Lipex, Ltd., of Birmingham, England, is interested in cutting the amount of time

Question

Lipex, Ltd., of Birmingham, England, is interested in cutting the amount of time between when a customer places an order and when the order is completed. For the first quarter of the year, the following data were reported: Required: 1. Compute the throughput time. 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. 3. What percentage of the throughput time was spent in non-value-added activities? 4. Compute the delivery cycle time. 5. If by using Lean Production all queue time can be eliminated in production, what will be the new MCE?

Explanation / Answer

1.Throughput time = Process time + Inspection time + Move time + Queue time
=3.2 days + 0.6 days + 0.8 days + 4.1 days = 8.7 days

2. Manufacturing cycle efficiency = Value-added time / Throughput time
= 3.2 days / 8.7 = 0.37

3. Non-value-added throughput time
= 100% - 37% = 63%

4. Delivery cycle time = Wait time + Throughput time
=16.3 days + 8.7 days = 25 days

5. Throughout time = Throughput time – Queue time = 8.7 – 4.1 = 4.6

New manufacturing cycle efficiency =Value-added time / Throughout time
=3.2 / 4.6 = 0.78

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