delays refer to hard to measure work or interruptions not directly related to the number of units processed

• Job delay factors are applied to the total standard minutes

• Types of delays Shift changeover Attention to equipment

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The Time Studies

• Studies performed to capture all of the time required to perform all of the work for a product (e.g., loan, collateral etc.)

• Worker(s) are followed for an entire sequence (usually several) and all times for all activities are recorded

• Worker(s) performance is rated

• Appropriate PFD allowances are added

Worker performance is arbitrary because it is based on observation

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Elements

• Elements are components of a job or activity that are logical divisions of the activity. They are distinct actions or steps in the process.

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Elements

An element is the subdivision of an activity cycle that can be recognized, described and timed.

•Advantages Makes a better job

description Aids in establishing better

methods Makes noting small

changes easier Enables comparison of

similar elements between jobs

Enables more accurate construction of future state job timings (hopefully improvements)

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Creating Elements

1. Stand or sit in a position where all movements are clearly visible

2. Observe enough cycles until familiar with operation

3. Start at beginning of cycle

4. Each element has a definite starting and stopping point

5. Elements should be relatively short and logical

6. Record any distractions or duties that are external to the activity (e.g., phone calls)

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Creating Elements

• The relative frequency of each element should be noted (some elements occur every cycle, other occur infrequently but regularly)

• Foreign elements are elements which occur but are not supposed to, such as sneezes or fire alarm.

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Elements - Keys to Accuracy

• When you define more then one element in an activity, the end of one element must be the beginning of the next element.

• Get the most elements as is practical and possible so you can add and subtract them and keep the validity of the time study.

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Sample Elemental Breakdown

Element Description Freq. Per Cycle

1 Get empty case and place on packing stand

1

2 Reach to conveyor, grasp bottles (1 per hand)

13

3 Twist bottles in fingers to inspect 13

4a If necessary discard defective in LH 1

4b If necessary discard defective in RH 1

5 Load bottles in case 12

6 Transfer case to conveyor 1

(One cycle = one case 24 bottles)

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Stopwatch Operation

Total Elapsed Time

End of element button

Elemental (lap) Time

End of cycle button

Start of cycle button

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Exercise 3

• View the slide with the alternating colors and determine the time for each element

• Use the provided worksheet

• What are the element times

• What is the total cycle time?

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Exercise 2 - Timing the Colors

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Insert Sample Time Sheets


End of Section 1

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