You are on page 1of 40

Chapter 11 – Work


Operations Management
R. Dan Reid & Nada R. Sanders
3rd Edition © Wiley 2007
PowerPoint Presentation by R.B. Clough – UNH
M. E. Henrie - UAA

© Wiley 2007
Learning Objectives
 Describe the elements of work system
design and the objectives of each
 Describe relevant job design issues
 Describe methods analysis
 Understand the importance of work
 Describe how to do a time study
© Wiley 2007
Learning Objectives -

 Describe how to do work sampling

 Develop standard times
 Show how to use work standards
 Describe compensation plans
 Describe learning curves

© Wiley 2007
Work System Design
 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
 Work measurements
 Worker compensation

© Wiley 2007
Job Design
 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?

© Wiley 2007
Additional Job Design
 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

© Wiley 2007
Machines or People -
Should the Job Be
 Safety & risk of injury to workers
 Repetitive nature of the task
 Degree of precision required
 Complexity of the task
 Need for empathy, compassion, or other
emotional elements
 Need for personal customer relationships

© Wiley 2007
Job Specialization
 Level of labor specialization can
 Reduce the employee’s scope of expertise
(higher levels of specialization)
 Increase the employee’s scope of expertise
(lower levels of specialization)
 Work satisfaction helps define level of
 Specialization can result in employee
© Wiley 2007
Specialization: Management’s
Advantages: Disadvantages:
 Readily available  High absenteeism
labor  High turnover rates
 Minimal training  High scrap rates
required  Grievances filed
 Reasonable wages
 High productivity
© Wiley 2007
Specialization: Employee’s
Advantages: Disadvantages:
 Boredom
 Minimal
 Little growth
required  Little control over
 Minimal work
responsibilities  Little room for

 Minimal mental initiative

 Little intrinsic
effort needed
 Reasonable wages
© Wiley 2007
Eliminating Employee
 Job enlargement
 Horizontal expansion of the job through increasing
the scope of the work assigned.
 Job enrichment
 Vertical expansion of the job through increased
worker responsibility
 Adding work planning or inspection to a routine
assembly task
 Job rotation
 Shifting of cross trained workers to other tasks
 Broadens understanding and can reduce fatigue
© Wiley 2007
Team Approach to Job
 Problem-solving teams:
 Small groups, trained in problem-solving
techniques. Used to identify, analyze, & propose
solutions to workplace problems
 Special-purpose task forces:
 Highly-focused, short-term teams with a focused
agenda (often cross-functional)
 Self-directed or self-managed teams:
 Team members work through consensus to plan,
manage, & control their assigned work flow

© Wiley 2007
Alternative Workplaces
 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:
 More than 30 million employees work in alternative workspaces
 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 and
out as needed

© Wiley 2007
Methods Analysis
 A detailed step-by-step analysis of how a
given job is performed
 Can distinguish between value-added & non-
value-added steps
 Analysis can revise the procedure to improve
 After improvement, must revise the new
standard operating procedure
 Follow-up to insure that changes actually
improve the operation
© Wiley 2007
Methods Analysis
 Method analysis consists of
1. Identify the operation to be analyzed
2. Gather all relevant information
3. Talk with employees who use the operation
4. Chart the operation
5. Evaluate each step
6. Revise the existing or new operation as needed
7. Put the revised or new operation into effect, then
follow up on the changes or new operation

© Wiley 2007
Methods Analysis at FEAT Company: The methods
analyst has been asked to review the transformer wiring
operation because of past quality problems from poor
solder joints. The solder operation sequence and the
workstation layout are shown below.

1. Picks up wire in left hand and

moves it to the terminal
2. Simultaneously picks up solder
iron in right hand and moves to
the terminal
3. Solders wire to terminal and
replaces solder iron in holder
4. Solders terminal #1, then
#2 - #6, going right to left

© Wiley 2007
Analyst’s Recommendations: A. Maize reviews the
workplace layout and the present flow chart (below), and
recommends reversing the solder sequence from #6-#1,
which is less problematic for the right handed operator. He
schedules a follow up to insure that the new method has
fixed the quality problem.

© Wiley 2007
The Work Environment
 Working conditions can effect worker
productivity, product quality, and worker
 Temperature, ventilation, noise, and lighting
are all factors in work system design
 Congress passed OSHA in 1970 to mandate
specific safety conditions that must be met

© Wiley 2007
Work Measurement
 Work Measurement helps determine
how long it should take to do a job
 Involves determining Standard Time
 Standard time:

The length of time a qualified worker, using
appropriate processes and tools to complete
a specific job, allowing time for personal
fatigue, and unavoidable delays

© Wiley 2007
Work Measurement
 Standard time is used in:
 Costing the labor component of
 Tracking employee performance
 Scheduling & planning required

© Wiley 2007
Setting Standard Times
 Step 1: Choose the specific job to be studied
 Step 2: Tell the worker whose job you will be studying
 Step 3: Break the job into easily recognizable units
 Step 4: Calculate the number of cycles you must observe
 Step 5: Time each element, record data & rate the
worker’s performance
 Step 6: Compute the normal time
 Step 7: Compute the standard time

© Wiley 2007
Doing 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

© Wiley 2007
Doing a Time Study
 Need to determine how many observations are required
 Involves determining the level of accuracy required and
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
 s: the standard deviation of the sample

a: desired accuracy or precision
 x-bar: the mean of the sample observations

© Wiley 2007
Pat’s Pizza Place: Pat hires an analyst to determine a
standard time to prepare a large pepperoni and cheese
pizza. He takes 10 observations of the 7 elements and
calculates the mean time and the standard deviation per
element. He must then calculate the # of observations to
be within 5% of the true mean 95% of the time.

1 E x a m p le 1 1 .3 P a t's P iz z a
2 St

3 W o r k E le m e n t
The analyst must calculate the observations for each element
to determine how many additional observations must be

4 1 . G e t b a ll o f d o u g h
taken. The maximum number of 25 (in this case) for element
#7 means that an additional 2
15 observations2
must be made
 z  s times
and then the observed   1.96 0.03 
are revised.

2 . F la tte n d o u g h
n7 =    =    = 25 observations
5 a
  
x 0.05
© Wiley 0.24
 2007 
Other Time Factors Used
in Calculating Standard
 The normal time (NT) is the mean observed
time multiplied by the performance rating
factor (PRF)
 The 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.

© Wiley 2007
Other Time Factors Used
in Calculating Standard
 The allowance factor (AF) is the amount of
time allowed for personal, fatigue, and
unavoidable delays
 Standard Time=normal time x allowance
factor, where:
1 1
AF Tme Worked = = = 1.176 = 117.6%
1 − PFD 1 − 0.15
ST = (NT)(AF)

© Wiley 2007
Calculating Normal Time and
Standard Time at Pat’s Pizza

1 2 E x a m p le 1 1 . 4 C a lc u la t in g
13 R ev
1 4 W o r k E le m e n t T im
 The standard time for preparing a large, hand-tossed

1 5 1 . G e t b a ll o f d o u g h
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)
© Wiley 2007
Other Time Study
 Elemental time data establishes standards
based on previously completed time studies,
stored in an organization’s database.
 Predetermined time data (e.g. MTM and MTS)
is a published database element time data
used for establishing standard times
 Reach, grasp, move, engage, insert, turn, etc.
 Work Sampling is a technique for estimating
the proportion of time a worker spends on an
© Wiley 2007
Work Sampling Procedure
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
and confidence level
4. Develop the random observation schedule. Make
observations over a time period that is representative
of normal work conditions
5. Make you observations and record the data. Check to
see whether the estimated sample size remains valid
6. Estimate the proportion of the time spent on the given
© Wiley 2007
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
z )  )   2.17  2
n≥  p1 − p  =   0.5(1 − 0.5) = 470.89 observations
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 .

 2.17 
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

© Wiley 2007
Worker Compensation
 Compensation is the third part of work system design
 Time-based plans (pay based on the number of hours
worked) versus output-based systems (pay based on the
number of units completed)
 Group incentive plans: profit sharing & gain sharing
 Plans put part of a worker’s salary at risk
 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?

© Wiley 2007
Worker Compensation
Systems - continued
 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
 Plans put part of a worker’s salary at risk
 Compensation system may undermine teamwork

© Wiley 2007
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 T x Ln = time required to perform
 If an employee took 12 hours to a task the nth time
T = the time required to perform
complete an initial task, how long the task the first time
will the 16th time take (4th doubling) L = the rate of learning
n = the number of times the task
has doubled
Hours for 16th task = 12 x (.85)4 = 6.26 hours
© Wiley 2007
Work System Design
Across the Organization
 Work system design affections
functional areas throughout the
 Accounting calculates the cost of
products manufactured, variances
between planned and actual costs as
well as operational efficiency
 Marketing uses work system design
as the bases for determining led time

© Wiley 2007
Work System Design
Across the Organization -
 Information systems uses estimates
of job duration and resources in the
software for scheduling and tracking
 Human resources uses work sampling
to establishes and validate hiring

© Wiley 2007
Chapter 11 Highlights
 Work system design involves job design, methods or process
analysis and work measurement. Job design specifies the work
activities of an individual or group in support of organizational
 Relevant job design issues include design feasibility, the choice
of human or machine, the use of teams, and the location where
the work is to be done. Technical feasibility is the degree to
which an individual or group of individuals is physically and
mentally able to do the job. Economic feasibility is the degree to
which the value of a job adds and the cost of have the job done
are profitable for the company.

© Wiley 2007
Chapter 11 Highlights -
 Methods or process analysis is concerned with how the
employee does the job. Methods analysis can also be used to
improve the efficiency of an operation.
 Work measurement is used to determine standard times. A
standard time is how long it should take a qualified operator,
using the appropriate process, material, and equipment, and
working at a sustained pace, to do a particular job. Standard
times are used for product costing, process and material
evaluations, and for planning workloads and staffing. Standard
times are usually based on time studies. Work sampling is used
to estimate the proportion of time that should be spent on an

© Wiley 2007
Chapter 11 Highlights -
 To do a time study, you identify the job and breaking the job into
work elements. Then you determine the number of observations
needed and perform the observation.
 Work sampling involves random observations of a worker. Each
time you observe the worker, you note what activity the worker is
doing. After numerous observations, you can project the expected
proportion of time the worker should spend on different activities.
 Standard times are developed with either time studies, elemental
time data, or predetermined time data. You learned how to develop
standard times using time studies. After conducting the time
study, you compute the mean observed time for each work
element. You compute the normal time for the work element by
multiplying the mean observed time by the performance rating
factor. You find the standard time for each work element by
multiplying the normal time by the allowance factor.

© Wiley 2007
Chapter 11 Highlights -
 Standard times are used to compare alternative processes,
evaluate new materials or components, and evaluate individual
worker performance. Standards also allow you to determine
when a job should be completed or how many units can be done
in a period of time.
 Worker compensation systems are either time-based or out-put
based. Time-based systems pay the employee for the number
of hours worked. Output-based systems pay the employee for
the number of units completed. Compensation schemes can be
based on either individual or group performance. and can be
based on individual or group performance.
 Learning curves show the rate of learning that occurs when an
employee repeats the same task. Using learning curves, you
can estimate how long a particular task will take. It allows the
company to schedule better and calculate cost more

© Wiley 2007
The End
 Copyright © 2007 John Wiley & Sons, Inc. All rights
reserved. Reproduction or translation of this work
beyond that permitted in Section 117 of the 1976
United State Copyright Act without the express written
permission of the copyright owner is unlawful. Request
for further information should be addressed to the
Permissions Department, John Wiley & Sons, Inc. The
purchaser may make back-up copies for his/her own use
only and not for distribution or resale. The Publisher
assumes no responsibility for errors, omissions, or
damages, caused by the use of these programs or from
the use of the information contained herein.

© Wiley 2007