Chapter 3 – Design of Work Systems

Course: Operations Management (OM)

Instructor: Getnet W. (Assi.Professor)

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 Learning Objectives
• Describe the elements of work system design & their objectives
• Explain relevant job design issues
• Understand the importance of work measurement
• Describe how to do a time study
• 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 System
 Designing a work system is part of developing an
operations strategy.
• Effective operations strategy provides structure for
company productivity.
 The work system includes:
 Job design
 Methods/process analysis
 Work measurements/time study
 Worker compensation

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 Reflection #1

• What are the considerations to decide whether jobs

should be automated (people/machines)?
• How can we reduce boredom associated with labor
specialization?
• Should the work environment be considered in job
design?
• Discuss.

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 Job Design
- specifies work activities of an individual or group
- Jobs are designed by answering questions like:
• What is the job’s 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 do
the job?

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 Job Design …
 Additional Job Design Factors
Factors::
 Technical feasibility - The job must be physically and
mentally doable
 Economic feasibility - Cost of performing the job is less
than the value it adds
 Behavioral feasibility - Degree to which the job is
intrinsically satisfying to the employee

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 Job Design (continuum) …

Self-directed
teams
Increasing
Empowerment reliance on
employee’s
Enrichment (VE-R) contribution
and increasing
Enlargement (HE-S)
responsibility
accepted by
Specialization employee

Job expansion

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 Job Design …
 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 & video conferencing.
 Current situation:
 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 & out as needed …

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 Methods/Process Analysis
 A detailed step-by-step analysis of how a given job is
performed
 Can distinguish between value-added & non-value-added
steps
 Used to analyze:
1. Movement of individuals or material
 Flow diagrams
2. Activities of human and machine and crew activity
 Activity charts
3. Body movement
 Micro-motion charts

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 Work Measurement
 Work Measurement helps determine how long it should take
to do a job
 Involves determining Standard Time
• Standard time
time:: the length of time a qualified worker, using
appropriate processes & tools to complete a specific job,
allowing time for personal fatigue & unavoidable delays
- Standard time is used in:
• Costing the labor component of products
• Tracking employee performance
• Scheduling & planning required resources

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 Work Measurement …
 Setting labor Standards can be done in 4 ways
ways::
1. Historical experience
2. Time studies
3. Predetermined time standards
4. Work sampling

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 Work Measurement …
 How to do a Time Study
 When making a time study several decisions are made to
assure desired results:
 # of observations to make

 Desired level of accuracy

 Desired level of confidence for the estimated standard

time
 Desired accuracy level is typically expressed as a % of the
mean observed times

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 Work Measurement …
 Doing a Time Study:
 Needs to determine how many observations are required
 Involves determining the level of accuracy required &
confidence level desired
2
 z  s  
n   a   
  x  

• 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 or precision
• x-bar: the mean of the sample observations
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 Pat’s Pizza Place: Pat hires an analyst to determine a standard time
to prepare a large pepperoni & cheese pizza. He takes 10
observations of the 7 elements and calculates the mean time & the
standard deviation per element. He must then calculate the # of
observations to be within 5% of the true mean 95% of the time.
A B C D E
1 Example 11.3 Pat's Pizza Place
2 Standard Deviation Mean Observed Revised Observed
3 Work Element (minutes) Time (minutes) Time (minutes) # Observations
4 1. Get ball of dough 0.010 0.12 0.15 11
5 2. Flatten dough 0.030 0.25 0.25 23
6 3. Spin and toss dough 0.040 0.50 0.60 10
7 4. Place dough on counter 0.005 0.12 0.15 3
8 5. Pour sauce on formed dough 0.035 0.30 0.30 21
9 6. Place grated cheese on top 0.025 0.25 0.28 16
10 7. Place pepperoni on sauce 0.030 0.24 0.28 25
• The analyst must calculate the observations for each element to determine
how many additional observations must be taken. The maximum number
of 25 (in this case) for element #7 means that an additional 15
observations must be made & then the observed times are revised.
2 2
 z  s     1.96   0.03 
n 7 =     =    = 25 observations
 a  x     0.05   0.24 
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 Other time factors used in calculating standard time
 Normal time (NT) = (mean observed time) x (performance
rating factor)
 The performance rating factor (PRF) is a subjective estimate
of a worker’s pace relative to a normal work pace
 The frequency of occurrence (F) is how often the element
must be done each cycle.
 The allowance factor (AF) is the amount of time allowed for
personal, fatigue & unavoidable delays (PFD), PFD=15%
 Standard Time=normal time x allowance factor
factor, where:
1 1
AF Tme Worked = = = 1.176 = 117.6%
1  PFD 1  0.15
ST = (NT)(AF)

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 Calculating Normal Time & Standard Time at Pat’s Pizza
A B C D E F
12 Example 11.4 Calculating Standard Time for a Hand-Tossed Cheese and Pepperoni Pizza
13 Revised Observed Performance Rating Frequency Normal Time Standard Time
14 Work Element Time (minutes) Factor (minutes) (minutes)
15 1. Get ball of dough 0.15 0.90 1 0.135 0.159
16 2. Flatten dough 0.25 1.00 1 0.250 0.294
17 3. Spin and toss dough 0.60 0.85 1 0.510 0.600
18 4. Place dough on counter 0.15 1.10 1 0.165 0.194
19 5. Pour sauce on formed dough 0.30 1.20 1 0.360 0.423
20 6. Place grated cheese on top 0.28 1.00 1 0.280 0.329
21 7. Place pepperoni on sauce 0.28 0.95 1 0.266 0.313
22 Total Time 1.966 2.312

 The standard time for preparing a large, hand-tossed pepperoni pizza is

2.312 minutes. This means that a worker can prepare 207 pizzas in an
8-hour shift (480 minutes divided by 2.312 minutes)
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 Predetermined Time Standards
 Divide manual work into small basic elements that have
established times
 Can be done in a laboratory away from the actual
production operation
 Can be set before the work is actually performed
 No performance ratings are necessary
 Predetermined time data (e.g. Motion Time Systems/MTS)
is a published database element time data used for
establishing standard times
 Reach, grasp, move, engage, insert, turn, etc.

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 Work Sampling
 Work Sampling is a technique for estimating the proportion of
time a worker spends on an activity
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 &
confidence level
4. Develop the random observation schedule. Make observations
over a time period that is representative of normal work
conditions
5. Make observations & record the data. Check to see whether the
estimated sample size remains valid
6. Estimate the proportion of the time spent on the given activity

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 Work Sampling Example: We are interested in estimating the
proportion of time spent by secretaries arranging and scheduling
travel. We are considering the possibility of bringing an on site travel
agency to free up secretaries from this time consuming task. We
estimate that the proportion might be as high as .50.
 Step 1 – We need to estimate the number of observations needed to
provide an estimate with 97% confidence (z=2.17), and the resulting
estimate will be within 5% of its true value. We use p = 0.5
2 2
 z     2.17 
n    p1  p =   0.51  0.5 = 470.89observations
e
   0.05 
 Step 2 – Based on the first 30 observations the secretary was making
travel reservations 6 times (6 out of 30 observations = 0.2). With this
new estimate, recalculate the sample size needed .
2
 2.17 
n  0.21  0.2 = 302 observations
 0.05 
 Final Step – After making the 302 observations, the secretary was
making reservations 60 times or 19.9%. This estimate can now be
used to make the decision on savings that might result by
consolidating this task with an in house travel agency

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 Compensation
 Time--based plans (pay based on the number of hours
Time
worked) vs. output
output--based systems (pay based on the
number of units completed)
 Group incentive plans
plans: profit sharing & gain sharing
 Does the compensation system undermine teamwork?

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

 Does the incentive plan encourage workers to support

the long-term health of the organization?

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 Compensation …
 Worker Compensation Systems:
 Group incentive plans reward employees when company
achieves certain performance objectives
 Profit sharing – a employee bonus pool based on sharing of
company’s profits
 Gain sharing – emphasizes cost reduction rather than profits
 Plans put part of a worker’s 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 4th time will take 85% of the 2nd TxLn = time required to perform a
task the nth time
• If an employee took 12 hours to complete
T = the time required to perform
an initial task, how long will the 16th time the task the first time
take (4th doubling)? L = the rate of learning
n = the number of times the task
Hours for 16th task = 12 x (.85)4 = 6.26 hours has doubled

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 Work System Design within OM: How it all fits together
 Work system design includes job design, methods analysis
& work measurement. Manufacturing or industrial
engineers often do these activities. Job design determines
exactly how the product or service will be done and is
linked directly to product & process design. Based on the
type of product (standard or custom) & its proposed
process (mass-producing or producing one at a time), a
company determines the skills set needed by its
employees as well as the necessary equipment.
 Method analysis provides a means for evaluating different
processes & materials, thus allowing a company to focus
on continuous improvement. This ties in directly with a
company’s TQM focus.

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 Work System Design within OM: How it all fits together …
 Work measurement techniques allow a company to develop
standards to use as a basis for evaluating the cost &
effectiveness of different methods and materials for building a
product or providing a service. These time standards provide a
time estimate to use as a basis for establishing detailed work
schedules & for determining long-term staffing levels. These
time estimates can be used as a basis for making delivery or
completion-time promises to customers. Standard times are
used to develop lead-time estimates, which are inputs for the
MRP system as well as the MPS process.
 Work system design provides the means for setting standards
against which to compare new methods, new materials, and
new designs, assures that employees know how to do their job,
and provides the information needed by the company to
calculate its costs.

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