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Productivity means the amount of products or services produced with the resources used Productivity is a ratio of output to input. Productivity varies with the amount of production relative to the amount of resources used.
Why do We Care About Productivity?
Without productivity improvement, businesses do not survive in a global economy. economy. Higher productivity means higher standard of living. living.
Ways to Increase Productivity
Increase output using the same or a lesser amount of resource. resource. Reduce amount of resource used while keeping output constant or increasing it. it.
some combination of the following must occur: occur: output is increased price of output is increased 5 .Impact of Price/Cost Change on Productivity When the cost of a resource increases and profit is to remain the same.
Factors used for Measuring Productivity Capital - Number of products produced divided by asset value Materials Number of products produced divided by amount spent on materials Direct Labor .Number of products produced divided by direct labor-hours laborOverhead Number of products produced divided by amount spent on overheads 6 .
Thus. a measurement of work involved in any job and setting up standards of time for control purposes normally expected is necessary. The primary purpose of improving µmethods¶ is to save time and thus effort of labour and machinery. ³Methods study´ is the means of improving ways and means of doing things. 7 .Work study Work study is a study of better ways of doing things and develops controls by setting standards with respect to time.
Foundation of work study Dr. Taylor¶s conclusion from various experiments was: ³The greatest production results when each worker is given a definite task to be performed in a definite time in a definite manner.´ 8 .
Analyse the obtained information critically Chalk out improved alternative methods Check acceptance and follow-up implementation followReRe-evaluate and maintain the method after production is undertaken 9 .Method Study The main components of method study are Gaining information about and understanding the process. machines carrying out the work. tools and working conditions. men carrying the process and their work.
Benefits of methods study Improved cost performance Improved time performance Improved worker satisfaction Improved standardisation of products 10 .
11 . output.Work Measurement Work measurement refers to the process of estimating the amount of worker time required to produce one unit of output. A goal of work measurement is to develop labor standards that can be used for planning and controlling operations.
conditions. Labour standards also aid in incentive pay systems. 12 . Labour standards are used to plan and control operations. or product under ordinary operating conditions. Labour standards help in determining labour costs and finally help in pricing new products.Labor Standards A labour standard is the number of worker-minutes workerrequired to complete an element. operation.
Labor Standards A labor standard can be determined using one or more of the following approaches: Time study Work sampling Predetermined time standards Historical standards Supervisor estimates 13 .
Basic systems of time study involve Using a stop watch Using synthetic time standards Using statistical sampling 14 .Time study Time study is undertaken to set the standard times for work.
Time Study Suitable Jobs Job performed by a single worker in a fixed location Job involves repetitive short cycles Job expected to continue unchanged for a long period Job produces large quantities of output Resulting time standard must be very accurate 15 .
Time Study Analysts use stopwatches to time the operation being performed by workers These observed times are then converted into labor standards expressed in minutes per unit of output for the operation 16 .
Determining Labor Standards from Time Studies Performance Rating Allowance Fraction Observed Time Normal Time Standard Time 17 .
5. estimate the observed worker¶s performance rating. 3.00 indicates the rating. Break the operation down into basic tasks 2. Observe and record the elapsed time for each of the tasks 4. For each task. A rating of 1. worker is working at normal speed. Determine which cycle of operations are to be timed. fatigue and unavoidable minor delays) 18 . (allowance are applied to compensate for personal time.Determining Labor Standards from Time Studies 1. Compute the allowance fraction for the operation.
Compute the element normal time for each element: = (Mean observed time) x (Performance rating) 19 . Compute the mean observed time for each element: (Sum of observed element times) = (Number of cycles timed) 7.Determining Labor Standards from Time Studies 6.
Allowance fraction) 20 . Compute the total normal time for the entire operation: = (Sum of element normal times for all elements) 10.Determining Labor Standards from Time Studies 9. Compute the labor standard for the operation: = (Total normal time) / (1 .
21 .95 and the allowance during an 8-hour shift was 12.6 minutes. The performance rating applied to the observed worker was 0. the average time observed to complete a product was 8.Example: Time Study Approach In a time study of a manufacturing operation. 8Compute the labor standard.5% or 60 minutes.
875) = 9.Example: Time Study Approach Observed time = 8.125) = 8.17 / (1 .337 minutes 22 .95 Allowance fraction = 0.17 / (0.17 minutes Standard Time = Normal time / (1 .6 x 0.125 Normal time = Observed time x Performance rating = 8.6 minutes Performance rating = 0..Allowance) = 8.95 = 8.
Uses of time sampling Aids in setting wages and incentives Comparing work efficiency of workers Arriving at job schedules for planning production Manpower planning Helps in product design 23 .
Work Sampling Work sampling samples the work of one or more employees randomly sampled at periodic intervals The proportion of the total operation that is accounted for in one particular activity is noted The results of these studies are used to set labor standards 24 .
09 Sum Mean Ratin g 1 Norm al .12 .04 .09 4 .03 .05 .09 .9 1 .05 .06 .09 3 .06 .9 Labour standard = total normal time / (1-Allowance time) 25 .04 .1 2 .09 .07 .08 .05 .Element 1 s Print first page Collate papers Print second page Collate papers .04 .10 .08 5 .
Work Sampling Suitable Jobs Job performed by a single worker in a fixed location Job involves repetitive short cycles Job expected to be changed periodically as customer orders change Job produces relatively small quantities of output Resulting time standard used for accounting cost standard. and production planning 26 . pricing analysis.
20 on the Assemble Units activity and 400 units were assembled during the study. The study covered an 8-hour shift with a single 8worker. The results of the study were: % of Worker¶s Time Activity Assemble Units 80 Allowances 20 If the worker received a performance rating of 1.Example: Work Sampling A work sampling study was performed on an electronic assembly operation at OK Instruments. what is the labor standard for this operation? 27 .
Example: Work Sampling 1) Compute the average time per assemble: = Total Minutes of Assembly Work Number of Units Assembled = .20) = 1.960 minutes per unit 2) Compute the normal time per unit: = (Average Time per Unit)(Performance Rating) = .8(480)/400 = .152 minutes per unit 28 .960(1.
20) = 1..44 minutes per unit 29 .152/(1 .Example: Work Sampling 3) Compute the labor standard: = Normal Time/(1 ± Allowance Fraction) = 1.
but a time study is too costly Only large elements of work need to be observed Little detail is needed in setting the time standard 30 .Predetermined Time Standards Suitable Jobs Job performed by many workers over a compact area Tasks may involve little repetition. but if repetitious ± the cycles are very long Workers must be observed by a single analyst A moderate degree of accuracy in the labor standard is desirable.
and entire operations Many predetermined time standard systems are used: Work factor MethodsMethods-time measurement (MTM) Basic motion time (BMT) study 31 .Predetermined Time Standards Commonly used for new operations or new products When labor standard must be determined in advance of performing an operation Utilize data that have been historically developed for basic body movements. elements of operations.
Move. body-leg and foot motions. EyeEyemotions. subThese are pre-determined times for motions which prehelp to set a time standard for a job. Apply pressure.Methods time measurement The basic MTM approach is to classify human work motions into certain fixed standard categories such as Reach. Turn. 32 . Grasp. bodyMTM association has done extensive studies on hand and body motions and arrived at normal times for each of these sub-classes of motions.
Merits and demerits It avoids performance rating which is subjective It can be used for jobs that are still in the planning stage There is a definite breakdown of motion elements A detailed method study and work study are combined into one It is applicable only for hand. body and eye motions Process times for other activities have to be established using other methods Ordinary workers are baffled by lengthy details Detailed analysis involved is time consuming 33 .
and work sampling is prohibitive 34 . or The cost of time study. predetermined time standards.Subjective Methods Suitable Jobs Any job or group of jobs in which: Very accurate labor standards are not required.
The tasks involve little repetition. Moderate accuracy required.Appropriate work measurement technique A job performed by a single worker in a fixed location. Very accurate labour standards are required A job performed by a single worker in a fixed location. if repetitive they involve long cycles. Any job or groups of jobs in which very accurate standards are not required or where cost of time study and other methods is prohibitive. pricing analysis and production planning A job performed by many workers over a compact area. Workers must be observed by a single analyst. Involves short repetitive cycles and is expected to continue relatively unchanged for long periods while producing large quantities of outputs. Involves short repetitive cycles and changes when customers orders for relatively small quantities of products change. 35 . Labor standards are used for accounting cost standards. Little detail is needed in setting standards.
Learning Curves At the start of production runs: Workers are unfamiliar with their tasks Time it takes to produce the first few units is high As the workers learn their tasks: Their output per day increases up to a point Then their output levels off to a rather constant rate 36 .
8 as the production quantity doubles If first aircraft assembled requires 100 labor-hours laborSecond aircraft would require 80 labor-hours laborFourth aircraft would require 64 labor-hours laborEighth aircraft would require 51.Learning Curves Most aircraft manufacturing tasks experience an 80% learning rate LaborLabor-hours required to assemble an aircraft is reduced by a factor of 0.2 labor-hours labor« and so on 37 .
Learning Curves LaborLabor-Hours for nth Unit 120 100 80 60 40 20 Aircraft Assembly 80% Learning Curve 10 20 30 40 50 60 70 80 90 100 110 120 130 Unit Number (n) (n 38 .
.Learning Curves Uses and limitations Products and services tend to be custom designed requiring the workers to start from the scratch Batches tend to be small and hence performance improves dramatically from the first to the last unit Product/services tend to be complex.. learning occurs quickly 39 ..
End of Chapter 40 .
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