Indian Institute of Management of Kozhikode

Operations Management -I
Prof. Arqum Mateen

CASE: AIC NOTE BOOKS: OPTIMIZING PRODUCT ASSEMBLY

Submitted by: Group 1

Emaad Mulla: PGP/22/074
Manjistha Kanth: PGP/22/086
Neha Sharma: PGP/22/088 : Contact (9626539164/nehas22@iimk.ac.in)
Pallawi Singh: PGP/22/092 : Contact (9926806604/pallawis22@iimk.ac.in)
Nishant Yadav: PGP/22/090
Ashana Shukla: PGP/22/108
1) How efficient is the netbook assembly at the Kaizhi plant?

The efficiency at the Kaizhi plant is calculated by taking into account the total time taken for
assembly at different stations on the assembly line. The cycle time for planned as well as actual
process is identified below:

Station Number Planned time (In seconds) Actual time (In seconds)
1 40 40
2 40 50
3 39 39
4 40 45
5 39 39
6 40 50
7 40 49
8 37 37
9 41 48
10 40 46
Cycle time (Time taken by 41(Maximum of timings of 50 (Maximum of timings of
the bottleneck workstation) 10 workstations) 10 workstations)

Efficiency = (Planned Cycle time/Actual Cycle time) *100 = (41/50) *100 = 82%

(a) What is the monthly output of the plant?

Taking into account 9-hour shift (including 1-hour break for lunch and breaks), the total monthly
output can be calculated as follows:

Description Formula Value

Available Hours per shift From case 8hr=480*60s
Cycle time (in seconds) Actual Cycle time from above table 50
No. of Assembly Lines 4
(Available time (in sec)/Cycle time) *
Output per shift (1 shift) No. of assembly lines = (480*60/50) *4 2304
Total output a day (2 shifts) Output per shift * Number of shifts (2) 4608
Working days (per week) From case 6
No. of weeks per month 4.28
 Output a day * Working-days a week* 118333(App
Monthly output No. of weeks per month=4608*6*4.28 roximated)

(b) What is the theoretical efficiency of the planned line, looking only at the direct labour on the
assembly line?
For theoretical efficiency, total planned time is compared with the actual time measured as per
planned cycle time for the assembly process.
 Planned Time for assembly line = 40+40+39+40+39+40+40+37+41+40 =396 sec
 Actual Time as per planned cycle time = 41(Maximum time taken by a single workstation
in the assembly line i.e. Bottleneck of the process) x 10(Number of workstations i.e. direct
labour) = 410 sec
 Theoretical efficiency = (396/410) *100 = 96.6%

2. How effective is the current operation?

 Expected units (as per design) to be produced per shift = 700*4 = 2800
 Actual units produced per shift = 2304 (From calculation in the first question).
 Thus, Efficiency = (Actual Production/Expected Production i.e. as per designed) *100
 Efficiency of current operation = (2304/2800) *100 = 82.28%.

(a) What are the right criteria with which to evaluate it?

The right criteria to evaluate the operation would be to record time taken on each step over a
longer period of time, since this would even out the random issues in the process. Considering
that the time taken at each step would be more reliable, also the number of actual workmen at
reach station would reflect more realistic values. At an aggregate level, these should be
compared with the planned time and operators required in order to evaluate effectiveness. Along
with this, we should measure the utilization and idle time of each operator in order to better
utilize usage of operators through optimizing it throughout the process.

2. b. Is the operation designed properly to meet demand?

 Expected increased demand in a month or two = 130,000 units a month.

  As per design, the monthly production of notebooks should be: (Total time available per shift
(8*60*60 sec)/ Planned Cycle time i.e. 41 sec) * Number of assembly lines (i.e. 4) * Number of
shifts a day (i.e. 2) * Number of working days per week (i.e. 6) * Number of weeks per month
(i.e. 30/7 i.e. 4.28 assuming 30 days a month) = 144309 (approximated to integer).
 As the expected demand in a month or two is less than that which designed production line can
produce, the operation is designed properly to meet demands.
 But as actual production i.e. 118333 is less than expected demand, without further optimization of
the processes, it would not bee possible to meet the demand.

3) What recommendations would you make to Elias Chen?

The recommendations for Elias Chen are:

1. Since the cost of overheads is much higher compared to that of labour/operators, we can
try to have one supervisor per two lines and thus reduce overhead costs. Also, the supervisor
can assist at the end of line or at the start during quality inspection.
2. The steps are systematically arranged at every station. We should try to find opportunities
to fix multiple parts at same station thus; trying to run two processes in parallel, this would
reduce cycle time as well as improve operator utilization.