© Wiley 2007

Chapter 11 – Work
System
Design
Operations Management
by
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
element

Describe relevant job design issues

Describe methods analysis

Understand the importance of work
measurement

Describe how to do a time study
© Wiley 2007
Learning Objectives -
continued

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
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
© Wiley 2007
Machines or People -
Should the Job Be
Automated?

Safety & risk of injury to workers

Repetitive nature of the task
(monotonous?)

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

Specialization can result in employee
boredom
© Wiley 2007
Specialization: Management’s
View
Advantages:

Readily available
labor

Minimal training
required

Reasonable wages
costs

High productivity
Disadvantages:

High absenteeism

High turnover rates

High scrap rates

Grievances filed
© Wiley 2007
Specialization: Employee’s
View
Advantages:

Minimal
credentials
required

Minimal
responsibilities

Minimal mental
effort needed

Reasonable wages
Disadvantages:

Boredom

Little growth
opportunity

Little control over
work

Little room for
initiative

Little intrinsic
satisfaction
© Wiley 2007
Eliminating Employee
Boredom

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
Design

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
productivity

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
safety

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
based

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
products

Tracking employee performance

Scheduling & planning required
resources
© 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

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
2
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x
s
a
z
n
© 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.

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
and then the observed times are revised.
ns observatio 25
0.24
0.03
0.05
1.96
x
s
a
z
n
2 2
7 ·
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·
1
2
3
4
5
6
7
8
9
1 0
A B C D E
E x a m p l e 1 1 . 3 P a t ' s P iz z a P la c e
S t a n d a r d D e v i a t io n M e a n O b s e r v e d R e v i s e d O b s e r v e d
W o r k E l e m e n t ( m i n u t e s ) T im e ( m in u t e s ) T im e ( m in u t e s ) # O b s e r v a t io n s
1 . G e t b a l l o f d o u g h 0 . 0 1 0 0 . 1 2 0 . 1 5 1 1
2 . F l a t t e n d o u g h 0 . 0 3 0 0 . 2 5 0 . 2 5 2 3
3 . S p i n a n d t o s s d o u g h 0 . 0 4 0 0 . 5 0 0 . 6 0 1 0
4 . P l a c e d o u g h o n c o u n t e r 0 . 0 0 5 0 . 1 2 0 . 1 5 3
5 . P o u r s a u c e o n f o r m e d d o u g h 0 . 0 3 5 0 . 3 0 0 . 3 0 2 1
6 . P l a c e g r a t e d c h e e s e o n t o p0 . 0 2 5 0 . 2 5 0 . 2 8 1 6
7 . P l a c e p e p p e r o n i o n s a u c e 0 . 0 3 0 0 . 2 4 0 . 2 8 2 5
© Wiley 2007
Other Time Factors Used
in Calculating Standard
Time

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
Time

The allowance factor (AF) is the amount of
time allowed for personal, fatigue, and
unavoidable delays

Standard Time=normal time x allowance
factor, where:
(NT)(AF) ST
117.6% 1.176
0.15 1
1
PFD 1
1
AF Worked Tme
·
· ·

·

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

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)
1 2
1 3
1 4
1 5
1 6
1 7
1 8
1 9
2 0
2 1
2 2
A B C D E F
E x a m p l e 1 1 . 4 C a l c u l a t i n g S t a n d a r d T i m e f o r a H a n d - T o s s e d C h e e s e a n d P e p p e r o n i P i z z a
R e v i s e d O b s e r v e d P e r f o r m a n c e R a t i n g F r e q u e n c y N o r m a l T i m e S t a n d a r d T i m e
W o r k E l e m e n t T i m e ( m i n u t e s ) F a c t o r ( m i n u t e s ) ( m i n u t e s )
1 . G e t b a l l o f d o u g h 0 . 1 5 0 . 9 0 1 0 . 1 3 5 0 . 1 5 9
2 . F l a t t e n d o u g h 0 . 2 5 1 . 0 0 1 0 . 2 5 0 0 . 2 9 4
3 . S p i n a n d t o s s d o u g h 0 . 6 0 0 . 8 5 1 0 . 5 1 0 0 . 6 0 0
4 . P l a c e d o u g h o n c o u n t e r 0 . 1 5 1 . 1 0 1 0 . 1 6 5 0 . 1 9 4
5 . P o u r s a u c e o n f o r m e d d o u g h 0 . 3 0 1 . 2 0 1 0 . 3 6 0 0 . 4 2 3
6 . P l a c e g r a t e d c h e e s e o n t o p 0 . 2 8 1 . 0 0 1 0 . 2 8 0 0 . 3 2 9
7 . P l a c e p e p p e r o n i o n s a u c e 0 . 2 8 0 . 9 5 1 0 . 2 6 6 0 . 3 1 3
T o t a l T i m e 1 . 9 6 6 2 . 3 1 2
© Wiley 2007
Other Time Study
Methods

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
activity
© 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
activity
© 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

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 .

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
( ) ns observatio 470.89 0.5 1 0.5
0.05
2.17
p 1 p
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z
n
2 2
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0.5 p ·
( ) ns observatio 302 0.2 1 0.2
0.05
2.17
n
2
· −

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|

© Wiley 2007
Worker Compensation
Systems

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
profits

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 4
th
time will take 85% of the 2
nd

If an employee took 12 hours to
complete an initial task, how long
will the 16
th
time take (4
th
doubling)
T x L
n
= time required to perform
a task the nth time
T = the time required to perform
the task the first time
L = the rate of learning
n = the number of times the task
has doubled
hours 6.26 (.85) x 12 task 16th for Hours
4
· ·
© Wiley 2007
Work System Design
Across the Organization

Work system design affections
functional areas throughout the
organization

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 -
continued

Information systems uses estimates
of job duration and resources in the
software for scheduling and tracking
operations

Human resources uses work sampling
to establishes and validate hiring
criteria
© 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
objectives

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 -
continued

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
activity.
© Wiley 2007
Chapter 11 Highlights -
continued

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 -
continued

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
accurately.
© Wiley 2007
The End

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