2.

2 Process Selection

1
 Process Selection

• Process selection-Deciding on the way production of goods or services will be

organized.
• It has Major implications for
• Capacity planning
• Selection of technology
• Layout of facilities
• Equipment
• Design of work systems
 The Approaches of process selection is determined by the organization’s process
strategy
 Process strategy
– an organization’s overall approach for physically producing goods and services

2
 Key aspects of process strategy

 Vertical integration-the extent to which firm will produce inputs and control outputs of
each stage of production process
 Capital intensity – the mix of equipment and labor used in production process
 Process flexibility- the degree to which the system can be adjusted to changes in
processing requirements such as: - Design, Volume , technology (in response to
changes in demand, technology, resource availability etc)
 Customer involvement –role of customer in production process
Factors in process selection
 Variety
- How much variety in products or services will the system need to handle?
– Flexibility
- What degree of equipment flexibility will be needed?
– Volume -What is the expected volume of output?
 Answers to these questions will serve as a guide to selecting an appropriate
process type 3
 Process Types

• Five basic process types:

1. Project
2. Job shop
3. Batch
4. Repetitive/assembly
5. Continuous
• Process types are defined by the volume and variety of ‘items’ they process

4
 Project
• Production of customized single products
• Non-routine work
• Unique (one of a kind) products
– make a one-at-a-time product exactly to customer specifications
• Little automation (large-scale ‘products’ with high work content)
• labor and equipment flexibility can range from low to high
• Llimited time frame

5
 Job shop

 Relatively small scale (and smaller products)

 Low volume of high-variety products
 Customized products
 High flexibility of equipment(general purpose equipment)
 Skilled labor (skill requirements are usually very broad)
 Processing is intermittent

6
 Batch

 Moderate volume of moderate variety products

(Higher volumes and lower variety than job shop)
 Semi-standardized products
 The equipment need not be as flexible as in a job shop
 The skill level of workers doesn’t need to be as high as in a job shop because
there is less variety in the jobs being processed (moderately skilled labor)
 Processing is intermittent

7
 Repetitive/assembly

 Higher volumes and low variety standardized products

 Discrete(non-continuous) products
 Less flexibility of equipment
 Low and/or narrow skill requirements
 Processing is repetitive

8
 Continuous
 Very high volume and less/no variety of highly standardized products
 Non-discrete products
 Very low equipment flexibility
• Workers’ skill requirements can range from low to high, depending on the
complexity of the system
• Processing is repetitive

9
Product-process Matrix

10
The effect of Process choice

11
 Advantages and Disadvantages of
process types
Job shop Batch Repetitive/ Continuous
Assembly
Description Customized Semi- Standardized Highly
goods or standardized goods or services standardized
services goods or services goods and sevs

Flexibility Low unit cost,

Advantages Able to handle a high volume, Very efficient,
wide variety of efficient very high volume
work
Moderate cost Low flexibility, Very rigid, lack of
Disadvantages Slow, high cost per unit, high cost of variety, costly to
per unit, complex moderate downtime change, very high
planning and scheduling cost of downtime
scheduling complexity

12
 Process Technology (PT)
• PT refers to the machines, equipment and devices that create and/or deliver
products and services
• all technology needs human intervention, but the ratio of labor and equipment
(capital intensity) used in production process vary
• Different process technologies are required for different parts of the volume–
variety continuum
• High variety–low volume processes generally require process technology that is
general purpose because it can perform the wide range of processing activities
that high variety demands

13
 Degree of Automation

• High volume–low variety processes can use technology that is more dedicated
to its narrower range of processing requirements
• Processes that have high variety and low volume will employ process
technology with lower degrees of automation than those with higher volume
and lower variety
• Automation
– Machinery that has sensing and control devices that enables it to operate
automatically

14
 Automation

 Computer-aided design and manufacturing (CAD/CAM)

 Electronic link between automated design (CAD) and automated manufacture (CAM)
• Computer numerically control (CNC)
– Machines controlled by software to perform a range of operations with the help of
automated tool changers; collects processing information and quality data
• Flexible manufacturing system (FMS)
– A collection of CNC machines connected by an automated material handling system to
produce a wide variety of parts
• Robots
– Programmable manipulators that can perform repetitive tasks; more consistent than
workers but less flexible
• Computer-integrated manufacturing (CIM)
– Automated manufacturing systems integrated through computer technology; also called
e-manufacturing
 Automation
• Advantage
– Better qualify of goods and
services.
– Reduction in direct labour costs.
– Effective control on operations.
– Greater accuracy: More output,
greater speed
– Minimisation of waste
– the quality is also improved as
human input is minimized
– service to the customer is
enhanced.
• Disadvantage
– high capital investment
– high maintenance costs and
maintenance labour of high
calibre
– Can create unemployment
– Automation equipment is highly
inflexible
– Any breakdown any where
would lead to complete
shutdown.
16
2.3 Capacity Planning

17
 Capacity planning
• Capacity is the upper limit or ceiling on the load that an operating
unit (plant, machine, department) can handle
• Capacity is the maximum output rate of a facility
• Capacity planning is the process of establishing the output rate
that can be achieved at a facility
• Goal
– To achieve a match between the long-term supply capabilities of an
organization and the predicted level of long-run demand
» Overcapacity (high costs)
» Under capacity ( loss of customers)

18
 Capacity planning
Organizations involved in capacity planning for various reasons
• Changes in demand
• Changes in technology
• Changes in environment
• Perceived threats or opportunity
Key question in capacity planning
 What kind of capacity is needed?
 depends on product/service to be produced
 How much is needed?
 When is it needed? depends on forecasts

19
 Importance of Capacity Decisions

1. Impacts ability to meet future demands

2. Affects operating costs
- costs of over capacity and under capacity
3. Major determinant of initial costs
- greater the capacity of a productive unit, the greater is cost, but the larger units cost
proportionately less than smaller ones
4. Involves long-term commitment
5. Affects competitiveness
- excess capacity may serve as a barrier to entry by other firms
6. Affects ease of management
- appropriate capacity makes management easier than when capacity is mismatched

20
 Measuring Capacity

• There is no one best way to measure capacity

• Output measures like kgs per day are easier to understand
• With multiple products, inputs measures work better

Input Measures of Output Measures

Type of Business
Capacity of Capacity
Car manufacturer Labor hours Cars per shift
Hospital Available beds Patients per month
Pizza parlor Labor hours Pizzas per day
Floor space in
Retail store Revenue per foot
square feet

21
 Measuring Capacity

• Design capacity:
– Maximum output rate under ideal conditions
– maximum output rate or service capacity an operation, process, or facility
is designed for
• Effective capacity:
– Maximum output rate under normal (realistic) conditions
– Design capacity minus allowances such as personal time (e.g coffee break),
maintenance, and scrap
• Actual output
– rate of output actually achieved-cannot exceed effective capacity due to
machine breakdown, absenteeism, shortage of materials

Design Capacity > Effective Capacity > Actual Output 22

 Measuring Effectiveness of
Capacity Use
• Measures how much of the available capacity is
actually being used:
actual output
Efficency  (100%)
effective capacity

Efficiency is the percent of effective capacity achieved

actual output
Utilization  (100%)
design capacity
Utilization is the percent of design capacity achieved

– Measures effectiveness (system effectiveness)

23
 Example of Computing Capacity Utilization: A repair facility has the capacity to repair 800
trucks per month. However, due to scheduled maintenance of their equipment, management
feels that they can repair no more than 600 trucks per
month. Last month, two of the employees were absent several days each, and only 400 trucks
were repaired. What are the utilization and efficiency of the repair shop?

actual output 400

Efficency  (100%)  (100%)  66.67%
effective capacity 600
Efficiency is the percent of effective capacity achieved
actual output 400
Utilization  (100%)  (100%)  50%
design capacity 800

Utilization is the percent of design capacity achieved

• Compared to the effective capacity of 600 trucks per month, 400 trucks
per month looks relatively good, but compared to the design capacity of
800, 400 trucks per month is much less impressive

24
 Measuring Effectiveness of
Capacity Use
• Key to improving capacity utilization is to
increase effective capacity by
• Correcting quality problems
• Maintaining equipment in good operating conditions
• Fully utilizing bottleneck operations
• Thus, increasing utilization depends on being able to
increase effective capacity

25
 Determinants of Effective Capacity

• Facilities:- design of facilities including size and provision for expansion; and location
factor such as transportation cost, distance to market, labor supply, energy sources.
Layout of facilities- how smoothly work can be performed
• Product and service factor:- The more the products are uniform/standard, the greater
the capacity than variety products
• Process factors: if quality of output does not meet standard, the rate of output will be
slowed by inspection & rework activities
• Human factors: training, skill, and experience required
• Operational factors : scheduling, inventory stocking , late delivery, etc
• Supply chain factors: any short coming to suppliers, warehousing, transportation,
distributors (if capacity is to be increased or decreased)
• External factors: product standards, safety regulations, unions, pollution control
standards

26
 Key Decisions of Capacity
Planning Capacity cushion - % of capacity held in
reserve for unexpected occurrences
Capacity cushion = capacity – average demand
1. Amount of capacity needed
 considerations of expected demand & capacity costs , and capacity cushion
 capacity cushion –extra capacity in excess of expected demand used to offset demand
uncertainty
 Organizations that have greater demand uncertainty typically have greater capacity
cushion
 Organizations that have standard products and services generally have smaller capacity
cushion
2. Timing of changes:- availability of capital, lead time, and expected demand
3. Need to maintain balance:- requires proportionate changes in capacity in all related
areas of the system
4. Extent of flexibility of facilities:- due to demand uncertainty and degree of variety
in work requirement

Capacity flexibility – essentially means having the capability to deliver

what the customer wants within a lead time shorter than competitors 27
 Making Capacity Planning
Decisions
The three-step procedure
1. Identify Capacity Requirements
2. Develop Capacity Alternatives
3. Evaluate Capacity Alternatives

28
 Identifying capacity requirements

• Forecasting Capacity:
– Long-term capacity requirements based on future demand
• Identifying future demand based on forecasting
• Converting those forecasts into capacity requirements
– Forecast and capacity decision must included strategic implications
• Strategic Implications
– How much capacity a competitor might have
– Potential for overcapacity in industry a possible hazard
• Capacity cushions
– Plan to underutilize capacity to provide flexibility
Capacity alternatives
 Do nothing
 Expand large now (may included capacity cushion)
 Expand small now with option to add later

29
 Capacity Considerations

• The Best Operating Level is the output that results in the lowest
average unit cost
• Economies of Scale:
– Where the cost per unit of output drops as volume of output increases
– Spread the fixed costs of buildings & equipment over multiple units,
allow bulk purchasing & handling of material
• Diseconomies of Scale:
– Where the cost per unit rises as volume increases
– Often caused by congestion (overwhelming the process with too much
work-in-process) and scheduling complexity

30
 Best Operating Level and Size

• Alternative 1: Purchase one large facility, requiring one large

initial investment
• Alternative 2: Add capacity incrementally in smaller chunks
as needed

31
 Other Capacity Considerations

• Focused factories:
– Small, specialized facilities with limited objectives
• Plant within a plant (PWP):
– Segmenting larger operations into smaller operating units
with focused objectives
• Subcontractor networks:
– Outsource non-core items to free up capacity for what you
do well

32
 Evaluating Capacity Alternatives

• Many tools exist such as cost-volume analysis, financial

analysis, decision theory and weighting line to assist in
evaluating alternatives
• Most popular tool is Decision Trees
• Decision Trees analysis tool is:
– a modeling tool for evaluating sequential decisions which
identifies the alternatives at each point in time (decision
points), estimate probable consequences of each decision
(chance events) & the ultimate outcomes (e.g.: profit or
loss)

33
2.4. Location Decision

34
 Location Analysis

Location Analysis
- the process of identifying the best
geographic location for a service or
production facility

35
 Factors Affecting Location
Decisions
• Proximity to source of supply:
– Reduce transportation costs of perishable or bulky raw
materials
• Proximity to customers:
– High population areas, close to JIT partners
• Proximity to labor:
– Local wage rates, attitude toward unions, availability of
special skills (silicon valley)

36
 More Location Factors

• Community considerations:
– Local community’s attitude toward the facility (prisons,
utility plants, etc.)
• Site considerations:
– Local zoning & taxes, access to utilities, etc.
• Quality-of-life issues:
– Climate, cultural attractions, commuting time, etc.
• Other considerations:
– Options for future expansion, local competition, etc.

37
 Globalization –
Should Firm Go Global?
Globalization is the process of locating facilities around the
world
• Potential advantages:
– Inside track to foreign markets, avoid trade barriers, gain access to
cheaper labor
• Potential disadvantages:
– Political risks may increase, loss of control of proprietary technology,
local infrastructure (roads & utilities) may be inadequate, high inflation
• Other issues to consider:
– Language barriers, different laws & regulations, different business
cultures

38
 Making Location Decisions

Analysis should follow 3 step process:

1. Identify dominant location factors
2. Develop location alternatives
3. Evaluate locations alternatives
Procedures for evaluation of location alternatives include
– Factor rating method
– Load-distance model
– Center of gravity approach
– Break-even analysis
– Transportation method

39
Evaluation of location alternatives

• Factor rating is a tool that helps managers evaluate

qualitative factors
• Load-distance model and center of gravity approach
evaluate the location decision based on distance
• Break-even analysis is used to evaluate location
decisions based on cost values
• Transportation method is an excellent tool for
evaluating the cost impact of adding sites to the
network of current facilities
40
 Factor Rating Example

Factor rating for Location 2 is higher than Location 1. Location 2

should be selected
41
 The Center of Gravity Approach

• This approach requires that the analyst find the center of gravity of the
geographic area being considered
Computing the Center of Gravity for Matrix Manufacturing
Coordinates Load
Location (X,Y) (li ) li xi li yi
Cleveland (11,22) 15 165 330
Columbus (10,7) 10 100 70
Cincinnati (4,1) 12 48 12
Dayton (3,6) 4 12 24
Total 41 325 436

• Computing the Center of Gravity for Matrix Manufacturing

Xc.g. 
l X
i 325
i

 7.9 ; Yc.g. 
 liYi  436  10.6
l
i 41  li 41
• Is there another possible warehouse location closer to the C.G. that should be
considered?? Why?
42
 Load Distance Method
Compute (Load x Distance) for each site
Choose site with lowest (Load x Distance)
Distance can be actual or straight-line

43
Example

44
 Break-Even Analysis

• Break-even analysis computes the amount of goods required to be sold to

just cover costs
• Break-even analysis includes fixed and variable costs
• Break-even analysis can be used for location analysis especially when the
costs of each location are known

Step 1: For each location, determine the fixed and

variable costs
Step 2: Plot the total costs for each location on one graph
Step 3: Identify ranges of output for which each location
has the lowest total cost
Step 4: Solve algebraically for the break-even points
over the identified ranges

45
 Break-Even Analysis

• Remember the break even equations used for calculation total cost of each
location and for calculating the breakeven quantity Q.
– Total cost = F + cQ
– Total revenue = pQ
– Break-even is where Total Revenue = Total Cost

Q = F/(p-c)
Q = break-even quantity
p = price/unit
c = variable cost/unit
F = fixed cost

46
 Example using Break-even Analysis: Clean-Clothes Cleaners
is considering four possible sites for its new operation. They
expect to clean 10,000 garments. The table and graph below
are used for the analysis.

Example 9.6 Using Break-Even Analysis

Location Fixed Cost Variable Cost Total Cost
A $350,000 $ 5(10,000) $400,000
B $170,000 $25(10,000) $420,000
C $100,000 $40(10,000) $500,000
D $250,000 $20(10,000) $450,000
From the graph you can see that the two lowest cost intersections
occur between C & B (4667 units) and B & A (9000 units).The best
alternative up to 4667 units is C, between 4667 and 9000 units the
best is B, and above 9000 units the best site is A 47
 The Transportation Method

• Can be used to solve specific location problems

• Could be used to evaluate the cost impact of adding
potential location sites to the network of existing
facilities
• Could also be used to evaluate adding multiple new
sites or completely redesigning the network

48
2.5 Facility Layout
 Introduction

• Layout refers to the configuration of departments, work centers, and

equipment, with particular emphasis on movement of work (customers or
materials) through the system.
The basic objective of layout design is to facilitate a smooth flow of work,
material, and information through the system
Other Supporting objectives includes
 To facilitate attainment of product or service quality
 To use workers and space efficiently
 To avoid bottlenecks
 To minimize material handling costs
 To eliminate unnecessary movements of workers or materials
 To minimize production time or customer service time
 To design for safety 50
 The Need for Layout Decisions

• Inefficient operations
 High Cost Bottlenecks
• Changes in the design of products or services
• The introduction of new products or services
• Accidents or Safety hazards
• Changes in volume of output or mix of products
• Changes in methods and equipment
• Changes in environmental or other legal requirements

51
 Inputs to the Layout Decision
1.Specification of objectives of the system in terms of output and flexibility
2.Estimation of product or service demand on the system
3.Processing requirements in terms of number of operations and amount of
flow between departments and work centers
4. Space requirements for the elements in the layout
5. Space availability within the facility itself

52
 Layout Types
There are 3 basic types and one hybrid type
 Basic types
– Product layouts-(production lines or assembly lines
– Process layouts- it is also called functional/job shop/batch process/
– Fixed-Position layout-All facilities are brought and arranged around one
work center
 Hybrid type
 Group Technology or Cellular layouts

53
 Basic Layout Types

• Product layout
– Layout that uses standardized processing operations to achieve smooth,
rapid, high-volume flow
– Equipment or work processes are arranged according to the progressive
steps by which the product is made
– Product layouts are most conducive to repetitive or Continuous
Processing

54
 Product layouts

A U-Shaped Production Line

55
 Advantages of Product Layout

• High rate of output

• Low unit cost due to high volume
• Labor specialization
• Low material handling cost
• High utilization of labor and equipment
• Established routing and scheduling(in the initial design of the system)
• Routing accounting, purchasing and inventory control
• Little direct supervision is required

56
 Disadvantages of Product Layout

• Creates dull, repetitive jobs

• Poorly skilled workers may not maintain equipment or quality of output
• Fairly inflexible to changes in volume
• Highly susceptible to shutdowns
– A breakdown of one machine in a product line may cause stoppages of
machines in the downstream of the line
• Needs preventive maintenance
• Incentive plans tied to individual output are impractical
l

57
 Process layout/
– similar resources or processes are located together. Layout that can handle
varied processing requirement
– The layouts include departments or other functional groupings in which
similar kinds of activities are performed
– Designed to facilitate processing items or providing services that present a
variety of processing requirements
– E.g – hospital some services such as -X-ray and laboratories
- machine shop, which has separate departments for milling,
grinding, drilling, and so on

58
Process layout

59
 Advantages of Process Layout

• Can handle a variety of processing requirements

• Not particularly vulnerable to equipment failures
• General-purpose equipment is less costly and is easier and less costly to
maintain
• Possible to use individual incentive systems

60
 Disadvantages of Process Layout
 In-process inventory is relatively high and its costs can be high
 Routing and scheduling pose continual challenges
 Equipment utilization rates are low
 Material handling is slow and inefficient, and more costly per unit
 Job complexities reduce the span of supervision and result higher
supervisory costs
 Special attention necessary for each product or customer and low
volumes result in higher unit costs
 Accounting, inventory control, and purchasing are much more
involved

61
Product and Process layouts

62
Product and Process layouts

63
 Fixed Position Layouts

• Layout in which the product or project remains stationary, and

workers, materials, and equipment are moved as needed.
• Nature of the product dictates this type of layout
– Weight
– Size
– Bulk
• Widely used for farming, firefighting, road building, home building,
power plants, dams construction, shipbuilding, and oil drilling
• In each case, compelling reasons bring workers, materials, and
equipment to the “product’s” location instead of the other way
around.

64
 Advantages of fixed layout
• Reduces movement of machines & equipment
• Minimizes damage/cost of movement
• Continuity of assigned work force

65
 Disadvantages of fixed layout

 Skilled & versatile workers needed due to multiple

operations
 Skill combination may be difficult to obtain higher
pay
 Movement of people/material may be expensive
 Equipment utilization low as they are left at location
for subsequent usage instead of being moved as
& where needed

66
 Hybrid Layout

• Many operations either design themselves hybrid layouts which combine

elements of some or all of the basic layout types or use the ‘pure’ basic
layout types in different parts of the operation

67
 Designing Product Layouts:
Line Balancing - Harmonizing the Content
of Work
 The goal of a product layout is to arrange workers or machines in the
sequence that operations need to be performed.
• The sequence is referred to as a production line or an assembly line. These
lines range from fairly short, with just a few operations, to long lines that
have a large number of operations
• A key issue in product layouts is that the tasks in the assembly line or flow
line must be 'balanced'. This means that the time spent by components or
customers should be approximately the same for each workstation,
otherwise queues will occur at the slowest workstation

68
 Line balancing
• Line Balancing is the process of assigning tasks to workstations in a
manner that minimizes the number of workstations and the total amount
of idle time at all stations for a given output level

• Objective
– Balance the assembly line i.e. minimize the imbalance between
machines or personnel while meeting required output

69
 Line Balancing Procedure

1. Specify the sequential relationship among tasks using a precedence diagram

2. Calculate the cycle time required for line
3. Calculate the theoretical minimum number of workstations required produce a specified
rate of output
4. Assigned tasks to workstations (one task at a time) recognizing cycle time and precedence
constraints
– a. All preceding tasks in the sequence have been assigned.
– b. The task time does not exceed the time remaining at the workstation
If no tasks are eligible, move on to the next workstation
Break ties that occur between tasks using one of these rules as a primary rule and the other
as secondary criteria
– a. Assign the task with the longest task time
– b. Assign the task with the greatest number of followers
If there is still a tie, choose one task arbitrarily.
5. Calculate efficiency of line
6. Determine if theoretical minimum number of workstations or an acceptable efficiency level
has been reached. If not, go back to step 5, and rebalance by interchanging primary and
secondary rules
70
Example
Suppose that the work required to fabricate
500 products per day can be divided up into
11 tasks, with the task time and precedence
relationship as shown in the table.
Production per day is 420 minutes.

71
2.6 Job Design
 Cont…
• 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?
 Cont…
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
 Cont…
Successful Job Design must be:
• Carried out by experienced personnel with the
necessary training and background
• Consistent with the goals of the organization
• In written form
• Understood and agreed to by both
management and employees
 Design of Work Systems
• Specialization
• Behavioral Approaches to Job Design
• Teams
• Methods Analysis
• Motions Study
• Working conditions
 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
 Cont…
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
 Cont…
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
Behavioral Approaches to Job Design
 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
◦ Workers periodically exchange jobs
 Empowerment
o increasing the authority given to people to make decisions with in
the job or changes to the job itself.
 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
◦ Groups of empowered to make certain changes in their work
process
Benefits of teams
◦ Higher quality
◦ Higher productivity
◦ Greater worker satisfaction
 Work 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
 Cont…
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
 Motion Study
Motion study is the systematic study of the
human motions used to perform an operation.
Developing Work Methods
1.Eliminate unnecessary motions
2.Combine activities
3.Reduce fatigue
4.Improve the arrangement of the workplace
5.Improve the design of tools and equipment
 Working conditions

• Working conditions can effect worker

productivity, product quality, and worker
safety
• Temperature, ventilation, noise, and lighting
are all factors in work system design
• These factors need to be considered in
analyzing the method of doing jobs.
 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 take to do
the job,
 using appropriate processes and tools to complete
a specific job,
 allowing time for personal fatigue, and
 unavoidable delays
 Cont…
• Standard time is used in:
– To schedule work and allocate capacity.
– To provide an objective basis for motivating the work forces
and measuring the performance.
– To bid for new contracts and to evaluate performance on
existing ones
– To provide benchmarks for improvement.
– Costing the labor component of products
– Tracking employee performance
– Scheduling & planning required resources
– Wage incentive plan
 Cont…
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
 Cont…
Work measurement techniques
 Historical experience
 Time study
 Predetermined time standards
 Work sampling
The choice of techniques depends on the level of
detail desired and the nature of work itself
 Cont…
A. Historical experience
 Based on how many labor hours were required to do a
task the last time it was performed.
 available from employee time cards or production
records
advantages
- relatively easy
- inexpensive to obtain.
Disadvantages
- they are not objective
- we do not know their accuracy.
 Cont…
B. Time study
 It was originally proposed by Frederick W.
Taylor in 1881
 A time study procedure involves timing a
sample of worker’s performance and using it
to set standard.
 generally made with a stop watch, either on
spot or by analyzing the video of the job.
 Cont…
Steps
1. Define the task to be studied
2. Divide the task in to precise elements
3. Decide how many times to measure the tasks(cycles to
observe)
4. Time and record elemental time and rating of
performance
5. Compute average actual cycle time.
6. Compute the normal time
7. Add the normal times for each element
8. Compute the standard time
 Cont…
Work Sampling- is a technique for estimating the proportion of time a
worker spends on an activity
developed in England by L. Tippet in the 1930s.
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
 Cont…
 work sampling does not require timing an activity, nor does
it even involve continuous observation of the activity.
Where as time study requires
 Instead, the observer makes, brief observation of a worker
or machines at random intervals and simply notes the nature
of the activity.
 For example, a machine may be busy or idle; a secretary
may be typing, filling, talking on the telephone, and so on.
Although work sampling is occasionally used to set time
standard, its two primary uses in:
◦ Ratio delay studies
◦ Analysis of non-repetitive tasks.
 Cont…
steps
1. Take a preliminary sample to obtain an estimate of the
parameter value (such as percent of time the worker is
busy)
2. Compute the sample size required
3. Prepare a schedule for observing the worker at appropriate
times
4. Observe and record worker activities; rate the worker’s
performance
5. Record the number of units or parts produced
6. Compute the normal time per unit or part
7. Compute the standard time per unit or part
 Cont…
 To determine the number of observations
required, management must decide up on:
 the desired confidence level
 the degree of error.
 First, however, the analyst must select a
preliminary value for the parameter under
study
 Cont…
Advantages
 A single observer can observe several workers
simultaneously, it is less expensive
 Observers usually do not require much training,
and no timing devices are needed
 The study can be temporarily at any time with
little impact on the results.
 Because work sampling uses instantaneous
observations over a long period, the worker has
little chance of affecting the study’s out come.
 Cont…
Disadvantages
 It does not divide work elements as completely
as time study
 It can yield biased or incorrect results if the
observer does not follow random routes of
travel and observation
 It is less effective than time studies when cycle
times are short