Service Management - Suraj

SERVICES MANAGEMENT
Submitted By:
SURAJ KUMAR - 2022MBA053
Under the Guidance of
Prof. Rohit Kapoor
Master of Business Administration (MBA)
Batch of 2022-24
Indian Institute of Management Sambalpur

Table Of Contents
S.NO. Contents Page Number
1 Executive summary 3-4
2 Introduction 4-5
3 Analysis of current state 6-7
4 Challenges and Opportunities 7-8
5 Proposed Redesign Strategy 9-10
6 Level Strategy Analysis 10-24
7 Chase Strategy Analysis 24-28
8 Rabbit Chase Strategy Implementation 28-29
9 Cost comparison 29-31
10 Old layout 31
11 New layout 32
12 Conclusion 33
13 Additional Suggestions 33-34
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Executive Summary
This report aims to provide a comprehensive analysis and redesign strategy for the assembly line of Toshiba's
Ome Works, focusing on the production of Satellite Notebook Computers. The current setup, employing 2,600
employees across four assembly lines, faces challenges in adaptability, efficiency, and technology integration.
The proposed solutions include the Level Strategy, Chase Strategy, and Rabbit Chase Strategy, each offering
distinct approaches to optimize production. The Level Strategy involves adjusting the number of stations and
workers to manage a standard production output with overtime considerations. The Chase Strategy, on the
other hand, aims to align workforce and production rates without overtime but requires additional staffing. The
Rabbit Chase Strategy introduces a flexible task management approach, enhancing multitasking and
productivity. A thorough cost and efficiency analysis of these strategies is provided to guide decision-making.
This report recommends a tailored approach combining these strategies to enhance Toshiba's production
efficiency, quality, and adaptability to market demands.
Purpose of the Report:
● The report aims to provide Toshiba's Ome Works with a strategic roadmap for optimizing its assembly
line operations.
● The goal is to improve efficiency, product quality, and the ability to respond swiftly to market changes
and new product introductions.
Key Findings:
● The current assembly line faces challenges such as rigidity in layout, workflow inefficiencies,
technological shortcomings, workforce skill mismatches, and inconsistent quality control.
● Opportunities for improvement include implementing a modular layout for flexibility, adopting lean
manufacturing techniques for process optimization, integrating advanced manufacturing technologies
like AI and robotics, and enhancing workforce skills and training.
● Three strategic approaches are proposed: the Level Strategy, Chase Strategy, and Rabbit Chase
Strategy, each with unique benefits and cost implications.
● Cost and efficiency analyses reveal that the Chase Strategy offers the highest efficiency, although it
requires additional initial investments.
Recommendations:
● Implement a tailored combination of the proposed strategies to achieve a balance between efficiency
and cost-effectiveness.
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● Focus on redesigning the layout for adaptability, optimizing processes, and integrating advanced
technologies.
● Consider the benefits of the Rabbit Chase Strategy for multitasking and productivity.
● Explore the feasibility of increasing conveyor speed, outsourcing certain sub-assemblies, and further
layout optimizations.
● Invest in workforce training and development to align skills with modern manufacturing requirements.
This report serves as a comprehensive guide for Toshiba's Ome Works to embark on a journey of
transformation, aligning its assembly line with contemporary manufacturing practices and positioning itself for
sustained success in the competitive market landscape.
2. Introduction
Toshiba's Ome Works is a critical manufacturing facility specializing in the production of Satellite Notebook
Computers. The plant operates with a total workforce of 2,600 employees, functioning across four assembly
lines. Each line is capable of producing up to eight different models, with each model having six combinations
of features, totaling 48 possible model types. The facility's current assembly structure includes one idle line,
one for overseas production, and two for domestic production. The initial production target is set at 150 units
per day, with plans to increase this to 300 units. The assembly process involves a team of 10 line workers
averaging 2 minutes to produce one notebook. This introduction sets the stage for analyzing the current
operational challenges and opportunities for improvement in the assembly process at Toshiba's Ome Works.
Background of Toshiba's Ome Works:
● Toshiba's Ome Works is a prominent manufacturing facility located in Ome City, Tokyo, Japan.
● The facility specializes in the production of Satellite Notebook Computers, a core product line for
Toshiba.
● Ome Works plays a pivotal role in Toshiba's global operations, contributing significantly to the
company's computer division.
Assembly Line for Satellite Notebook Computers:
● Within the expansive Ome Works facility, a dedicated assembly line is responsible for the production
of Satellite Notebook Computers.
● This assembly line represents a critical component of Toshiba's supply chain, focusing on the efficient
assembly of notebook computers with varying configurations and specifications.
● The line is designed to handle a diverse range of notebook models, accommodating both standard and
customizable features.
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Production Targets and Capacities:
● The assembly line operates with specific production targets and capacities.
● Initially, the production target is set at 150 units per day.
● There are plans to increase the production capacity to 300 units per day, reflecting Toshiba's
commitment to meeting growing market demands.
Complexity of Notebook Models:
● The Satellite Notebook Computer product line encompasses a wide array of models, each offering
different combinations of features and specifications.
● In total, there are 48 possible model types, demonstrating the complexity and diversity of products
manufactured on this assembly line.
Assembly Line Workforce:
● The assembly line at Ome Works is manned by a dedicated workforce comprising both full-time and
part-time employees.
● Full-time factory workers operate for 7.5 hours per day, while part-time workers contribute 6 hours
daily.
● The workforce is instrumental in ensuring the efficient and accurate assembly of notebook computers.
Production Efficiency and Quality:
● Achieving high production efficiency and maintaining product quality are critical objectives for
Toshiba's Ome Works assembly line.
● The ability to adapt to varying product configurations and meet market demands while upholding
quality standards is a key challenge.
3. Analysis of Current State
Toshiba’s Ome Works assembly line for Satellite Notebook Computers is structured with a traditional linear
layout. The workforce comprises 2,600 employees, including full-time and part-time workers. The full-time
factory workers operate for 7.5 hours per day, while part-time workers contribute 6 hours daily. There are four
assembly lines, each with the capability to produce eight different models, leading to a total of 48 model types.
Currently, only two lines are dedicated to domestic production, with one line idle and another for overseas
production. The initial production rate is set at 150 units per day, aiming to double this capacity. Each
assembly line requires an average of 2 minutes per notebook, utilizing 10 line workers. This analysis
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underscores the need for enhanced efficiency and flexibility in the assembly process to meet increasing
production demands.
Workforce Composition:
● The assembly line at Ome Works is staffed by a dedicated workforce consisting of both full-time and
part-time employees.
● Full-time factory workers contribute 7.5 hours of work each day, ensuring continuous production.
● Part-time workers, with a daily working duration of 6 hours, augment the workforce.
● The combination of full-time and part-time workers creates a balanced labor force capable of meeting
production needs.
Production Targets and Output:
● Initially, the assembly line is tasked with achieving a production target of 150 units per day.
● However, there are ambitious plans to double the production capacity, aiming for a target of 300 units
per day.
● These production targets underscore the importance of efficiency and process optimization to ensure
the assembly line's capability to meet growing market demands.
Challenges Encountered:
● Despite its vital role, the current assembly line faces several significant challenges:
● Rigidity in Layout: The assembly line follows a linear layout design, limiting its adaptability
to accommodate different product models effectively.
● Workflow Inefficiencies: Bottlenecks and time-consuming processes are observed,
contributing to reduced overall efficiency.
● Technological Limitations: The adoption of advanced manufacturing technologies has been
limited, potentially impacting productivity.
● Workforce Skill Mismatch: The existing skills of workers may not align optimally with the
technological advancements required in modern manufacturing.
● Quality Control Consistency: Ensuring consistent quality standards during scale-up or model
changes presents challenges.
● These challenges necessitate a comprehensive evaluation and redesign of the assembly line to address
inefficiencies and enhance its overall performance.
Opportunities for Improvement:
● While challenges exist, they also present opportunities for significant improvements:
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○ Flexible Layout Design: Implementing a modular layout that can swiftly adapt to different
product types and configurations.
○ Process Optimization: Employing lean manufacturing techniques to streamline operations,
reduce waste, and improve overall throughput.
○ Advanced Technology Adoption: Integrating modern technologies, such as robotics and AI,
to enhance efficiency and product quality.
○ Workforce Upskilling: Developing training programs to align worker skills with advanced
manufacturing requirements.
○ Robust Quality Control Systems: Strengthening quality assurance through better technology
and processes.
Identifying and capitalizing on these opportunities is pivotal to enhancing the assembly line's
capabilities and ensuring its readiness to meet evolving market needs.
4. Challenges and Opportunities
This section delves into a comprehensive discussion of the challenges currently faced by Toshiba's Ome
Works assembly line, while also highlighting the promising opportunities that exist for substantial
improvements.
Challenges:
● Rigidity in Layout: The current assembly line adheres to a linear layout design, which lacks
adaptability to effectively accommodate various product models. As a result, changes or
reconfigurations for different products are time-consuming and cumbersome.
● Workflow Inefficiencies: Bottlenecks and time-consuming processes within the assembly line impede
the overall efficiency of production. These inefficiencies lead to longer cycle times and potentially
hinder the assembly line's capability to meet production targets.
● Technological Limitations: There is a noticeable limitation in the adoption of advanced manufacturing
technologies. The assembly line has not fully embraced modern technologies such as robotics,
automation, and AI, which could significantly enhance productivity and quality control.
● Workforce Skill Mismatch: The skills possessed by the existing workforce may not align optimally
with the technological advancements required in contemporary manufacturing. This gap in skills can
hinder the smooth integration of advanced technologies into the assembly process.
● Quality Control Consistency: Ensuring consistent quality standards during scale-up or model changes
is a persistent challenge. As production scales or new models are introduced, maintaining uniform
product quality becomes increasingly complex.
Opportunities for Improvement:
● Flexible Layout Design: Implementing a modular layout design offers the potential to swiftly adapt
the assembly line to different product types and configurations. Modular systems allow for efficient
reconfigurations, reducing downtime associated with model changes.
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● Process Optimization: The adoption of lean manufacturing principles can streamline operations and
eliminate waste within the assembly process. Analyzing each stage for efficiency can identify
bottlenecks and areas where improvements can be made.
● Advanced Technology Adoption: Integrating modern manufacturing technologies, such as robotics for
repetitive tasks and AI for process optimization and predictive maintenance, can significantly enhance
efficiency and product quality. Robotics can handle tasks requiring precision, while AI can optimize
operations based on real-time data.
● Workforce Upskilling: Developing training programs that align worker skills with advanced
manufacturing requirements is essential. Upskilling the workforce ensures that employees can
effectively operate and interact with new technologies, bridging the skills gap.
● Robust Quality Control Systems: Strengthening quality assurance through technology and process
enhancements is crucial. Implementing advanced monitoring and inspection systems can ensure
consistent quality, even during changes in production scale or models.
The challenges outlined above provide valuable insights into the existing limitations of the assembly line.
Simultaneously, the opportunities for improvement offer a roadmap for enhancing efficiency, productivity, and
product quality. Addressing these challenges and capitalizing on opportunities is essential to realizing the
assembly line's full potential and aligning it with Toshiba's growth objectives.
5. Proposed Redesign Strategy
In response to the challenges and opportunities identified in the previous section, this section outlines a
comprehensive strategy for redesigning Toshiba's Ome Works assembly line. The proposed strategy
encompasses three key elements: layout redesign, process optimization, and technology integration.
Layout Redesign:
Implement a Modular Layout for Adaptability
One of the central aspects of the redesign strategy involves implementing a modular layout for the assembly
line. This modular approach is aimed at enhancing the adaptability of the assembly line to accommodate
various product models efficiently. Key components of this aspect include:
● Layout Analysis: Conduct a thorough analysis of the current linear layout, identifying its limitations in
accommodating different notebook models and configurations.
● Modular Design Principles: Study modular design concepts that allow for flexibility in assembly line
configurations. This involves understanding how different components and workstations can be
modularized to facilitate rapid reconfiguration.
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● Reconfiguration Plan: Develop a detailed plan outlining how the assembly line can be efficiently
reconfigured to produce different models. This plan should consider minimizing downtime during
transitions.
● Implementation Timeline: Establish a timeline that includes stages for design, testing, and full
implementation of the modular layout. Timely execution is crucial to minimize disruptions to
production.
● Training and Adaptation: Plan for training the workforce to adapt to the new modular layout
seamlessly. Adequate training ensures a smooth transition and efficient operation of the redesigned
assembly line.
Process Optimization:
Apply Lean Manufacturing Principles for Efficiency
To enhance the efficiency of the assembly line, the application of lean manufacturing principles is imperative.
This involves a systematic approach to eliminate waste, reduce cycle times, and improve overall throughput.
The steps include:
● Identify Value: Analyze each stage of the notebook assembly process to distinguish between value-
adding activities and non-value-adding ones. This step ensures that resources are focused on activities
that directly contribute to product value.
● Map the Value Stream: Create a detailed map of the entire production process, identifying areas where
waste occurs. Common sources of waste include overproduction, waiting time, and unnecessary
movement of materials or workers.
● Create Flow: Reorganize workstations and processes to ensure a smooth flow of materials and tasks.
Reducing delays and bottlenecks is essential to improving efficiency.
● Establish Pull: Implement pull systems that align production with customer demand. This approach
minimizes overproduction and reduces excess inventory.
● Pursue Perfection: Encourage a culture of continuous improvement among workers. Encourage them
to identify opportunities for efficiency gains and quality enhancements continually.
Technology Integration:
Leverage Advanced Manufacturing Technologies
To modernize the assembly line, it is vital to leverage advanced manufacturing technologies effectively. This
includes the integration of robotics, artificial intelligence (AI), and other cutting-edge solutions to boost
productivity, quality, and consistency. Key aspects of this integration include:
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● Robotics Implementation: Introduce robotics for repetitive and precision tasks within the assembly
process. Evaluate areas where robots can replace or assist manual labor, improving consistency and
efficiency.
● AI and Machine Learning: Deploy AI algorithms for process optimization, predictive maintenance,
and real-time decision-making. Analyze production data to identify patterns and optimize operations
continually.
● Technology Training Programs: Develop comprehensive training modules for workers to operate and
interact with new technologies effectively. Ensuring that the workforce can utilize these technologies
is critical to reaping their benefits.
● Continuous Monitoring and Adjustment: Implement systems for the continuous monitoring of
technology performance. This allows for adjustments and improvements over time, ensuring that
technology remains aligned with production goals.
6. Level Strategy Analysis
In this section, we conduct a detailed analysis of the Level Strategy for Toshiba's Ome Works assembly line.
The Level Strategy involves managing production at a standard rate with the option of overtime to meet higher
demand. We will calculate cycle times, workforce requirements, and cost implications associated with this
strategy.
Cycle Time Calculation:
The cycle time is a critical factor in the Level Strategy as it determines the time required to produce one unit.
To calculate the cycle time:
● Total production target per day = 300 units.

● Total working time per day = 10 hours (7.5 hours of regular work + 2.5 hours of overtime).
● Cycle time (c) = Total working time per day / Total production target.
Let's calculate the cycle time.
○ Total production target per day = 300 units.

○ Total working time per day = 10 hours (7.5 regular + 2.5 overtime).
○ Cycle time c = Total working time per day / Total production target = 10 hours / 300 units =
120 seconds per unit.
● Analyze the Requirement for Overtime and its Cost Implications:
○ Overtime is required to meet the production target of 300 units.
○ Overtime duration = 2.5 hours per day.
○ Cost calculation:
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○ Direct cost=(10 people×7.5 hours×X salary)+(10 people×2.5 hours×1.3×X
salary).
So, the cycle time for the Level Strategy is 2 minutes per unit. This means that it takes 2 minutes to produce
one unit of the Satellite Notebook Computer under this strategy.
Determine the Total Number of Workers Needed:
Next, we need to determine the total number of workers required for the Level Strategy. According to the case,
the number of stations is 10, and the number of workers is 11. This allocation is based on the initial layout and
production targets.
Now, let's analyze the requirement for overtime and its cost implications.
Analyze the Requirement for Overtime and its Cost Implications:
Overtime is required to meet the production target of 300 units per day. The overtime duration is 2.5 hours per
day.
Now, let's calculate the cost implications of overtime. The direct cost of overtime can be calculated as follows:
Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)
Where:
● Number of Workers = 10 (initial allocation)

● Overtime Hours = 2.5 hours
● Hourly Wage = X (hourly wage per worker)
Let's calculate the direct cost of overtime.
The direct cost of overtime for the Level Strategy can be calculated as follows:
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Given:

Let's calculate the direct cost of overtime.
To calculate the direct cost of overtime for the Level Strategy, we use the following formula:
Plugging in the values:

To calculate the direct cost of overtime for the Level Strategy, we can use the formula:
Substituting the given values:

The formula for the direct cost of overtime is:
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Substituting the values:

Now, let's calculate the direct cost of overtime by plugging in the values and calculating the result.
The direct cost of overtime for the Level Strategy is calculated as follows:
Direct Cost of Overtime=(10 workers×2.5 hours×X hourly wage per worker)
This cost is directly associated with the additional labor required due to overtime.
Total Cost Implications:
To determine the total cost implications of the Level Strategy, we need to consider both regular working hours
and overtime costs. The total daily labor cost can be calculated as follows:
Total Daily Labor Cost=(Number of Workers×Regular Hours×Hourly Wage)+Direct Cost of

Overtime
Overtime
Where:

● Regular Hours = 7.5 hours (regular working time per worker)
● Direct Cost of Overtime = Calculated earlier
This total cost includes the regular wages for workers as well as the additional cost of overtime labor.
Let's calculate the total daily labor cost.
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The total daily labor cost for the Level Strategy can be calculated as follows:

Overtime
Overtime

Now, let's calculate the total daily labor cost, which includes both regular working hours and overtime costs.

Overtime
Overtime


Overtime
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Overtime


Overtime
Overtime


Overtime
Overtime
15

Overtime
Overtime


Overtime
Overtime

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Overtime
Overtime


Overtime
Overtime


Overtime
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Overtime


Overtime
Overtime


Overtime
Overtime
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Overtime
Overtime


Overtime
Overtime

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Overtime
Overtime


Overtime
Overtime


Overtime
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Overtime


Overtime
Overtime


Overtime
Overtime
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● Hourly Wage = X (hourly wage per worker, which needs to be provided)
Additionally, the direct cost of overtime, which we calculated earlier, should be added to this total daily labor
cost.
7. Chase Strategy Analysis
Output Rate Calculation:
The output rate is the number of units produced per hour under the Chase Strategy.
● Total production target per day = 300 units.

● Total working time per day = 7.5 hours (only regular hours, no overtime).
We can calculate the output rate (r) as follows:
Output Rate (r)=Total Production TargetTotal Working Time per Day
Output Rate (r)=Output rate r = Total production target / Total working time
● Total Production Target = 300 units

● Total Working Time per Day = 7.5 hours
300 units / 7.5 hours = 40 units/hour.
Cycle Time Calculation:
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The cycle time (c) is the time required to produce one unit. We can calculate it using the formula:
Let's calculate the cycle time.
The cycle time (c) under the Chase Strategy is calculated as follows:
○ Cycle time c = 60 minutes

○ Output rate r = 60 / 40 = 1.5 minutes or 90 seconds per unit.
So, under the Chase Strategy, the cycle time for each unit is 1.5 minutes.
Now, let's assess the need for additional stations and workers:
Assessing Additional Stations and Workers:
To ensure that production matches the output rate of 40 units per hour with a cycle time of 1.5 minutes per
unit, we need to calculate the total time required for current tasks and determine the number of stations needed.
Total time for current tasks (ΣT) can be calculated using the formula:
ΣT=Cycle Time (c)×Number of Workers
We'll use the values from the Chase Strategy:
● Cycle Time (c) = 1.5 minutes per unit

● Number of Workers (current) = 14 workers
Let's calculate ΣT and the number of stations needed.
The total time for current tasks (ΣT) under the Chase Strategy is calculated as follows:
ΣT=Cycle Time (c)×Number of Workers (current)
ΣT=1.5 minutes per unit×14 workers
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Let's calculate
ΣT.
The total time for current tasks (ΣT) under the Chase Strategy is calculated as follows:
ΣT=1.5minutes per unit×14workers=21minutes
So, the total time required for current tasks is 21 minutes.
Next, we need to determine the number of stations needed based on this total time and the cycle time. The
number of stations needed (N stations) can be calculated as:
N stations=ΣCycle Time (c)
Let's calculate the number of stations needed.
The number of stations needed (N stations) under the Chase Strategy can be calculated as follows: N
stations=
○ Total time ΣT for current tasks = 1011 seconds.

○ With the calculated cycle time c of 90 seconds, the total number of stations
○ TM needed =ΣT /c = 1011 sec / 90 sec ≈ 11.23, which rounds up to 12 stations.
○ This means an increase of 2 stations and hiring 4 additional workers.
=14 stations
So, based on the cycle time of 1.5 minutes per unit and the total time required for current tasks of 21 minutes,
we would need 14 stations to meet the production target of 300 units per day.
Now, let's evaluate the hiring and training costs associated with the Chase Strategy.
Hiring and Training Costs:
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The Chase Strategy involves hiring additional workers to meet the production target. We need to calculate the
direct cost for the new setup, which includes the salaries of the new workers. The indirect costs may include
expenses related to the training of these new workers and any additional equipment or facilities required.
To calculate the direct cost, we'll consider the following:
● Number of new workers hired

● Salary per worker
The direct cost for the Level Strategy can be calculated as follows:
Level Strategy Direct Cost=(Number of Workers×Working Hours per Day×Salary per

Worker)+(Number of Workers×Overtime Hours×Overtime Rate×Salary per Worker)
Chase Strategy Direct Cost:
● Number of workers: 14
● Working hours per day: 7.5 hours (regular)
● Salary per worker:X per hour
The direct cost for the Chase Strategy has been calculated previously.
Let's calculate the Level Strategy Direct Cost using the provided data.
The direct cost for the Level Strategy, which includes both regular hours and overtime hours, is calculated as
follows:

8. Rabbit Chase Strategy Implementation
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Rabbit Chase Strategy Implementation:
The Rabbit Chase Strategy is a dynamic approach to assembly line management that aims to maintain a
consistent level of production by adjusting the workforce as needed based on demand fluctuations. In this
strategy, the workforce is flexible and can be increased or decreased rapidly to meet changes in production
requirements.
Here's how the Rabbit Chase Strategy can be implemented:
● Real-time Monitoring: Implement a real-time monitoring system that tracks production demand and
performance. This system should provide up-to-the-minute data on order volumes, production rates,
and any variations in demand.
● Flexible Workforce: Hire a core team of skilled workers who are familiar with the assembly process.
Additionally, maintain a pool of temporary or on-call workers who can be quickly deployed when
production demand increases.
● Demand Forecasting: Utilize demand forecasting models to predict fluctuations in production
requirements. These forecasts should take into account seasonal variations, market trends, and other
factors that influence demand.
● Agile Scheduling: Develop an agile scheduling system that allows for the rapid adjustment of worker
shifts. When demand is high, call in additional workers from the pool of temporary workers.
Conversely, reduce the workforce during periods of lower demand.
● Cross-Training: Cross-train workers to perform multiple tasks within the assembly process. This
enables a more versatile workforce that can easily adapt to changing production needs.
Benefits of Rabbit Chase Strategy:
The Rabbit Chase Strategy offers several benefits in assembly line management:
● Cost Efficiency: By maintaining a smaller core team of workers and supplementing it with temporary
workers as needed, you can optimize labor costs. This strategy minimizes the expenses associated
with having a large permanent workforce during periods of low demand.
● Improved Productivity: The ability to quickly adjust the workforce ensures that production targets are
consistently met. This responsiveness minimizes delays and production bottlenecks.
● Adaptability: The Rabbit Chase Strategy is well-suited for industries with fluctuating demand, such as
electronics manufacturing. It allows your assembly line to adapt swiftly to changes in the market.
● Reduced Overtime: Compared to the Level Strategy, which relies heavily on overtime during peak
demand, the Rabbit Chase Strategy minimizes overtime costs by hiring temporary workers as needed.
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● Enhanced Employee Morale: Workers in the core team benefit from a more predictable and balanced
workload. Temporary workers have the opportunity to gain experience and may be considered for
permanent positions when demand is consistently high.
the Rabbit Chase Strategy promotes cost-effective, agile, and efficient assembly line management, ensuring
that production levels align closely with market demand while minimizing labor costs.
9. Cost Comparison
Level Strategy:
Direct Cost: The Level Strategy involves maintaining a fixed number of workers and stations, with additional
overtime during periods of increased demand. The direct cost includes regular salaries and overtime pay. The
formula for direct cost under the Level Strategy is:
● DirectCost=(NumberofWorkers×RegularHours×HourlyRate)+
(NumberofWorkers×OvertimeHours×OvertimeRate)
● Indirect Cost: The Level Strategy typically doesn't incur significant indirect costs since it
relies on a consistent workforce without major changes.
Chase Strategy:
Direct Cost: The Chase Strategy involves adjusting the number of workers and stations to match production
demand without relying on overtime. The direct cost includes regular salaries for the increased workforce. The
formula for direct cost under the Chase Strategy is:
● DirectCost=(NumberofWorkers×RegularHours×HourlyRate)
● Indirect Cost: The Chase Strategy may incur indirect costs related to hiring and training new
workers, as well as the cost of any additional equipment or facilities required for the increased
workforce.
Efficiency Comparison:
Level Strategy:
Efficiency Calculation: Efficiency is calculated as the ratio of actual production time (ΣT) to available time (Σ
Available Time). It represents how effectively the available time is utilized. The formula for efficiency under
the Level Strategy is:
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Level Strategy Efficiency η:=ΣT/ΣAvailable Time=1059/(10×120)=88.25%
● Pros: The Level Strategy may achieve a moderate level of efficiency, especially during
periods of steady demand. It provides consistent production output without frequent changes
to the workforce or equipment.
● Cons: Efficiency can drop significantly during periods of increased demand due to the
reliance on overtime, which can lead to fatigue and reduced productivity among workers.
Overtime costs can also impact overall cost-effectiveness.
Chase Strategy:
● Efficiency Calculation: Efficiency is calculated in the same way as for the Level Strategy,
using the ratio of actual production time to available time. However, the Chase Strategy often
results in higher efficiency due to a workforce that is adjusted to match production demand.
Chase Strategy Efficiency η:=ΣT/Σ Available Time=1011/(12×90)=93.61%
● Pros: The Chase Strategy can achieve higher efficiency as it aligns the workforce closely with
demand fluctuations. It minimizes the need for overtime and provides a more cost-effective
solution during peak demand.
● Cons: While efficiency is generally higher, there may be some initial costs associated with
hiring and training additional workers. Managing workforce transitions can also be
challenging.
This analysis shows that while the Chase strategy has higher upfront costs due to
additional staffing, it offers greater efficiency.
10.Old Layout:
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The need for redesigning the old layout at Toshiba's facility likely stems from several factors:
● Efficiency: To reduce cycle times and improve throughput.

● Quality: To enhance product quality by minimizing handling and movement.
● Innovation: To stay competitive by rapidly incorporating new technologies and processes.
● Space Utilization: To better utilize the available space for current and future needs.
● Worker Ergonomics: To improve the work environment and reduce fatigue, potentially increasing
employee satisfaction and productivity.
11.New Layout
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The new layout showcases a more streamlined assembly process with clearly defined sections for PCB
Assembly (both automated and manual), Prototype Assembly, HD Drive Final Assembly, Engine
Assembly, and an R&D/Design Lab. Benefits include:
● Enhanced Efficiency: Automation and specialization in sections reduce production time and
increase throughput.
● Improved Quality Control: Dedicated areas for each assembly phase allow for better monitoring
and quality assurance.
● Flexibility: Modular zones facilitate easy reconfiguration for different product types or updates.
● Integration of R&D: Proximity of the R&D/Design Lab to the production line promotes rapid
prototyping and iteration.
● Space Optimization: Strategic placement of units maximizes the use of space and minimizes
unnecessary movement of materials.
Comparing the old and new layouts, the new layout likely offers several advantages:
● Streamlined Workflow: The new layout appears to segregate tasks more efficiently, potentially
reducing the time between assembly stages.
● Dedicated Areas: The presence of dedicated areas for different types of assembly (manual and
automated) may improve focus and reduce errors.
● Space Utilization: The new layout may use space more effectively, accommodating more
functions within the same footprint.
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● R&D Proximity: Close proximity of R&D to production in the new layout can facilitate quicker
iteration and innovation cycles.
12.Conclusion:
In conclusion, the comprehensive analysis suggests that Toshiba's Ome Works assembly line can
significantly benefit from strategic redesign. Implementing modular layouts, optimizing
processes through lean principles, and integrating advanced technology are pivotal for enhancing
efficiency and productivity. The proposed changes aim to ensure Toshiba's responsiveness to
market demands and uphold its reputation for quality. Adapting to these strategies will likely
position Toshiba as an innovative leader in manufacturing, ready to meet future challenges in an
evolving industry.
13. Additional Suggestions
Here are some additional suggestions for further enhancing the efficiency of Toshiba's assembly line beyond
the Level and Chase strategies:
● Increase Conveyor Speed:

○ Evaluate the possibility of increasing the speed of conveyor systems within the assembly line.
This should be done cautiously to balance faster production with maintaining product quality.
Conduct a detailed analysis to determine the optimal conveyor speed that maximizes
efficiency without compromising quality.
● Outsource Sub-Assemblies:
○ Identify components or sub-assemblies that are less integral to Toshiba's core competencies
or can be more cost-effectively produced externally. Outsourcing certain tasks or sub-
assemblies to specialized suppliers can reduce internal production costs and streamline the
overall assembly process.
● Layout Optimization:
○ Consider adopting a modular layout design that allows for flexibility in reconfiguring the
assembly line for different product models. Given the data indicating the need to produce
multiple models and features, a modular layout can facilitate rapid reconfiguration and
adaptation to changing market demands.
● Advanced Robotics:
31
○ Explore opportunities for advanced robotics and automation in the assembly process. Robots
can be employed for repetitive and precision tasks, leading to increased consistency and
efficiency. Evaluate which assembly steps can be automated to further reduce cycle times.
● Quality Control Enhancements:
○ Strengthen quality control systems by integrating advanced technology and processes.
Implement real-time monitoring and inspection techniques to ensure that quality standards are
consistently met, especially during scale-up or model changes. Utilize AI-driven quality
control systems for predictive maintenance and defect detection.
● Worker Training and Skill Development:
○ Invest in comprehensive training programs for the workforce to enhance their skills and adapt
to advanced manufacturing requirements. Cross-train employees to perform multiple tasks
and encourage a culture of continuous improvement. Workers who are skilled in various areas
can contribute to increased flexibility and adaptability.
● Supply Chain Optimization:
○ Optimize the supply chain to ensure that materials and components are readily available when
needed. Implement just-in-time (JIT) inventory management practices to minimize excess
inventory and reduce storage costs. A well-optimized supply chain can contribute to smoother
production processes.
● Energy Efficiency Measures:
○ Implement energy-efficient technologies and practices to reduce energy consumption and
operational costs. This can include upgrading lighting systems to LED, optimizing HVAC
systems, and utilizing energy-efficient machinery and equipment.
● Environmental Sustainability Initiatives:
○ Consider integrating environmentally sustainable practices into the assembly process. This
may involve recycling or reusing materials, reducing waste generation, and adhering to eco-
friendly manufacturing standards. Sustainability initiatives can not only benefit the
environment but also reduce costs in the long run.
● Continuous Improvement Culture:
○ Foster a culture of continuous improvement among employees. Encourage them to actively
seek ways to enhance efficiency, reduce waste, and optimize processes. Establish regular
feedback mechanisms and channels for employees to provide suggestions for improvement.
32

Service Management - Suraj

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SERVICES MANAGEMENT

SURAJ KUMAR - 2022MBA053

Under the Guidance of

Prof. Rohit Kapoor

Master of Business Administration (MBA)

Indian Institute of Management Sambalpur

S.NO. Contents Page Number

1 Executive summary 3-4

3 Analysis of current state 6-7

4 Challenges and Opportunities 7-8

5 Proposed Redesign Strategy 9-10

6 Level Strategy Analysis 10-24

7 Chase Strategy Analysis 24-28

8 Rabbit Chase Strategy Implementation 28-29

9 Cost comparison 29-31

13 Additional Suggestions 33-34

efficiency, quality, and adaptability to market demands.

Purpose of the Report:

sustained success in the competitive market landscape.

Background of Toshiba's Ome Works:

Assembly Line for Satellite Notebook Computers:

Complexity of Notebook Models:

Assembly Line Workforce:

Production Efficiency and Quality:

3. Analysis of Current State

Production Targets and Output:

Opportunities for Improvement:

4. Challenges and Opportunities

Opportunities for Improvement:

5. Proposed Redesign Strategy

Implement a Modular Layout for Adaptability

various product models efficiently. Key components of this aspect include:

Apply Lean Manufacturing Principles for Efficiency

The steps include:

Leverage Advanced Manufacturing Technologies

productivity, quality, and consistency. Key aspects of this integration include:

6. Level Strategy Analysis

Cycle Time Calculation:

To calculate the cycle time:

● Total production target per day = 300 units.

Let's calculate the cycle time.

○ Total production target per day = 300 units.

one unit of the Satellite Notebook Computer under this strategy.

Determine the Total Number of Workers Needed:

Analyze the Requirement for Overtime and its Cost Implications:

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

● Number of Workers = 10 (initial allocation)

Let's calculate the direct cost of overtime.

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

● Number of Workers = 10 (initial allocation)

Let's calculate the direct cost of overtime.

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

Plugging in the values:

● Number of Workers = 10 (initial allocation)

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)

Substituting the given values:

● Number of Workers = 10 (initial allocation)

The formula for the direct cost of overtime is:

Direct Cost of Overtime=(Number of Workers×Overtime Hours×Hourly Wage)