SESSION 1

Introduction to the subject (MTM)

Subject name: MTM

MTM stands for Methods Time Measurement.

Subject Aim:

1. To provide basic understanding about the various concepts and significance of PMTS over and
above what you have learned in IE
2. To provide understanding and knowledge of various types/categories of MTM
3. To inculcate skills among you to undertake MTM activities for the improvement of productivity.

Basic terms used in IE:

A. Production:

According to Bates and Parkinson:

“Production is the organized activity of transforming resources into finished products in the form of
goods and services; the objective of production is to satisfy the demand for such transformed
resources”.

According to J. R. Hicks:

“Production is any activity directed to the satisfaction of other peoples’ wants through exchange”. This
definition makes it clear that, in economics, we do not treat the mere making of things as production.
What is made must be designed to satisfy wants”

What is not Production?

The making or doing of things which are not wanted or are made just for the fun of it does not qualify as
production. On the other hand, all jobs which do aim at satisfying wants are part of production.

Those who provide services Such as hair-dressers, solicitors, bus drivers, postmen, and clerks are as
much a part of the process of satisfying wants as are farmers, miners, factory workers and bakers. The
test of whether or not any activity is productive is whether or not anyone will buy its end-product. If we
will buy something we must want it; if we are not willing to buy it then, in economic terms, we do not
want it.

Three Types of Production:

For general purposes, it is necessary to classify production into three main groups:

1. Primary Production:

Primary production is carried out by ‘extractive’ industries like agriculture, forestry, fishing, mining and
oil extraction. These industries are engaged in such activities as extracting the gifts of Nature from the
earth’s surface, from beneath the earth’s surface and from the oceans.

2. Secondary Production:

This includes production in manufacturing industry, viz., turning out semi-finished and finished goods
from raw materials and intermediate goods— conversion of flour into bread or iron ore into finished
steel. They are generally described as manufacturing and construction industries, such as the
manufacture of cars, furnishing, clothing and chemicals, as also engineering and building.

3. Tertiary Production:

Industries in the tertiary sector produce all those services which enable the finished goods to be put in
the hands of consumers. In fact, these services are supplied to the firms in all types of industry and
directly to consumers. Examples cover distributive traders, banking, insurance, transport and
communications. Government services, such as law, administration, education, health and defence, are
also included

B. Productivity:

Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In
other words, it measures how efficiently production inputs, such as labour and capital, are being used in
an economy to produce a given level of output. Productivity is considered a key source of economic
growth and competitiveness and, as such, is basic statistical information for many international
comparisons and country performance assessments.

For example, productivity data are used to investigate the impact of product and labour market
regulations on economic performance. Productivity growth constitutes an important element for
modelling the productive capacity of economies. It also allows analysts to determine capacity utilisation,
which in turn allows one to gauge the position of economies in the business cycle and to forecast
economic growth. In addition, production capacity is used to assess demand and inflationary pressures
Productivity is a measure of efficiency of a person completing a task. We often assume that productivity
means getting more things done each day. Wrong. Productivity is getting important things done
consistently. And no matter what you are working on, there are only a few things that are truly
important.

Being productive is about maintaining a steady, average speed on a few things, not maximum speed on
everything.

C. Efficiency:

While productivity measures quantity, efficiency measures quality. You could calculate a very high
productivity number per employee, but that number alone doesn’t give you any insight into the quality
of work (in theory, an employee could seem very productive, but actually be producing horrible
outputs).

To compare the productivity numbers against a benchmark, you can compare the current productivity
with the standard amount of effort needed for the same output. Divide the standard labor hours by the
actual amount of time worked and multiply by 100. The closer the final number is to 100, the more
effective your employees are.

For example, let’s say the standard labor hours for a certain project is 80 and the actual amount of time
worked is 92. You would divide 80 by 92, and multiply by 100, calculating your efficiency to be 87%.
As we compare productivity and efficiency, there are a few different ratios to consider:

 Idle time ratio: (Production downtime / total labor hours) x 100

 Activity ratio: (Expected hours needed to produce actual output / actual hours need to
complete) x 100

 Labor capacity: (Actual hours worked / total budgeted labor hours) x 100

D. Performance:

Performance rating is the step in the work measurement in which the analyst observes the worker's
performance and records a value representing that performance relative to the analyst's concept of
standard performance.

Performance rating helps people do their jobs better, identifies training and education needs, assigns
people to work they can excel in, and maintains fairness in salaries, benefits, promotion, hiring, and
firing. Most workers want to know how they are doing on the job. Workers need performance feedback
to work effectively. Accessing an employee timely, accurate, constructive feedback is key to effective
performance. Motivational strategies such as goal setting depend upon regular performance updates.
While there are many sources of error with performance ratings, error can be reduced through rater
training and through the use of behaviorally anchored rating scales. In industrial and organizational
psychology such scales are used to clearly define the behaviors that constitute poor, average, and
superior performance.

The purpose of performance rating is to provide systematic evaluation of the employees’ contribution to
the organization. Globally, the combination of indicators and performance management, combined with
intensifying work, transforms the work of employees and of the managers. On the managerial level, the
will of hierarchy to fulfill performance indicators is dependent on task prioritizing, which is not shared
amongst everyone.
Performance Rating intensifies the environment of the organization but provides structure for
production. Performance satisfaction is found to be directly related to both affective commitment and
intention of employee. If motivated more likely to meet goals.

E. Utilization:

Utilization is defined as the amount of an employee's available time that's used for productive, billable
work, expressed as a percentage.

An employee's utilization rate is a critical metric for organizations to track. It’s a measure of billing
efficiency that helps the company understand if it's billing enough to cover its cost plus overhead.

When it comes to resource management, utilization rates help in forecasting, resource optimization, and
many other essential business functions. It's a simple measurement that has powerful effects on how
your business runs.
F. SAM:

Standard allowed minute (SAM) means how much time is required to make one complete garment
including allowances. SAM is used to measure the task or work content of a garment. This term is widely
used by industrial engineers and production people in the garment manufacturing industry.

For the estimation of cost of making a garment, SAM value plays a very important role. In the garment
industry, the industrial engineering department determines and calculates SAM for assembling
processes of garments using a standard calculation method.

The applications of SAM are:

 Firm as well as individual operator’s performance

 Operator and associated cost ratios
 Operators’ payroll and incentive amount
 SAM is one of the key parameters in state-of-the-art production scheduling methods like in line
balancing and performance measuring systems

Calculations of SAM:

For the valuation of garment cost, determination of SAM value plays a critical role. General sewing data
(GSD) has a definite set of codes for motion data for determination of SAM. According to research,
standard minute value has been defined for each movement needed to accomplish a job. Synthetic data
are available for each movement, while performing specific steps in a garment manufacturing. There are
two methods of calculating SAM. One is calculated by synthetic data and another is by time study.

Calculation of SAM by synthetic data:

In this system ‘predetermined time standard’ codes are utilized to establish ‘standard time’ of a specific
style of garment. The step-by-step procedure for calculation of SAM by this method is given below.

 Selection of any one process or operation for which the SAM has to be determined.
 Study of various motions of the specific process/operation performed by an operator and
remarking all movements used by the operator in carrying out one complete cycle of work.
 Enlist various motions performed by an operator sequentially. By referring to GSD and synthetic
data for time measurement unit (TMU) values, TMU value (1 TMU = 0.0006 minute) for one
operation could be obtained, which is then converted into minutes which is known as basic
time.
 SAM = Basic minute + Bundle allowances (10%) + Machine and personal allowances (10%).
Calculation of SAM by time study:
The step-by-step procedure for calculation of SAM by this method is given below.

 Selection of one process or operation for which the SAM has to be estimated.
 Note down the cycle time (total time necessary to carry out all tasks required to complete one
operation) for the specific operation using a stop watch by standing at the side of the operator
using the stop watch. It has to be done for five consecutive cycles of that operation and the
average has to be determined. Basic time = cycle time × performance rating.
 Establishing the performance rating of an operator after evaluating his or her movement and
work speed. Suppose if the performance rating of an operator is 85% and the cycle time is 0.55
minutes, then basic time = (0.55 × 85%) = 0.46 minutes.
 SAM = Basic minute + Bundle allowances (10%) + Machine and personal allowances (20%). Now,
SAM = (0.46 + 0.046 + 0.092) = 0.598 minutes.

Functions of SAM value in production planning:

1. Determination of line capacity – The systematic method of estimating the production capacity
of a line by utilising the SAM of a garment.
2. Determination of lead time – Based on the production capacity of a garment unit, order
allocation has to be done for different lines.
3. Order booking – While booking the orders, available capacity in a particular period of time has
to be taken into account. In these circumstances, determination of time required to complete
the new order using SAM and comparing the same with production minutes available in the
factory for the particular period will be helpful.
4. Process scheduling – Time and action calendar of each and every order is carried out by
the production planning department based on capacity of each process, which is known by
calculating SAM.
5. Order execution and production monitoring – SAM facilitates the production planning
department to set targets for sewing lines.
6. Estimation of labor – For the estimation of labour cost for a particular style, the SAM value will
play a vital role

G. SMV:

The term Standard Minute Value – SMV is mostly used in the garments industry. It is a process of time
study and measure standard minute and then calculates the SMV. The calculation of SMV is actually
done by the Industrial Engineer. Generally, SMV indicates the time taken to make garments by the
workers using the right types of machinery. In the garments factory, you may find that many people
used to the SAM – Standard Allowed Minute which is the same as SMV. SMV varies garments to
garments, style to style, factory to factory. Management and buyers ask for SMV and it is the
responsibility of the IE department to calculate SMV and give it to the respective parties.
Importance of SMV in the Apparel Industry

The reason Why we use SMV in Garments Factory is given below

 SMV is calculated for doing costing of garments
 It is used for calculation of target and set the right target
 For Calculating the Efficiency of workers
 SMV is calculated for making a plan and take effective factory production decisions.

For Calculating SMV – Standard Minute Value in Garments you must have a proper idea of
machine operating procedure and working process of workers. Close observation of Industrial
Engineer is required to calculate the right SMV for a particular product or style in your factory.

Basically, SMV is the sum of the basic time requirement and allowance applicable to it. Normally
allowance is given at the rate of 10% based on efficiency.